Between Estimates of the Emissions Income Elasticity

My paper Between Estimates of the Environmental Kuznets Curve has been accepted for publication by Ecological Economics. I changed the title though to "Between estimates of the emissions income elasticity", which seems reasonable given that I don't reject a log-linear relation between (sulfur and carbon) emissions and income per capita. So I confirm the findings of Wagner (2008) and Vollebergh et al. (2009) who used other methods to get around some of the econometric issues facing EKC estimation. You should know that there is a lot of resistance to publishing more "EKC" papers in the top journals. So you better have something rather innovative to say about this topic at this point I think to get published.

Martin Parkinson Gives the Sir Leslie Melville Lecture

This lecture was part of an annual series in memory of economist Leslie Melville who was the second vice-chancellor (=president) of the Australian National University. Parkinson, who has a PhD in economics from Princeton, made a point related to Ken Henry's recent comments. He said that there was limited engagement on climate change among Australian economists (with exceptions such as Ross Garnaut and Warwick McKibbin) and there was no consensus on whether action even needed to be taken let alone what form that action should take. He said that economists needed to take the science seriously. That's something I can agree on. I was somewhat surprised about his statement that there was little enagagement as a bunch of names went through my head of economists who are very engaged on this issue. But then I realised that he was giving a lecture aimed at economists to an audience that seemed to consist of few economists and the few that I recognized were well known as environmental economists in one capacity or another. I guess this made his point.

Top Environmental and Energy Economics Journals

Following on from my post on the 2009 Journal Citation Report I've extracted a list of energy and environmental journals. I've ranked them by "Article Influence Score":



Article Influence Score is a recursive impact factor. It is derived from the Eigenfactor Score by scaling for the number of articles published by a journal and for the average number of citations received by all journal articles. A score of above one means that articles in the journal have a larger than average impact.

Three of the journals are, therefore, more influential on a per article basis than the average journal across science. JEEM is the top journal but is only ranked 42nd among economics journals, which is maybe why the ARC didn't rank any of these journals as A*.

Because Ecological Economics publishes more articles than any of the other journals it has the highest Eigenfactor Score. This indicator is supposed to measure the overall importance of a journal to science. The sum of Eigenfactor Scores for all journals is 100. The top 1000 journals have scores above 0.01, which means Ecological Economics is in this elite group.

I mentioned last time how the number of citations received was rising over time. It's interesting to compare the data that Chunbo Ma and I collected for 2003 for JEEM and Ecological Economics:



JEEM has doubled the citations the journal receives in the last 6 years while Ecological Economics has quadrupled its citation rate. Impact factors have roughly doubled too. BTW, JEEM articles are now citing 33 items on average and Ecological Economics 46 on average. Increasingly long reference lists is one explanation for the rising impact factors we are seeing across the board.

Jotzo and Stern Paper to be Published at Energy Policy

Our paper: How Ambitious are China and India's Emissions Intensity Targets? has been accepted for publication at Energy Policy.

New Climate Change Economics Journal

A new journal published by World Scientific titled: Climate Change Economics has been launched. The aims and scope statement states:

"Climate Change Economics (CCE) publishes theoretical and empirical papers devoted to analyses of mitigation, adaptation, impacts, and other issues related to the policy and management of greenhouse gases. CCE is specifically devoted to papers in economics although it is understood that authors may need to rely on other fields for important insights. The journal is interested in papers examining the issue at every scale from local to global and papers from around the world are encouraged. CCE is also interested in both original research and review papers and welcomes comments discussing previous articles."

The editor in chief is Robert Mendelsohn of Yale University and the editorial board is full of big names in environmental and energy economics:

Carlo Carraro (Fondazione Eni Enrico Mattei (FEEM), Italy)
Larry Goulder (Stanford University, USA)
Charles Kolstad (University of California - Santa Barbara, USA)
William Nordhaus (Yale University, USA)
Richard Richels (Electric Power Research Institute (EPRI), USA)
Daigee Shaw (Chung-Hua Institution for Economic Research, Taiwan)
Thomas Schelling (University of Maryland, USA)
Robert Stavins (Harvard University, USA)
Richard Tol (Economic and Social Research Institute, Dublin, Ireland)
Martin Weitzman (Harvard University, USA)

So this has the potential to be a highly ranked journal.

2009 Journal Citation Report Released

ISI has released the 2009 edition of the Journal Citation Report. Ranking journals by the traditional two year impact factor:



The first thing I notice is how impact factors have been increasing rapidly in recent years. At least the top journals are getting considerably more citations to their articles. Also, REEP, JEEM, and Ecological Economics are all in the top 20 journals by this measure. In a slow publishing field like economics the five-year impact factor probably makes more sense:



This list is a bit more consistent with conventional notions of prestigious journals in economics.
REEP still does well by this measure. The eigenfactor score and article influence score take into account where articles are cited:

None of the environmental journals make the top twenty now. Environmental economics articles get cited a lot but not in journals that themselves are highly cited.

IPCC AR5 WGIII Authors Announced

This won't get much attention in this country, today :), but the IPCC has formally announced the lead and coordinating lead authors for the IPCC 5th Assessment Report.

Long-Term Outcomes?

My initial thoughts on tonight's developments * in terms of long-term effects is that this could lead for a push for a republic with an executive president and/or longer government terms which give the prime minister more time to implement the government's policies and show that they are working before an election needs to be called. Both ideas have been floated before, of course, and the first is what sank the referendum on the republic back in 1999.

* Note for my non-Australian readers: There will be an election for leader of the Australian Labor Party among Labor members of parliament and, therefore, for prime minister on Thursday morning. Candidates: Kevin Rudd, prime minister and Julia Gillard his deputy. Rudd is a first term prime minister elected in 2007. Only one other Australian prime minister has had a single term and that was back in 1932 in the depths of the Great Depression. The Labor party lost the election in that case. I don't know if any other prime minister has been challenged for the leadership by his party in his first term.

McKibbin on Henry

Following on from yesterday, Peter Martin has a post today where he interviews Warwick McKibbin. I mentioned McKibbin in my comments yesterday. I mostly agree with what McKibbin says in Peter Martin's post. What he doesn't mention and what shocked me the most, though, was that Henry's comments were an attack on academic freedom/freedom of speech from a government official. That is anti-democratic in my opinion.

Ken Henry Tells Economists to Get Behind Policy Proposals

And stop arguing in public reports Peter Martin. Would we argue that medical doctors who believe there are problems with some treatment should not speak out because it is better than no treatment at all and the medical profession should form a united front to the public? What is the proper role of academic economists in policy debates? Do you agree with Henry?

Chalmers Introduces Online Climate Model for Public Use

Christian Azar and Daniel Johansson, at the Division for Physical Resource Theory at Chalmers University of Technology, have built a simple climate model for online use, the Chalmers Climate Calculator. The model is an easy-to-use tool meant for anyone who wants to learn more about the climate problem. Journalists, students, policy makers, and international negotiators, along with everyone else, can access the model.

The straightforward online presentation quickly lets users get a feel for how carbon dioxide emissions can affect climate in the future. Users choose scenarios for future emissions, deciding when, and by how much, emissions are cut, or whether to allow them to increase according to a business as-usual projection. Using these inputs, the model then calculates the future atmospheric concentration of carbon dioxide and the increase in global average surface temperature. (Other greenhouse gases are also taken into account)

Users get to see how both the amount of carbon dioxide in the atmosphere and temperature vary depending on emissions. Model users can also see how temperature changes depend on how sensitive the climate is to greenhouse gases. For instance, with the business-as-usual emissions scenario employed by the model, the temperature could increase by more than five degrees Celsius, by the end of the century (for a climate sensitivity equal to 4.5 degrees per CO2 doubling). However, if temperature is less sensitive to greenhouse gases, cutting global emissions in half by the end of the century could let us avoid overshooting the so-called 2-degree target. (The “2-degree target” refers to the goal of keeping global average surface temperature from increasing more than 2 degrees above pre-industrial levels.)

Additional examples of questions that can be explored with the model:

• What temperature increase will we see by 2100, if we keep global emission levels at the current level, or if we cut emissions by 3% annually, starting now?
• What if we delay emission cuts for another 10, 20, or 30 years?
• How much does climate sensitivity matter to global warming?
• What if only developed nations cut emissions and developing nations don’t take any measures?
• How much and how quickly do developed and developing nations, need to cut emissions,
• respectively, to stay below the 2-degree limit?
• What role does deforestation play for atmospheric carbon dioxide levels and for temperature?
• How much will stopping deforestation matter to global warming?

Two region version of the model
In order to answer questions related to developed and developing nations, or questions related to deforestation, the 2-region version of the model must be used.

Climate sensitivity
How much the temperature will increase in the future depends on how much greenhouse gases we emit. But the amount of warming also depends on how sensitive climate is to increasing concentrations of greenhouse gases, e.g., carbon dioxide, in the atmosphere. The uncertainty in climate sensitivity is substantial. When the temperature starts rising, the air can hold more water vapor, which in turn leads to more warming because water vapor is a greenhouse gas. This positive feedback amplifies the greenhouse effect. There are both negative and positive feedbacks; major uncertainties in this area have to do with clouds. Major climate models compute how water vapor and clouds are affected by warming. These calculations are complicated and take a long time. The models estimate how sensitive climate is--or, to be more specific, how much the average surface temperature will increase, at equilibrium, if the amount of carbon dioxide in the atmosphere is doubled.

Different models produce different results, mainly because of the difficulties in modeling the impact of climate change on clouds. With the Chalmers Climate Calculator, the user gets to determine this parameter. This allows the Calculator to reproduce the results from a wide range of models. The user can see that a high climate sensitivity makes the problem significantly more serious; a low climate sensitivity makes it less serious. Different climate sensitivities require different emissions reductions in order for us to stay below the 2-degree limit.

Where is it Cheapest to Cut Carbon Emissions: Estimating Marginal Costs

This is the second part of a series on my new working paper on where it is cheapest to cut carbon emissions.

In the previous post I assumed that all countries shared the same marginal cost of abatement curve. In reality this is not the case and in order to rank countries by marginal cost of abatement or total costs of meeting a given policy we need to estimate a cost curve for each country. The Treasury Review assessed the costs of meeting 4 different policy scenarios at 2020 and 2050. This gave us 8 data points for each region or country.

The data we used to estimate the curves are GDP data rather than GNP data because changes in GNP include net receipts for the sale of emissions permits. Our data on the cuts in emissions are the actual domestic reductions in emissions in each region. We don't want, therefore, to use a measure of cost that includes the costs of offsets.

Also we subtracted the "terms of trade impact" component from the estimates of GDP losses and gains. Under a global climate policy countries experience GDP impacts that have nothing to do with their domestic mitigation efforts but are the effect of climate policy actions elsewhere. For example, OPEC countries are hard hit under global mitigation efforts because of the reduction in world demand for oil. On the other hand, oil importers such as India gain from the fall in the oil price. Again, because we wanted to limit costs to the costs of domestic mitigation we needed to remove these effects.

Obviously a lot of technological change is expected to take place over the next 50 years. This technological change would be expected to lower the emissions intensity of the economy even in the absence of climate policy. This lowers business as usual emissions compared to what they would be without technological change. We make the assumption, though, that the elasticity of GDP with respect to reducing emissions relative to business as usual does not change. It's a strong assumption, but we think it is the best we can do with the data we have available.

These are the resulting 2005 marginal costs that we come up with:



The left side of the table ranks countries by the marginal cost of abating a ton of carbon (not carbon dioxide) where marginal cost is measured in PPP (Purchasing Power Parity) adjusted dollars. To get figures in terms of carbon dioxide multiply by 12/44.

Japan and Canada actually have GDP gains. This shows that despite the adjustments made these numbers are still not, of course, the effect of a unilateral domestic policy but of a coordinated global mitigation effort. Apparently, investment increases in Japan under climate mitigation increasing its GDP. Abatement is fairly cheap in the US and EU and expensive in most developing and transition economies. There isn't any correlation between emissions intensity and marginal cost. Countries appear to be on different cost curves.

In terms of marginal domestic loss of GDP climate policy is expensive in developing countries and cheap in the developed world.

The right hand side of the table uses actual market exchange rates instead. Now it is cheap to abate in China and OPEC as well as in the US and EU.

Nature Feature on "Metrics"

This week's issue of Nature has a feature on citation metrics and their use. There seems to be a lot of dissatisfaction with their use:

I presume that most people think they are used too much and too indiscriminately. I wish that they were used more in economics in Australia. But as there is a lot of noise in the relationship between paper quality and the number of citations received, deterministic citation metrics shouldn't be used indiscriminately or as the only method of evaluation.

Jerry Hausman on the RSPT

MIT economist Jerry Hausman has an article in The Australian today that includes a link to his full paper. As I suspected, real option analysis comes into play here.

Where is it Cheapest to Cut Carbon Emissions?

The answer to the question depends on what you mean by "cheap". In other words, how you measure cost.

I have a new working paper coauthored with Ross Lambie that attempts to answer the question using the results of the GTEM modeling exercises carried out as part of the Australian Treasury review of climate change policy.

Development of policy on the cutting of greenhouse gas emissions has in many countries, including Australia and the United States, been characterized by fierce debate among opposing interest groups. Obviously some interest groups will suffer larger losses than other groups in society and are likely to oppose climate policy.

But putting this issue to one side, is it possible that there are many cheap ways to cut emissions in countries such as the United States and Australia as green groups argue, yet the total cost of climate policy are higher in these countries than in other countries that are often perceived as being more environmentally responsible such as Sweden and the Netherlands as often argued by industry lobbies?

The cost of mitigation - in plainer language cutting carbon emissions - is often represented by a cost curve such as this:



On the X axis is the level of emissions and on the Y axis cost. So that we can put both large and small countries in the same diagram emissions are measured in terms of emissions intensity - emissions per dollar of GDP. Cost is measured as marginal cost - the additional cost of reducing emissions by another unit.

The chart shows two hypothetical countries. One, that I call Ameralia, has high emissions, while Swepan has low emissions. Because it gets harder to cut emissions the lower they get - the "law of diminishing returns" - the marginal cost of reducing emissions is higher in low emissions Swepan than in high emissions Ameralia. The environmentally responsible who have already made efforts to reduce pollution and save energy have higher costs.

The chart shows a Kyoto style equal percentage emissions cut in both countries. The green areas are the total costs that are born by each country in meeting the mitigation target. I've designed the curve so that Ameralia's total costs are greater than Swepan's.

So in this example it is true that depending on what you mean by cheaper it could be cheaper to cut emissions in either Ameralia or Swepan.

The difference between total cost in the two countries will be greater for other policy goals. The total cost of converging on a common emissions intensity will be far greater in Ameralia. Similarly, a common carbon price, if it is to affect Swepan at all, will impose huge costs on Ameralia.

Things get more complicated in the real world. I'll discuss some of those complications in future blog posts.

New Energy Blog

Cutler Cleveland, a professor of geography and environmental studies at Boston University has a new blog on energy issues: The Energy Watch. He is editor in chief of the Encyclopedia of the Earth, edited the Encyclopedia of Energy, and was editor of Ecological Economics for several years. He was also my PhD advisor :)

Is Too Much Research Being Published?

The authors of an article in The Chronicle of Higher Education certainly think so. The article seems to be behind the curve on what is happening:

1. Here in Australia, for example, government financial incentives to universities used to favor quantity explicitly over quality but that has changed. Depending on the field either journal quality or number of citations will be the way things are measured quantitatively.

2. Being able only to submit your best publications over a given period is routine here at least in research evaluation and grant applications.

3. Comments about print are silly as no-one reads print journals anymore. I only print out a very few key articles myself. Mostly I read them on a laptop. I do 90% of my reading of all sorts on my laptop (maybe it being a Mac helps :)).

4. There is no need to read everything in the area of ones interest if one knows how to do research properly. You need to read the most cited articles and articles in top journals. The rest can be safely ignored.

5. At top universities around the world quantity of publications has never been favored over qualtity.

There are, however, huge numbers of new open access journals popping up all over the place right now.

The flip side of the coin is that suppression of research results is bad for science. This results in "publication bias" which can lead to a misleading estimate of the size of a given effect. Meta-analysis of course can help overcome this to some degree.

New EERH Research Reports

We've put up several more Environmental Economics Research Hub Research Reports on the web. #63 is coauthored by Ross Lambie and myself and I will be blogging soon more about that one. We've also corrected all the problems in our RePEc file so several older ones that were missing from RePEc are showing up properly now too.

How I Keep Up To Date on the Scientific Literature

I suppose that most academic's reading can be divided into two categories: Specific reading for projects you are working on; general background reading. Most people probably don't have enough time for the latter so it is important to maximize the value you get from the time applied. After finding a very useful paper yesterday, though I was disappointed to find that I had been "scooped" to some degree on one of the projects I'm working on, I thought I could make lemonade from lemons by writing about how I find such papers. Once upon a time I subscribed to the a bunch of hardcopy journals from different academic societies. The only one I am getting currently though is AJARE as part of my membership in AARES. So this is what I do currently (This may or may not work for you of course):

1. Subscribe to NEP: (New Economics Papers). Here you can get abstracts of all new working papers added to RePEc in the fields you are interested in sent to you regularly.

2. Citations: This won't be very useful for new scholars of course... but regularly check citations to your work. It's likely that papers of interest to you will cite your papers. I admit that I check new citations to my work weekly in Web of Science and Scopus. I have now added Google Scholar on an annual rotation. The trouble with Google Scholar is that there is no way to limit citations to the most recent week or month or anything in fact. The paper mentioned above came up in the Google Scholar search.

3. Journal RSS feeds: Many journals allow you to subscribe to the table of contents via RSS. Elsevier/Science Direct seems to send papers as they become "in press" online.

4. Blogs/news sources: I subscribe to quite a few blogs using Google Reader. Some of these are in the general climate science area. I also read science news online in sources like the New York Times. I can follow up on interesting stories in the relevant journals. Of course, you could subscribe to Science and Nature by RSS instead...

5. Conferences and seminars: We all know this one. But everywhere I've been it seems a struggle to get grad students to come to seminars that are not in their exact specialised area of research.

ResearchGate

I just received an e-mail invitation to join ResearchGate. I'd never heard of this network before. In contrast to Academia.edu it seems to be organized more on disciplinary lines than institutional lines. I looked through some of the names of people who have registered under environmental economics and saw only one I knew. So it seems to be even less successful than Academia.edu so far at attracting the big names. I have a profile on Academia.edu mainly in order to attract visitors to my websites. I'm not sure that anything-gate is a good name for a website :)

Are you a member of ResearchGate? Have you thought about joining?

Was There No Little Ice Age?

Morgan Kelly and Cormac O Grada have a new working paper titled: The Economic Impact of the Little Ice Age. But their main point seems to be that there wasn't much of a Little Ice Age at all. Rather there were some years with particularly bad weather in the middle of the last millennium. If temperatures are smoothed using moving averages these bad years will reduce the temperature of extensive periods of time. There is evidence they believe that there were periods of higher temperature volatility. Winter temperatures in NW Europe began to climb in the later 19th century representing the onset of anthropogenic global warming.

The Little Ice Age is already seen today as not having been as signficant a cooling as once thought, just as the "Medieval Warm Period" is not seen as having been as warm as once thought. I'm not totally convinced by this paper that there was really no such event at all. But it is certainly an interesting study.

TV Ad Campaigns

Though both the government and the union movement are running TV ads for the RSPT, I've only seen the mining industry's anti-RSPT TV ad so far:



Apparently, I'm not in the target demographic that either the government or the unions think they can influence. I'm amused how the guy says "if it goes ahead" and it sounds like he's talking about all that investment that's on hold rather than the RSPT.

Samantha Maiden has a post covering the ads from all three groups. I have to say the union one is best.

UCL Australia

University College London has opened a program in Australia in collaboration with oil and gas company Santos. They are offering interdisciplinary graduate certificate, graduate diploma, masters (2 years including a 9 month internship), and PhD programs. So far, they have 4 academic staff in Australia with the head of the program, Prof. Tony Owen, recruited from Curtin University of Technology (Perth), which is the main competition at the moment in this space. Santos is also providing some scholarships for the masters program.

Ben Smith on the RSPT

Ben Smith, who did some research in the past on resource rent taxes, has an article in today's Australian on the RSPT. He favors the pure "Brown tax".

Associate Director: Center for Sustainable Processes and Practices

The Center for Sustainable Processes and Practices at Portland State University is searching for an associate director. Bob Costanza has just been appointed as director of the center. If you are interested in the position, please follow the directions in the linked pdf.

Equations in Microsoft Word 2008

The equation editor in Microsoft Word 2004 was incompatible with the latest Macintosh operating system, rendering some symbols in equations incorrectly. So I "upgraded" to Word 2008. But now when I saved a document in the new .docx format all equations were converted to pictures. Some online research showed that the bug was due to interaction between footnotes and equations. I got around this bug by saving documents in the old .doc format. But I just downloaded the two latest updates to Word 2008 from Microsoft's site and now the problem seems to have been finally solved.

However, I'm still using Excel 2004 because the new version of Excel's chart features are so screwed up in my opinion. I have looked at switching entirely to iLife or OpenOffice. OpenOffice's spreadsheet just looked totally terrible and Numbers and Pages both don't seem to include all the features I want. So I'm still stuck with Microsoft in the meantime.

Changes to CRU Database

I recently wrote about the controversy regarding climate change and malaria. I've now applied a couple of different models to both the data we used in our 2002 Nature paper and data from the latest version of the CRU database. Our Nature paper used an older version of the CRU database. One of the models I used was the basic structural model also used by Chaves and Koenraadt. The other one is a test for trends in time series that is robust irregardless of the true model underlying the data.

My estimates of the basic structural model came out nothing like those of Chaves and Koenraadt casting doubt on their results but on reflection I don't think this is a particularly useful model for addressing this question. I don't really want to get into that here but would be happy to answer questions. The trend test finds though that:

1. There is no significant increase in temperature in the data we used in our 2002 paper in line with our conclusions there.

2. But that there is a significant increase in temperature for the new CRU dataset, especially for Kericho in Kenya. It's easy to see the differences between the old and the new series.

3. Adding post 1995 data increases the effect further.

The key point is that CRU have changed their data. Chaves and Koenraadt appear at this stage to be correct that there was an increase in temperature at Kericho. But it appears that that is due to the changes in the dataset and not due to the specific modeling reasons that they cite in their paper.