Tuesday, December 31, 2013

A Meta-analysis Investigation of the Direction of the Energy–GDP Causal Relationship: Implications for the Growth-Degrowth Dialogue

A new paper by Kalimeris et al. is the third meta-analysis of the energy GDP causality literature. The previous two studies are Chen et al. and, of course, our own paper in press at the Energy Journal. This paper covers more studies in fact than either of the previous two papers, 158, but the number of individual tests analyzed is not much greater than in our study. Like Chen et al. the authors only classify results according to the direction of causality and not the magnitude or significance of the test statistics.

The authors attempted to use "Rough Set Data Analysis", which attempts to find decision rules in poorly defined data sets. The results show that there are no well supported conclusions about causal directions in the meta-sample. The main method used in the paper is like Chen et al. a multinomial logit regression analysis. Using this approach, Kalimeris et al. find, as we did too, that the cointegration techniques are more likely to find causality in some direction than are other techniques. This makes sense as there must be Granger causality in at least one direction in order to find cointegration between the variables. But they could not come to any general conclusions about the direction of causality.

Friday, December 27, 2013

Cost Concepts for Climate Mitigation

A new paper in Climate Change Economics by Paltsev and Capros lays out the different metrics one can use to assess the costs of climate change mitigation. The main content of the paper has been around for a while in working papers and a book chapter, which I have cited previously. The paper makes the following points inter alia:
  • Total costs of abatement depend on both the marginal cost and the amount of emissions abated, as we discussed in our paper linked above.
  • In a second best world where there are existing distorting taxes, the costs of abating emissions are greater than simply integrating the area under a marginal abatement cost curve.
  • Terms of trade effects are very important at the macro-economic level. For example, as we are finding in our current research using the G-Cubed model, the loss of GDP in OPEC countries under a climate mitigation policy would come more from the reduction in demand for oil then from domestic abatement efforts.

Tuesday, December 24, 2013

My Year in Review 2013

This was a year of further consolidation and was less eventful academically than 2012, which I also reported was more of a following through on things planned in 2011. It certainly wasn't boring though! And there is plenty to report.

This was my second and final year as research director at Crawford. Renée McKibbin will be taking over from me in 2014. One success this year was getting Megan Poore hired on a continuing contract as HDR (higher degree by research = PhD) academic skills adviser. She continues to do an amazing job working with PhD students in the School. Also our annual PhD Conference was the biggest and best ever, with more than 200 registrations. Megan guides the PhD students in organizing the conference. Coinciding with the end of my term as research director, Robyn Walter, our HDR administrator, will be retiring. As I also wrote last year, Robyn has done a fantastic job of keeping everything running smoothly in this space at the Crawford School (we have about 120 PhD students), dealing with all aspects of student applications, scholarships, milestones etc. I really appreciated having such an experienced staff member to help me through these two years in my role, which made my life so much easier than it might have been.

Canberra in Google Earth 3D Building View

I formally published two journal articles this year. One was the paper on standard errors for journal impact factors published in the Journal of Economic Literature. The other was the paper on Granger causality in the long-run energy GDP dataset for Sweden coauthored with Kerstin Enflo and published in Energy Economics. I also published a very short book chapter. I do also have a paper published already in a 2014 issue of Climatic Change and we have another paper in press at the Energy Journal. We also have a couple of papers under review. So, already there is a good chance of publishing more papers in 2014 than in 2013. And of course the Working Group 3 contribution to the IPCC 5th Assessment Report will be out in 2014 and there will a couple more book chapter style pieces.

Work continued on the research funded by the ARC grant we were awarded in 2011. We hired Yingying Lu as a postdoc to work on CGE modelling with the G-Cubed model. Following Astrid Kander's visit to Canberra last year, in September I visited Lund for two weeks. As this grant will end in early 2015, it's now time to apply to the ARC for another grant. Zsuzsanna Csereklyei will be visiting Canberra in January and February and working with me on developing a proposal focusing on energy efficiency. We've also been working on a paper that hopefully we can soon put out as a working paper.

I gave presentations at two conferences - one was the First International Workshop on Econometric Applications in Climatology in Guelph. The other was the ANZSEE meeting here in Canberra. Actually here in the Crawford Building, which is why I didn't write that I went to two conferences :) Besides those, the only non-teaching presentation I gave was to a visiting delegation from the Ho Chi Minh National Academy of Politics and Public Administration about research assessment.

I attended my last IPCC meeting of this assessment cycle, this time in Addis Ababa, Ethiopia. This was my first trip to Africa south of the Sahara. I also visited Kenya after the meeting in Ethiopia. Spain and Israel also featured in the trip and there were plane changes in Germany, Turkey, and Abu Dhabi as well...

On the teaching front, I taught the Energy Economics course for the second time - in the second semester. Chris Short, Hugh Saddler, and Paul Burke were again guest lecturers. I also again taught an introductory microeconomics course - Economic Way of Thinking I and I again gave a series of three lectures in our flagship CRWF 8000 course in the first semester.

My most popular blogpost that I wrote this year was one on my paper on uncertainty in journal impact factors. Of course, that was near the beginning of the year and so has had plenty of time to accumulate hits...

Some things lined up for 2014, which I haven't already mentioned above, include:
  • Both Yingying and I and many other of our colleagues will be at the AARES meeting in Port Macquarie in early February. Yingying will present a paper on the first results from our CGE research. I am supposed to talk about "Rethinking the Emissions-Income Relationship in Terms of Growth Rates".
  • There will be another research trip to Sweden as required by the terms of our grant.
  • Astrid Kander will be visiting Sydney in February to collaborate with researchers at UNSW on embodied emissions in trade. This work emerged from discussion at the seminar she gave when she visited ANU in 2012. Jack Pezzey and I plan to meet with her there to work on our next paper in preparation for a presentation he will give at the Economic History Society meeting in the UK.
  • Then there are a bunch of conferences in mid-year that we plan to submit abstracts to. The biggest is the World Congress of Environmental Economics in Istanbul. In 2013 I didn't get out of the airport in Istanbul, so 2014 will hopefully present progress on that front :)
  • The deadline for the special issue of Energies on "Energy Transitions and Economic Change" will be in July and we hope to get the first articles online during 2014.
  • I should be more involved with the ANU Energy Change Institute this year. I will be serving on the executive committee and assisting in convening the Masters of Energy Change from the social science side.
  • I'm also hoping to increase my pace of research after completing my term as research director and maybe even write more posts on this blog than this year.
Granada, Spain (and me)

Wednesday, December 18, 2013

Cuts to ARC Funding, Strategic Research Priorities

In yesterday's mid-year budget update, the Australian government announced cuts to ARC funding. $103 million will be cut over a 4 year period and diverted instead to medical research. This actually amounts to about 3% per year of the ARC budget. So, it's not as bad as one might think at first.

Back in June the government announced new Strategic Research Priorities to replace the previous National Research Priorities. I heard that these may be undergoing some revision. We'll only get new funding rules and instructions for all schemes in January. But I think we should assume that we will need to address these new priorities in ARC proposals to be submitted in the upcoming rounds at the beginning of 2014.

Wednesday, December 11, 2013


Americans won't appreciate this, but I just realised while signing my name that today is the last day this century where the date can be written as three numbers one apart in order. For countries which list the year first it's 13/12/11. For Americans December, 13, 2014, will be the last such day this century.

Saturday, December 7, 2013

Researchers Work Times Vary Around the World

If downloading papers from Springer = working then this paper by Wang et al has fascinating evidence on when researchers are working around the world. They got several days data on downloads of academic articles from Springer by location and time of day and composed download curves across the day for both weekdays and the weekend. Most of the cultural stereotypes hold up - late lunch in Spain and almost no lunch break in the US and UK. Australians tend to have a more defined workday than other English speakers. Americans, Chinese, and British work particularly hard at the weekend compared to other countries.

Monday, December 2, 2013

Blunt Instruments

"Blunt Instruments: Avoiding Common Pitfalls in Identifying the Causes of Economic Growth" by Samuel Bazzi and Michael Clemens is an interesting read. I have long thought that it is hard to find valid instrumental variables in macroeconomics, this paper provides lots of evidence for this.

So-called "endogeneity" of explanatory variables in regression analysis is mainly due to the following:
  • Reverse causality - Feedback from the dependent variable to the explanatory variable.
  • Omitted variables bias - When variables that are correlated with the included variables and the dependent variable are excluded from the regression, the included variables are attributed as explaining too much or too little of the variance in the dependent variable.
  • Measurement error - When there is error in measuring the explanatory variables their regression coefficients tend to be biased towards zero.
All of these lead to correlation between the explanatory variables and the true underlying error term (but by design not to the actual estimated regression residuals). One approach to dealing with these issues is instrumental variables regression where variables that are correlated with the explanatory variables but supposedly not with the true residuals are introduced. The instrumental variable estimates effectively only use the part of the explanatory variables associated with the variation in the instrument in estimating the regression coefficient. Bazzi and Clemens point out that there are many pairs of econometric studies that claim to have found the same strong and valid instruments for different explanatory variables but don't include the explanatory variables included in the other studies in their models. If a study finds an instrumental variable is strongly correlated with an explanatory variable and it is used as an instrument in another study that doesn't include the explanatory variable in question then the instrument must be invalid as it will be correlated with the error term. Bazzi and Clemens show that many studies published in top journals suffer from these problems.

Of course, there is much more in the paper, but I think that is the key point.

Wednesday, November 27, 2013

Carbon Tax Thresholds

Jack Pezzey and Frank Jotzo have a new short piece in Nature Climate Change on carbon taxes with free emissions thresholds.

Jack Pezzey comments on this piece:

"We're hoping this piece will shift economists' views on a basic assumption about carbon taxation, which we argue is unnecessary, and is stifling the adoption of a tax, with its well-known advantages over carbon (emissions) trading.

The basic, unnecessary assumption is that a carbon tax must be charged on ALL emissions coming from any source that's included in the tax scheme. Our commentary notes that current tax schemes typically do charge for all emissions from included sources, and have low tax rates with key emitters given even lower tax rates or excluded altogether. On the other hand, charging a high tax rate on all emissions would generate implausibly large revenues, at least in the short to medium term. We highlight the academically established, but institutionally ignored alternative of taxing only emissions above fixed thresholds, which are equivalent to free tradable permits in many ways.

We're not arguing that carbon tax thresholds are always a good idea, or that they solve the intractable problem of international cooperation on emissions control, just that a tax with thresholds should always be considered as an option whenever emission pricing is debated (or explained in textbooks). For example, starting a carbon tax at a low rate and with no thresholds may be a good idea. But the trading equivalent of this is full permit auctioning and an unambitious emissions cap, which in the profession is now usually seen as inferior, so why not also consider a higher tax rate with thresholds, the equivalent of the standard trading system seen in practice, with some free permits and (sometimes) a more ambitious cap?

We do not advocate for carbon tax thresholds as a permanent feature. Rather, we see them as transitory measures that facilitate the introduction of carbon taxes, at higher tax rates than might otherwise be possible politically. Carbon tax thresholds could be phased out over time. In the article, we point out the potential benefits from treating carbon taxes as a source of fiscal revenue, and recycling it to achieve greater efficiency in taxation, and to assist low-income households in dealing with energy price increases.

Thresholds also raise contentious issues which complicate taxation; but as we note briefly in the paper, and at length in the Supplementary Information, many of these issues have already been "dealt with" for free tradable permits, that is, resolved, albeit imperfectly, well enough to allow permit trading in practice. So we contend that similar resolutions can be found for tax thresholds, but only if they are first put on the agenda."

Tuesday, November 26, 2013

Energy and Climate: A Primer

A new online textbook written by Cutler Cleveland (who was my PhD adviser) published by Trunity. You can request a desk copy just like you can for conventional hard copy textbooks.

The book's theme is that "a stable, predictable climate is an essential life support function of the Earth. Human use of carbon-based fuels such as oil, natural gas, and coal has increased the quantity of greenhouse gases in the atmosphere that warm the planet. The increase in the Earth's temperature since 1850, and the increase that is forecast to occur over the next 100 years, pose grave risk to all nations. The "climate problem" and the "energy problem" thus are are intimately linked, and must be tackled together."

Produce a List of All Your Department's Publications on RePEc

Something I just discovered, you can make a list of all an academic institution's publications on RePEc. Here is the link for the Crawford School. I don't know where you can access this list from the menus on IDEAS (let me know if you know) but you can produce a list for another institution by pasting the institutions EDIRC handle into the URL in place of Crawford's.

René Böheim explains in the comments how to navigate to the list of publications for each institution. I hadn't noticed that link before...

Monday, November 25, 2013

Can Negotiating a Uniform Carbon Price Help to Internalize the Global Warming Externality?

Martin Weitzman has a new NBER working paper on whether negotiating a common global carbon price will be more likely to succeed than negotiating for emissions quantity reductions has been. His answer is, yes, on the grounds that it is easier to negotiate a common carbon price than separate emissions reduction targets for each country, and that each country has an incentive for a high price on everyone else and to collect taxes itself. For the developed countries it also has the political advantage that they won't be forced to buy permits from developing countries and transfer money overseas.

But, as we showed in our paper in AJARE last year, a common carbon price will impose much higher total direct costs on developing countries than developed countries. Developing countries already argue that global warming is mainly the historical responsibility of the developed countries and, therefore, they should take stronger action. So, a common carbon price doesn't look very politically attractive to developing countries unless there are large side payments. Weitzman misses this dimension of the problem. This will negate the supposed political advantage that developed countries would see in retaining all their carbon tax revenue. Weitzman does admit that: "The model of this paper is so abstract and so removed from reality that it is open to enormous amounts of criticism on many different levels" (p. 17). He does write that: "Nothing in the model excludes side payments to help obtain an international agreement on harmonized national carbon prices" (p18). But won't those change the political acceptability of such an approach?

Fossil fuel exporting countries are a group that will suffer high GDP losses under any emissions reduction plan. Not only do they have fossil fuel intensive economies, but the reduction in demand for fossil fuels under a carbon tax reduces their income, which maybe a cap and trade approach does not do to the same extent. I'm skeptical that they would find it optimal to agree to a high carbon tax. These countries differ from the players in Weitzman's model who only suffer costs from their own abatement.

I do think that carbon taxes have important advantages over cap and trade schemes but I'm skeptical that a global uniform tax rate would see more success than a global Kyoto style quantitative emissions reduction.

Sunday, November 24, 2013

Anthropogenic and Natural Causes of Climate Change

I have a new article coauthored with Robert Kaufmann in Climatic Change titled "Natural and Anthropogenic Causes of Climate Change." In the paper, we test for Granger causality between temperature and, as the title says, potential natural and human causes of climate change. We find that both natural and anthropogenic factors cause temperature change and also that temperature causes greenhouse gas concentration changes. Although the effects of greenhouse gases and volcanic forcing are robust across model specifications, we cannot detect any effect of black carbon on temperature, the effect of changes in solar irradiance is weak, and the effect of anthropogenic sulfate aerosols may be only around half that usually attributed to them.

It is very important in Granger causality testing to control for as many other possibly relevant explanatory variables as possible. So, in the paper we always include all the causes we consider in each regression model. We found only one other paper that attempted to do this - Triacca et al. (2013) - which was very recently published after we initially submitted our paper. And the latter paper still does not include anthropogenic aerosols. This was the main reason why we wrote this paper. The paper is also a follow up on our 1997 paper in Nature which pioneered the application of Granger causality testing to climate change.

All models in the paper include all the potential causes, the differences between models in the paper are in terms of:

1. Sources of temperature data - We use both the HADCRUT 4 and GISS3 datasets.

2. Time periods - We look at the full 1850-2011 period as well as the post 1958 period. Regular atmospheric sampling  of carbon dioxide started in 1958 at Mauna Loa.

3. Ocean heat content - The ocean stores most of the heat accumulated through global warming. It is important to include it in climate modelling especially when using short time series. But we only have data from 1955 on. So we estimate models with and without this variable.

4. Restrictions on the equality of climate sensitivity across causes - All explanatory variables are converted to radiative forcing in Watts per square metre. If we aggregate all of these together into total radiative forcing we assume that the relative sizes of the effects have been correctly estimated and the dynamics of temperature in response to changes in radiative forcing are equal across all factors. So we estimate both more restrictive models that impose these assumptions and ones that don't. In particular, we allow the size of the effects of anthropogenic aerosols to vary. There is particularly high uncertainty concerning the size of the effects of sulfur and black carbon aerosols.

Another important dimension of the paper is that we use Granger causality tests that are robust to the non-stationary (potentially stochastically trending) nature of the global climate data. These are the Toda-Yamamoto Granger causality tests.

Saturday, November 23, 2013

First Issue of Asia and the Pacific Policy Studies Now Online

Most of the papers for the first issue of the Crawford School's flagship journal are now online in "early view". All of the papers for the first issue have now been finally approved. It looks like a few more still need to be processed into the journal format (I know that there should be a paper by Bob Costanza and Shuang Liu in this issue). The journal is open access - so no problems or fees for anyone to download the papers.

The Economics of Global Climate Change: A Historical Literature Review

I have a new working paper coauthored with Frank Jotzo and Leo Dobes up on RePEc titled: The Economics of Global Climate Change: A Historical Literature Review. It is a by-product of a book of collected papers we edited for Edward Elgar to be titled Climate Change and the World Economy. The paper has three sections. The first is on trends and drivers of emissions, the second on mitigation and impacts, and the third on adaptation. I wrote the first section, Frank wrote the second and Leo wrote the third. I then edited all the sections together into a hopefully coherent whole. The paper is titled "A Historical Literature Review" because we focus to some degree on the evolution of the literature from some of the early classic papers to the latest contributions. Of course, there is no way we can write a review that is at all comprehensive. The IPCC reports struggle to do that. I think we do cover some of the key papers in the literature and it could be a useful reading guide for further research.

2012 SNIP and SJR Values Released

I'm a bit behind the curve here but new values for Elsevier's bibliometric indicators SNIP and SJR were released on 18th October. The indicators have been refined further. Both SNIP and SJR are supposed to now average 1 for the journals included in Scopus. But I found that only 5949 journals had a SNIP of one or greater out of 18684 journals with a non-zero SNIP. For SJR only 3234 journals out of 19988 had values of of one or greater. So, this is pretty confusing. Also, unfortunately The Energy Journal still has missing values. We use SNIP internally at Crawford School, because it is the best indicator we have to compare across journals, but clearly there are still some questions about it both regarding the normalization and the very large number of journals with missing values.

Wednesday, November 13, 2013

ANZSEE 2013 Presentation

I'm at the ANZSEE 2013 conference. As it is in the Crawford Building, I don't actually need to go anywhere to be "at" the conference :) So far it has been quite interesting with an opening plenary by John Thwaites from Monash on the report of the National Sustainability Council. My presentation is on Thursday morning at 8:30am in Weston Theatre in the Crawford Building. It's titled: "Identifying the effect of the elasticity of substitution on the rate of economic growth"...

Sunday, November 10, 2013

Steve Dowrick

Here is a link to the obituary that Bruce Chapman and Maria Racionero wrote. All I can add is that I interacted a bit with Steve after I started working for the Environmental Economics Research Hub at Arndt Corden Department of Economics in 2009. I found him to be a very friendly and helpful person. Steve came in to chat a few times when he happened to be visiting over at Arndt Corden and took an interest in my work and also gave me some very nice comments on my draft proposal for the ARC (my first) - he said that if it was up to him he would fund it - this made me feel much more confident! I certainly saw him as a role model.

I knew he had been ill and then heard recently that he had died. It was very sad news, especially as he was only 60 years old.

Saturday, November 9, 2013

New Journal: Energy Research and Social Science

Another new journal in the energy space: Energy Research and Social Science. Published by Elsevier and the editor in chief is Benjamin Sovacool. The journal will cover all social science approaches and all energy technologies.

Thursday, October 31, 2013

Australia Needs Electronic Voting

Back in 2000 the US presidential election ended in a debacle due to "hanging chads" in Florida. This year the federal election here in Australia we have a similar debacle in Western Australia with ballot papers going missing. This follows an attempted recount there as well as a recount in the lower house seat of Fairfax in Queensland, where it seems that Clive Palmer has been confirmed as the winner with a different margin than either the first round count or the first recount... These problems would be solved by electronic voting. Here in the ACT we do have the option to vote electronically in the Territory election. I don't see why we couldn't do this nationally. Also, in the ACT election the officials look up voters on laptop computers instead of "telephone books" before giving them their voting materials. At the Federal election it was back to paper.

Evolution of the UK REF

Interesting article on how the UK's Research Excellence Framework evolved. An interesting comment is: "Per pound distributed, the RAE and REF are vastly cheaper than distributing the same sums via grant applications to the research councils" Very significant funding is tied to the results of the REF. By contrast, the Australian system is primarily driven by winning grants and then getting overheads based on them sent to institutions by the government a couple of years later with a smoothing process over time. PhD completions also feature strongly. So far, the ERA is only linked to a very small allocation of funding.

Tuesday, October 29, 2013

Survey of Australian Economists on Climate Policy

Fairfax Media surveyed 35 Australian economists on climate policy. Only two (Paul Frijters and Craig James) supported the government's direct action plan. 30 supported emissions trading or a carbon tax and three supported neither direct action nor carbon pricing. They didn't ask me but depending on how the question was worded I might either have been with the 30 or with the 3 who said neither, who seem to have included my colleague Warwick McKibbin. If they asked whether we supported the previous government's policy, then I'd probably have said no, though it was preferable to no action and maybe to "direct action" too, if they asked about carbon pricing in general then it would have been a yes. Anyway, it now seems that Labor will vote to abolish carbon pricing. On the other hand, it looks like they'll oppose direct action. So then what the minor parties think will be important.

Sunday, October 27, 2013

Special Issue of Energies: Call for Papers

Energies is an open access journal on all topics relating to energy. I have agreed to be the guest editor of a special issue on energy transitions and economic change. The journal is indexed in both the Web of Science and Scopus with an impact factor of 1.844 (5 year IF = 2.087) and a SNIP of 1.296 (SJR = 0.543). I am looking for contributions on all topics related to energy transitions past, present, and future (the theme of my current funded research project) and related economic changes. I'm looking for a broad interpretation of energy transition to include not just changes in energy carriers used but also in the scale of energy use. Some of the topics that could be covered are:
  • economics of new renewable energy technologies
  • energy efficiency and the rebound effect
  • energy ladder in developing countries
  • historical energy transitions (biomass to coal, coal to oil etc.)
  • role of energy in economic growth
  • energy and climate change
  • energy security
  • peak oil
  • economics of unconventional fossil fuels
 But this is just to give you an idea of the type of papers we are looking for. The deadline for submissions is 15 July 2014 but early submissions that pass the refereeing process before that date will be published before then.

I look forward to some interesting submissions and will update the blog with progress.

Thursday, October 17, 2013

Carbon Co-benefits of Tighter SO2 and NOx Regulations in China

An in press paper by Nam et al. in Global Environmental Change uses a CGE model to estimate the co-benefits in terms of reduced CO2 emissions from the tougher new policies on SO2 and NOx emissions in the current Chinese 5 year plan. They find very large co-benefits with a reduction in CO2 emissions of 1.4 billion tonnes by 2015 alone. In later (post-plan) years these come to a large extent from switching to non-fossil energy. But in the short-run a large part of the reductions come from reducing energy use very significantly as shown in this figure from the paper:

The figure shows the reduction in energy use relative to business as usual in exajoules under an SO2 and NOx policy alone with no climate policy. For context, current Chinese energy use is in the rough ballpark of 100 exajoules a year. So the figure shows that by 2020 the reduction in energy use due to the policy relative to BAU is around this current level of Chinese energy use. This is simply huge. The policy also induces a complete shift away from using coal to generate electricity after 2040. The reason that the RHS figure above shows reduced coal use flattening out after 2035, is because China would already be using hardly any coal under this scenario.

Looking at historical analogs, when the US introduced tightened caps on SO2 emissions in the early 1990s there was some fuel switching in the long run to natural gas and other electric generation sources, but the main choice that electricity generators made was to switch to lower sulfur coal, to install scrubbers, and to use coal washing etc. I have less detailed knowledge of the reaction in Europe to similar policies but it involved these things in different proportions (more scrubbers and natural gas from what I understand). Presumably electricity use did fall a bit due to higher costs but not on a huge scale.

This model does not seem to have a low sulfur coal option though it does have a scrubber style abatement technology. Switching to natural gas can save some energy as it is a more efficient fuel for electricity generation and switching to renewables can save a lot of energy depending on how renewables are accounted for. But these things mostly happen after 2020 in this paper. So most of the reduced emissions are from reducing energy use on a large scale. Nothing like this happened in the US or Europe (or elsewhere) in reaction to such policies.

My thinking is that the large energy use reductions relative to BAU must be due to high elasticities of substitution between energy and other inputs (the model uses nested CES functions) or other model features that are not immediately apparent to me. The costs of the policy seem to be quite small in the first ten years, so the reduced energy use does not have a big economic impact in the short-run.

Wednesday, October 16, 2013

Econometric Approach to Detection and Attribution of Climate Change in IPCC AR5 Report

It seems odd to put the full Working Group 1 report on the open web but then say that it shouldn't be quoted or cited. But, anyway, it's nice to see that a fairly extensive discussion of the econometric approach to detecting and attributing climate change made it into the final draft of the report. The text of the final draft of the Working Group 3 report is just in the process of being submitted to the TSU. Last Friday was supposed to be the deadline. The government approval session will take place in April next year. So, some way to go to publication for us.

Wednesday, October 9, 2013

Injection of Carbon in the PETM Happened "Instantaneously"

Fascinating paper. They suggest that the most consistent explanation for the observations is that the Earth was hit by a carbon rich comet. I'm skeptical of the former though because a comet containing that much carbon would have to be very large and so would expect larger general effects from that. If it was pure dry ice then it would have a radius of 12km to generate a 3000GT increase in carbon in the atmosphere. Because methane is less dense, about the same radius is needed for that compound too despite its lower molecular mass per atom of carbon. That is the same scale as the object that ended the Cretaceous period though, of course, less massive if the Chicxulub impactor was rocky. And it seems unlikely that it would be pure carbon dioxide or methane and then would need to be even bigger. Perhaps the object was smaller but the impact occurred in a limestone area?

Sunday, October 6, 2013

Economics Blog Aggregator: econacademics.org

Economists who are blogging about economics research can ask to have their blog included in Econacademics.org. Then, any post that refers to an abstract page on RePEc will automatically be included in the list of blogposts. It's a useful resource on the latest economics research or a way to find new blogs you might be interested in following.

Thursday, October 3, 2013

External Impact and Ideal Academic Careers

A couple of interesting papers on the sociology of science. Paper by Chan et al. (authors include Frey and Torgler) on the relationship between external influence (measured using Google hits) and academic influence in economics. Winning the Nobel Prize or the John Bates Clark Medal helps :)

Paper by Janger and Nowotny uses a choice experiment to find what academics value in potential jobs. They find that US tenure track jobs at research universities closely match the bundle of desired characteristics.

Saturday, September 28, 2013

Citations Variance and Journal Ranking Uncertainty

Two articles in the August issue of the Economic Journal make similar points to my Journal of Economic Literature article on the uncertainty in economics journal rankings, which I discussed in this blog here.

David Laband's article "On the use and abuse of economics journal rankings" (also see his recent blogpost) explicitly looks at the issue of the dispersal of citations in a journal as important information in addition to the mean or median citations. The major table in his paper includes mean, median, and standard deviation of citations to 2011 of articles published in 248 economics journals in 2001-5. Also provided is the Hirsch index, the fraction of the journal's articles included in the Hirsch index, the percent of articles with zero citations, at least 15 citations, and at least 40 citations. Finally, an interesting concept is the number of articles in each journal which were included in the 408 articles that made up the "global Hirsch index" of the 248 journals. Most journals do not have any articles in this highly cited group and a small number of the "usual suspects" have large numbers of them.

John Hudson's article "Ranking journals" compares four different subjective journal rankings including the Keele list and the ARC ERA 2010 list. He regresses their rankings on various objective citation based measures and measures intended to capture bias factors such as home country bias. The model is then used to predict the probability that a given journal belongs in a given quality rank, of which there are four (for example ABDC uses A*, A, B, C). There is a lot of ambiguity with many journals with low probabilities based on the objective criteria being allocated to a particular category by the subjective list-makers. The message is that there is a lot of uncertainty in the rankings assigned by such lists. A simpler way of making the same point is in the table of correlations that Hudson presents. The correlation between the ARC and Keele lists is only 0.67.

Capital in the Penn World Table 8.0

This is another tricky issue with the new Penn World Table (PWT 8.0). In principle it is easy to compute a capital series if we know the level of investments each year, have estimates of the depreciation rate and the initial capital stock. The latter is the most difficult to obtain and cross-country datasets make essentially arbitrary decisions to estimate these starting stocks. The usual approach is to assume that the economy is in the steady state of the Solow model and compute the initial stock from the current level of investment, some growth rate of the economy or capital stock and the rate of depreciation. We are using that for the paper we are writing on the stylized facts of energy and growth. PWT 8.0 instead assumes that all countries had a capital/GDP ratio of 2.6 expressed in units of the local currency in the first year that data is available for that country, which could be anywhere from 1950 to 1990... There is some rationale for this. A regression analysis shows that there is no relation between the level of GDP and capital/GDP ratios in 2005 (Because of depreciation capital stocks in 2005 are not that sensitive to the initial values) and the average is about 2.6.

The interesting thing is that they have separate price series for each country for (output side) GDP (pl_gdpo) and for capital stock (pl_k). These show that in developing countries capital is much more expensive relative to output than it is in the US and other developed countries. This means that a common ratio of 2.6 translates into a real capital/GDP ratio where capital and GDP are both aggregated using US prices that varies across countries and is lower in developing and higher in developed countries. You can compute this as CK/CGDPO. Also, this will mean that there is an extra term in a cross-country Solow growth model which is the capital/output price ratio:

where Y is GDP, K capital, delta is the depreciation rate, s is the saving rate, and pY/pK is the ratio of output to capital prices. In developing countries saving buys less new capital stock per Dollar than it does in developed countries. This would be another reason in the Solow framework for why developing countries are poorer than developed countries. At least, that's what I'm understanding at the moment.

Here are the three different capital-output ratios for China:

The blue line is the ratio at international prices and the red line at constant national prices. These are equal by construction in 2005. The green line is the nominal ratio of dollar values of capital and GDP. This is equal to 2.6 in 1952. The blue line shows the strong capital deepening in China since the late 1980s. The other series do not indicate any capital deepening at all. The discrepancy between the blue and green lines is easy to explain. The price of capital/output relative to the US ratio has fallen from 2.77 in 1952 to 0.74 in 2011 (capital cost 1.39 times the US price in 1952 and 0.46 times in 2011 while output's price changed from 0.5 to 0.61 times the US level). By assumption capital and output have the same price in the US.

So what does the red "constant national prices" series mean? It will deviate from the blue line to the extent that the prices of different types of capital deviate in the country in question from the international price vector. It seems that the two lines tend to track each other much better in developed countries than developing, though India is a clear exception to that rule. For example, if structures are relatively undervalued in China (as would make sense as structures are non-traded) and the capital deepening in China is heavily driven by structures (as the data in this article by Wang and Szirmai support) then the red line will show a much slower increase in capital per unit of GDP than the blue line. 

Carbon Taxes vs. Cap and Trade: A Critical Review

A nice paper by Goulder and Schein comparing the two policy instruments. They come down in favor of carbon taxes, which is also my current thinking on this issue. One issue that they highlight is that under a cap on emissions, fossil fuel producers can cut supply raising energy prices with no demand response from consumers until the carbon price falls to zero. Therefore, potentially they can extract all the revenue from the scheme and the government gets zero. This isn't the case at all under a carbon tax.

AR5 WG1 Summary for Policy Makers Released

The IPCC Working Group 1  5th Assessment Report Summary for Policymakers (WG1 AR5 SPM in IPCC jargon) was released yesterday. It is the overall summary of the first of three volumes of the 5th AR. The other two will be released next year. We are still working on the final draft of the Working Group 3 report (I notice some e-mails in my inbox about it this morning). The SPM will then go next year for approval by the governments.

This cartoon appeared on The Australian website:

I think it does nicely sum things up. The SPM is pretty similar to previous ones and pretty conservative on projected climate change. Not much different from previous reports. When reading it, I was thinking "Joe Romm won't like this" and also that it was pretty jargon-laden for a report to policymakers. It turns out that Climate Progress is pretty positive about the report, though Romm's own comments are a bit more negative.

One interesting statement (D.1) is:

"There is robust evidence that the downward trend in Arctic summer sea ice extent since 1979 is now reproduced by more models than at the time of the AR4, with about one-quarter of the models showing a trend as large as, or larger than, the trend in the observations. Most models simulate a small downward trend in Antarctic sea ice extent, albeit with large inter-model spread, in contrast to the small upward trend in observations."

This is in the context that it is often stated that Arctic sea ice is declining much faster than  models predict. Another change is that there is now much more information about ocean heat content trends. The words "ocean heat content" don't even appear in the the AR4 WG1 SPM. This time there is a separate section on the oceans (the whole summary is about 50% longer). Ocean warming is also the third point on the really brief headline summary. So this is a change of emphasis based on the better availability of data on the oceans.

Thursday, September 26, 2013

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

During my recent visit to Sweden, we successfully revised and resubmitted a paper, titled: "Economic Growth and the Transition from Traditional to Modern Energy in Sweden". We have now made it available as a working paper in the CAMA Working Paper series.

This paper follows up on the paper we published last year in the Energy Journal. That paper looked at the paradox of energy and growth. How could energy have been important in the Industrial Revolution yet be a fairly small portion of production costs today. The new paper looks at the relative contributions of changes in the quantity, quality, and related technology (so called factor augmenting technical change) of traditional (biomass, animal power) and modern (fossil fuels and hydro-electricity) to economic growth in Sweden between 1850 and 1950. This was the period of the energy transition to modern energy in Sweden.

The graph shows that in 1850 less than 5% of energy in Sweden was derived from modern energy sources. By 1950 around 80% was. There are two large spikes in the share of traditional energy associated with the World Wars when imports of fossil fuels were restricted. The share of biomass in Sweden today is higher than it was in 1950. Because the share of modern energy was so small in the early years, even though the rate of improvement in the efficiency with which it was used was in fact higher than that of traditional energy, it contributed less to growth than traditional energy did. Over time, as the share of modern energy increased, this changed so that modern energy innovation and the increase in the use of (quality adjusted) modern energy contributed more to growth. However, according to our data and model, innovation in energy came to a halt towards the end of this period. By contrast, the role of labor augmenting technical change, which includes both better management of labor, increased human capital per worker etc. accelerated smoothly over time to become the most important driver of growth. Of course, Stern and Kander (2012) found this too. It's nice that the results in the two papers match! :)

The table presents the detailed growth accounting results. We actually computed these contributions for every year and then the table provides averages for each 20-year period. Betwen 1870 and 1910 growth was at first slower and then faster than our simple model fitted to the data predicts. But we found that giving the model more degrees of freedom to fit the wiggles in the data could lead to nonsensical results. It's also possible that it is the data that is mismeasured.

What the data implies is that it took a long time for the innovation in using modern energy to diffuse through the economy as the quantity of modern energy used increased. The following graph shows the rate of (factor-augmenting) technological change associated with each of the three inputs (the model also has capital but we assume its rate is zero):

We probably shouldn't take the negative values too seriously, but as noted above, fitting a more complex model was challenging. There was very rapid innovation in the use of modern energy in 1850-1890 starting at about a 7% per year increase in productivity and falling to about 3% a year. But the contribution to growth in the table started at 0.03% per year and rose to 0.08% per year over this time. Growth accounting type exercises, by attributing all the effects of an innovation to the year it happens, are extremely conservative. In later years, when the quantity of modern energy was much larger, that energy contributed more to growth than it would otherwise have done because those earlier innovations had permanently increased the marginal product of modern energy (ceteris paribus of course...).

Penn World Table 8.0

The new version of the Penn World Table - version 8.0 - has recently been made available and is now hosted at University of Groningen in the Netherlands. An NBER working paper by Feenstra et al. describes what is new in PWT 8.0.

The new edition of the dataset introduces several new measures of GDP and the working paper is mostly devoted to discussing them as well as the relationship between PPP exchange rates (relative to market exchange rates) and the level of income known as the Penn or Balassa-Samuelson Effect.

GDP is now given both in terms of the output side and the expenditure side. The difference between these is that real output side GDP (RGDP(O)) deflates expenditure on final goods (the standard macro-economic C+I+G - consumption, investment, and government expenditure), exports (X), and imports (M) using separate deflators:

The expenditure side real GDP (RGDP(E)) uses only the final output deflator to deflate the GDP. Feenstra et al. argue that the former expresses better the real production level in each country and the latter the standard of living in each country. Previous versions of the Penn World Table used the expenditure side measure only. The difference between the two measures is due to the terms of trade. Countries with relatively expensive exports and relatively cheap imports will have living standards (RGDP(E)) that are higher than their real productive capacity (RGDP(O)).

GDP is also given in "current" and "constant" prices. This terminology is confusing because usually current prices mean prices not adjusted for inflation and constant prices mean adjusted for inflation. Here constant prices mean the reference prices from a given benchmark year -  in the current version 2005 - and current prices mean using the reference prices from each year though these are adjusted for US inflation. These differ because the reference prices change over time. The constant price series RGDP are better for comparisons across time while the current price series CGDP can be used to compare countries at a single point in time.

Finally, there is also an RGDP(NA) series that uses the growth rates in each country's own national accounts to extrapolate GDP in that country in years other than the benchmark year. National accounts growth rates were used exclusively in previous versions of the Penn World Table. This series can differ substantially from the RGDP(E) series as is shown by this graph for India:

According to RGDP(E) living standards in India fell from 1975 to 1985 while according to India's own national accounts they rose. Which is right? Well, it depends what you want to measure. The change in RGDP(E) measures the change in relative living standards across countries while that in RGDP(NA) measures the change in real expenditure weighted according to the budget shares in the country in question. They differ because budget shares differ across countries. RGDP(E) will also grow faster than RGDP(NA) in a country experiencing an improvement in the terms of trade as, for example, Australia did in the years up to 2009 due to the mining boom.

PWT 8.0 also includes capital stock, human capital, and total factor productivity series. The former was included for some countries in some previous versions but not version 7. The latter are both new.

So, all this sounds more complicated than using The Economist's Big Mac Index or previous versions of the PWT. The User Guide gives a less technical guide on how to use the data.

Meta-Analysis Paper Accepted at The Energy Journal

My paper with Stephan Bruns and Christian Gross on meta-analysis of the energy-GDP causality literature has been accepted (subject to some minor editing corrections) at the Energy Journal. Back in March, I wrote a blogpost about this paper when we put out the working paper version. In this final version we mainly added some separate results for OECD and non-OECD countries, which while different do not change the overall results very much. As you will see, both my coauthors have nicely developing research track records and, if you are hiring, they are looking for jobs (probably in Germany or nearby countries)!

Librello Publishing

Librello Publishing is a new open access publisher with a model somewhat similar to PeerJ. But while PeerJ has lifetime memberships that then allow you to submit as many papers as you want (for $299 membership and one or two papers a year for the discount classes), Librello is using annual memberships of 156 Swiss Francs. As its five journals are mostly in the social sciences this higher pricing is necessary as the average number of authors is lower. In practice this will likely amount to the submission fee which many subscription journals already charge. For example, the Energy Journal requires you to either pay USD 100 per submission or be a member of the IAEE. Assuming a 50-70% rejection rate this is still very much below the pricing of a conventional open access journal like PLoS ONE, which is only profitable because it operates on such a huge scale. However, this looks to be a totally legitimate publisher with a respectable editorial board for the Challenges in Sustainability journal.

Tuesday, September 17, 2013

Revising and Resubmitting...

Sorry, I haven't posted much recently... I'm in Sweden, working with Astrid Kander, so far we've only been working on this paper we are trying to revise and resubmit. It's for the top journal in economic history and so we are really working hard on it. We'll put up a working paper soon when it is ready. In the middle of all that I just saw this blogpost on the processing of trying to get articles published. Seems this guy tries to hit all the top journals in political science each time with only limited success. Some of my papers have gone to about four journals before getting a revise and resubmit but mostly they get published in the first or second one we try. The paper I am working on was rejected from a good general interest economics journal first. But that only took a day :) Desk rejection is common in economics now which maybe is speeding the process up a little. Doesn't seem like polisci has caught onto that yet. But if you are working in environmental and resource economics and one general interest journal rejects your paper it's probably not productive to send it to more, I think?

Other interesting points in the article - importance of avoiding sloppiness - a lot of effort needs to go into polishing articles and revising and resubmitting if you want to get published in good journals. I think a lot of beginning researchers underestimate the effort involved in that. Also that researchers are often surprised by which of their articles get into good journals and how many citations they get. This is somewhat true. When I do research and write a paper I am always thinking it is going to be a good one. I think though that at the submission stage it can be clear that a paper is not the greatest. But sometimes I have been surprised that some of my papers got few citations, while others got a lot.

Tuesday, September 3, 2013

Xenophon Opposes "Direct Action", Favours Carbon Trading

Senator Xenophon, a South Australian independent, says that he won't back repeal of the carbon pricing legislation as promised by the Liberal Party unless it is replaced with a carbon trading scheme similar to the one proposed by Frontier Economics in a report commissioned by Xenophon and the Liberal Party.

Even if Xenophon loses his seat in the Senate he will remain in parliament till 1 July 2014 but he looks to be certainly re-elected as the Liberal-National coalition looks certain to be elected as the new government. Of course, we don't know if he will have the balance of power when the new Senate takes its seats or whether the Liberals might call a double dissolution election.

The Liberals "direct action" plan might make some sense as a small scheme to get emissions reductions in the agricultural sector etc. but its big flaw is that as it costs taxpayer money it requires raising taxes elsewhere, ceteris paribus, to pay for the payouts.

An even simpler approach than the Frontier Economics trading model would be carbon emissions trading with totally free allocation of permits. This is no longer a "big new tax" because the government doesn't gather any revenue from it. It doesn't require spending except for monitoring and other administration. On the other hand, it isn't as efficient as auctioned permits because it doesn't allow the reduction of other taxes in a "green tax reform".

I'm sceptical that the Liberals will agree to Nick Xenophon's demands or modify carbon trading to a free permit system. A double dissolution election is not unlikely. Free allocated permit trading that could be modified later would though be a better outcome I think though I am actually a supporter of carbon taxes rather than emissions trading.

Monday, September 2, 2013

World Congress of Environmental and Resource Economics 2014

The European Association of Environmental and Resource Economics (EAERE) and the US based Association of Environmental and Resource Economics hold a joint meeting every four years called The World Congress of Environmental and Resource Economics. 2014's meeting will be in Istanbul from 28 June to 2 July. The deadline for submission of sessions is 1 December 2013 and for individual papers 15 January 2014. Submissions are peer reviewed. Details of submission requirements are yet to be released.

I was at the first of these World Congresses in Venice in 1998. But I haven't been to one since. I've always wanted to visit Turkey, but the nearest I've got is Istanbul airport this year in June. So, this looks like a good opportunity.

Wednesday, August 28, 2013

Don't Compare Absolute Levels of GDP from Different Integrated Assessment Models

This article on Climate Progress claims that because world GDP is higher under the RCP 2.6 emissions scenario than under RCP scenarios with higher levels of carbon emissions that means that cutting emissions is good for the economy:

Nothing could be further from the truth. The reason GDP varies so much under the different scenarios is because each of the four scenarios was produced by a different modelling team using a different integrated assessment model. The RCP 2.6 team used the IMAGE model, which is a model that is relatively optimistic about the amount of economic growth that will occur under business as usual. In the EMF22 exercise it had one of the highest levels of GDP under the reference scenario. The other modelling teams used models with lower baseline scenarios for economic growth. This explains most of the difference. Our current research on modelling the costs of climate change shows that it's likely that models that find economic growth to be harder to achieve anyway also find that cutting emissions is harder. So probably they had to use a model like this to be able to model the RCP 2.6 scenario. In EMF22 most models couldn't model the more extreme scenarios.

Tuesday, August 27, 2013

Edward Elgar Books Added to Scopus

In the last few days, Edward Elgar books published between 2009 and the present have been added to Elsevier's Scopus citation index. I reported a couple of years ago about the Web of Science adding a book citation index that would at first feature Elgar books. Some Elsevier book series are already included in Scopus, but I'm surprised that they would add Elgar's books before doing a more comprehensive selection from Elsevier. Elsevier doesn't publish much in the area of economics but I just checked a couple of recent books from their list and they aren't included in Scopus. Anyway, this is a further narrowing of the gap in coverage by the three main citation index providers: Google, Thomson Reuters, and Elsevier.

Monday, August 26, 2013

The Environmental Kuznets Curve in 500 Words... Well, Almost

I was asked to write an article about the EKC in 500 words including references. This is my draft:

The environmental Kuznets curve (EKC) is a hypothesized inverted U-shape relationship between various environmental impact indicators and income per capita. In the early stages of economic growth environmental impacts and pollution increase, but beyond some level of income per capita economic growth leads to environmental improvement. The name comes from the similar relationship between income inequality and economic development called the Kuznets curve. Grossman and Krueger (1991) introduced the concept in an analysis of the potential effects of the North American Free Trade Agreement. The EKC also featured prominently in the 1992 World Bank World Development Report and has since become very popular in policy and academic circles. The EKC is seen as empirical confirmation of the interpretation of sustainable development as the idea that developing countries need to get richer in order to reduce environmental degradation.

However, the EKC is a controversial idea and the econometric evidence that is claimed to support it is not very robust (Stern, 2004). It is undoubtedly true that some dimensions of environmental quality have improved in developed countries as they have become richer. City air and rivers have become cleaner since the mid 20th Century and in some countries forests have expanded. But the overall human burden on the global environment has continued to increase and the contribution of developed countries to problems such as climate change has not been reduced. Carbon dioxide emissions have declined over recent decades in only a few European countries. Therefore, it does not seem to be generally true that economic growth eventually reduces environmental degradation. There is also evidence that emerging economies take action to reduce severe pollution (Stern, 2004). For example, Japan cut sulfur dioxide emissions in the early 1970s following a rapid increase in pollution when its income was still below that of the developed countries (Stern, 2005) and China has also acted to reduce sulfur emissions in recent years (Xu et al., 2009).

Alternatively, while the scale of economic activity increases environmental impacts, improvements in technology can reduce these impacts according to the famous IPAT identity (Impact = Population * Affluence * Technology). If improvements in technology occur across countries irrespective of their level of income, in developed countries, where economic growth is slow, impacts would decrease over time (Brock and Taylor, 2010) while rapid economic growth in emerging economies would overwhelm the rate at which technology improved resulting in increasing impacts. Thus the apparent EKC for some pollutants might be a result of slower economic growth at higher income levels rather than due to the increased income itself. Further research is needed to determine the separate roles of growth rates and income levels.

Brock, W. A. and M. S. Taylor (2010) The green Solow model, Journal of Economic Growth 15: 127–153.
Grossman, G. M. and A. B. Krueger (1991) Environmental impacts of a North American free trade agreement, National Bureau of Economic Research Working Paper 3914.
Stern D. I. (2004) The rise and fall of the environmental Kuznets curve, World Development 32(8): 1419-1439.
Stern D. I. (2005) Beyond the environmental Kuznets curve: Diffusion of sulfur-emissions-abating technology, Journal of Environment and Development 14(1): 101-124.
Xu, Y., R. H. Williams, and R. H. Socolow (2009) China’s rapid deployment of SO2 scrubbers, Energy and Environmental Science 2: 459-465.

Sunday, August 25, 2013

Sexual Activity and Wages

I expect that, like the "male organ" paper I commented on a couple of years ago, a new paper by Nick Drydakis on "Sexual Activity and Wages" will get a lot of hits. My wife saw it mentioned on this Chinese website.

Using Greek survey data, the paper finds that the frequency of sexual activity is positively correlated with wages and that this result is robust to a large number of control variables including psychological traits, age, incidence of various health problems, and marital status. But you can't control for everything and you have to work with the data you have available. One thing that I think is likely to be very important isn't controlled for - having children. I would expect that this is negatively correlated with frequency of sexual activity and, for women at least, is associated with lower wages. What do you think? Is this is a critical issue for this paper?

Friday, August 16, 2013

Crawford School Rolls Out New Academic Profiles

The reason many academics start their own websites is the usually very slow pace at which profiles on official university websites are updated. Often a web profile will list publications from 2009 as being "in press" or worse. A simple solution is to allow academics to update their own pages. In the past this would have resulted in very unpretty website full of all kinds of strange edits. But now content management systems allow users to make changes to content without being able to damage the overall look. Well, that's the theory, anyway. Today, the Crawford School rolled out new academic profiles that each individual academic can edit using the Drupal content management system. I've already updated my publication list so that my PLOS ONE paper is no longer listed as "in press" two years on.

Tuesday, August 13, 2013

Explaining the Decline in Australian Electricity Use

Some interesting graphs in the Business Spectator that help explain the recent decline in electricity use in Australia. Uptake of rooftop solar by consumers is a big part of the story as official electricity use doesn't include self-generation. Here is the graph for South Australia, which is the most dramatic:

The decline in electricity closely matches the solar intensity curve over the day.

Monday, August 12, 2013

Growth in Oil Reserves 2011-12

I'm updating my lecture on fossil fuels for my Energy Economics class. BP released its latest Statistical Review of World Energy about a month ago and I'm taking my first look at it. The graph above shows the ten largest increases in oil reserves by country. I used the reserve data for 2012 in this year's report and the reserve data for 2011 in last year's report to calculate the difference. Some of the changes in reserves have been backdated in the current report. The US comes in third with 4.1 billion barrels. US reserves have increased by 6.6 billion barrels or around 15% since the fracking boom took off. Of course, this doesn't reflect the amount of oil discovered as there is ongoing production. But US reserves remain at around 2% of the world total. In terms of increases in proven reserves this isn't yet revolutionary or game changing, I think.

Monday, August 5, 2013

RePEc Most Cited and Most Citing

RePEc citation profiles now tell you who are the ten authors who cite your work the most and who are the ten authors you cite the most. At least, I don't remember seeing this feature before. Pretty predictably the authors citing me the most are working on issues around the environmental Kuznets curve and energy-GDP causality. The authors I have cited the most are EKC researchers and econometricians. I'm a bit surprised that Peter Phillips is the econometrician I have cited the most. Would have thought Clive Granger would have gotten more cites from me.

Friday, August 2, 2013

2014 IAEE Conference in New York City

Next year's IAEE international meeting is in New York City from 15th to 18th June. I went to my first IAEE meeting in 2012 in Perth, this year's meeting was in Korea and I was tempted to go as I enjoyed my previous visit to Korea but it clashed with everything else I was doing this northern summer. In Perth I gave a presentation on the stylized facts of energy and economic growth. Until recently there was only a presentation and no paper. But I have been working recently with Zsuzsanna Csereklyei at WU on turning the presentation into a real paper. Maybe I could present on it again in New York? Some of the facts have changed a little since my presentation, as we have analyzed the data... but only my energy economics class has seen the new version.

Tuesday, July 30, 2013

... and Now the Old Reader Shuts Down to Most Users...

After Google Reader shut down I migrated to the Old Reader, which offered a similar user interface. But they have been swamped with migrants from Google Reader and suffered a major crash and outage. They have decided to throw out all users who joined since 13th March unless they have donated money. I don't remember seeing a donate button. I would have been happy to pay for the service but the owners aren't interested in making money apparently. Now I have to move again. Seems that inoreader is the next port of call. Wonder how long it will last... Seems that anyone who could sell an application to run on users' machines that would help them access RSS feeds instead of a web-based RSS reader site would be able to make a lot of money.

P.S. 3:23pm In fact there is at least one application based RSS reader for Mac: NetNewsWire. Thanks to Chris Short for the recommendation. For the moment, InoReader is looking good, but if it goes the way of my previous two readers, I will give NetNewsWire a serious look.

Monday, July 29, 2013

Travel Cost Study: Lake Nakuru National Park, Kenya

I was interested to see a working paper on pricing Lake Nakuru National Park, which I recently visited.  They find that the revenue maximizing price for foreign visitors is $1500 compared to a fee of $75 currently. It is hard to imagine it could be this high given the existence of substitutes, though obviously some foreign visitors would be able to pay it. For comparison our whole trip for four days to Lake Nakuru and Maasai Mara cost less per person than than this suggested entrance fee for one day at one national park.

Sunday, July 28, 2013

Joel Mokyr is Very Optimistic on Future Technological Progress

I've made a few posts in the last half year or so on the potential slowing of the rate of technological change and economic growth and the implications of continued technological change for the distribution of income. Economic historian Joel Mokyr discusses some of these issues in a very optimistic piece on the future of technological change and economic growth. He sees no real limits to advances in technology and sees the implications for the future of labor as positive.

U.S. Employment Trends

Some very interesting trends in US employment that I saw in a free newsletter I subscribe to. The data is from the Federal Reserve Bank of St Louis. Total US employment has partially recovered from the Great Recession:

But things look very different when you break the total down into age groups (the first graph is not seasonally adjusted and the others are...). In the main 25-54 age group there has been little recovery:

while in the above 55's there was hardly a recession:

This graph is truly stunning I think. The under 25's seem to follow the pattern of total employment:

It's perhaps understandable that employment in this cheaper to hire group has rebounded strongly (but employment of 16-19 year old's has not), but what explains the almost lack of decline in employment in the over 55's? Usually, you'd expect older workers to be retired early in a recession.

Friday, July 26, 2013

Timur Kuran Calls Islamic Finance a Scam

I get a huge amount of spam from something called "Inayah Group". Most of it is in Arabic or has no content but I noticed this item while deleting the daily influx (I check quickly through my spam folder before deleting because I wouldn't want to delete legit e-mail from some grad student in a developing country etc.): Timur Kuran calls Islamic finance a scam in an interview in the Financial Times. I found this interesting because I had assumed that Islamic finance was based on equity investing rather than debt-based investing but here he says that interest is disguised as fees etc. Of course, Judaism also prohibits the charging of interest  to other Jews (as did Christianity in the past at least). This was got around using the heter iska (permit for business), which it seems is not that far from what Islamic finance does in practice. Another trick is to pay the interest to a third party rather than the lender.

ARC Releases 2014 Schedule

The ARC has released its schedule of important dates for 2014. In the past, funding rules and application dates have only been released close to the actual dates and so it has been hard to plan grant submissions. This was especially the case in 2011 when they announced that the closing date for Future Fellowship applications would be several months earlier than expected. There were relatively few applications that year as a result. That benefitted applicants as the success rate was higher. But then this round there were far more applicants than usual and the success rate will halve from 30% to 16%. So, this is a good move from the ARC to make the whole grant application process a little saner.