Bets on the Coalition Winning the Australian Federal Election Paid Out Early

There is still more than a week of campaigning to go, but Sportsbet has already paid out bets on the Coalition the election. Odds offered by other bookmakers also predict a landslide win for the Coalition. Research shows that betting markets predict elections better than opinion polls.

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.

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.

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.

References
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.

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?

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.

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.

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.

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.

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.