Tuesday, March 30, 2010

Legal Origin Strikes Again

van Ewijk and van Leuvensteijn have an article in VoxEU arguing for the EU to reduce taxes on residential mobility. What struck me was this chart:

The highest transactions costs are in French legal origin countries, moderate costs are seen in German and Scandinavian legal origin countries and the UK has the lowest costs. Ireland is stuck in the middle of the German group but the trend is still clear. This ordering is similar to the ordering of stringency of product and labor market regulation.

My research on sulfur emissions and now on energy efficiency has found that legal origin seems to make a difference in environmental policy. German and Scandinavian legal origin countries have the strictest environmental policies and English legal origin countries the weakest. French legal origin countries occupy an intermediate position.

Environmental Valuation and General Equilibrium

I'm not a fan of most approaches to non-market environmental valuation and one of my criticisms is that once all externalities would be internalized all market prices would change including in turn the valuations placed on the current non-market goods. Existing valuations of non-market environmental goods are partial equilibrium estimates which could be very misleading. I haven't always expressed that point very clearly. This point was the main point of Ayres and Kneese's original discussion of externalities and is also implicit in Ayres' comment on Costanza et al.'s 1997 paper in Nature.

Now Jared Carbone and V. Kerry Smith not only express the point very clearly in a new working paper but they also calibrate a CGE model to illustrate what happens to valuations in general equilibrium. They find quite large general equilibrium effects. This is definitely a step in the right direction.

Sunday, March 28, 2010

U.S. Survey of Earned Doctorates

If you are a statistics (in sense of data) junkie, there is plenty of fascinating info in the NSF's Survey of Earned Doctorates. Did you know for instance that only 7% of Saudis want to stay in the US after getting a PhD whereas 89% of Iranians do?

Total numbers of doctorates in the US continue to grow - mainly in the sciences and in particular life sciences and engineering. There is moderate growth in economics and strong growth in business doctorates. Humanities and social science areas such as English and sociology where there appears to be an oversupply of graduates show stagnation and decline as you'd expect to see.

Friday, March 26, 2010

Final Hub Report

The final report for my Hub project titled: "Modeling International Trends in Energy Efficiency and Carbon Emissions" is finally up on the EERH website. I've highlighted the key results in previous posts so not so much to add here. This paper also has a lot of literature review and a theoretical model as well as the econometric model and results. Originally I had more radical ideas of how to use the theoretical model but for various reasons decided to abandon them. The main reason was that I decided to incorporate the variables that explain the level of energy efficiency technology directly into the production frontier model. Originally, I planned to estimate the technology trends and then use the theoretical model to explain the changes in the trend. There is a bit of a disconnect in this paper between the theory which assumes that capital and energy are non-substitutable but the empirical model finds substantial substitutability. By that point it was too late and go back and develop a new theoretical model. This paper is way too big to submit to a journal (something like 19,000 words). So much of the literature review and theory will be cut or condensed in a journal submission. I have a bunch of stuff to do before that so it will be a while. I'll be happy to get feedback in the meantime. Especially, about any mistakes in the theoretical model.

RePEc Expands Listings

Christian Zimmermann lays out recent and upcoming changes to RePEc which will include somewhat expanded rankings. I think this is a good move, but I still think that they should just list the top 20 or 25% for all the different rankings. Why list the top 25% for countries and US States but only the top 10% for fields?

Thursday, March 25, 2010

Google Scholar Weirdness

Google Scholar appears to update their database about once every 10 days. Then every 2-3 months they do a more fundamental reorganization, pruning multiple entries, shuffling things so articles appear again exactly in the order of most cited etc. In this most recent shuffle the main entry for my 1996 World Development paper disappeared entirely from their system. None of my other articles seems to have gone AWOL. Very strange.

P.S. 11 April

I found the missing paper - it is now attributed to "S Stern Michael, I David"

Wednesday, March 24, 2010

Tuesday, March 23, 2010

Coverage in The Australian

The Australian had a story today covering our research:

How Ambitious are China and India's Emissions Intensity Targets?

Following Frank's presentation we have a new working paper up with the same title as this blogpost. This is an updated version of the papers I presented at the AARES conference and the EERH Hub Workshop in Adelaide in February.

The revised model includes variables for capital and human capital inputs. This has important effects on the estimated relative energy efficiency of China and India. Both now seem less energy efficient at each point in time than they seemed under the previous approach. India actually has relatively low energy intensity (energy/GDP) when this is measured using PPP exchange rates that adjust for the differences in purchasing power between countries:

While China was very energy intensive 20 or 30 years ago, it too has now reached similar levels to the developed economies. The new model says that these countries partly achieve their low energy intensity by using labor intensive processes instead of energy intensive processes. Once we take this into account they are in fact less energy efficient than most developed economies:

I say "most developed economies" because the model finds that China and India have similar levels of underlying energy (in)efficiency. Underlying energy efficiency tells us what energy intensity would be if variables such as labor and capital intensity, temperature, and economic structure were the same in all countries and over all time periods.

We use the model to project underlying energy efficiency and using projections of other variables from a variety of sources we come with BAU scenarios for China and India. Under these scenarios, China's emissions intensity would fall by 24% between 2005 and 2020 and India's by 29%. Yet China is targeting a 40-45% cut and India a 20-25% cut. Hence we conclude that China will require very strong policy actions to meet its target while India's target is likely close to business as usual.

Full details are in the paper. A second working paper covering Frank's analysis of other developing country targets will be up on the EERH Website soon.

Media Release: Developing Countries Set Climate Benchmark

As I mentioned, Frank Jotzo will be giving a presentation at the Crawford School today (Tuesday, 23rd March) on his work on comparing countries' Copenhagen targets and our joint work on the ambition of China and India's emissions intensity targets. Below is the media release we are putting out. We are also putting out an EERH working paper, details to follow.



Australia needs to announce larger emissions targets if it wants to match the commitments shown at Copenhagen from China and the developing countries, according to researchers from The Australian National University.

The comparative study of targets announced at the Copenhagen Climate Change talks is the first Australian study to measure commitments on a common footing. It shows that China will have its work cut out to reach its very stringent targets and that developing countries might contribute over half of global emissions cuts by 2020.

The researchers, Dr Frank Jotzo and Dr David Stern of the Crawford School of Economics and Government at ANU, assessed key countries’ Copenhagen climate pledges, and put China’s target under the microscope. They found that ambitious carbon reduction policies will be needed to achieve the targeted 40 to 45 per cent reduction in China’s emissions intensity, or carbon per unit of GDP. Even so, China’s emissions will continue growing absolutely.

“The ‘business as usual’ trend in emissions intensity is well above the target that China has proposed,” said Dr Stern. “In fact, China’s proposed reductions in emissions intensity are on par with those implicit in the US and EU targets. That means that a substantial new effort will be needed to achieve their target.”

But China isn’t alone in making a commitment to significant emissions targets. Among developing countries Indonesia, Brazil, South Africa and others have made pledges which the researchers say would amount to substantial cuts.

“Compared to ‘business as usual’, the total cuts promised by developing countries may well be greater than the total reductions committed by developed countries,” said Dr Jotzo.

He added that this has implications for Australia’s emissions target, which remains at the bottom end of the five to 25 per cent range.

“Given that major developing countries are pledging to substantially restrain emissions, and developed countries have made comparable commitments to Australia’s range, it would be logical for Australia to announce a 15 per cent target, plus financing for developing countries and extra action on land-based carbon,” said Dr Jotzo.

Dr Jotzo will present the results of the study at a seminar today at The Australian National University.

For interviews: Dr Frank Jotzo – 02 6125 4367
For media assistance: Martyn Pearce, ANU Media – 02 6125 5575 / 0416 249 245

Saturday, March 20, 2010

John Cochrane's Tips

John Cochrane's writing tips for PhD students. He also has some good tips on presentations in the paper. But I can't see how you can go directly to your results if people don't yet know what you are trying to do, what your question is and what your model is etc.

Some Things Coming Up...

I haven't blogged much this month as I've been very busy, mainly on trying to finish my EERH Hub project and set up the next stage in my career. A couple of the things coming up soon:

Frank Jotzo will be giving a presentation at the Crawford School at 12:30 on Tuesday analyzing the emissions reduction targets put forward by countries at Copenhagen. This will include our joint work on China and India's emissions intensity reduction targets. We will have a working paper up by then and a media release is planned. We have updated our projections since the AARES meeting in Adelaide, though the basic conclusions about China and India's targets remain.

Yesterday I got an e-mail from the Department of Climate Change stating that they had received a request from a "global news outlet" to release the names and affiliations of the people they are nominating to the IPCC to work on Assessment Report 5. I am a nominee for Working Group III. The British and US governments also have been requested to release this information. DCC will be putting the info on their website. I guess this is good if it leads to more transparency in the IPCC process.

Friday, March 12, 2010

Purchasing Power Parity vs. Market Exchange Rates

Latest in a series of articles by Richard Tol criticizing the IPCC AR4 WGIII report. This article focuses on the effect of using market exchange rates or purchasing power parity adjusted exchange rates (PPP) to project future emissions. Models that use market exchange rates, including the IPCC SRES projections project higher future emissions and emissions growth than models that use PPP exchange rates.

But recently emissions have been rising as fast as the most extreme IPCC scenarios. Ross Garnaut has called this phenomenon of very fast economic and emissions growth the "Platinum Age" If we buy Tol's arguments (which I do) this period will not be long-lasting and emissions growth will again slow down.

Thursday, March 4, 2010

EERH Working Papers Statistics for February 2010

RePEc stats for February are out. Total abstract views and downloads seem to have stabilized now. The most popular paper this month is Evers et al. on the economics of ethanol production

Wednesday, March 3, 2010

Sounds Like a Headline from the Onion!

But it's a New York Times article: Union College Finally Admits Where It Is. I lived for 5 years in Troy, NY about 25km east of Schenectady and also in the Albany metro area when I was teaching at Rensselaer Polytechnic Institute. I think that Troy is worse than Schenectady if anything. I first arrived there in March for an interview and the cab-ride from the railway station in Rensselaer (I came up from a conference in New York City) along the East Bank of the Hudson went through some of the worse parts of town, and the heaps of dirty snow all over the place and grey sky didn't add to the attraction!

Monday, March 1, 2010

World Trade Report 2010

The 2010 World Trade Report will be about trade in natural resources. In the run-up to publication the World Trade Organization is inviting discussion on the topic. Go to their website to participate.