Assorted links

Sometimes I wish the internet would slow down. There is just too much interesting stuff out there.

1. I don’t think I would want Bryan Caplan as a neighbor, since he seems to think pissing on my front steps is A-OK. Mike Moffatt snaps back.

2. Quiz time! See if you can spot all of the errors in this horribly glib Megan McArdle post on emissions permit allocation. Bonus points for citing previous CT posts that provide rebuttals in the comments.

3. RealClimate puts concerns about the global warming impacts from flat screen TVs in perspective.

4. “Free” roads — available for only $2.22 in gases taxes per gallon! What a steal!

5. Free Exchange is hosting a discussion on global inflation this week. Many interesting comments on the rise in energy and food prices.

6. Speaking of the food crisis, here are some sensible policy recommendations, starting with the no-brainer (and non-starter) idea of making U.S. food aid cash rather than crops.

7. I discussed the G-8 summit last week while guest-blogging at Free Exchange. Leaders at the summit have pledged to cut greenhouse gas emissions by 50% from current levels by 2050. Cue muffled laughter.  Addendum: Creative ambiguity — whether the 50% cut is from current or 1990 levels was left undefined.

Assorted links

1. The Lieberman-Warner bill dies in the Senate. The vote represents a “giant step forward” according to one sponsor.

2. Ryan Avent is a real live journalist now.  Here’s a new piece about the lack of political leadership on public transit issues.

3. The carbon footprint of food — buying local may not be the answer after all.

4. Pay by the pound — the future of air travel?

Farm bill

I’ve been surprised by the lack of attention that the U.S. farm bill has received in the corners of the blogosphere I frequent. The current food crisis is getting lots of attention, but the farm bill… not so much. I’ve refrained from commenting largely because of how shamefully little I know about U.S. farm policy.

I suspect that some of the current silence among bloggers is a result of similar ignorance, but a larger portion represents a combination of shame and despair. Nearly every policy wonk of any political persuasion agrees U.S. agricultural policy is a disaster — conservatives hate it (or should) for the massive governement handouts, while liberals decry (or should) who the handouts go to and the environmental damages they cause. But at the same time the political interests entrenched behind leaving policy ‘as is’ mean that substantive reform is a non-starter. Hence the shame and despair.

Now that the bill has passed (over the President’s veto) I thought I’d point you to the best post I’ve seen so far on the bill’s problems: Greg Mankiw quotes an insider at the White House on some of the bill’s most distasteful provisions. Do read the whole thing, but here’s a couple candidates for worst part of the policy:

Too much spending: The bill increases spending by almost $20 billion over the next ten years, at a time when net farm income is at an all-time high. …

New sugar program: The bill would make the government buy sugar for 2X the world price, store it, then resell it at about an 80% loss to the taxpayer. Sugar sells for about 11¢/lb on the world market. The US government would have to buy sugar for about 22¢/lb, store it, and then auction off the excess to ethanol plants. …

Using food aid $ inefficiently: Under current law, US food assistance for hungry people around the world must be spent purchasing US crops. The President proposed to allow up to 25 percent of US global food assistance to be spent purchasing food from local farmers (in the country where the people are starving). This allows US dollars to be spent purchasing food, rather than paying transportation costs.

Meanwhile, the WaPost editorial page highlights another real loser from the bill:

…the bill could authorize up to $16 billion more in crop subsidies than previously projected…

The culprit is a new program called Average Crop Revenue Election, or ACRE for short. ACRE gives farmers an alternative to direct payments, which come regardless of how much money they make, and other subsidies. Starting in 2009, farmers can choose to trade in some of their traditional subsidies in return for a government promise to make up 90 percent of the difference between what they actually made from farming and their usual income. …

[ACRE] pegs the subsidies to current, record-high prices for grain, meaning farmers would get paid if prices fall back to their historical and, for farmers, perfectly profitable norms. A program that started out as a streamlined insurance policy against extraordinary hardship has mutated into a possible guarantee of extraordinary prosperity. [emphasis added]

As the editorial makes clear, the policy change could have actually been a welcome reform, by providing a way to transition from direct subsidies to a more insurance-based model where farmers got paid in bad years. The problem is that by using record-high grain prices as the baseline for ‘usual income’, the program is insuring that farmers make bank. On the other hand, there’s always the chance that this won’t cost the government as much as we think:

The farm bill’s defenders insist that a budgetary disaster will not come to pass, because grain prices will not come down much during the five years the bill will be in effect.

Ah, what a relief! The government won’t have to pay for this program because the world’s urban poor are going to continue to be choked by food prices for the next five years. Glad we got that cleared up.

If readers are aware of other good analyses of the farm bill I’d be thankful for a pointer. Here’s Tim Haab recently on the effects of U.S. farm subsidies.

Getting what you pay for: food & energy prices

In a relatively recent post, Rich asks how food and energy are different.  His implicit point (and I agree) is that in many ways they’re not that different.  My preliminary thoughts on why escalating food prices haven’t been getting as much press are: 1) oil is “sexy” in the sensationalist media sense of the term, food isn’t “sexy” until we start talking about riots and starving children, 2) the component of rising food prices that is related to rising energy prices suggests an inherent lag - energy prices are leading food prices, and 3) there may be some variation in the degree of regressivity in rising food prices versus rising gas prices.

I expand on number 3 and offer some other thoughts below…

Assorted links

1. Agricultural Subsidies: Still a Bad Idea. Felix Salmon explains why removing ag subsides and taxing carbon are similar, and why they both make sense. Free Exchange squares the circle with a discussion of biofuels.

2. Who Pays a Tax? Tim Haab’s two-part series is here and here.

3. 6 Cities That Were Caught Shortening Yellow Light Times For Profit. What happens when your city stands to make money off of lawbreaking? Yep, that’s right, they make it harder to avoid breaking the law.

4. Malaria and the politics of disease. Efforts to fight malaria seem to be ramping up quickly. But even if near-term success can be achieved, will many be left worse off in the long run?

5. Congestion pricing works. Evidence from California.

6. Location, location, location. The premium for urban living.

7. The cost of siting transmission lines.  This came up yesterday in the seminar on curbing electricity demand at RFF as one of the key uncertainties in the future of electricity, given the political or economic forces that will bring new types of resources onto the grid in the coming years.  (Video from the event should be up in the next few days.)

Assorted links

1.  New York City’s congestion pricing plan dies in Albany.  Felix Salmon and Ryan Avent are depressed and disappointed, respectively.  Disgust comes to mind as well.

2.  Tyler Cowen has been providing a thought-provoking discussion on Jeff Sachs’ new book Common Wealth: Economics for a Crowded Planet.  The first three installments are on climate change, water policy, and biodiversity.

3.  Someone was listening to Rich’s complaint about the lack of coverage of escalating food prices: Paul Krugman discusses it on the New York Times Op-Ed page.  Plus the blogosphere is on the case – Energy Outlook examines the food-energy nexus, Free Exchange questions whether grain markets are behaving rationally, while this guy just wants to know he’ll still be able to afford his craft beer.

4.  David Zetland is blogging on the economics of water.

5.  Tim Haab issues a green jobs analysis challenge.

6.  And speaking of Env-Econ, UCLA couldn’t push me past Tim on Saturday night, so he edged me out in the Env-Econ NCAA tournament pool. But the combination of the Memphis win and UNC loss actually put Evan in front of both of us and gave CT bragging rights in the EE-CT showdown.  I think I’m now supposed to thank Evan for providing me cover when my “mouth starting writing checks my ass couldn’t cash.”  Or something like that.

The Ethanol Recession?

If you had qualms about corn ethanol before, how about facing the prospect of an Ethanol Recession? From the LA Times:

Economists are cautioning that the nation’s growing dependence on corn would make for a double jolt in the event of a drought across the Midwest: soaring prices not just for food but also for gasoline. Analysts now warn that a “corn shock” might not be far off — and it could lead to $5 gas and $3.50 eggs as the effects reverberate across the economy. “We are replacing price volatility from the Middle East with Midwestern weather price volatility,” said Michael Swanson, a Wells Fargo & Co. vice president and agricultural economist.

As our food and fuel sectors become more and more integrated, we face the possibility that high food prices would be made all the more potent by a slowing economy driven by high fuel prices. However, in lamenting the consequences for our grocery budgets, it’s easy to forget that other economies would likely be hit even harder than our own. Lester R. Brown, president of the Earth Policy Institute, notes:

“The rest of the world is less able to pay high prices for food. What’s annoying for us is life-threatening elsewhere.”

Honestly, in general terms, I think we would all do well to think in these terms as we go forward making policy.

Fish: farmed or free?

The BBC News has an article summarizing a new study, published in the journal Science (gated), that reports on the negative impacts on wild salmon stocks from farmed salmon in British Columbia:

Dr Krkosek and colleagues compiled data on the numbers of pink salmon in rivers around the central coast of British Columbia.

They compared populations of salmon that had come into contact with salmon farms with those that had not been exposed, from 1970 to the present day.

Using a mathematical model of population growth rates, they show that sea lice from industrial fish farms are reducing the numbers of wild pink salmon — a Pacific salmon species — to the extent that the fish could be locally extinct in eight years or less. …

Scientists say commercial open-net salmon farms are a “haven” for sea lice - naturally occurring parasites that attach to the skin and muscle of salmon.

Mature fish can survive being infested by a few lice but tiny juvenile salmon are particularly vulnerable to attack.

They come into contact with sea lice when they swim past fish farms on their migratory routes from rivers to the sea.

The actual study compiled data from 71 rivers where salmon migrate and spawn, including 7 rivers where salmon must migrate past at least one farm. The researchers found that from 2002 to 2006 the parasite-induced mortality rate among juvenile salmon exposed to lice along these rivers ranged from 16% to 97%, with mortality commonly over 80%. The BBC News article points out, however, that there are benefits to salmon farming, and there are ways to do it without putting wild salmon at risk:

Dr Krkosek said the impact of fish farms on wild salmon has been “an emotionally, politically and economically charged debate” in Canada.

“Salmon are considered a natural treasure to Canadians, but salmon farming has a lot of economic opportunity - we really need economic activity to supplement coastal economies where fisheries and other resource centres are not doing as well,” he explained.

“So there are economic benefits to having salmon farms, but the way that it is currently being done is very damaging to the environment and there are better ways of doing it.” …

“The most obvious thing to do is to move the farm out of the way of the wild fish,” Dr Krkosek told BBC News.

“Don’t put them on the migration route, and don’t put them near the spawning rivers. Another option is to move to closed containment technology where the net pen is replaced with a physical barrier that prevents the exchange of parasites - that would solve the problem too.”

The value of smart land management: pollinators edition

The CS Monitor had a recent article that followed up on the collapse of honeybee colonies. It turned out to be a smaller problem than many feared:

Last fall, honeybee hives began showing up mysteriously vacant. Entire adult bee populations seemingly vanished without a trace, often leaving the queen, juveniles, and honey behind.

By spring, what beekeepers had called “autumn collapse” or “fall dwindle dis­­ease” had a new name: Colony Collapse Disorder (CCD). CCD hit nearly one-quarter of commercial beekeeping operations in the United States. Affected operations lost between 50 and 90 percent of their hives. …

Ultimately, pollination went smoothly this year. Imported bees replenished domestic stocks, and good weather aided weak hives.

What I found most interesting about the article, however, is that natural wild pollinator species could be doing a lot more of the pollinating for U.S. agriculture if there were smarter land management practices and less reliance on monocultures:

…honeybees’ predicament has brought long-sought attention to the usefulness – and plight – of natural pollinators. …in a forthcoming study in Ecology Letters, Rachael Winfree, a postdoctoral research associate at the University of California, Berkeley, finds that, when present, wild pollinators can do much of the pollinating.

In the New Jersey watermelon farms she studied, they did 90 percent. As compared with the vast monocultural fields of California’s Central Valley or the Great Plains, the eastern agricultural landscape is dominated by many small farms interspersed with patches of natural habitat.

Check the article out, there’s plenty of interesting info, including this tidbit:

Dry conditions also contributed to a record low honey harvest – 150 million pounds compared with the usual 200 million to 250 million…

Expect to pay more for honey this year.