Environmental and Urban Economics

Mark Thoma and Paul Krugman ask a great question.   In this post, I will sketch an answer.  You won't be shocked that the answer relates to public goods versus private goods.  Republicans are not "anti-environment".   They breathe air and many play golf on pretty courses.  They boat and they vacation in very nice places.  Their homes tend to feature tidy pretty yards.   They seek out safe food.

I conjecture that many Republicans seek to maximize their own income and to then spend it on the goods (including environmental services) that they want to buy. They prefer this outcome to giving government a larger % of their income and then delegating a purchase decision to government officials who they do not trust to do their job efficiently.

A UC Berkeley Ph.D. student named Liz Carlisle has written a smart  NY Times piece providing some examples of how farmers in rural places such as Conrad, Montana and Valier, Montana are making "greener" choices in production in order to cope with the new conditions they face.  These guys are not Berkeley hippies . Instead, they are profit maximizing business people who need to adapt.  They have the right incentives to experiment and search for new solutions and they are finding them.

In 1951, a "High Pop Automatic Toaster" was priced at $21 dollars (nominal $).   In 2014,  Kohl's is selling a better $5 (nominal $) toaster.   I realize that this is a simplified consumer price index but this 76% reduction in price is the tip of the iceberg.   Nominal wages have risen over this 60 year period and real quality adjusted prices of durables have probably fallen by 95%.

The NY Times reports  that a defunct power plant's ugly structure remains on Morro Bay.   You don't have to be Don Trump to recognize that a real estate developer would pay the costs of dismantling it and removing it if he/she could then develop on the vacated land.  Can Jerry Brown and the Coastal Commission figure out such a private/public partnership? Or does Gov.

Paul Romer serves as the Director of NYU's Marron Institute of Urban Management.   I am a Visiting Scholar at this Institute and try to show up there twice a year.   The Institute has just posted my new Working Paper titled: Climate Change Adaptation: Lessons from Urban Economics.    This paper builds on my 2010 Climatopolis book by tracing out my current thinking on the key issue of how cities help us to adapt to climate change.

I was given the chance to speak for 5 minutes yesterday at a public event.  Unlike the other speakers, I stuck to my time limit and tried to give a punchy talk about the Future of Los Angeles.  The event took at place at Prof. Thom Mayne's studio called Morphosis Office in Culver City.

Here is a photo of me talking and you can see that I'm having fun and the audience of roughly 45 people are listening.   I stressed four ideas;

1.  Competition

2.  Big Data

3.

Suppose that upstate New York has a snow blizzard.   What types of workers produce the

same level of output on such a day?   I recognize that guys who operate snow plows are more productive on those days!   But, there more and more indoor workers who are just as productive at home than if they commute to the office for face to face interactions with peers.    A benefit of deindustrializing is that fewer people must work face to face to produce something.

Professor Jeff Reimer was kind enough to send me a great example of ingenuity at work to protect natural capital in the Pacific Northwest.  Julian Simon would respect  the salmon cannon.  This video from Last Week from John Oliver tells the story.

Jeff correctly points out that the rise of the Salmon Cannon is due to a public/private partnership.  The private company; Whooshh Innovation sells it to state and federal agencies.

An honest discussion is now taking place concerning the unintended consequences of limiting new construction.   Paris hasn't allowed many high rise buildings to be built. Would Paris continue to be "Paris" if there were Hong Kong style buildings?   Everyone appreciates the basic prediction of econ 101 that by limiting supply that real estate prices rise in restrictive cities.