Environmental and Urban Economics

For those professors starting to write economics final exams, I suggest that you post the following two comments that were posted on the NY Times webpage.  Ask your students for an evaluation of the logic behind each of them.  Each quote highlights that economists have  failed in our educational mission to foster a society of workers/consumers/voters who understand and appreciate how free markets operate.

In the year 2015, our cities are increasingly safe, clean and green.  Yet, the NY Times points out  new challenges that cities around the world now face.    Example #1 is Jeju, South Korea.  This article sketches the recent trend that large numbers of wealthy Chinese tourists are visiting this island.   This is a tale of "too much growth".

"The Japanese imperial era is long over, but Mr.

The 2022 World Cup will be played in Qatar.  The NY Times reports that Qatar is hot during the summer.  Anticipating that soccer players are less productive running around in 115 degree heat for 90 minutes, there is now a proposal to move the World Cup to the cooler months of November and December. Talk about adaptation!   There are lots of folks complaining that this change in plans interferes with existing league schedules.    I don't really care but this is a nice case study of how we adapt.

The NY Times asks a good question related to basic energy research.  Given that the world needs cheap, green energy,  why aren't more US top research nerds working on this topic?  Part of the answer is related to our global endowments of fossil fuels, increased ability to access them (i.e fracking) combined with the absence of a carbon tax. Together, these two factors lead to low energy prices and hence a lower rate of return on investments in alternative energy.

The Times reports the sad  and scary case of the spread of a superbug at UCLA as an invasive piece of medical equipment was used on multiple patients without being properly sterilized after each use.    Economic risk analysis can be used here to analyze the tradeoffs between costs incurred in purchasing durable equipment and the expected loss in life from reusing the equipment.

Suppose that it costs $F to purchase one of these devices and that it has a marginal cost of $c to clean it each time.

I learned a piece of algebra recently.  Did you know that rent per month = ($/sqft)*sqft?     Where "sqft" = square feet of the apartment and $/sqft = price per square foot.  In major coastal cities,  price per square foot continues to rise.   This is caused by both supply and demand forces.  One way to continue to have affordable housing units in desirable cities is to allow developers the ability to supply micro-apartments.  This article talks about the demand for 400 square foot apartments.

Citylab reports some great stuff in this blog post.  Such information plays the same role as Paul Revere did a long time ago.  Now that we know that coastal Manhattan has a problem, the efficient markets hypothesis makes some testable predictions about how asset prices will adjust. Investors will see these price signals and adjust their investment patterns.

Optimists of the world unite.   While this piece does not discuss the cost of constructing and operating floating schools,  it demonstrates the power of the Climatopolis Two Step;  Anticipate a challenge and invest accordingly.

"Bangladesh — a country of waterways — is one of the most threatened by rising sea levels. About a third of the country is covered by water during monsoon time, but with climate change, water can soak two-thirds of the country.

Michael Greenstone has a nice quote on Marketplace making the green case for raising gas taxes now.  At the same time, the NY Times recently reported that Ragu Rajan is celebrating that importer India is now paying low gas prices.  "With crude prices now halved, fuel costs for trucks and cars have plunged, pulling down transport expenses and inflation. The cost of government fuel subsidies has nose-dived, helping curb the country’s chronic budget deficits.

The NY Times engages in the guilty pleasure of checking out how my Bel-Air neighbors live in their 40,000 square foot homes.   This is "50 Shades of Green".  One quote from the piece caught my eye;

"Mr. Landry learned how to design for the special needs of the rich and famous. Two kitchens, one for family and one for staff. Large, open foyers with direct flow to give fund-raiser crowds easy access to the backyard.