Environmental and Urban Economics

The New York Times devotes a lot of effort to bashing the Chinese Communist Party, thus it is interesting that today the Chinese leadership receives praise from the NY Times.   The backstory is the fact that President Trump is repealing President Obama's low carbon policies.  The New York Times now is hoping and saying that China will have to lead the world's low carbon agenda.  

For those interested in academic economics, I suggest that you take a look at a couple of my papers on this subject;

our 2016 book

our 2017 Journal of Economic Perspectives paper

my 2011 Energy Policy paper

My piece in The Conversation also summarizes my thinking.

The NY Times has published a great piece about Acemoglu's co-authored piece on the economics of robots.   The "headline" claim in Daron's new paper is that robots cost us jobs (substitutes not complements).   I'd like to sketch a few claims that might explain their fact;

1.   Robots don't need health insurance.  In the language of economics, to employ a worker requires fixed costs (health insurance, life insurance) and variable costs (wages and benefits).

I am very happy to announce that the Brookings Institution has just published my new paper  titled "Protecting Urban Places and Populations from Rising Climate Risk".  Back in 2011,  David Levinson and I published "Fix it First" and that paper became well know. I'm proud to write a sequel.

Nick Bloom has published a very nice general interest piece in HBR discussing his new co-authored empirical work documenting rising inequality across firms.   Suppose I handed you Google's payroll database in the year 2005 and 2017 and I handed you similar data for Uber, McDonalds, General Motors, etc.  Nick Bloom is finding that those firms that are focused in the information technology sector are paying higher average salaries and higher salaries at each percentile of the distribution.

The NY Times has published a touching piece about London in the aftermath of the recent terror attack.  Several years ago, I published a piece that contrasts adaptation to terror risk versus climate change risk.  I think it is useful to restate my key points (here is an unpublished draft).

1.  The rational terrorist chooses a set of targets such that there is no predictable pattern of the attacks. In the language of time series statistics, there is no serial correlation in the attack targets.

President Trump is helping a future generation of economists to publish natural experiment papers.  In a "natural experiment" research design (see QJE back in the 1990s), a sudden policy change provides exogenous variation that allows for a test of whether X causes Y.  For example, X may be a new government savings program and Y might be private savings.  So, if government expands Social Security, do people save less for their retirement.

This Houston Chronicle piece is worth reading.   The new Trump Administration budget calls for eliminating funding for the U.S Chemical Safety Board.   This agency investigates chemical spills.

My new Harvard Business Review piece is based on this recent NBER paper.

Climate change will increase the risk of temperature extremes. Induced innovation could offset some of this threat. This paper explores the demand and supply for climate adaptation innovation in a market economy. Climate change induces this innovation because the rising temperatures increase demand for self protection products and for profit firms respond to these incentives.

The LA Times has published a fascinating piece pointing to California as an important state where Republicans wield little political clout. In such a "progressive paradise", is all well?  Or , to repeat this again;  when progressives are in charge does the wise governance of the TV show West Wing's President Bartlet emerge?

So, there are two issues I want you to consider.

Two years ago, I was chatting with one of the current editors of one of the "top 5" economics journals. I sketched my climate change adaptation arguments and he grudgingly agreed with my optimism (this occurs quite often in private discussions).  He then said that a major challenge that cities will face will be disruptive storms that will lower urban productivity.  Is he right?  I don't think so.

Today's major snowstorm in the Northeast offers a natural experiment.