Environmental and Urban Economics

Paul Krugman won the Nobel Prize in part for his work on economic geography.  Today, he has published a very good piece on the economics of coal while ignoring local economic and political geography.  That is interesting on several levels.  A few months ago Jonathan Eyer and I released this NBER working paper.

The paper's title is "Prolonging Coal's Sunset".  We argue that coal is heavy to ship so electric utilities closer to mines should be closer to the margin of adopting it as their primary fuel for producing power.  Such a trade gravity model does a good job of explaining coal shipments but now let me introduce politics.

Suppose that all 7.5 billion people on the planet achieve the "American Dream" and buy a car that achieves 25 MP G and each drives 10,000 miles per year.  The "Paul Ehrlich/Jared Diamond" arithmetic show that the carbon footprint caused by this privately enjoyable consumption would be proportional to burning 3 trillion gallons of gasoline a year.

Such large numbers immediately highlight the importance of collective action in mitigating this ugly Tragedy of the Commons.

My friends and students know that I like to talk.  Here are my slides for an upcoming speech I'm giving about real estate in China.

President Obama just gave a major speech in which he argues that climate change is causing food prices to spike.   Economists often write down models of induced innovation (see Acemoglu and Lin 2004 or my recent NBER paper).

Brad Plumer is a thoughtful young columnist for the New York Times.  In this piece , he argues that a byproduct of President Trump's gutting of the Department of Energy's green subsidies is that world climate change mitigation will suffer a great blow.  Is he correct?  In his piece, he argues that  green economy investments remains risky both due to the inherent failure rates in R&D and due to shifting market conditions.

James Heckman and Burton Singer have written an important AER P&P piece on "evidence".  This piece borders on philosophy as it touches on the deep issue of how do we as economists update our beliefs about how the world works.  Put simply;  "what is convincing?".

Geoffrey West has just  published a new book Scale that was recently reviewed in The Economist.  I have met Geoffrey on several occasions.  I'm a big fan of his and I have few points to make.  First, what is "scale"?   If Los Angeles had twice as many cars driving around, would congestion and pollution double?  This is a scale effect.

Air travel literally features little "wiggle room".  If you are late to your flight, you can't board.  As United Airlines recently demonstrated, if you are "randomly selected" to be kicked off the plane, you will be!  The airlines have slots for boarding planes and landing planes, if they miss the slot due to some shock, they wait and you are delayed taking off or de-boarding.

The New York Times has reported a story on Puerto Rico's fiscal challenges.  The area has a large deficit and a large part of this is due to allowing workers to retire on a generous pension plan at roughly age 50.  Using my micro data from California, I'd like to teach you a few facts about generous public sector pensions.  I use these data in this recent NBER Working Paper.

The media reports that NYC received almost a month's total of rain in 3 hours recently.  While this imposed some time and inconvenience costs, I see little evidence from the following NY Times story that the city was "crippled" by this shock.   Urban areas are already ready for such shocks. Since we are urbanized, we can adapt.