Environmental Valuation & Cost-Benefit News

Abstract: Cities across the United States that have considerable vacant land are debating whether to foster community gardens on that land, while cities with land shortages are debating when to replace gardens with other uses. Meanwhile, many cities are looking for new ways to finance green spaces. Little empirical evidence about the neighborhood impacts of community gardens is available, however, to inform the debate or to help cities design financing schemes. This article estimates the impact of community gardens on neighborhood property values, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that gardens have significant positive effects, especially in the poorest neighborhoods. Higher-quality gardens have the greatest positive impact.

by Ioan Voicu 1 and Vicki Been 2
1. Office of the Comptroller of the Currency, Washington, DC 20219; email: Ioan.Voicu@occ.treas.gov
2. New York University School of Law, New York, NY 10012; email: vicki.been@nyu.edu

Real Estate Economics via Blackwell Publishing www.Blackwell-Synergy.com
Volume 36, Issue 2; Summer, 2008; Pages 241-283
doi:10.1111/j.1540-6229.2008.00213.x
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1540-6229.2008.00213.x

The U.S. Environmental Protection Agency Region 5 has reached an agreement with Black Beauty Coal Co., Evansville, Ind., and with its subsidiary Arclar Co., Equality, Ill., for filling in streams and wetlands without a permit while mining in Indiana and Illinois. Black Beauty Coal is a subsidiary of Peabody Energy. Black Beauty Coal and Arclar will pay a total fine of $75,000, and Black Beauty Coal has agreed to spend $292,344 to create a forested wetland near its Farmersburg mine in Indiana.

EPA alleges that over the last several years, while mining in Sullivan, Vigo and Gibson counties, Ind., and Gallatin and Saline counties, Ill., the companies' operations adversely affected ditches, streams, creeks and wetlands near their mines. About 164,179 linear feet of streams were affected at all three sites with about 17 acres of wetlands affected at the Indiana sites. The companies did not have the required permits from the U.S. Army Corps of Engineers to place fill material in the waterways. Under the federal Clean Water Act, a permit from the U.S. Army Corps of Engineers is required to fill in waters of the United States.

"In order to reduce its penalty, Black Beauty Coal has agreed to carry out a supplemental project to benefit the environment," added Mathur. "It will create a forested wetland that will improve water quality by reducing soil erosion, filtering pollutants and providing habitat for animals and aquatic life."

Black Beauty Coal will create 36.3 acres of forested wetland and 5.5 acres of forested buffer around the perimeter of the wetland. Planning, design, tillage and tree planting will be completed by Oct. 31, 2010. The company will monitor the wetland for an additional seven years and place the entire property into a perpetual conservation easement held by the Indiana Department of Natural Resources.

Copies of the agreements with Black Beauty Coal and Arclar are available at: http://www.epa.gov/region5/publicnotices/index.htm.

U.S. Environmental Protection Agency (EPA) www.EPA.gov
Press Release date: May 8, 2006
http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/5048a29926cca3f285257443006f81cf!OpenDocument

Abstract: Bacillus thuringiensis (Bt) vegetables will likely be commercialized in India soon. The technology could reduce pesticide residues in foods. Yet it is unclear whether consumers will appreciate this health advantage, or whether potential GM crop risks will dominate their attitudes. Using contingent valuation methods and a sample of urban households, we find that almost 60% of consumers would purchase Bt vegetables at current conventional vegetable prices, indicating a high acceptance level. The rest would purchase at a certain price discount. Strikingly, the required discount increases for people particularly concerned about pesticide residues, demonstrating that risk-averse consumers do not easily offset technology benefits against perceived risks.

by Vijesh V. Krishna11 1 and Matin Qaim 2
1. Postdoctoral Fellow in the Department of Agricultural and Resource Economics, University of California at Berkeley.
2. Matin Qaim is a professor in the Department of Agricultural Economics and Rural Development, Georg-August-University of Göttingen, Germany.

Review of Agricultural Economics via Blackwell Publishing www.Blackwell-Synergy.com
doi:10.1111/j.1467-9353.2008.00402.x
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9353.2008.00402.x

Starting next month, people in Washington, D.C. will be able to rent a three-speed bicycle day and night with the swipe of a membership card available for $40 per year.

A new public-private venture called SmartBike DC will make 120 bicycles available at 10 automated spots in central locations in the city and plan to eventually offer 1,000 bicyles.
...
In the deal, Clear Channel will have exclusive advertising rights in the city’s bus shelters. The company has reached a similar deal with San Francisco.

Milan, Amsterdam and Portland have all had lower-tech free bike-sharing programs in the past, with Amsterdam’s dating to the 1960s. However, many bikes were stolen. The Vélib program in Paris and Bicing in Barcelona, Spain, both started around a year ago offer thousands of bicycles and appear to be more successful.

Improved technology allows programs to better protect bicycles. In Washington, users who keep bicycles longer than the three-hour maximum will receive demerits and could eventually lose renting privileges. Bicycles gone for more than 48 hours will be deemed lost, with the last user charged a $200 replacement fee.

The European programs would cost cities about $4,500 per bike if sponsors did not step in.
Martina Schmidt of Clear Channel Outdoor claims that cities “ literally have to spend no money on designing, marketing or maintaining” a program.
...
by Ed Alcock

FOR FULL STORY GO TO
http://www.nytimes.com/2008/04/27/us/27bikes.html?_r=1&em&ex=1209614400&en=87b58a129cae0f64&ei=5087&oref=slogin
The New York Times www.NYTimes.com
Published: April 27, 2008

About This Report
A scarcity of clean, fresh water presents increasing risks to companies in many countries and many economic sectors. These risks are difficult for investors to assess, due both to poor information about the underlying supply conditions and to fragmentary or inadequate reporting by individual companies. As a result, market prices of securities are unlikely to accurately reflect the potential costs of water-related problems.

In this report, JPMorgan Global Environmental, Social, and Governance Research offers investors a framework for evaluating the impact of water scarcity and water pollution on individual sectors and companies. This is the first of a series of reports on transformational issues that they expect to offer investor clients and corporate managements over the course of 2008.

This report draws on the expertise of the World Resources Institute, which has helped us provide an overview of the issues from a global perspective. Then, with both our corporate and investor clients in mind, JPMorgan equity analysts from around the world lay out the water-related risks and opportunities they see facing companies in specific sectors. They provide criteria for examining these issues, which they hope will be of use to companies seeking to improve communication with investors about environmental issues as well as to investors themselves.

Here are the main points:
• Exposure to water scarcity and pollution is not limited to onsite production processes, and may actually be greater in companies’ supply chains than in their own operations.
• The power-generation, mining, semiconductor manufacturing, and food and beverage sectors are particularly exposed to waterrelated risks, in their view.
• In their opinion, corporate disclosure of water-related risks is seriously inadequate and is typically included in environmental statements prepared for public relations purposes rather than in the regulatory filings on which most investors rely.
• JP Morgan Chase recommends that investors assess the reliance of their portfolios on water resources and their vulnerability to problems of water availability and pollution.

Introduction
Water is increasingly scarce due to the confluence of population growth, urbanization, and climate change. Deteriorating water quality exacerbates the supply problems. These factors play out on a local basis, with some regions clearly more affected than others.

Wall Street appears well aware of the investment opportunities in water supply infrastructure, waste water treatment, and demand management technologies. Much less attention has been paid to those sectors that rely on clean water as an input into supply chains or production processes, or have waste water as an output. Water pollution impacts are as important, and diverse, as impacts due to water scarcity.

Importantly, risks differ between sectors and between countries and regions because of climatic conditions, water resources availability, and water use efficiencies. Regionally, areas such Northern California may well encounter more severe water-supply problems as climate reduces the Sierra Nevada snowpack.

Other areas, such as Northern Europe, may see more intense rainfall. Sectorally, while steel production everywhere may come under pressure as water supplies tighten, plants in China, which use four to nine times as much water per ton of steel as plants in the US or Japan, may face additional competitive burdens as a result.

The financial impact of water shortages on sectors and companies is unclear, because information on water use data and impacts is spotty and partial. The authors believe this will change as the consequences of water-supply shortfalls become more apparent.

• Increased publicity surrounding supply shortfalls can lead to increased government intervention, such as the recent restrictions on water use in the Atlanta area and in Australia, altering companies’ cost structures.
• In many situations, the risk of business interruption due to water scarcity appears to be on the rise, making contingency planning more important.
• As water becomes more precious, companies’ real and perceived behavior with respect to water consumption and discharge is also likely to have greater consequences in the marketplace, with an increased risk of consumer backlash against companies judged to be profligate or irresponsible.

The authors anticipate that companies will come under increasing pressure to provide detailed disclosure of water-related risks to investors, including potential changes in supply or treatment costs, regulations, and costs arising from supply chain disruptions.

This report represents an initial effort to outline these risks and to understand how they may affect various companies and industries in the coming years.

A World of Water Scarcity
The world has plenty of water, but 97.5% of it is saltwater. Mankind depends on the remaining 2.5%—of which only a fraction is accessible surface or groundwater — to serve a variety of functions: sustaining life, growing food, supporting various economic processes, and transporting and assimilating waste. Globally, there are increasing pressures on water supply. In many regions demand for water now outstrips renewable supplies. It is likely this gap will widen.

Moreover, water pollution is getting worse in many developing economies, which exacerbates the challenge of delivering sufficient water of the required quality.
...

Table of Contents
About This Report ........................................3
Introduction .............................................5
A World of Water Scarcity ................................6
Water Risks in the Value Chain............................9
Sectoral Impacts.........................................12
Assessing Corporate Risks................................16
Water Risks: Six Case Studies............................20
Power Generation: Asia Plans for Water Shortage .........20
Manufacturing: Groundwater Risks in Taiwan...............26
Insurance: Shortage Means Opportunity ...................33
Semiconductors: Water Is Material........................37
Leisure: The Las Vegas Gamble ...........................39
Food Processing: Big Risks, Little Disclosure ...........43

by Marc Levinson, (212) 622-5552, marc.levinson@jpmorgan.com
J.P Morgan Chase www.jpmorgan.com
Economic Research Global Equity Research; Environmental, Social, and Governance Research
April, 2008
http://www.jpmorgan.com/cm/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1158484353549&ssbinary=true&blobheadername1=Content-disposition&blobheadervalue1=attachment;filename=Watching_Water:_A_guide_to_evaluating_corporate_risks_in_a_thirsty_world.pdf

Abstract: Utilization of renewable energy resources such as wind energy for electric power generation has assumed great significance in recent years. Wind power is a source of clean energy and is able to spur the reductions of both consumption of depleting fuel reserves and emissions of pollutants. However, since the availability of wind power is highly dependent on the weather conditions, the penetration of wind power into traditional utility grids may incur certain security implications. Therefore, in economic power dispatch including wind power penetration, a reasonable tradeoff between system risk and operational cost is desired. In this paper, a bi-objective economic dispatch problem considering wind penetration is formulated, which treats operational costs and security impacts as conflicting objectives. Different fuzzy membership functions are used to reflect the dispatcher’s attitude toward the wind power penetration. A modified multi-objective particle swarm optimization (MOPSO) algorithm is adopted to develop a power dispatch scheme which is able to achieve compromise between economic and security requirements. Numerical simulations including sensitivity analysis are reported based on a typical IEEE test power system to show the validity and applicability of the proposed approach.

Keywords: Particle swarm optimization; Fuzzy sets; Risk and cost tradeoff; Multi-objective optimization; Economic dispatch; Wind power

Electric Power Systems Research via Elsevier Science Direct www.ScienceDirect.com
Volume 78, Issue 8; August, 2008; Pages 1361-1368
http://dx.doi.org/10.1016/j.epsr.2007.12.005

An EPA independent advisory committee, National Advisory Council for Environmental Policy and Technology (NACEPT), today released a new report identifying actions that EPA and the investment community can take and partnerships they can create to achieve the goal of greater long-term private sector investment in the commercialization of environmental technologies.

The report, EPA and the Venture Capital Community: Building Bridges to Commercialize Technology, April 2008, is the third in a series of reports by the NACEPT Environmental Technology Subcommittee. The Subcommittee's other two earlier reports on environmental technology are: EPA Technology Programs: Engaging the Marketplace, and EPA Technology Programs and Intra-Agency Coordination.

NACEPT, a balanced panel of representatives from academia, business and industry, nongovernmental organizations, and state, local and tribal governments, advises the EPA Administrator on a broad range of environmental policy, technology and management issues.

To view all three reports, go to: epa.gov/ocem/nacept/reports/index.html or to: epa.gov/etop

U.S. Environmental Protection Agency (EPA) www.EPA.gov
http://epa.gov/ocem/nacept/reports/index.html

Residents took to the streets of a provincial capital over the weekend to protest a multibillion-dollar petrochemical plant backed by China’s leading state-run oil company....

The protest, against a $5.5 billion ethylene plant under construction by PetroChina in Chengdu, the capital of Sichuan Province, reflected a surge in environmental awareness by urban, middle-class Chinese determined to protect their health and the value of their property. A similar protest last year, against a Taiwanese-financed petrochemical venture in Xiamen, in China’s southeast, left that project in limbo.

The recent protest, which was peaceful, was organized through Web sites, blogs and cellphone text messages...
...
Some protesters wore white masks over their mouths to evoke the dangers of pollution. About 400 to 500 protesters took part in the march, witnesses said.

Organizers circumvented a national law that requires protesters to apply for a permit by saying they were only out for a “stroll.”

Critics ... said ... that the government had not done proper environmental reviews of the project....

The plant is a joint venture of the Sichuan provincial government and PetroChina, the publicly traded subsidiary of the state-owned China National Petroleum Corporation, the country’s main oil producer. Approved last year, the plant is expected to produce 800,000 tons of ethylene and refine 10 million tons of crude oil a year
...
The project’s Web site said that $565 million of the total investment would be dedicated to environmental protection.

by Edward Wong
FOR FULL STORY GO TO:
http://www.nytimes.com/2008/05/06/world/asia/06china.html?th&emc=th
The New York Times www.nytimes.com
May 6, 2008

Abstract: A simple model predicting bathing water concentrations of Escherichia coli from livestock in the Irvine catchment in SW Scotland has been adapted for intestinal enterococci (IE). This has been used to predict risk of bather illness by extrapolation of published data on bather IE exposure vs incidence of gastro-enteritis. Simulated reduction in the risk of illness by reduced faecal loading was multiplied by a willingness to pay for risk reduction to estimate the annual benefits of mitigation. Health benefits of reducing loading by 75% at Irvine Beach were estimated by a willingness to pay method to be about £276k pa. Estimated annualised costs of diffuse pollution mitigation measures across the catchment were higher (>£1 m), and it is very unlikely that 75% mitigation is achievable with current stocking rates. Further work should explore the influence of uncertainty of model parameters, and use emerging epidemiological information on specific zoonotic pathogens such as E. coli O157 and Cryptosporidium. Other components of the value of clean water should also be included to obtain a complete estimate of the cost:benefit of mitigation.

Keywords: Intestinal enterococci; Risk assessment; Bathing water; Valuation; Livestock
Article Outline

Journal of Environmental Management via Elsevier Science Direct www.ScienceDirect.com
Volume 87, Issue 4; June, 2008; Pages 633-638
Special Issue: Microbial and Nutrient Contaminants of Fresh and Coastal Waters
http://dx.doi.org/10.1016/j.jenvman.2007.06.021

Legislation and regulation are but the first steps in protecting natural resources and the environment, and neither ensures compliance, enforcement, nor effective results. This panel convenes scholars who have been awarded RFF's Fellowships in Environmental Regulatory Implementation. Speakers will highlight lessons learned from several case studies, including use of performance and management standards, command and control approaches, and audit policy.

Introduction
Moderator: Molly K. Macauley, Senior Fellow, Resources for the Future

Panels:

Performance and Management Standards: Implications from Regulatory Implementation in the Cases of Heavy-Duty Diesel and Reducing Use of Toxics
Cary Coglianese, Edward B. Shils Professor of Law and professor of political science at the University of Pennsylvania; and founding director, Penn Program on Regulation

Smog Check: A Policymaking Odyssey
Doug Eisinger, director of Transportation Policy and Planning, Sonoma Technology Incorporated; and program manager, University of California-Davis/Caltrans Air Quality Project

Discovery and Disclosure: Examining the Impact of EPA's Audit Policy
Sarah Stafford, Verkuil Distinguished Associate Professor of Public Policy, Department of Economics, College of William and Mary

12:45 pm - 2:00 pm; A light buffet lunch will be available at 12:30 p.m.
Resources for the Future; 1616 P St. NW; Washington, DC 20036 www.RFF.org
Please RSVP by sending your contact details in an email to rffseminars@rff.org.

Resources For the Future Seminars are generally available as video webcasts shortly after the event. Check the website after May 8th.
http://www.rff.org/rff/Events/Legislation-and-Regulation-Arent-Enough.cfm

As the debate over the design of a federal greenhouse gas cap-and-trade program unfolds, the distribution (or allocation) of emission allowances will be one of the most difficult issues to resolve. The distributional implications of allocation decisions have long been appreciated. However, various proposals in Congress have made it increasingly clear that these decisions also could have a profound effect on how emissions are reduced under a cap-and-trade program, and could thereby have a substantial effect on the program’s societal cost.

This paper describes an important exception to the conventional wisdom that allocation decisions do not affect a cap-and-trade program’s societal cost. While this wisdom holds for many types of allocations, it does not apply to conditional allocations in which the number of allowances that a firm receives is conditioned on the firm’s future operational or investment decisions.

To demonstrate this point, this paper examines an allocation provision in the draft of the Lieberman-Warner Climate Security Act of 2008 that was reported out of the Senate Environment and Public Works Committee in December 2007 (the Lieberman-Warner bill). This provision, Section 3902, would distribute allowances to new fossil-fuel-fired power plants on the basis of their future output. In so doing, it would dramatically reduce, and in certain cases reverse, some of the most important emission reduction incentives that a cap-and-trade program would create.

Section 3902’s new entrant provision would counteract the incentive that a cap-and-trade program otherwise would create for firms to shift some investments in new electric generating capacity toward non-emitting renewable or nuclear plants. The provision’s effects would be so significant that, for several years, the Lieberman-Warner bill’s cap-and-trade program would actually create incentives for firms to invest in low-emitting fossil-fuel-fired plants instead of non-emitting renewable or nuclear plants. Section 3902’s new entrant provision also would reduce the marginal cost of generation from new fossil-fuel-fired plants relative to existing plants. As a result of this provision, electricity generation from some existing plants would be economically displaced by generation from new plants even in cases where the new plants have higher emission rates and fuel costs.

An examination of Section 3902’s effects highlights the need to carefully analyze the incentives that any conditional allocation provisions would create, regardless of whether those provisions are designed with the intention of creating particular incentives, or are instead designed to achieve certain distributional objectives. Otherwise, there is a real risk that much of the emission reduction measures achieved under a cap-and-trade program will be driven by allocation decisions made in the halls of Congress, rather than by the market-based incentives that a cap-and-trade program is intended to create. Such an outcome would invariably increase the cost of reducing U.S. greenhouse gas emissions.

by Judson Jaffe
AEI Center for Regulatory and Market Studies www.reg-markets.org
Regulatory Analysis 08-02; April, 2008
http://www.reg-markets.org/admin/authorpdfs/page.php?id=1459

The "Reg-Markets Center" is officially the AEI Center for Regulatory and Market Studies. It was founded by Bob Hahn in 2008 as the successor to the AEI-Brookings Joint Center. A primary aim of the Reg-Markets Center is to gain a deeper understanding of how markets, laws and regulation contribute to economic well-being.

Recent efforts to endogenize technological change in climate policy models demonstrate the importance of accounting for the opportunity cost of climate R&D investments. Because the social returns to R&D investments are typically higher than the social returns to other types of investment, any new climate mitigation R&D that comes at the expense of other R&D investment may dampen the overall gains from induced technological change. Unfortunately, there has been little empirical work to guide modelers as to the potential magnitude of such crowding out effects. This paper is a first attempt to address this question. In it, Richard Newell and I consider the private opportunity costs of climate R&D, asking whether an increase in climate R&D represents new R&D spending, or whether some (or all) of the additional climate R&D comes at the expense of other R&D.

by David C. Popp, Syracuse University

Seminar will be held at the EPA West Building 1301 Constitution Avenue, NW, Washington, DC, corner of 14th Street Room 4144 at 2PM. If you are not an EPA employee and would like to attend, send an e-mail to PASURKA.CARL@EPA.GOV at least two business days prior to the seminar. A teleconference connection (only audio) can be established for these seminars.

Previous 2008 Climate Economics Seminars (Working papers and slides available on website)

April 15, 2008
The Shape of Things to Come: Why is Climate Sensitivity So Unpredictable (and Who Cares Anyway)?
Gerard Roe (University of Washington)

Underlying all the benefit estimates of global climate change control are the climate's sensitivity to GHG increases; this presentation will explore what is currently known about this critical factor.

What kind of information from the climate science community is the most useful for policy makers, and which uncertainties matter most? Constraining climate sensitivity - the long-term increase in global mean temperature expected from the doubling of atmospheric carbon dioxide - has been one of the main benchmark goals of climate science. I will review the various disagreements over what future progress might be anticipated, as well as the debate about the extent to which reducing climate sensitivity even matters for any practical decisions on climate policy.

Uncertainties in projections of future climate change have not lessened substantially in past decades. Both models and observations yield broad probability distributions for climate sensitivity, with small but finite probabilities of very large increases. We show that the shape of these probability distributions is an inevitable and general consequence of the nature of the climate system. Further, we show that the breadth of the distribution and, in particular, the probability of large temperature increases are relatively insensitive to decreases in uncertainties associated with the underlying climate processes.

March 5, 2008
Incorporating Price Effects into Lifecycle Analysis
Mark Delucchi (Institute of Transportation Studies, U.C. Davis)

Professor Delucchi's talk (slides available on website) argued that no existing models of lifecycle carbon dioxide-equivalent greenhouse-gas (LC-CO2E-GHG) emissions from transportation fuels account for the interaction of policy, the production of new fuels, prices, production and consumption, and finally GHG emissions. In the real world, the production of biomass and biofuels and the substitution of biofuels for petroleum will affect the prices of a wide range of commodities, from gasoline and coal to fertilizer and steel. A change in the price of a commodity will affect the production and consumption of that commodity, of course, but also will affect the price and hence production and consumption of substitutes for and complements of the commodity, products derived from the commodity, and inputs used to make the commodity. So, for example, an increase in use of biofuels in the U. S. can lead to an increase in the use of home heating oil, via the effect of biofuel substitution for gasoline on oil prices. The increase in heating oil will be partly a substitution of oil for other sources of heat, and partly a net increase in heating. Both of these affect GHG emissions and climate change. A general equilibrium model of the world economy, including government sectors, is needed to trace out all of the relevant economic effects of a particular biofuel policy or assumed market outcome.

There are at least four different ways to combine life-cycle analysis (LCA) and general-equilibrium analysis: build a combined model from scratch; connect an existing LCA and an existing general equilibrium model in a meta-modeling framework; add technological detail, input-output linkages, and emission factors to an equilibrium model; or add price-production-GHG relationships to an LCA model. The focus of this talk will mainly be on the last alternative.

Working Paper related to seminar:
Delucchi, Mark A. (2005) Incorporating the Effect of Price Changes on CO2-Equivalent Emissions From Alternative-Fuel Lifecycles: Scoping the Issues. ITS-Davis.October 2005. Publication No. UCD-ITS-RR-05-19.
http://www.its.ucdavis.edu/publications/2005/UCD-ITS-RR-05-19.pdf

February 12, 2008
Estimating the Effect of Climate Change on Crop Yields and Farmland Values: The Importance of Extreme Temperatures
Wolfram Schlenker (Columbia University)

Prof. Schlenker summarized (slides available on website) a paper written with Anthony Fisher, Michael Hanemann, and Michael Roberts. The paper pairs a panel of yearly crop yields in the United States with a fine-scale weather data set that incorporates the whole distribution of temperatures between the minimum and maximum within each day and across all days in the growing season. Yields increase in temperature until about 29°C for corn, 30°C for soybeans, and 32°C for cotton, but temperatures above these thresholds become very harmful. The slope of the decline above the optimum is significantly steeper than the incline below it. This has strong implications for global warming which is predicted to increase the frequency of temperatures above the critical threshold that are harmful for yields. Area-weighted average yields given current growing regions are predicted to decrease by 31-43% under the slowest warming scenario and 67-79% under the most rapid warming scenario by the end of the century. There is limited potential for adaptation within a crop species as the same nonlinear and asymmetric relationship is found if we look only at the time series or cross-section, and the latter should pick up how farmers adapt to warmer climates.

A cross-sectional analysis of farmland values that accounts for an even wider set of adaptation possibilities gives comparable, robust impacts. Mean impacts range from a 27 decrease under the slow warming scenario to a 69 decrease under the fast warming scenario by the end of the century. The increased frequency of very hot temperatures is again responsible for the largest share of the predicted impacts.

January 22, 2007
Intergeneratonal Discounting
William Pizer (Resources for the Future)

Dr. Pizer discussed (slides available on website) the challenges of discounting benefits and costs of policies that occur over multiple generations. He is a recognized expert in the economics of energy and climate change. His remarks on intergenerational discounting focused on his 2003 analysis with Richard Newell of incorporating uncertainty about discount rates on estimates of the benefits of reducing greenhouse gases. This article, the abstract of which is provided below, was awarded the Petry Research Prize for the economics of Climate Change by the Association of Environmental and Resource Economists.

Article related to January 22 seminar:
Discounting the Distant Future: How Much Do Uncertain Rates Increase Valuations?
Richard G. Newell and William A. Pizer
Journal of Environmental Economics and Management, Vol. 46, No. 1 (July, 2003), pp. 52-71.

Paper abstract:
The authors demonstrate that when the future path of the discount rate is uncertain and highly correlated, the distant future should be discounted at significantly lower rates than suggested by the current rate. They then use two centuries of US interest rate data to quantify this effect. Using both random walk and mean-reverting models, we compute the ‘‘certainty-equivalent rate’’ that summarizes the effect of uncertainty and measures the appropriate forward rate of discount in the future. Under the random walk model they find that the certainty-equivalent rate falls continuously from 4% to 2% after 100 years, 1% after 200 years, and 0.5% after 300 years. At horizons of 400 years, the discounted value increases by a factor of over 40,000 relative to conventional discounting. Applied to climate change mitigation, they find that incorporating discount rate uncertainty almost doubles the expected present value of mitigation benefits.

U.S. Environmental Protection Agency www.EPA.gov
National Center for Environmental Eonomics (NCEE) http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/homepage
http://yosemite.epa.gov/ee/epa/eed.nsf/Webpages/CurrentClimateSeminars.html

Misguided federal farm policies have encouraged the growth of massive confined animal feeding operations, or CAFOs, by shifting billions of dollars in environmental, health and economic costs to taxpayers and communities, according to a report released today by the Union of Concerned Scientists (UCS). As a result, CAFOs now produce most of the nation's beef, pork, chicken, dairy and eggs, even though there are more sophisticated and efficient farms in operation.

"CAFOs aren't the natural result of agricultural progress, nor are they the result of rational planning or market forces," said Doug Gurian-Sherman, a senior scientist in UCS's Food and Environment Program and author of the report. "Ill-advised policies created them, and it will take new policies to replace them with more sustainable, environmentally friendly production methods."

"CAFOs Uncovered: The Untold Costs of Confined Animal Feeding Operations" enumerates the policies that have allowed CAFOs to dominate U.S. meat and dairy production. For example, it found that from 1997 to 2005 taxpayer-subsidized grain prices saved CAFOs nearly $35 billion in animal feed, which comprises a large percentage of their supply costs. Cattle operations that raise animals exclusively on pasture land do not benefit from the subsidy. (To read the full report, go to: http://www.ucsusa.org/food_and_environment/sustainable_food/cafos-uncovered.html)

The report also details how other federal policies give CAFOs hundreds of millions of taxpayer dollars to address their pollution problems, which stem from the manure generated by thousands, if not tens of thousands, of animals confined in a small area. The report estimates that CAFOs have received $100 million in annual pollution prevention payments in recent years through the federal Environmental Quality Incentives Program, which was established by the 2002 Farm Bill.

"If CAFOs were forced to pay for the ripple effects of harm they have caused, they wouldn't be dominating the U.S. meat industry like they are today," said Margaret Mellon, director of UCS's Food and Environment Program. "The good news is that we can institute new policies that support animal production methods that benefit society rather than harm it."

Instead of favoring CAFOs, the report recommends that government policies provide incentives for modern production methods that benefit the environment, public health and rural communities. The report also shows that several smart alternative production methods can offer meat and dairy at costs comparable to CAFO products.

For example, some livestock producers move beef and dairy cattle frequently to different areas of a pasture, enabling them to spread out manure, prevent overgrazing, and take advantage of grass as a cost-effective source of animal feed. Meanwhile, some hog farmers have built hog hoop barns—open-ended structures with curved roofs—as an alternative to confining the animals in cramped buildings.

"Many farmers are succeeding when they work with nature instead of against it," said Gurian-Sherman. "These savvy producers are proving that hog hoop barns, smart pasture operations, and other alternative methods can compete with the massive CAFOs. And that's despite the fact that the cards are stacked against them."

In addition to steering taxpayer dollars away from CAFOs, the report also urges Congress to enforce laws that encourage competition so alternative producers can get their meat and dairy to consumers as easily as CAFOs. Making CAFOs, rather than taxpayers, pay to prevent or clean up the pollution they create is also critical, Gurian-Sherman said.

Mellon noted that next week the Pew Commission on Industrial Farm Animal Production is expected to issue its final report that documents the effects of intensive animal production on humans, animals, and the environment. "When taken together," she said, "the two reports paint a grim picture of CAFOs and make strong, practical recommendations for new policies that can take us in a new, more efficient direction that will not fleece the American public."

Union of Concerned Scientists www.ucsusa.org
Press Release dated April 24, 2008
http://www.ucsusa.org/food_and_environment/sustainable_food/cafos-uncovered.html

With consumers facing higher electricity bills and a growing interest in limiting carbon emissions and fostering "green" power, the Maryland Energy Administration issued a detailed "Strategic Energy Plan" in January 2008. The plan's recommendations range from allocating revenues from selling carbon emissions permits to subsidize energy efficiency and renewable energy programs, to legislatively requiring utilities to reduce consumption, to decoupling utility profits from sales volume. Our panelists evaluated some of the many recommendations in the plan and offer general perspectives on the advantages and disadvantages of its provisions.

Introduction: Phil Sharp, President, Resources for the Future
Moderator: Timothy J. Brennan, Senior Fellow, Resources for the Future; Professor of Economics and Public Policy, University of Maryland, Baltimore County
Speakers:
Malcolm Woolf, Director, Maryland Energy Administration
Benjamin F. Hobbs, Professor, Department of Geography & Environmental Engineering, Johns Hopkins University ; Member, California ISO Market Surveillance Committee
Karen Palmer, Darius Gaskins Senior Fellow, Resources for the Future
Panel discussion and Question and Answer Session

Resources For the Futures (RFF) www.RFF.org
http://www.rff.org/rff/Events/Curbing-Electricity-Demand-April-2008-First-Wednesday.cfm

Abstract: Numerous studies on housing markets indicate that neighborhood amenities such as trees and open space increase property values while the presence of hazardous facilities, pollution and flooding risks decreases housing prices. However, previous studies have focused on the direct impacts of neighborhood characteristics on housing prices using the Hedonic Price Model (HPM). Potential interactive relationships among neighborhood characteristics have not been clearly tested. This study examines direct impacts of urban forest on property values and indirect impact on the relationship between Toxics Release Inventory (TRI) chemical facilities and tax base property values in Tarrant County, Texas. Distance to hazardous chemical sites and the amount of foliage coverage within neighborhoods are measured using Geographic Information Systems (GIS) and regressed to tax base property values. To test the indirect impact of trees coverage on the relationship between TRI sites and property values, the moderation model is examined with more foliage coverage (MF) parcels and less foliage coverage (LF) parcels. The empirical result of this study confirms the findings of previous studies suggesting negative influences of hazardous facilities, and positive effects from trees on housing prices. Furthermore, this study uncovers that amount of tree coverage within a neighborhood have an indirect impact on housing values. Specifically, trees in neighborhood environments significantly reduce the negative influence of distance to TRI hazardous chemical facilities. Negative influences of TRI hazardous chemical facilities appear not to be significant in many-treed neighborhoods while hazardous chemical facilities show negative influences on housing values in neighborhoods less-covered by trees.

Keywords: Moderation effects; Trees; Vegetation; Tax base property values; Geographic; Information systems (GIS); Toxics release inventory (TRI)

by Sang-Woo Lee 1, Pat D. Taylor 2 and Sung-kwon Hong 1
1. Department of Environmental Science, Konkuk University
2. Program in Landscape Architecture, School of Architecture, The University of Texas at Arlington, Box 19108, 601 West Nedderman Drive, Arlington, TX 76019-0108, USA

Landscape and Urban Planning via Elsevier Science Direct www.ScienceDirect.com
Volume 86, Issue 2; May 26, 2008; Pages 171-176
http://dx.doi.org/10.1016/j.landurbplan.2008.02.002

Abstract:
This paper contains brief statements about three new low-cost methods of obtaining clean hydrogen in massive amounts.

In the first method, new technology for converting solar energy and water to hydrogen at a price of $2.50 for an amount of hydrogen equal in first law energy to that in a gallon of gasoline seems to follow from a company's announcement of their new technology, already working, in one fully industrialized plant, producing electricity at a price corresponding to that from coal.

In the second method, pure hydrogen (no accompanying CO2) can be obtained from natural gas and heat. The cost would be a little less than that of the low-cost hydrogen from water decomposition (and avoid storage of hydrogen for the 18 h/day of zero solar light).

In the third method, CO2 is extracted from the atmosphere and combined chemically with the low-cost hydrogen to produce methanol. On being used to produce heat or electricity (fuel cell), CO2 is left over. However, the amount of CO2, thus added to the atmosphere is just equivalent to the amount removed. The presence of low-cost hydrogen from water means that the resulting methanol will also be of low cost and be a cure for global warming without a radical change of distribution method.

Keywords: Hydrogen; Global warming; Oil-based economy; Fossil fuels

Article Outline
1. Introduction
2. The projected fall in the cost of solar-based electricity
3. Hydrogen from natural gas without co-production of CO2
4. The synthesis of methanol from atmospheric CO2 and solar hydrogen

by John O’M. Bockris; Haile Plantation, 10515 SW 55th Place Gainesville, FL 32608, USA

International Journal of Hydrogen Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 33, Issue 9; May, 2008; Pages 2129-2131
http://dx.doi.org/10.1016/j.ijhydene.2008.02.030

In the US, President Bush's proposed federal budget for the Fiscal Year 2009 would cut funding for hydrogen and fuel cell technologies by 69%, deferring research on hydrogen production to focus instead on hydrogen storage and fuel cell technologies that are needed to aid the development of a practical fuel cell vehicle by 2015.

Fuel Cells Bulletin via Elsevier Science Direct www.ScienceDirect.com
Volume 2008, Issue 4; April, 2008; Page 10
http://dx.doi.org/10.1016/S1464-2859(08)70172-X

Abstract: A model of a solar–wind hydrogen energy system was applied to the Ceará state—Brazil and the prospects for reducing emissions of fossil fuels pollutants in such federal state were studied. This long-term study simulates three scenarios of fast, slow and no introduction of hydrogen in the energy balance of the Ceará state. Not including nitrogen oxides, if fuel burning continues, results indicate that hydrogen energy eventually will reduce to zero all emissions of fossil fuels pollutants in the Ceará state by the year 2060 in both scenarios of hydrogen introduction.

Keywords: Hydrogen energy; Fossil fuels pollutants; Ceará state
Key Variables: electric energy for desalination, fossil fuel price, hydrogen price, energy consumption/demand, gross product, hydrogen production (consumption) rate, quality of life, pollution, population, fossil fuel resources, solar insolation, fossil fuel pollution per unit energy, fraction of fossil fuels extracted per year, ratio of pollution produced by hydrogen to that produced by fossil fuels, ratio of hydrogen utilization efficiency to that of fossil fuels, Emissions of carbon dioxide in the Ceará state, Emissions of methane, Emissions of sulphur oxide, Emissions of nitrogen oxide

by E.M. do Sacramento 1, L.C. de Lima 1, C.J. Oliveira 1 and T. Nejat Veziroglu 2
1. Department of Physics, State University of Ceará, Fortaleza CE 60740-000, Brazil
2. Clean Energy Research Institute, University of Miami, Coral Gables, FL 33124, USA

International Journal of Hydrogen Energy via Elsevier Science Direct www.ScienceDirect.com
Volume 33, Issue 9; May, 2008; Pages 2132-2137
http://dx.doi.org/10.1016/j.ijhydene.2008.02.018

Abstract: Over the last two decades, global electricity production has more than doubled and electricity demand is rising rapidly around the world as economic development spreads to emerging economies. Not only has electricity demand increased significantly, it is the fastest growing end-use of energy. Therefore, technical, economic and environmental benefits of hydroelectric power make it an important contributor to the future world energy mix, particularly in the developing countries. This paper deals with policies to meet increasing energy and electricity demand for sustainable energy development in Turkey. Turkey has a total gross hydropower potential of 433 GWh/year, but only 125 GWh/year of the total hydroelectric potential of Turkey can be economically used. By the commissioning of new hydropower plants, which are under construction, 36% of the economically usable potential of the country would be tapped. Turkey's total economically usable small hydropower potential is 3.75 GWh/year.

Keywords: Hydropower; Renewable energy; Sustainable development; Large dams
Article Outline
1. Introduction
2. The role of hydropower in sustainable development
3. An overview of Turkey
4. Water resources management in Turkey
5. Energy utilization in Turkey
5.1. Energy resources
5.2. Development of electrical energy
6. Hydropower development in Turkey
6.1. Historical review
6.2. Hydropower potential
6.3. Current situation
6.4. Future aspects
6.5. Developments in Turkish energy sector policies
6.6. The importance of hydropower
7. Future energy and emissions projections
8. Conclusions

by Ibrahim Yüksel; Department of Construction, Technical Education Faculty, Sakarya University, 54187 Sakarya, Turkey

Renewable and Sustainable Energy Reviews via Elsevier Science Direct www.ScienceDirect.com
Volume 12, Issue 6; August, 2008; Pages 1622-1640
http://dx.doi.org/10.1016/j.rser.2007.01.024

In an Op-Ed appearing in the May 1st edition of the New York Times Thomas Friedman writes:

It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks....
...
The ... gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”
...
For almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. ... When Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December.
...
The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious....

By Thomas Friedman
FOR FULL OP-ED GO TO:
http://www.nytimes.com/2008/04/30/opinion/30friedman.html?em&ex=1209700800&en=5e50edff9f212b25&ei=5087%0A
The New York Times www.NYTimes.com
Op-Ed Published: April 30, 2008