Thursday, November 30, 2006

Are penguins heading towards extinction?

There is concern that twelve penguin species worldwide are under the threat of extinction. The Center for Biological Diversity has filed a petition to put the twelve species under the protection of the Endangered Species Act. Global warming is thought to be the cause of reduced food supply and decreased penguin populations. Humans are said to be the main contributors to global warming. The Center believes that “predators, disease, habitat destruction, disturbance of breeding colonies, oil spills, marine pollution, and in some cases, direct harvest”, are threatening penguins. There is belief that the people of Earth are in denial about what is happening and that the government of the United States needs to take control of the situation before it’s too late.

If the criteria of the Endangered Species Act were met and the species were listed, the economy could incur substantial economic costs. Knowing that economic costs are not required to be examined when making policy decisions in reference to the ESA is of concern to me. No, I do not want to see penguins disappear, but at what cost should we keep them around? Is it even possible to save them? What if the scientists are wrong about global warming? These are all questions that I do not have answers to. It says in the article that there is evidence that the “costs of reducing emissions will be vastly outweighed by the economic benefits of reducing future warming”. I just have to wonder if this is really true. If this were true, why have the companies not taken it upon themselves to invest in capital that would reduce global warming? It just does not seem to be me that it would be cheaper for them. It would add to their costs. Government would not be needed to enforce regulations if the companies had their own incentives to invest in cleaner capital. So, should we save the penguins? Probably. However, I feel that there is more information that is needed before we ultimately turn to the ESA.

Fishing industry moving toward economic efficiency and sustainability?

Seeing fishing industry move toward efficiency and sustainability is the dream of many people in the world , as there is major concern about over fishing and depletion of fish stocks….if we over fish then the ecosystem in the ocean will be massively disrupted. And many people will face starvation etc…it’s something more real to people more quantifiable... more pressing and more feared, Than global warming but it receives less press...
Most people say not to interfere with the current market and its current costs however if industry doesn’t move to a more sustainable system the real cost of feeding people will skyrocket. The current system faces gross overcapacity. Such circumstances provide for constant downward pressure on the pricing. Thus blinding us to the real cost…
I found a reference in an article to how Iceland dealt with their system Iceland is a good test market for the world because they have small enough economy to manipulate but large enough to be representative of the rest of the world . They are trying a hydrogen power car economy right now and the world is watching because its models may be used to implement similar program in rest of the world. The article goes over the 15 yr Icelandic implementation of a sustainable program the first thing introduced is quotas. These bring some protest but a solution is found in transferability. The quotas were not acceptable because they faced overcapacity. The transferable quotas solve things by allowing efficient allocation of quota to be market determined…. The government wanted to internalize over fishing‘s costs. The best way they had was to give those who make living in fisheries an economic stake in conserving the stocks this would encourage using them in a sustainable manner. For this policy to succeed the fisheries sector must be made economically efficient. Economic efficiency is a required ingredient to ensure ecological efficiency.
Here is an excerpt from the article...
"Fisheries management is of crucial importance to the promotion of sustainable fisheries. Such a system must be based on sound scientific knowledge and rigid surveillance and enforcement. Yet while fisheries management is a necessary condition for sustainable fisheries it is not sufficient all by itself. For the system to be effective it must be accepted and supported by the fishing industry and fishermen alike. An important way to build that support is to raise awareness through consultation between public authorities and the fishing community. But a more effective way is to give those who live from fisheries an economic stake in conserving the stocks and using them in a sustainable manner. For that to happen the fisheries sector must be made economically efficient. In short, economic efficiency is required to ensure ecological efficiency.
To offer an example, the Government of Iceland devoted some fifteen years to developing an effective sustainable fisheries management system. Total Allowable Catch (TAC) was introduced for all the most important commercial fish species, based on sound scientific observations and assessments. Also, to ensure that catch levels were not surpassed, a rigid enforcement and compliance system was established to monitor the fishing of every fishing vessel in the country with the help of a state-of-the-art computer system that links all ports of landings to the Directorate of Fisheries.
Yet despite the ever more stringent system, there was always pressure from the industry to increase the TAC and to allow for more fishing capacity. The underlying reason was that the system lacked the economic incentive granting the industry and fishermen a more direct stake in the conservation and sustainable use of the stocks. The one factor standing in the way of generating this incentive was the overcapacity of the fleet. In other words, there were too many boats fishing the limited amount of fish to allow for sufficient economic return for the operations. The fleet had to be rationalized. Towards this end Individual Transferable Quotas (ITQs) were introduced.
The advantage of ITQs is the efficiency and flexibility offered. Fishing operations can increase or reduce their harvesting rights and change their composition in accordance with what they feel is cost-effective. This they can do by trading in catch quotas through a public auction market, the Quota Exchange. The price is determined by supply and demand and payment for harvest rights is either made in monetary form or by exchanging rights.
The cost-effectiveness of fishing in Iceland has increased substantially due to the quota system. Many enterprises have merged to allow for increased efficiency and to spread operating risks. Both management and ownership of enterprises have also changed and presently most of the country’s larger fishery enterprises are listed on the stock market. This, coupled with the flexibility of the system, has led to results in line with the generally positive experience from the application of ITQs in other countries, which broadly speaking means,
there has been a decline in fishing efforts;
the growth of the fishing fleet has stopped and in some cases contracted;
economically important fish stocks have recovered;
the quality of landed catch has increased;
profitability has increased; and
total employment in the industry has not contracted significantly owing to the increased emphasis on product value and quality.
The fisheries management system in Iceland is still under development. But the experience to date has shown that the success of sustainable fisheries management depends not only on rigid ecological requirements with respect to science and catch levels and on active participation of stakeholders, but also and perhaps more importantly on the fisheries sector being economically efficient."

The lesson learned can apply globally as we currently estimate
  • Global overcapacity was estimated at 30% in 1989 fishing fleet
  • Some see this as an underestimation and assess the current overcapacity as high as 150%.
  • Government subsidies are a major cause of this overcapacity.
  • State subsidies have attracted more entrants into the fishing industry and financed advanced technology that otherwise may not have been afordable.
  • Subsidies to the fishing sector have prevented the market signals from influencing the fishing industry to stop investing in already overcapitalized fisheries.

Tuesday, November 28, 2006

Flamingo Paradise Shrinks Along With Lake

Flamingo Paradise Shrinks Along With Lake – Cliff Brown

In an article on, by Charles Hanley on November 16, 2006 the “famous flamingos of Nakuru are fading away.”

Warming, drought, deforestation and pollution are blamed for the decline. A sewage treatment plant is being worked on which will certainly help with the pollution issue. But, what about the other issues?

Since “Tourism is the lifeline of the area” it would seem that either assigning some kind of property rights to the Flamingos to those responsible for the polluting and/or responsible for the deforestation would help capture some of the associated negative externalities,

Combining this with an elasticity of demand study for the tourists may help raise revenues for the area. If it did then these additional monies could further enhance the efforts at reducing some of these negative effects.

As for the warming effect I have to look at the statement “Lake Nakuru … has shrunk before, even disappeared. But this time, because of global warming it may be different.” Also, some of the birds have relocated to other lakes in the Rift Valley that are suitable for the bird’s survival. This makes me wonder if it is even necessary to do anything about the “problem”? Does the cost of tying to alleviate the problem, and get the birds onto the proverbial Noah’s ark, outweigh the benefit? Might the birds figure things out for themselves and be just fine without any intervention?

Never fear. I am sure the UN Environment Program will arrive at a satisfactory solution without my intervention!

Tuesday, November 07, 2006

Import Automakers are still the best!

Volkswagen Research has developed a new and innovative type of high temperature fuel cell (HTFC) that means an affordable fuel cell-powered vehicle suitable for everyday use could be available as early as 2020.
This breakthrough is made possible thanks to a new, high temperature membrane and electrodes, which enable significantly more compact, cheaper and more efficient fuel cell systems. In the HTFC protons are exchanged via phosphoric acid. The acid has good electrolyte prperties, similar to water, but has a higher boiling point permitting higher temperature operation and simplifies the water management and humidification required in most PEM cells. On a special screen printing machine, the new electrodes, made of carbon fiber cloth are coated with a new type of paste, which makes the electrode impermeable to water and preventing dilution of the phosphoric acid.
LTFC systems are operated at a membrane temperature of approximately 80 degrees Celsius, or about 176 degrees Fahrenheit. If the temperature greatly exceeds this value, fuel cell performance breaks down and irreparable damage is done to the cell.
The high temperature, thinner membrane developed by Volkswagen can, in combination with newly-designed electrodes operates at temperatures of up to 120 degrees Celsius, or about 248 Fahrenheit, without additional humidification. Thus a distinctly simpler cooling and water management system is possible, significantly reducing the cost and the requirements for space and weight.
After additional improvements the first research vehicles are expected by 2010 and by about 2010 the first full production models could appear.

The Endangered Species Act is Endangered

I think the main critisism of the ESA is that it encurages private land owners to "shoot shovel and forget it" That is Land owners are givin the insentive to kill those species that threaten the value of thier land and the very least to under report thier existance.
"Such a law would encourage developers to go looking for environmentally sensitive areas to propose projects and seek compensation."
And this is a bad thing that we can be sure about is that species would no longer be under reported...and those with such species on thier land would have the incentive of keeping them there and keeping thier populations healthy.
My simple question is what is the intent of the ESA? To punish land owners and developers or to protect species for extintion.
The advantage of such a law is two fold first it gives insentives to land owners to preserve wild life and second it puts the burdon of preservation on the public rather then the individual land owners. Which is good becouse it is the public that benifits.

Sunday, November 05, 2006

Conservation Hotspots

For the longest time it was thought that the best way to save endangered species was to have the government allocate land for conservation. This land would have to have a large number of endangered animal species. The hope was that the designation of these hotspots would be the most effective route. However, recent studies have shown that there is no way to be certain that these areas will conserve a species. The reason is said to be that many species do not populate just one region or area. Ian Owens and David Orme found that different species in different regions have varying issues that they face. Some of the issues are poachers, disease, the destruction of their habitat, etc. There is now concern over the efficient allocation of funds to conserving the endangered species.
My thought is that maybe they should take these issues into consideration when directing funds into a conservation site. One of the men from the study said that "politics and economics control conservation". When I think of the economics of this situation I wonder if what they have been doing has been efficient or even sustainable. The study appears to show it has been neither. It would seem to me that in the future the governments need to take the issues affecting the conservation into consideration a little bit more when making policies.