Category Archives: Peer Reviewed Article Review

DICE

This article in Ecological Economics reminded me of the DICE model from William Nordhaus at Yale.

In integrated assessment models (IAMs) economic activity leads to global warming, which causes future economic costs. However, typical IAMs do not explicitly represent the role of natural capital. In this paper, the DICE model by Nordhaus (2008) is expanded with a natural capital variable that is affected both by climate change and by depletive effects of economic activity. Due to a synergy between the two effects, the optimal policy of the expanded model features more and earlier abatement of CO2 emissions than DICE. Interestingly, the policy implications are different from what follows if one tries to capture the depletive effects on natural capital by simply reducing factor productivity growth in DICE. Acknowledging considerable uncertainty, simulations show that climate- and savings rate policies from the expanded model are more robust in the long term than policies that do not consider non-climatic depletion effects on natural capital.

The DICE model and a variety of papers related to it are freely available here.

meeting future food demand

This article in Water Resources Research says we have a shot at meeting future food demand.

Sustainable options for decreasing food demand and for increasing production include reduction of food losses on both the producer and consumer ends, elimination of unsustainable practices such as prolonged groundwater overdraft, closing of yield gaps with controlled expansions of nutrient application and irrigation, increases in crop yield and pest resistance through advances in biotechnology, and moderate expansion of rain fed cropland. Calculations based on reasonable assumptions suggest that such measures could meet the food needs of an increasing global population while protecting the environment.

social network theory and research

Here is a long paper with a lot of references on social network theory and empirical evidence, including learning and diffusion of innovations. For example,

A nice example of this using field data is a study of social learning by Conley and Udry (2001, 2004). They examine the use of fertilizer by pineapple farmers. In particular, they show that changes in the amount of fertilizer used by a given farmer are related to the success or failure of similar past changes in fertilizer use by other farmers. Having controlled experiments can substantially narrow down the range of explanations for observed peer correlations. For example, Hesselius, Johansson, and Nilsson (2009) examine absences in the workplace based on a randomized rule affecting about 3000 workplaces in G oteborg Sweden. Randomly
assigned agents were allowed to have longer spells of absence from work (14 days) without having to produce a doctor’s certificate than was the rule for the general population (8 days). This resulted not only in an increase in absences for the treated individuals (those allowed the extra time before producing a doctor’s certificate), but also for non-treated individuals conditional on being in a workplace with many treated individuals. Interestingly, the affect of how many other treated individuals there were in the workplace did not significantly influence treated individuals’ behavior. This allows them to distinguish between various ways in which the peer effects might work, ruling out things like enjoying time together and being more consistent with a fairness effect or related peer effect on preferences. This sort of study shows the power of (field) experiments in identifying peer effects…
The list of settings where peer effects, or network effects more generally, have been found to be important is a long and varied one. It includes a range of things from criminal behavior (Reiss (1980), Glaeser, Sacerdote and Scheinkman (1996), Kling, Ludwig and Katz (2005), Patacchini and Zenou (2008)), to education (e.g., Calvo-Armengol, Patacchini and Zenou (2008)), to risk-sharing and loan behavior (Fafchamps and Lund (2003), De Weerdt (2004), Karlan, Mobius, Rosenblatt, Szeidl (2009)), to obesity (Christakis and Fowler (2008), Fowler and Christakis (2008), and Halladay and Kwak (2009)). (See Fafchamps (This volume), Ioannides (This volume), Jackson and Yariv (This volume), Munshi (This volume), Sacerdote (This volume), and Topa (This volume), for more examples and background on empirical evidence.)

Paul Romer and “mathiness”

Paul Romer has attacked a number of fellow economists for relying on what he calls “mathiness” rather than mathematical theory. He believes the study of economic growth and its practical applications have suffered because of this.

Academic politics, like any other type of politics, is better served by words that are evocative and ambiguous, but if an argument is transparently political, economists interested in science will simply ignore it. The style that I am calling mathiness lets academic politics masquerade as science. Like mathematical theory, mathiness uses a mixture of words and symbols, but instead of making tight links, it leaves ample room for slippage between statements in natural versus formal language and between statements with theoretical as opposed to empirical content.

Solow’s (1956) mathematical theory of growth mapped the word “capital” onto a variable in his mathematical equations, and onto both data from national income accounts and objects like machines or structures that someone could observe directly. The tight connection between the word and the equations gave the word a precise meaning that facilitated equally tight connections between theoretical and empirical claims. Gary Becker’s (1962) mathematical theory of wages gave the words “human capital” the same precision and established the same two types of tight connection—between words and math and between theory and evidence. In this case as well, the relevant evidence ranged from aggregate data to formal microeconomic data to direct observation…

The market for mathematical theory can survive a few lemon articles filled with mathiness. Readers will put a small discount on any article with mathematical symbols, but will still find it worth their while to work through and verify that the formal arguments are correct, that the connection between the symbols and the words is tight, and that the theoretical concepts have implications for measurement and observation. But after readers have been disappointed too often by mathiness that wastes their time, they will stop taking seriously any paper that contains mathematical symbols. In response, authors will stop doing the hard work that it takes to supply real mathematical theory. If no one is putting in the work to distinguish between mathiness and mathematical theory, why not cut a few corners and take advantage of the slippage that mathiness allows? The market for mathematical theory will collapse. Only mathiness will be left. It will be worth little, but cheap to produce, so it might survive as entertainment.

doubling of El Nino

Nature Climate Change says El Nino frequency could double due to climate change. The result: “severely disrupted global weather patterns, affecting ecosystems4, 5, agriculture6, tropical cyclones, drought, bushfires, floods and other extreme weather events worldwide3, 7, 8, 9

El Niño events are a prominent feature of climate variability with global climatic impacts. The 1997/98 episode, often referred to as ‘the climate event of the twentieth century’1, 2, and the 1982/83 extreme El Niño3, featured a pronounced eastward extension of the west Pacific warm pool and development of atmospheric convection, and hence a huge rainfall increase, in the usually cold and dry equatorial eastern Pacific. Such a massive reorganization of atmospheric convection, which we define as an extreme El Niño, severely disrupted global weather patterns, affecting ecosystems4, 5, agriculture6, tropical cyclones, drought, bushfires, floods and other extreme weather events worldwide3, 7, 8, 9. Potential future changes in such extreme El Niño occurrences could have profound socio-economic consequences. Here we present climate modelling evidence for a doubling in the occurrences in the future in response to greenhouse warming. We estimate the change by aggregating results from climate models in the Coupled Model Intercomparison Project phases 3 (CMIP3; ref. 10) and 5 (CMIP5; ref. 11) multi-model databases, and a perturbed physics ensemble12. The increased frequency arises from a projected surface warming over the eastern equatorial Pacific that occurs faster than in the surrounding ocean waters13, 14, facilitating more occurrences of atmospheric convection in the eastern equatorial region.

growing the urban forest

This abstract in Restoration Ecology contains an interesting result: planting shrubs along with urban trees helps the trees. You might think the opposite, due to competition, but I have heard this before. One theory I’ve heard is that shrubs help establish beneficial fungi in the soil that pave the way for healthy trees. It shouldn’t be too surprising, when this is exactly the succession that will occur in an abandoned field over time, given enough rainfall and not too much fire.

Compost also helps trees, which might be surprising to some professional engineers but not to any amateur gardener (luckily, some of us are both!). Still, in urban stormwater management we engineers are often encouraged to plant trees and other vegetation, but to minimize organic matter because the same nutrients that trees need can become water pollutants if they find their way downstream. It’s a delicate balance. Civil, “environmental”, and geotechnical engineers aren’t good at finding it because it is not part of our typical training. We need the agriculture, forestry, and soil science types to help us with this.

Forests are vital components of the urban landscape because they provide ecosystem services such as carbon sequestration, storm-water mitigation, and air-quality improvement. To enhance these services, cities are investing in programs to create urban forests. A major unknown, however, is whether planted trees will grow into the mature, closed-canopied forest on which ecosystem service provision depends. We assessed the influence of biotic and abiotic land management on planted tree performance as part of urban forest restoration in New York City, U.S.A. Biotic treatments were designed to improve tree growth, with the expectation that higher tree species composition (six vs. two) and greater stand complexity (with shrubs vs. without) would facilitate tree performance. Similarly, the abiotic treatment (compost amendment vs. without) was expected to increase tree performance by improving soil conditions. Growth and survival was measured for approximately 1,300 native saplings across three growing seasons. The biotic and abiotic treatments significantly improved tree performance, where shrub presence increased tree height for five of the six tree species, and compost increased basal area and stem volume of all species. Species-specific responses, however, highlighted the difficulty of achieving rapid growth with limited mortality. Pioneer species had the highest growth in stem volume over 3 years (up to 3,500%), but also the highest mortality (up to 40%). Mid-successional species had lower mortality (<16%), but also the slowest growth in volume (approximately 500% in volume). Our results suggest that there will be trade-offs between optimizing tree growth versus survival when implementing urban tree planting initiatives.

green roofs

Everybody kind of likes the idea of green roofs, but water professionals are not always 100% confident we understand them well enough to promise they will meet water quality and flooding regulations. But the studies are gradually trickling in. Here is a new one from Ecological Engineering:

Increasing recognition is being given to the adoption of green roofs in urban areas to enhance the local ecosystem. Green roofs may bring several benefits to urban areas including flood mitigation. However, empirical evidence from full-scale roofs, especially those that have been operational for more than several years is limited. This study investigates the hydrologic performance of a full-scale extensive green roof in Leeds, UK. Monitoring of the green roof took place over a 20 month period (between 30th June 2012 and 9th February 2014). The results indicate that the green roof can effectively retain and detain rainfall from the precipitation events included in the analysis. Retention was found to correspond significantly with rainfall depth, duration, intensity and prior dry weather period. Significant differences in retention values between the summer and winter seasons were also noted. Regression analysis failed to provide an accurate model to predict green roof retention as demonstrated by a validation exercise. Further monitoring of the green roof may reveal stronger relationships between rainfall characteristics and green roof retention.

Beyond questions on performance, there is a kind of chicken and egg problem where they are not used much (in the U.S., at least) because they are expensive and they are expensive because they are not used much. That is true of many emerging technologies. Of course, this “emerging” technology has been used in Europe for centuries, not to mention it is also popular with hobbits.

aging and deflation

This study says the relationship between aging and deflation (as seen in Japan, but possibly coming to many more countries in the future) depends on whether the aging is driven by falling fertility (which shrinks the work force in absolute terms) or longevity (which shrinks it only in relative terms).

Negative correlations between inflation and demographic aging were observed across developed nations recently. To understand the phenomenon from a politico-economic perspective, we embed the fiscal theory of the price level into an overlapping-generations model. In the model, successive short-lived governments choose income tax rates and bond issues considering the political influence of existing generations and the policy response of future governments. The model sheds new light on the traditional debate about the burden of national debt. Because of price adjustments, the accumulation of government debt does not become a burden on future generations. Our analysis reveals that the effects of aging depend on its causes. Aging is deflationary when caused by an increase in longevity but inflationary when caused by a decline in birth rate. Numerical simulation shows that aging over the past 40 years in Japan generated deflation of about 0.6 percentage points annually.
Here is another study that concludes “a larger share of dependents (ie young and old) is correlated with higher inflation, while a larger share of working age cohorts is correlated with lower inflation.” So maybe it depends to what extent the aging population is dependent on the working population, and whether the working population has additional dependents in the form of children (who will become the next working population). It’s complex, dynamic stuff that is hard to puzzle out.

autonomous truck

With all the talk of self-driving cars, I figured self-driving trucks and buses wouldn’t be far behind. And here is a self-driving truck, already licensed in a few U.S. states. It sounds like there is still a human driver in it for now. But in the long term, I imagine this is bad news for human driver as an occupation. It should be good news for the safety of humans on the road in general. It seems like it could favor the economics of road freight vs. rail. Then again, it might make much narrower travel lanes practical, leaving plenty of room in the right of way for other infrastructure like high speed rail, high voltage lines, pipelines, etc. Time will tell.

meta-analysis on designing active cities

This is a great example of meta-analysis in Active Living Research. There are a few things I like about it. First, it combines academic literature, other literature, and expert opinion in a very transparent and defensible way, by giving each a score. It takes a very wide array of urban design and planning choices and relates them to a number of outcomes (physical health, mental health, environmental sustainability, health and safety, and economic growth), and draws quantitative conclusions about the importance of each. Some outcomes challenge my pre-conceived notions, for example that street connectivity is bad for safety, but the methodology is very transparent, so I can dig in if I want and try to figure out whether I disagree with a particular rating, or whether I really should rethink my preconceived notion. Those of us dealing with complex planning and engineering programs (and many other complex systems) can’t realistically expect to optimize a handful of objectives any more. Instead, we can play the odds by making sure all our small, daily decisions have a better than even chance of nudging the system in a desired direction, based on the complete body of evidence out there, even with all its contradictions and confusions.