COP21 and 2 Degrees

As you may know, government officials around the world are currently deliberating in Paris in an attempt to create a legally binding agreement to combat climate change at COP21. Beginning on November 30th, and lasting until December 11th, the UN Paris Climate Talks are aiming to build a “Paris Climate Alliance” capable of keeping the average global temperature rise below 2 degrees Celsius that is universal, flexible, balanced, and dynamic. Policymakers have been working away at a draft text that went from a lengthy 34,678 words and 1,609 unresolved brackets, to a current 19,733 words and 361 unresolved brackets. Although Continue reading COP21 and 2 Degrees

Soundcast Episode 2: Interview with Yoram Bauman

On Monday, I had the privilege to interview the world’s first and only stand-up Economist, Yoram Bauman, Ph.D before he spoke about the second round of the Tacoma Climate Conversation right here at the University of Puget Sound. Not only is he an incredible speaker and comedian, but he is also the founder of CarbonWA, a grassroots initiative advocating for a carbon tax here in Washington. It was incredible being able to talk to an expert on “getting the price right” after writing many articles about the topic because it gave me a dimension of the conversation that is rarely written Continue reading Soundcast Episode 2: Interview with Yoram Bauman

Getting the Price Right: Which is Better? pt. 2

Last week, I began to compare two important programs in the realm of environmental policy: cap-and-trade and carbon tax. I first examined the political viability of both programs and came to the conclusion that although they have received relatively equal magnitude of political praise and scrutiny, the carbon tax is a bit more politically reasonable. A carbon tax has more of a potential to attract people on the right due to the fact that it can come with the condition of revenue neutrality, which takes away people’s natural loss-averse tendencies because another part of the tax system would be adjusted. Continue reading Getting the Price Right: Which is Better? pt. 2

Getting the Price Right: Which is Better? pt. 1

Recently, I have written about the primary techniques to combat the negative externality of pollution: cap-and-trade and carbon taxation. For decades, politicians, economists, and environmentalists alike have debated which method is more effective. Both cap-and-trade and carbon taxes put a price on pollution and, for the most part, have successfully reduced carbon emissions and sparked innovations in sustainable energy use. Of course, because a carbon tax is a price instrument and cap-and-trade is a quantity instrument, as we have seen in my previous posts, the means to the emission reductions are quite different. I will begin my series of comparisons with Continue reading Getting the Price Right: Which is Better? pt. 1

Oh Say, CANUSSEE pt. 2

I, along with fellow writer Nicky Smit and Professor Lea Fortmann, had the incredible opportunity to attend the CANUSSEE (Canada & United States Societies for Ecological Economics) Conference two weekends ago in Vancouver B.C. For those of you who aren’t familiar with ecological economics, it is a growing interdisciplinary field that aims to reform basic economic theory and reverse the paradigm that monetary growth measures the success of a society. Ecological economists criticize the anthropocentric nature of neoclassical economists, and emphasize the fact that the economy is a subset of nature, rather than the other way around. Most importantly, they Continue reading Oh Say, CANUSSEE pt. 2

Getting the Price Right: Cap and Trade

Last week, I talked about carbon taxes, which is one of the primary methods that governments can monetarily encompass the negative environmental externalities that come from irresponsible production. Now, I will discuss the cap and trade system, also known as emissions trading. The cap and trade system is very interesting in the sense that it literally creates a market for carbon. The government sets an overall cap on emissions and creates limited authorizations to emit, up to the level of the cap. Sources that emit pollution, such as factories, can buy or sell the authorizations or save them to use in Continue reading Getting the Price Right: Cap and Trade

Getting the Price Right: Carbon Tax

Last week, I introduced the issue of negative externalities and how the amount that consumers pay for energy fail to reflect the environmental and social costs that come with its extraction and production. Recall that the supply curve typically shown in introductory economics classes only projects the Marginal Private Cost (MPC) of the firm, but there also exists a curve called the Marginal Social Cost (MSC), which gives a graphical representation of the external costs that come with the creation of a good. The gap between the MPC and the MSC must be closed for the sake of sustaining not only the Continue reading Getting the Price Right: Carbon Tax

The Price is Wrong

This may not be the easiest pill to swallow, but worldwide, energy prices are far too low. In the United States, on average, the federal U.S. tax on gasoline has remained at merely 18 cents per gallon since 1993. We all know that there are negative effects that come with the overconsumption of nonrenewable energy, but is it reflected in the prices? When gas, or any other fossil fuel, is bought at market price, the cost fails to account for the environmental and social impacts that come with the production and consumption of these fuels. This issue is called a Continue reading The Price is Wrong

Game Theory in International Climate Change Politics

Whether it’s in my personal or academic life, I always have this desire to figure out why people do the things that they do. Fortunately, there’s a branch of economics for that. This past fall, I took a microeconomics class where we touched upon a topic that I found especially fascinating called Game Theory. In case you don’t know what it is, Game Theory is a strategy of analyzing decision making wherein a model is made to figure out the optimal strategies for two or more parties in some sort of competitive situation. Game Theory is used not just in economics, but Continue reading Game Theory in International Climate Change Politics

Drachma Drama

Lately, there have been unsettling talk in the international economy about a “Grexit”: Greece leaving the Eurozone if it refuses to pay its debts and has to default. Greece’s debt stands at approximately 323 billion euros (366 billion dollars). Although this doesn’t seem like a huge number, especially compared to the United State’s debt of 16.34 trillion dollars, the importance of the number is in the debt-to-GDP ratio. This is simply an equation with a country’s total debt in the numerator and the country’s Gross Domestic Product (GDP) in the denominator. It is generally concerning for developed countries to have Continue reading Drachma Drama