Anticipating that fireworks on July 4th could cause a severe fire in dry places where it hasn't rained, many cities are canceling July 4th fireworks celebrations. While that may be "unamerican", it is smart. Here is a quote from the article:
"From Colorado to Indiana, Wyoming to Missouri, dozens of cities and towns have decided to scrap their fireworks displays — the cherished denouement of July 4 revelry — driven by parched conditions, vicious wildfires and sometimes a simple hunch that putting on a show this year might leave too much to Mother Nature’s mood."
This is a prime example of adaptation. How costly is it to sacrifice the fireworks? You can watch a youtube video instead.
Krugman on the Green Economy
Here is a two year old piece that Paul Krugman wrote about the "green economy". I really like 99% of the piece but it is revealing that such a skilled micro economist devotes little attention to the micro economics of climate change adaptation.
Note that he spends 95% of the article on carbon mitigation and merely skims the adaptation part of the piece. Given that the carbon mitigation piece continues to fail and global emissions continue to rise, I am hoping that more serious economists begin to focus on the micro economics of climate change adaptation. My Climatopolis was meant to start the urban economic discussion of this point.
Here is his quote.
"While there may be some benefits from a warmer climate, it seems almost certain that upheaval on this scale would make the United States, and the world as a whole, poorer than it would be otherwise. How much poorer? If ours were a preindustrial, primarily agricultural society, extreme climate change would be obviously catastrophic. But we have an advanced economy, the kind that has historically shown great ability to adapt to changed circumstances. If this sounds similar to my argument that the costs of emissions limits would be tolerable, it ought to: the same flexibility that should enable us to deal with a much higher carbon prices should also help us cope with a somewhat higher average temperature.
But there are at least two reasons to take sanguine assessments of the consequences of climate change with a grain of salt. One is that, as I have just pointed out, it’s not just a matter of having warmer weather — many of the costs of climate change are likely to result from droughts, flooding and severe storms. The other is that while modern economies may be highly adaptable, the same may not be true of ecosystems."
His own first paragraph contradicts the first point in the second paragraph. As documented in my 2005 Restat paper, richer nations are better able to withstand losses from natural disasters. Property is damaged but many fewer lives are lost. As a Keynesian, Krugman should celebrate the capital destruction because this will lead to new investment and a higher C+I+G! For his second point to be important, he must have a story for what is the feedback loop through that ecosystem damage injures the modern urban economy. How is New York City's health affected by ecosystem loss? It is certainly possible, but he needs a coherent hypothesis and must explain why international trade doesn't provide implicit insurance against the loss of any one ecosystem due to climate change.
Singapore
I am on the 54th floor of the Marina Bay Sands Hotel in Singapore. This place is like a small city. My 11 hour plane ride from Munich to Singapore was very pleasant. Singapore Airlines offered a broad variety of entertainment and this allowed med to watch 21 Jump Street, Safe House, the start of a Dirty Harry movie and then listen to the Door's Greatest Hits twice. I even got some work done while waiting to board the flight from Munich. In Singapore, it is tropical and humid. I experienced my first heavy rain storm and ate my first Chinese meal in a month. I made my first visit to NUS and liked what I saw.
Professor Mitchell Moss Debates Matthew Broderick Over the Future of NYU's Expansion Plans
As the son of a NYU Professor and as an economist who is interested in land use in center cities, I have been avidly following the NY Times stories about NYU's expansion plans. A leading Wagner School Professor named Mitchell Moss is quoted in this NY Times article. Mitchell is a friend of mine and he is a fan of progress and he isn't afraid of standing up to the forces seeking to protect the status quo.
While Matthew Broderick (think of Ferris B. and his famous wife Sarah J. Parker) opposes the expansion plan, Professor Moss steps up and counters Broderick's celebrity wattage with this witty quote:
"“This is not the pristine Village of Sarah Jessica Parker, of ‘Sex and the City,’ of Matthew Broderick,” Mitchell L. Moss, a professor of urban planning at N.Y.U., bellowed, prompting hisses from the audience. “This is the future of New York, and we have to build for the future.”
In 2010, Ed Glaeser and I published a well known paper where we ranked cities with respect to their household carbon footprints. New York City was relatively green! Of course the Village has charm, but in this low crime era there are large social benefits from permitting high density to take place.
It appears to me that there is a large bargaining game taking place and "preservationists" such as Broderick have an incentive to over-state how much they suffer from NYU's plan in order to improve the counter-offer that NYU makes. This is similar to the situation in environmental economics of how much to sue an oil company when a non-market environmental good such as a pristine Gulf of Mexico or Prince William Sound in Alaska is injured. Valuing non-market goods is tricky and leaves a lot of room to discretion.
The NY Times should know that NYU knows that the charm of the Village is its golden goose. While Tom Sargent, Martin Kahn and Mitchell Moss and Paul Romer and others are awesome faculty members, the real reason that young people are willing to pay $55,000 of their parents' cash to attend NYU is to live and play in the Village. If NYU's growth plan kills the "golden goose" then NYU loses! For NYU to keep its competitive edge in private school competition it needs the Village to thrive. It knows that and the NY Times should know that. Instead, the NY Times relishes a "David vs. Goliath" story. But, in this case, who is David?
While Matthew Broderick (think of Ferris B. and his famous wife Sarah J. Parker) opposes the expansion plan, Professor Moss steps up and counters Broderick's celebrity wattage with this witty quote:
"“This is not the pristine Village of Sarah Jessica Parker, of ‘Sex and the City,’ of Matthew Broderick,” Mitchell L. Moss, a professor of urban planning at N.Y.U., bellowed, prompting hisses from the audience. “This is the future of New York, and we have to build for the future.”
In 2010, Ed Glaeser and I published a well known paper where we ranked cities with respect to their household carbon footprints. New York City was relatively green! Of course the Village has charm, but in this low crime era there are large social benefits from permitting high density to take place.
It appears to me that there is a large bargaining game taking place and "preservationists" such as Broderick have an incentive to over-state how much they suffer from NYU's plan in order to improve the counter-offer that NYU makes. This is similar to the situation in environmental economics of how much to sue an oil company when a non-market environmental good such as a pristine Gulf of Mexico or Prince William Sound in Alaska is injured. Valuing non-market goods is tricky and leaves a lot of room to discretion.
The NY Times should know that NYU knows that the charm of the Village is its golden goose. While Tom Sargent, Martin Kahn and Mitchell Moss and Paul Romer and others are awesome faculty members, the real reason that young people are willing to pay $55,000 of their parents' cash to attend NYU is to live and play in the Village. If NYU's growth plan kills the "golden goose" then NYU loses! For NYU to keep its competitive edge in private school competition it needs the Village to thrive. It knows that and the NY Times should know that. Instead, the NY Times relishes a "David vs. Goliath" story. But, in this case, who is David?
Tesla's Smart Marketing Efforts
A former student of mine has taken a sales job at the new Tesla Store in Santa Monica. The LA Times reports about the new store located on theThird Street Promenade in Santa Monica. Many "green products" are new and risk averse consumers do not have much experience with them. By opening a store in a high profile, expensive retail strip, Tesla (who makes electric vehicles) is taking a page from Apple's book by creating hubs where like minded people can gather and learn and touch and see the product. This will generate "green buzz" and should create some momentum. A smart social scientist should stand at the entry of the Tesla Store and try to get the name and address of the people who come through the door. Do these "influentials" talk to their friends about Tesla or write something on Facebook? How does the "green contagion" spread?
Here is a quote from the LA Times article:
"We are deliberately trying to engage with people when they are not thinking about buying a car," said George Blankenship, Tesla's sales chief, who previously worked in the store divisions of Apple and Gap. That's the best way to educate people about how electric cars work, how much they cost to operate and what Tesla has to offer when they eventually go car shopping, he said.
Tesla is a small volume auto company that just started selling its flagship Model S, a sporty, full-size hatchback. The car sells for about $50,000 to more than $100,000 depending on trim level and options. Tesla builds the Model S at a factory in Fremont, Calif., where it plans to also make the Model X, an electric SUV built on the same platform and sharing much of the technology, starting late next year."
The next time I blog, I will be in Singapore.
Here is a quote from the LA Times article:
"We are deliberately trying to engage with people when they are not thinking about buying a car," said George Blankenship, Tesla's sales chief, who previously worked in the store divisions of Apple and Gap. That's the best way to educate people about how electric cars work, how much they cost to operate and what Tesla has to offer when they eventually go car shopping, he said.
Tesla is a small volume auto company that just started selling its flagship Model S, a sporty, full-size hatchback. The car sells for about $50,000 to more than $100,000 depending on trim level and options. Tesla builds the Model S at a factory in Fremont, Calif., where it plans to also make the Model X, an electric SUV built on the same platform and sharing much of the technology, starting late next year."
The next time I blog, I will be in Singapore.
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