Ecology and Economics

Jared Diamond's Collapse: How Societies Choose to Fail or Succeed

Book Review teaser: "Diamond argues [that] environmental concerns are at least equal in importance, and inextricably linked, to all other aspects of a society's success. … when it comes to the environment, a stitch in time means more than saving nine—it's the difference between keeping and losing your shirt."

via Grist: Don't Do as the Romans Do
Jared Diamond's Collapse traces the fates of societies to their treatment of the environment
BY MICHAEL J. KAVANAGH
[writer and public radio reporter]
08 Feb 2005

If [Guns, Germs and Steel:The Fates of Human Societies ] venerated the role that geographic chance played in societal development, Diamond's newest book, Collapse: How Societies Choose to Fail or Succeed, restores human agency to the picture. Through a grab bag of case studies that range from the Mayan Empire to modern China, Diamond tries to distill a unified theory about why societies fail or succeed. He identifies five factors that contribute to collapse: climate change, hostile neighbors, trade partners (that is, alternative sources of essential goods), environmental problems, and, finally, a society's response to its environmental problems. The first four may or may not prove significant in each society's demise, Diamond claims, but the fifth always does. The salient point, of course, is that a society's response to environmental problems is completely within its control, which is not always true of the other factors. In other words, as his subtitle puts it, a society can "choose to fail."

Diamond … identifies the 12 environmental problems that are portents of doom: destruction of natural habitats (mainly through deforestation); reduction of wild foods; loss of biodiversity; erosion of soil; depletion of natural resources; pollution of freshwater; maximizing of natural photosynthetic resources; introduction by humans of toxins and alien species; artificially induced climate change; and, finally, overpopulation and its impact. …

Correcting Market Failure in Timber Markets

This is from Tim Haab at Environmental Economics via Economist's View. Particularly interesting readers' comments at EV.

How to lengthen timber rotations, by Tim Haab: Since the mid-1800's economists have understood that a private owner of a stand of trees will harvest the trees when the future returns to leaving the trees in the ground (to grow) dip below the returns that could be earned by cutting the trees. But, if the trees provide external--social--benefits beyond those captured in the private market, like for example storing carbon, then the private owner of the trees must be given the monetary incentive to incorporate these benefits. Otherwise, the private benefits and the social benefits will not be the same and the trees will be cut too soon. That's exactly the premise behind Forest Protocols program of the California Climate Action Registry. As the AP explains it (via ENN.com):

The nonprofit California Climate Action Registry was set up by the state six years ago to encourage corporations and government agencies to track, and ultimately reduce, their emissions. The Forest Protocols program will allow environmentally minded citizens to pay to preserve enough trees to offset their personal carbon emissions.

The registry has calculated how much the timber industry loses by allowing trees to grow longer and bigger -- past the time they are normally harvested. The industry would then be compensated by other companies that buy carbon credits -- or shares of the trees -- to offset their carbon emissions.

Foresters will be paid to lengthen the rotation period.

I'm starting to become a big fan of these offset programs. One of the major problems with markets is that it is difficult to for multiple individuals to convey social costs (or benefits) imposed by the actors in a market without government organization. But private, nonprofit groups provide just such a means without the government bureaucracy.

While these groups help to solve the coordination problem, participation is voluntary so they don't solve the free-riding problem. I have no incentive to participate in carbon emissions reduction-- either through contributing to an offset program or through changing my behavior. But if the government did decide to mandate my carbon reductions, I would much rather have the choice to pay someone else to do it for me rather than just be forced to change my own behavior. I'm not saying I wouldn't change my behavior, I'm just saying I want the choice. I like more choices...most of the time.

New Online Journal: International Journal of Transdisciplinary Research!

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International Journal of Transdisciplinary Research! A journal in favor of an economic paradigm shift and for research on society, economy, and ecology.

Current Issue: Volume 1, Issue 1

1. Transdisciplinary Research: Moving Forward [PDF]
   John M. Polimeni
   
2. The Need for a New Biophysical-based Paradigm in Economics for the Second Half of the Age of Oil [PDF]
   Charles A. Hall and Kent A. Klitgaard
   
3. Production Theory and Peak Oil: Collapse or Sustainability? [PDF]
   John M. Gowdy
   
4. Knowledge Representation and Mediation for Transdisciplinary Frameworks: Tools to Inform Debates, Dialogues & Deliberations [PDF]
   Ângela Guimarães Pereira and Silvio Funtowicz
   
5. Can Biofuels Replace Fossil Energy Fuels? A Multi-scale Integrated Analysis Based on the Concept of Societal and Ecosystem Metabolism: Part 1 [PDF]
   Mario Giampietro, Kozo Mayumi, and Jesus Ramos-Martin
   
6. Systems Thinking and Common Ground [PDF]
   John Peet
   
7. Economic Efficiency in Fisheries and Aquaculture [PDF]
   Paul Molyneaux

Global Warming Blamed for Increasingly Destructive Wildfires

Global Warming gets tagged for increased frequency and destructive character of wildfires:

Science News Online
Week of July 8, 2006; Vol. 170, No. 2 , p. 19

The Long Burn: Warming drove recent upswing in wildfires
Ben Harder

Major forest fires in the western United States have become more frequent and destructive over the past 2 decades. The trend has occurred in step with rising average temperatures in the region.

WILDFIRE WEST. Rising temperatures and earlier snowmelts have intensified forest fires.    AP/Wide World

… Western snow packs now typically melt a week to a month earlier than they did half a century ago, recent studies have shown.

The northern Rockies have borne the brunt of the shift in fire patterns. In 1988, midsummer infernos torched 600,000 hectares in and around Yellowstone National Park; 25,000 firefighters battled the blaze, which continued until that winter's first snows fell.

About three-fifths of the largest U.S. wildfires since then have struck the same region. Government agencies spend up to $1.7 billion per year on wildfire control, and annual damages sometimes exceed $1 billion.

To understand the factors behind this mounting hazard, Swetnam and three colleagues examined fire, weather, and snowmelt data from 1970 to 2003.

For each year, the number and total area of major forest fires closely correlated with average spring and summer temperatures and with the date on which snowmelt peaked, reports the team, which was led by Anthony Westerling of the Scripps Institution of Oceanography in La Jolla, Calif.

Since 1987, fires have burned 6.5 times as much area per year as they did between 1970 and 1986, the researchers report in an upcoming Science. The average temperature increased 0.87°C between the two periods, and the average length of the fire season grew by 78 days.

"Warmer temperatures seem to be increasing the duration and intensity of the wildfire season in the western United States," comments ecologist Steven Running of the University of Montana in Missoula. …

… Fire-control efforts need to be adjusted accordingly … says Constance I. Millar of the U.S. Forest Service in Albany, Calif.

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Science Express
Published Online July 6, 2006
Science DOI: 10.1126/science.1128834

RESEARCH ARTICLES
Submitted on April 17, 2006
Accepted on June 28, 2006

Warming and Earlier Spring Increases Western U.S. Forest Wildfire Activity
Anthony Leroy Westerling, Hugo G. Hidalgo, Daniel R. Cayan, Thomas W. Swetnam
[Abstract and link to PDF]

Why Can't We Learn from our Mistakes?

In The Limits to Learning, James Montier says that "The major reason we don't learn from our mistakes (or the mistakes of others) is that we simply don't recognise them as such. We have a gamut of mental devices all set up to protect us from the terrible truth that we regularly make mistakes." Don't we ever!

I have decided that in government, in large industry, and in personal endeavors people don't want to study decision-making in part or in whole because it proves much easier to pretend that they know more than they can, or at least to pretend to others that they know more than they do.

In either case, the lucky get rich and or famous, proving up on Kurt Vonnegut's line: "If you would be unloved and forgotten, be reasonable." PS.. The "unlucky" are just collateral damage from the systems, never to be remembered, never to be mourned except by the few who knew them personally and who also tend to be disgusted by the "systems that be," by the "powers that be."

Montier continues by identifying several "biases" that thwart learning:

Self attribution bias: heads is skill, tails is bad luck

We have a relatively fragile sense of self-esteem; one of the key mechanisms for protecting this self image is self-attribution bias. This is the tendency for good outcomes to be attributed to skill and bad outcomes to be attributed to sheer bad luck. This is one of the key limits to learning…. This mechanism prevents us from recognizing mistakes as mistakes, and hence often prevents us from learning from those past errors. …

Hindsight bias: I knew it all along

One of the reasons I suggest that people keep a written record of their decisions and the reasons behind their decisions, is that if they don't, they run the risk of suffering from the insidious hindsight bias. This simply refers to the idea that once we know the outcome we tend to think we knew it was so all along. …

Illusion of control

We love to be in control. We generally hate the feeling of not being able to influence the outcome of an event. It is probably this control freak aspect of our nature that leads to us to behave like [B.F.] Skinner's pigeons. ["Skinner's theory was based around operant conditioning. As Skinner wrote, 'The behavior is followed by a consequence, and the nature of the consequence modifies the organism's tendency to repeat the behavior in the future.'"] ...

Feedback distortion

Not only are we prone to behave like Skinner's pigeons but we also know how to reach the conclusions we want to find (known as 'motivated reasoning' amongst psychologists). …

We have outlined four major hurdles when it comes to learning from our own mistakes. Firstly, we often fail to recognize our mistakes because we attribute them to bad luck rather than poor decision making. Secondly, when we are looking back, we often can't separate what we believed beforehand from what we now know. Thirdly, thanks to the illusion of control, we often end up assuming outcomes are the result of our actions. Finally, we are adept at distorting the feedback we do receive, so that it fits into our own view of our abilities.

Some of these behavioural problems can be countered by keeping written records of decisions and the 'logic' behind those decisions. But this requires discipline and a willingness to re-examine our past decisions. Psychologists have found that it takes far more information about mistakes than it should do, to get us to change our minds.

In a more broadly framed article titled "Part man, part monkey" [PDF: 12 pp.], James Montier helps us understand how our decision-making errors can be traced to four common causes: self-deception, heuristic simplification, emotion, and social interaction. Looking for biases that limit our learning, Montier develops a broader list under his four categories, that he calls a "Taxomony of Biases."

Stiglitz: A New Agenda for Global Warming

In The Economists’ Voice Joseph Stiglitz proposes: A New Agenda for Global Warming. Stiglitz proposes a "global" environmental tax on emissions in lieu of tradeable pollution rights. Although it may seem like a good idea, some big problems remain, including: Who is going to levy the tax? Who is going to broker the agreement as to the size of the tax? And how are we to get any agreement as to the equity of such a tax when the industrialized countries already had their pollution heyday, and less-industrialized countries feel they should somehow either get theirs or get a subsidy from the already industrialized countries? This is not to say there aren't similarly big problems with tradeable pollution rights agendas. Here is a snippet from Stiglitz's proposal:

… The world seems at an impasse: the United States refuses to go along unless developing countries are brought into the fold; and the developing countries see no reason why they should not be allowed to pollute as much per capita as the United States or Europe. Indeed, given their poverty and the costs associated with reducing emissions, one might give them even more leeway. But, given their low levels of income, that would imply that no restraints would be imposed on them for decades.

There is a way out, and that is through a common (global) environmental tax on emissions. There is a social cost to emissions, and the common environmental tax would simply make everyone pay the social cost. This is in accord with the most basic of economic principles, that individuals and firms should pay their full (marginal) costs. The world would, of course, have to agree on assessing the magnitude of the social cost of emissions; the tax could, for instance, be set so that the level of (global) reductions is the same as that set by the Kyoto targets.

As technologies evolve, and the nature of the threat of global warming becomes clearer, the tax rate could adjust, perhaps up, perhaps down. ... each country could keep its own revenues and use them to replace taxes on capital and labor: it makes much more sense to tax "bads" (pollution,like greenhouse gas emissions) than to tax "goods," like work and saving. (Economists refer to these taxes as corrective taxes.) Hence, overall economic efficiency would be increased by this proposal. The big advantage of taxation over the Kyoto approach is that it avoids most of the distributional debate. Under Kyoto, getting the right to pollute more is, in effect, receiving an enormous gift. (Now that pollution rights are tradeable, we can even put a market value on them.) The United States might claim that because it is a larger country, it “needs” more pollution rights. Norway might claim that because it uses hydroelectric power, the scope for reducing emissions is lower. France might claim that because it has already made the effort to go into nuclear energy, it should not be forced to reduce more. Under the common tax approach, these debates are sidestepped. All that is asked is that everyone pay the social cost of their emissions, and that the tax be set high enough that the reductions in emissions is large enough to meet the required targets. The economic cost to each country is small—in some cases, actually negative.

What do you think of this proposal relative to Kyoto?

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Hat Tip to Calculated Risk.

Some Points to Ponder During Messy Ecological Policy Wars

Robert T. Lackey published nine Axioms of Ecological Policy [PDF] in the June issue of Fisheries, the journal of the American Fisheries Society. Lackey's axioms are insightful, and ring particularly true to those of us who have spent our adult lives tangled up in ecological policy wars. Here they are, in brief:

Axioms of Ecological Policy

1. The policy and political dynamic is a zero-sum game. [... "The search for a "win-win" choice...is hopeless.... There are always winners and losers..."]
2. The distribution of benefits and costs is more important than the ratio of total benefits to total costs.
3. The most politically viable policy choice spreads the benefits to a broad majority with the costs limited to a narrow minority of the population.
4. Potential losers are usually more assertive and vocal than potential winners and are, therefore, disproportionately important in decision making.
5. Many advocates will cloak their arguments as science to mask their personal policy preferences.
6. Even with complete and accurate scientific information, most policy issues remain divisive.
7. Demonizing policy advocates supporting competing policy options is often more effective than presenting rigorous analytical arguments.
8. If something can be measured accurately and with confidence, it is probably not particularly relevant in decision making.
9. The meaning of words matters greatly and arguments over their precise meaning are often surrogates for debates over values.

Lackey frames "messy" ecological policy as follows:

Many of today's are politically contentious, socially wrenching, and replete with scientific uncertainty. They are often described as wicked, messy, policy problems, (e.g. reversing the decline of Salmon, deciding on the proper role of wild fire on public lands; what to do, if anything, about climate change; worries about the consequences of declining biological diversity; making sense of the confusing policy choices surrounding notions of sustainability).

Wicked, messy, ecological policy problems share several qualities:

1. complexity—innumerable options and tradeoffs;
2. polarization—clashes between competing values;
3. winners and losers—for each policy choice some will clearly benefit, some will be harmed, and the consequences for others is uncertain;
4. delayed consequences—no immediate "fix," and the benefits, if any, of painful concessions will often not be evident for decades;
5. decision distortion—advocates often appeal to strongly held values and distort or hide the real policy choices and their consequences.
6. national vs. regional conflict—national or (international) priorities often differ substantially from those at the local or regional level; and
7. ambiguous role for science—science is often not pivotal in evaluating policy options, but science often ends up serving inappropriately as a surrogate for debates over values and preferences.

As if they are not messy enough, ecological policy issues may become further clouded by skepticism about the independence of scientists and scientific information. Much of the available science is tendered by government agencies, corporations, and public and private organizations, as well as myriad public and private interest and advocacy groups. Each arguably has a vested interest in the outcome of the debate and often promulgates "science" that supports its favored position. …

If you enjoy Lackey's sampler, here are a few suggested readings:

• A Primer on Decision-Making: How Decisions Happen. James G. March. 1994.
• Policy Paradox: The Art of Political Decision Making. Deborah Stone. 2001 (Revised Edition).
• System Effects: Complexity in Political and Social Life. Robert Jervis. 1997.
• Decision Traps: The Ten Barriers to Brilliant Decision-Making and How to Overcome Them. J. Edward Russo and Paul H. Schoemaker. 1989.
• The Logic of Failure: Recognizing and Avoiding Error in Complex Situations. Dietrich Dörner. 1996.

And for more from Robert Lackey, try these:

• Normative Science, 2004
• Seven Pillars of Ecosystem Mangement, 1998

July 10 Update:
Lackey did an admirable job of stating his nine axioms, but on reflecton I feel inclined to edit and embellish them a bit. Something like:

1. The policy and political dynamic is a zero-sum game. [... "The search for a "win-win" choice...is hopeless.... There are always winners and losers..."]
2. The distribution of benefits and costs is more important than the ratio of total benefits to total costs. {Efficiency should be addressed in designing alternatives—each alternative should be designed to be efficient, to do what it is intended to do without apparent waste—leaving the choice among alternatives to be based on other factors, including "distribution."}
3. The most politically viable policy choice appears to spread the benefits to a broad majority with the costs limited to a narrow minority of the population. {Of course Machiavellian players will try to narrow the benefits to their preferred constituents while maintaining the appearance of broad distribution, and simultaneously distribute the cost to those disfavored, else distribute the costs generally so as to give the appearance of fairness.}
4. Potential losers are usually more assertive and vocal than potential winners and are, therefore, disproportionately important in decision making and often used as important targets in political smear campaigns by Machiavellian players.
5. Many advocates will cloak their arguments as science to mask their personal policy preferences. {Including government agencies, polticians, interest groups, ...}
6. Even with complete and accurate scientific information, most policy issues remain divisive. {Almost never, by the by, is there "complete and accurate scientific information" in ecological policy disputes.)
7. Demonizing policy advocates supporting competing policy options is often more effective than presenting rigorous analytical arguments.
8. If something can be measured accurately and with confidence, it is probably not particularly relevant in decision making. {The analytical game played by many agencies, despite valiant attempts otherwise by well-meaning analysts, is to mask true value choices as choices varying in degrees of efficiency, thereby distracting participants into policy backwaters and eddies.}
9. The meaning of words matters greatly and arguments over their precise meaning are often surrogates for debates over values.

ICAPE: alliance of radicals (wide-awake economists?)

Ever heard of ICAPE? I had not until I saw this announcement from post-autistic economics review for a next-year conference in my part of the world:

Announcement
The International Confederation of Associations for Pluralism in Economics (ICAPE)
announces its second international conference:
Economic Pluralism for the 21st Century
June 1-3, 2007
University of Utah (Salt Lake City, Utah, USA)

In the second half of the 20th century, neoclassical economics and its derivatives came to dominate economic thinking, teaching and policymaking. Humanity is increasingly feeling the consequences of this blinkered vision: the ever-widening gap between the very rich and all the rest, and between developed and underdeveloped nations; globalization without global coordination for the common good; and economically induced climate change, with the mid-century prospect of an Earth unable to support even current levels of human population. Meta-externalities from economic systems are draining the resources on which they depend, from families and other institutions that educate and socialize human beings, to water, air, soil, and the diversity of species.

In a positive vein, economics in the 21st century has already taken a decidedly pluralist turn, spurred in part by the struggles of economists – mainstream and heterodox – to increase the relevance of economic theory, policy, and education in a changing and challenged world where no single theoretical tradition or institutional structure can reasonably claim to hold “the key” to human betterment.

ICAPE and the organizers of "Economic Pluralism for the 21st Century" invite proposals for papers that discuss or demonstrate the value of economic pluralism in any of its domains: economic theory and philosophy, economic institutions and policies, or economic education.

Panels will be organized around thematic topics, with an eye to encouraging dialogue among authors whose papers address similar issues from different points of view. In this fashion, we hope to promote critical engagement and mutual learning among conference participants.

Details are available here.

Update July 10:

Following a trackback on this post I was reminded that it proves important to note that there are many economists from many different ideologies in economics who are indeed "wide-awake" to the limits of thier ideology/methodology as well as to the complexities and political wickedness embedded in the problems of the world.

But there are also many economists in both mainstream and non-mainstream fields who, like many practitioners from all fields, remain pretty much zombie-like in their too-narrow focus, too-easily-misinterpreted prognostications. We who align ourselves with the more radical (or more rational, depending on one's perspective) fields need to acknowledge contributions from whence they come and not get too wrapped up in of our criticism of other disciplines.For those wanting to know more about the "associate groups" in ICAPE, read on:

The Three Lenses of Threat Perception

In an article in the LA Times, psychologist Daniel Gilbert offers some insight into how people tend to evaluate the extent to which something like terrorism or global warming is a threat.  According to him:

NO ONE seems to care about the upcoming attack on the World Trade Center site.  Why?  Because it won't involve villains with box cutters.  Instead, it will involve melting ice sheets that swell the oceans and turn that particular block of lower Manhattan into an aquarium.

The odds of this happening in the next few decades are better than the odds that a disgruntled Saudi will sneak onto an airplane and detonate a shoe bomb.  And yet our government will spend billions of dollars this year to prevent global terrorism and … well, essentially nothing to prevent global warming.

Why are we less worried about the more likely disaster?  Because the human brain evolved to respond to threats that have four features — features that terrorism has and that global warming lacks.

What, in Gilbert's estimation, are the four features of perceived threats? 

1. they are the product of human intention;
2. they violate our moral sensibilities;
3. they represent an immediate problem; and
4. they appear suddenly or grow rapidly.