Water is the common bond: agriculture, basic human needs, climate change, the environment

BBC News reports on the current drought in India, a complicated and challenging issue.

Following two consecutive bad monsoons, India is facing one of its worst droughts.

Of its 29 states, nearly half were reported to have suffered from severe water crisis this dry season…

The federal government in Delhi has had to send trains carrying water to the worst affected places.

India has faced a water crisis for years. Its ground waters have depleted to alarming levels, mainly because of unsustainable extraction for agriculture and industries.

In response to the drought, the government is planning to create several linkages between rivers so that water can more easily be distributed to locations most severely affected by the drought. The Water Resources Minister, Uma Bharti, also suggests some forward thinking regarding the project:

“The water crisis will be there [in the future] because of climate change but through this [inter linking of rivers] we will be able to help the people,” Ms Bharti said.

“The public has welcomed it and they are happily ready to be displaced.”

Are you keeping tracks of the costs and benefits of this project so far? Physical cost of actually implementing the linkages, benefit of addressing the current drought (e.g. water for direct human consumption and helping agriculture), benefit of being able to address future climate-change-related water crises, cost of displacing people to make the river linkages…anything else?

Environmentalists have opposed the project, arguing it will invite ecological disaster.

Diverting the water will certainly impact ecological systems. And there’s one final curveball mentioned:

“It is even more impossible in the context of climate change as you don’t know what will happen to the rivers’ flows,” says Himanshu Thakkar of the South Asia Network for Dams, Rivers and People.

“The project is based on the idea of diverting water from where it is surplus to dry areas but there has been no scientific study yet on which places have more water and which ones less.”

So apparently there is uncertainty about where exactly more water is needed now, where there is surplus water now, and how this will change in the future. Undoubtedly there is political pressure to address the problem sooner rather than later. Unfortunately, because the issue is extremely complicated and there is a lot that is unknown, a quality economic analysis of the problem would take a lot of time, time which certain people might not be willing to wait for. A difficult problem to address…

Can I pay you not to harvest that timber?

From BBC News, Norway is going to pay Liberia to cease all harvesting of trees from its rainforest by 2020:

Liberia is to become the first nation in Africa to completely stop cutting down its trees in return for development aid.

Norway will pay the impoverished West African country $150m (£91.4m) to stop deforestation by 2020.

Why would Norway want to do that? Apparently…

Liberia’s forests are not as big as other countries but the country is home to a significant part of West Africa’s remaining rainforest, with about 43% of the Upper Guinean forest.

It is also a global diversity hotspot, home to the last remaining viable populations of species including western chimpanzees, forest elephants and leopards.

“We hope Liberia will be able to cut emissions and reduce poverty at the same time,” said Jens Frolich Holte, a political adviser to the Norwegian government, speaking to the BBC on the sidelines of the UN climate summit in New York.

So apparently (assuming “Norway” is acting on behalf of its citizens) Norwegians value the forest because it provides habitat for endangered species and because it acts as a carbon sink. Well, that’s not really that surprising – plenty of studies have shown that residents of one nation value ecosystem services provided by forests and other kinds of habitat in other nations.

But what is surprising is that the two nations were able to strike a deal. Here’s why: typically, the benefit to the nation owning the forest (here, Liberia, whose harvesters can sell the timber) of harvesting from it is greater than the cost of harvesting, which includes not only costs of equipment and labor, but also costs of giving up carbon storage and the costs of harming wildlife habitat. Let’s call the benefits of harvesting to Liberia Bl, and the Costs of harvesting to Liberia Cl. However, forests provide services like carbon storage and wildlife habitat that benefit not only the nation which controls the forest, but residents of other nations as well. So let’s say we have some nations whose names start with a, b, and c. The typical problem is that, even though Bl > Cl, Bl is yet less than Cl + Ca + Cb + Cc. So, from the perspective of the entire world, it’s economically inefficient to harvest from the forest, but from the perspective of the owning nation, it’s economically efficient to harvest from the forest.

This problem comes up repeatedly with the Amazon rainforest which is primarily controlled by Brazil. As far as I know, Brazil has never entered any similar deal with another nation or group of nations to receive payments to not harvest from its rainforest.

In the case of Liberia and Norway though, a deal was struck because the benefits to Norway of not harvesting the forest are greater than the $150m payment it gives to Liberia, and the $150m that Liberia receives is greater than its costs of not harvesting from the forest (i.e. forgone profits from selling timber). And, again, this assumes that each nation has made a decision that is actually best for its own nation.

As the article mentions, success of the deal will depend on being able to enforce the ban on logging, and Norway is prepared to help with that.

By the way, this is also the same exact problem that makes coordinating a global effort to curb greenhouse gas (ghg) emissions difficult (e.g. the Kyoto protocol). For each individual nation, the costs of cutting down on ghg are greater than the benefits of doing so. But from a global perspective, the costs are less than the benefits of doing so because curbing ghg emissions in one nation benefits all other nations.

You don’t see this kind of deal that Liberia and Norway struck very often, if ever. And one of the nice things about it is that residents of other nations besides Norway benefit as well, for example, the U.S. Many U.S. citizens would be happier protecting the habitat of the chimps, elephants, and leopards than allowing the habitat to be cut down. That increase in happiness? Economists would consider that to be a benefit that should be accounted for in any economic analysis of the decision – but most non-economists aren’t used to thinking about these kinds of benefits.

That’s why I describe economics in my principles class as the study of how to make the best decisions by comparing all the costs and all the benefits of an action.

Whither global warming?

I recently read an academic article with the word “whither” in the title and thought it sounded a bit hifalutin (but wait, the word hifalutin sounds hifalutin…) so let me know if you do to. Anyway…

There’s an interesting Wall Street Journal article about how global warming doesn’t really seem to be a thing anymore.

On Sept. 23 the United Nations will host a party for world leaders in New York to pledge urgent action against climate change. Yet leaders from China, India and Germany have already announced that they won’t attend the summit and others are likely to follow, leaving President Obama looking a bit lonely. Could it be that they no longer regard it as an urgent threat that some time later in this century the air may get a bit warmer?

In effect, this is all that’s left of the global-warming emergency the U.N. declared in its first report on the subject in 1990. The U.N. no longer claims that there will be dangerous or rapid climate change in the next two decades. Last September, between the second and final draft of its fifth assessment report, the U.N.’s Intergovernmental Panel on Climate Change quietly downgraded the warming it expected in the 30 years following 1995, to about 0.5 degrees Celsius from 0.7 (or, in Fahrenheit, to about 0.9 degrees, from 1.3).

Climate change has been a major area of research in agricultural and environmental research lately, so it will be interesting to see – if climate science continues to downgrade the threat of global warming – how quickly economic research will change.

Of course, this isn’t to say the matter is settled. The article mentions that it’s mainly the effects over the next two decades which have been adjusted, not necessarily beyond that. So stay tuned to this blog for climate change updates for the next 20 years.

 

IPCC: Crop yields to decline by 2% per decade

From BBC News, the Intergovernmental Panel on Climate Change (IPCC) will soon publish a new report on the anticipated effects of climate change over the next century. In an initial draft of the report, the IPCC states that we can expect world crop yields to decline by up to 2% per decade for the rest of the century.

A leaked draft of the summary, seen by the BBC, points to a range of negative effects that will, in some instances, be “irreversible”.

Millions of people living in coastal areas in Asia will be affected by flooding, and displaced due to land loss.

The draft says that crop yields around the world will decline by up to 2% per decade for the rest of the century.

If the world warms by 4C towards the end of this century, this will pose a “significant risk to food security even with adaptation”.

The summary says that in the near term, at levels of warming that scientists say we are already committed to, there is a very high risk to Arctic sea ice and coral reefs.

They warn that the oceans will become more acidic as they warm, and species will move towards the poles to escape the heat.

Last Thursday, super-famous (hey, at least in our world) environmental economist Richard Carson came and gave a lecture on the evolution of economic thought on climate change. One thing he pointed out was that most current climate change prediction models look at effects on agriculture in a still relatively broad manner and that there is a great need for analyses that are more crop-specific and region-specific.