Monthly Archives: December 2007

Divorce and the environment

 

Resource-inefficient lifestyles such as divorce?  Yu and Liu in Environmental impacts of divorce , published online Dec 5 2007 in the Proceedings of the National Academy of Sciences USA suggest that divorce increase the amount of resources devoted to housing and quantify such increase.

The point they make is simple: there are economies of scale in housing so that a person living in a large household consumes less resources than one living in a smaller one. Divorce increases the number of households and thereby the amount of resources housing uses up.

In the abstract, the authors use the expression “resource-inefficient lifestyles such as divorce“. I am perplexed: shouldn’t one evaluate the efficiency or inefficiency of a lifestyle taking into account, in addition to the resource used, also the benefit such use yields? Russ Roberts is outright critical in Not from the Onion:

The environmental impact of divorce? Are you kidding me? This is the cost of not understanding economics, not understanding trade-offs, not understanding the role of prices. The virtue of prices is that prices tell us what things cost. Some things are relatively cheap. Some are relatively expensive. Marriage is tough on cotton. When you marry, you tend to have kids. Kids tend to wear clothes and that means marriage is tough on cotton. But we don’t worry about that. We understand that the price of clothes discourages people from consuming too much clothing. And when clothing gets cheaper, as it has over the last 50 years, people buy more clothing as a result, use more cotton, devote more land to cotton farming and so on. That’s not a downside of marriage or having kids–people pay for the clothing they use. They take account of the cost when they decide to buy something. So when they do buy it or use it, that means that the benefits outweigh the costs. And that means that live IMPROVES and gets better, not worse when we use more of something.

In the case of water or electricity, if they’re subsidized, then yes, people ignore the full costs when they use more of those things, whether it’s because they’re divorced or simply because they want a warmer home or take a longer shower. The solution isn’t to decry divorce, it’s to fix the prices.”

We could fix prices with Pigouvian taxes as suggested in the Pigou club manifesto.

More on the topic: NPR podcast ‘Marketplace:’ Divorce, an Environmental Hazard?

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Becker and Posner on carbon offsets

Becker and Posner discuss carbon offsets on the Becker-Posner blog. Posner suggests that the most serious drawback of the carbon offset movement is that it “creates the false impression that global warming can be tamed by voluntary efforts just as cleaning up after dogs has been achieved by voluntary efforts, without need for legal compulsion. Global warming cannot be tamed by voluntary efforts, because the costs of significantly reducing carbon emissions in order to reduce the atmospheric concentration of carbon dioxide (or at least stop it from increasing) are enormous. If people believe that voluntary efforts will suffice, there will be no political pressure to incur the heavy costs that will be necessary to avert the risk of catastrophic climate change.

In a comment Adam Stein co-founder of TerraPass, a carbon offsets selling company objects: “…offsets are not a substitute for cap-and-trade at all. Rather, the voluntary market is a potentially useful complement to a regulated market, acting in the short-term as a sort of policy bridge while the world waits for the U.S. federal government to take meaningful action; and in the long term as a supplementary source of carbon reductions…Regarding whether the existence of a voluntary market reduces political pressure for mandated reductions: this is a charge that is made frequently, and without real evidence. Awareness of the causes and potential solutions of climate change is still dismally low in the United States, and it is hard to see the disadvantage of programs which draw attention to the problem. In fact, the rise of the voluntary market has coincided with a remarkable surge in support for political solutions to climate change.”

Taleb’s Black Swan

I recently finished reading Nassim Nicholas Taleb’s The Black Swan: The Impact of the Highly Improbable, a book I found very stimulating. For those who aren’t acquainted with this book, here is a link to the good Ecological Economics blog post Nassim Taleb on Cultural Blinders and the excellent interview with Taleb on EconTalk podcast. See also Nassim Nicholas Taleb’s Home Page.