Monday, November 30, 2009

"By Force of Thought"

I wish more economists - especially those associated with the Bank of Sweden - would read Janos Kornai's fascinating intellectual autobiography, By Force of Thought (MIT 2006). As someone who has written about the law and economics of socialism (e.g., in my 1998 book Instituting Environmental Protection: From Red to Green in Poland (Macmillan and St. Martin's)), I was already very familiar with Kornai's important contributions - shortage economics, soft budget constraints, etc. - to our understanding of socialist economics. I did not realize, however, just how much he was engaged in empirical and econometric studies in association with those theories. And he was almost entirely self-taught! Kornai is not only a brilliant and important economist, but a remarkable man.

"Social Enterprises"

My law school colleagues Rob Katz and Antony Page made a very interesting presentation today at the Workshop in Political Theory and Policy Analysis in Bloomington on the place of so-called "social enterprises" in the American system of corporate organization. These "social enterprises" claim missions beyond maximizing profits, such as supplying public goods that are not supplied either by for-profit enterprises or government agencies. But, Katz and Page argue, "social enterprises" do not fit comfortably into existing categories of for-profit or non-profit organizations, and require new legal rules to facilitate their activities. I tend to agree, but I see a tremendous line-drawing problem. After all, every for-profit enterprise creates social value by contributing the the tax base, creating jobs, training workers, etc. What seems to differentiate "social enterprises" is the explicit social mission. Unlike non-profit corporations, social enterprises seek   revenues primarily from sales of goods or services, rather than donations; but unlike for-profit enterprises, they seek profit not as an end in itself but as a means to accomplish whatever social mission the corporate officers articulate. Normally, for-profit corporations can only engage in social missions through a distinct entity, such as a foundation. That is why, according to Katz and Page, "social enterprises" require a distinct set of rules to facilitate their activities.

Just what those rules should be, and how they might be structured to prevent strategic manipulation by for-profit corporations acting like "social enterprises," are issues Katz and Page are still working to address. The problem of manipulation is potentially massive. I'll be interested to see where Katz and Page end up with this project. As soon as they post a paper on SSRN, I'll link to it.

Go Saints!

I participate in a NFL football pool for charity; proceeds go to public school libraries in Chicago. The participants pick the winners of each regular-season game, and weight the games from 16-1. So, for example, I put 16 points on the Vikings to beat the Bears yesterday, and only 1 point on Denver to beat the NY Giants. I won the pool title for the 2007 season, but since then I haven't even managed to win a single week against the other 25 participants, including two of my law school colleagues both of whom are ahead of me in this year's pool with only 5 weeks remaining. But I can win the pool for this week, if the Saints beat the dreaded Patriots. A Saints win would give me 125 points for the week, 1 point victory, and some momentum for a late-season surge toward the championship. Ah, delusions of grandeur!

Sunday, November 29, 2009

Unsuspecting Cyclists Win Tour de France (very funny)

Hat tip: Christian VandeVelde

A Miserable Performance

I got home from today's ride in time to watch the second half of the Arsenal-Chelsea match, which has significantly implications for the Premiership title race. By the time I turned on the TV, Arsenal were already down 2-0. Chelsea scored 3 minutes before halftime, and again in first-half stoppage time on an own-goal by Vermaelen (who has been great for Arsenal all season). Anelka added a third for Chelsea with 10 minutes left in the game. I can't remember the last time Arsenal failed to score at home. To say they miss van Persie would be a gross understatement. The Gunners' hopes for the title are looking quite dim. Still, there's a lot of football/soccer left to be played.

Saturday, November 28, 2009

Good Weekend of Cycling

35 miles of tempo pace on Chilly Friday. 48 miles of more sprightly riding today, on what might have been the best day of cycling weather Indy will experience for the next three months. Today's ride put me over 5100 for the year. The legs are feeling a bit heavy tonight. Instead of tomorrow morning's chilly outdoor ride, I'll pedal easy (with a few spin-ups and maybe some one-legged drills) on my trainer while watching the Arsenal-Chelsea derby at 11. It would be an understatement to say that it's a big game for The Gunners.

UPDATE: It's Sunday morning and the weather's too nice to sit on the trainer. I'll be riding outdoors this morning, and back to see the last half or so of the Arsenal-Chelsea match.

2d UPDATE: Special thanks to Coach Bob Brooks for leading a GREAT Sunday ride at recovery pace. He achieved what I hadn't be able to accomplish in the last month of Sundays. With more than 20 riders in the pack, Bob's natural authority kept the hammerheads in check. Everyone stayed together with much good conversation during the ride.

Against "Coasian Bargaining," But Pro Coase and Pro Bargaining

When Peter Grossman and I revise Chapter 4 (on "'The Problem of Social Cost and Modern Law and Economics") of our Principles of Law & Economics textbook for the Second Edition (forthcoming Aspen/Kluwer 2011), I would like to incorporate some paragraphs on the phrase "Coasian bargaining," which appears with increasing frequency in the literature. In my view, it is a meaningless and potentially pernicious phrase, which Ronald Coase himself would almost certainly disavow.

When scholars use the phrase "Coasian bargaining," it is rarely clear just what they mean by it. Perhaps they mean many different things, but in the aggregate the phrase seems to refer to a subset of all bargains in which parties to some dispute or potential dispute over entitlements to resources manage to bargain their way to a socially efficient outcome.

But if that's all "Coasian bargaining" means, then the question arises: what distinguishes "Coasian bargaining" from bargaining simpliciter? I have never come across a satisfactory answer to this question. The difference cannot be based on the existence of transaction costs because, in the real world, transaction costs are ubiquitous; all bargaining (failed or successful) occurs in the presence of transaction costs. When those costs are high, bargaining is less likely to be successful, but may nevertheless succeed; when transaction costs are low, bargaining is more likely to be successful, but may nevertheless fail. In the absence of any analytically significant basis for distinguishing between bargaining and "Coasian bargaining," the addition of Coase's name seems inconsequential. "Coasian bargaining" = bargaining.

The phrase "Coasian bargaining" may also be pernicious to the extent that scholars might use it to assert or imply that the "Coase theorem" functions in the real world - something Coase himself has always vehemently denied. Coase articulated what George Stigler later labeled "the Coase theorem" to describe the world of neoclassical economic theory, which Coase sought to amend. The Coase theorem states that markets will always move goods to their highest and best uses, regardless of the initial allocation of entitlements (i.e., property rights) via voluntary contracting in the free market, if transaction costs are zero. The if is all important. As Coase has consistently pointed out, in the real world transaction costs are never zero; they are always positive and often quite high. Consequently, the initial allocation of entitlements - more broadly, the legal rules and social norms - can impede (or facilitate) allocative efficiency. If "Coasian bargaining" implies otherwise, it flies in the face of everything Coase has tried to teach us about the importance of property rights and legal rules for ultimate economic outcomes.

If it is ironic that Coase is best known for the "Coase theorem," which describes an unrealistic economic world view Coase sought to amend, it is equally ironic (not to mention wrong-headed) for scholars today to use the term "Coasian bargaining" in a vain effort to empirically validate the "Coase theorem."

Friday, November 27, 2009

The Curse of a Book-You-Can't-Put-Down

Usually, the phrase "book you can't put down" is high praise, but it can pose a problem when that book - CP Snow's Strangers and Brothers - is a 3,000-page collection of 11 novels, meant to be read as a single work. The omnibus edition, in three volumes, is thoroughly engrossing, but takes up far too much of my time. I'm currently on novel #5, The Masters, which is widely regarded as the best of the series. It is, indeed, excellent, but I'm not sure it's better than the first, The Time of Hope, or the fourth, The Light and the Dark. The later is a compelling examination of the curse of chronic depression before the availability of effective anti-depressant medication.

From Fall Cycling to Winter Cycling

It seems somehow appropriate that the day after Thanksgiving I should have to pull out my winter cycling gear for a ride this afternoon. With expected high temps around 40, and wind chills in the mid-30s, long-sleeved jerseys over base layers and knee warmers won't be good enough today. It's time to go thermal. Balaclava here I come.

Thursday, November 26, 2009

China Trumps the US Promise on GHG Reductions

The Daily Telegraph is reporting (here) that China has voluntarily committed to a 40-45% reduction in greenhouse gas (GHG) emissions reductions per unit of GNP. It's very difficult to judge just what this means for total Chinese emissions; it's not even clear whether it would amount to a nominal reduction in emissions as against 2005, let alone 1990, given the rate of growth in the Chinese economy and its emissions. Moreover, like the Obama Administration's proposed reduction in emissions (which I posted about earlier), the commitment lacks credibility - there is no reason for any other country to believe that China will actually meet the commitment.

That said, it is worth recognizing that China is, at least, engaging with the rest of the international community on the need for GHG emissions reductions. As the world's largest emitter (though not per capita), Chinas's participation in international climate policy is absolutely essential. Today's promise to reduce emissions per unit of production is a very small step in a good direction. And getting the direction right on GHG emissions would be a very nice change in climate policy.

The Importance of Zone 2 Training for Cyclists

I found this great article by Frank Overton from a 2003 issue of confirming the benefits of base (Power Zone 2) training during the off-season for "building the aerobic 'engine' of the cyclist":
For the cyclists in the base phase, consistency and steady time spent in zone 2 are key elements in building plasma volume and teaching the body to burn fat in preference of muscle glycogen. Increasing mitochondrial density in all that newly developed muscle gained in the weight room is another adaptation that occurs during the base phase. Pushing yourself towards the red zone negates all these aerobic gains during these long easy rides.... An under developed aerobic engine, overtraining, decreased recovery, and ultimately decreased race performance are all risks of going too hard too early.
*     *     *
Instead of showing up for your weekend group ride and getting sucked into the madness, I recommend finding a smaller group of friends with similar fitness levels interested in maintaining a steady zone 2 pace. You’ll be happy that you’re not in the gutter duking it out on the Saturday morning world championships AND your training will be better for it.
I couldn't agree more.

Happy Thanksgiving

This is my favorite of all holidays because of its simple premise of giving thanks for the good things we have in life. I hope everyone enjoys the day.

Wednesday, November 25, 2009

President Obama's Incredible Commitments

The New York Times is reporting (here) that President Obama will travel to Copenhagen next month for  climate change talks, bearing a US "pledge" to reduce greenhouse gas emissions by 17% from 2005 levels by 2020, and 84% by 2050.

From my perspective, there are two problems with the president's plan: (1) As I argued in an earlier post, getting the institutions right is more important at this point in time than setting emissions reduction targets. I recognize that, as a practical matter, setting targets may be a necessary prerequisite to instituting regulatory policies, but targets without policy prescriptions are senseless. (2) A president's "pledge" that is not backed up by legislation has little credibility, and a pledge about targets 40 years in the future is not credible at all. Thomas Schelling, the 2005 Nobel laureate in economics, and Oliver Williamson, one of this year's winners, have each written extensively about the need for commitments to be credible in order to achieve strategic aims. Because the president's pledge does not amount to a credible commitment, it seems unlikely to have much affect on any other country participating in the Copenhagen talks.

The New York Times article opines that President Obama's strategy may be intended primarily for domestic, rather than international, consumption: by committing to emissions reduction targets at an important international meeting, he may ratchet up pressure on the Senate to pass climate legislation early next year. Whether or not that is a sensible strategy, the fact remains that Congress's failure to complete work on climate legislation this year has weakened the President's legitimacy at Copenhagen, and reduced the already low probability that the parties might adopt a successor treaty to the Kyoto Protocol this year. That, in itself, may not be such a bad thing, however, if delay results in the design of an improved protocol, which is at least barely possible.

I fear that President Obama's second trip this year to Copenhagen will prove no more successful than his first (in support of Chicago's bid to host the Olympics).

UPDATE: According to this story in the Daily Telegraph, President Obama's 2020 commitment of a 17% GHG emissions reduction from 2005 only amounts to a 4% reduction from 1990 emissions, which is below the commitment the US made in the Kyoto Protocol, which President Clinton signed, but the Senate never ratified. Other countries, including the EU, that are working to meet their Kyoto targets are hardly likely to be wowed by such a commitment.

A Natural Experiment

Will winter training sessions this evening and Friday morning do enough to counteract all the eating I will do on Thanksgiving Day? My hypothesis: no.

UPDATE: So much for my experiment. No training on Friday.

New Book by Maria Pabon Lopez

My colleague, Maria Pabon Lopez, has just published a new book, with her husband Gerardo: Persistent Inequality: Contemporary Realities in the Education of Undocumented Latina/o Students (Routledge 2009). I haven't had a chance to read it yet, but Maria and Gerardo are both top-notch scholars.

New OIRA Regulations on Regulatory Review

Just after taking office, the Obama Administration announced that it would considered amending the existing Executive Order that requires executive-branch agencies to performing benefit-cost analyses (BCAs), subject to review by the Office of Information and Regulatory Affairs (OIRA) in the President's Office of Management and Budget (OMB). Since that announcement,  the OIRA has received more than 180 comments from various individuals (including me) and organizations, which making all kinds of recommendations for improving, expanding, reducing, etc., regulatory review. Those comments can all be viewed here.

Regulated industries, environmental organizations, the agencies, and interested academics have been waiting patiently for the results of the process, which were delayed by the protracted confirmation process for new OIRA administrator Cass Sunstein. Sunstein's appointment was finally confirmed in September. So, the wait shouldn't be too much longer.

Of particular interest to me is whether a new Executive Order or a subsidiary OMB circular lowers the base-case discount rate that federal agencies must utilize in discounting future streams of costs and benefits to net present value. I've argued, both in past papers (not available in final published version on-line) and in my own comments to OMB, that the current required discount rate of 7% is significantly higher than most economists believe is appropriate for environmental regulations designed to reduce market externalities. In my view, the OMB should follow the UK Treasury's lead in designing a schedule of discount rates that decline over time, starting from 3 or 3.5%. In addition, it would be appropriate to have two separate discount rate schedules in order to distinguish circumstances in which the government is acting to correct market failures (as in environmental protection) from those in which it is acting in an entrepreneurial capacity to stimulate economic development (e.g., government reclamation and irrigation projects).

Aside from the issue of discounting, I am hopeful that a new Executive Order might require federal agencies to engage in more post hoc benefit-cost accounting. Under the existing Executive Order, the agencies have to assess estimated costs and benefits before issuing major regulations (those with annual costs of $100 million or more). They are not required, however, to re-examine those regulations later in order to determine whether they have, in fact, resulted in net benefits or costs to society. Not only would post hoc benefit-cost analyses contribute to improved federal regulations, they would also help to improve the process of ex ante benefit-cost analysis, by allowing analysts to see where possible methodological flaws contributed to erroneous estimations.

Tuesday, November 24, 2009

What Will President Obama Do About Afghanistan?

Afghanistan is famously recognized as the centerpiece in "The Great Game," where Britain, Russia, the US and numerous other countries have sought vainly to establish political control for literally hundreds of years. The failures of, first, Genghis Khan, and, much later, the British and Russians to subdue the unruly peoples of Central Asia led to the description of Afghanistan as the "graveyard of empires."

The history of failed efforts to control  Afghanistan is brilliantly described in Peter Hopkirk's 1994 book, The Great Game (Kodansha International). As Hopkirk presciently noted in the foreward to his book: "the collapse of the Soviet Union has tossed Central Asia back into the melting pot of history. Almost anything could happen there, and it would take a brave, or foolish, man to forecast what. But one thing seems certain. Central Asia, for good or for ill, is back once more in the thick of the news, and looks like staying there for a long time to come."

Given the history of "The Great Game," President Obama is well advised to be cautious about staying in Afghanistan at all, let alone deploying more troops there. But, as usual, the choice is not so simple for several reasons. For one, an unstable Afghanistan could, once again, become home to the same radical terrorist groups (and others) that attacked the US on 9/11. For another, Afghanistan's neighbor Pakistan is itself teetering on the brink of instability, posing an even greater potential danger to the region and the world simply because Pakistan is a nuclear power. If the US cuts and runs from Afghanistan, the implications for Pakistan and, potentially, for the US are parlous.

In other words, there are no first-best options for the US president in Afghanistan. Any choice he makes is sure to be roundly criticized, and with good reason. That is, ultimately, what it means to be president. I do not envy him the decision he must make.

Happy 145th Birthday Henri de Toulouse-Lautrec

Happy 150th Birthday to "On the Origin of Species"

One hundred and fifty years ago today, Charles Darwin's On the Origin of Species was first published. It was one of the most important publications in history, setting off a scientific revolution and a theological-political controversy that has not yet abated. Just as the Church vilified and condemned Galileo 400 years ago for the heresy of confirming Copernicus's sun-centered model of the solar system, so Darwin's "heresy" of evolution by natural selection continues to be reviled by theocrats.

The theocrats are stronger in the US than in most other countries, as
the graphic below indicates. According to an article in the August 11, 2009 issue of Science, approximately as many American adults reject as accept evolution (with 20% or so unsure). Of the 34 countries listed, only Turkey has a lower percentage of  acceptance of Darwinian evolution. The fight over evolution is at the heart of religiously and politically motivated anti-scientism and anti-intellectualism movements that have grown stronger in recent decades.

Monday, November 23, 2009

A Message to My Nebo Ridge Teammates

I have heard that several of my teammates have been making inquiries about my "sudden" or "rash" departure from the team leadership. I just want to let everyone know that it was neither sudden nor rash, but has been building up for quite some time as I have watched the team moving inexorably away from its original conception as a developmental squad for both racers and non-racers toward a far more competitive racing model.

Virtually every single ride sponsored by the team or by team members has increased in both pace and competitiveness, with less and less attention to team- and skill-building. I don't mind occasional, even frequent, fast and hard rides; but I regret the attendant loss of team cohesiveness. Riding as a cohesive group is, in my view, a great and difficult skill requiring concentration, determination, and self-control. It's pretty easy for any individual to ride as fast as he or she wants. It's far more difficult to ride more slowly for the good of the group. I think that paying more attention to that discipline, in addition to power training and races, would make Team Nebo Ridge stronger as a team. In any case, it is the loss of the sense of a unified team and club, together with the general trend towards becoming a more competitive racing team, which has led to my decision to step down from the Board, committees, etc.

Finally, I want to reassure everyone that I have not had a falling out with any member(s) of the team or club. In fact, I am not leaving the club. I remain a member because I still cherish riding with my Nebo Ridge friends. There is nothing personal whatsoever about this decision.

Has the US Become So Politically Dysfunctional that It Cannot Ratify a Convention on the Rights of Children?

Jurist reports that, last Friday, Somalia ratified the 1989 United Nation's Convention on the Rights of Children (UN CRC). That leaves only one UN member country that has not yet ratified the convention: the United States of America.

The UN CRC is, according to Jurist, the world's most highly ratified human rights treaty. Having read the convention, it strikes me as benign and uncontroversial; I cannot see anything in it that American's should find reasonably objectionable. In fact, the US played a significant role in its drafting. President Clinton belatedly signed it in 1995. So, why hasn't our Senate ratified it, so as to make it the law of the land under the US Constitution? Would it really pose a threat to our national sovereignty, as some have allegedly argued? Well, that's true of any treaty we might ratify, however benign. Does it really threaten parental rights, as others have allegedly argued? To my reading, the provisions of the convention do not reduce parental rights at all, relative to existing US law.

It has been argued, in other contexts, that the US is more reluctant than other countries to ratify international treaties because, far more than many other countries, the US takes its international obligations seriously. That may be true. In fact, it is entirely likely that child welfare is less of a problem in the US than in many countries that have ratified the UN CRC - all the more reason why the US Senate should ratify the convention as soon as possible. It might also be argued that the treaty, like many international laws, is essentially symbolic and  unenforceable. But even if that's true, it's symbolic importance should not be ignored. If the US wants to be  serious player on other international legal issues, such as nuclear nonproliferation, then it must be able to treat seriously issues of international human rights laws.

To be the only country in the UN not to have ratified a convention designed to do no more or less than ensure fundamental rights for children - rights that already are generally secured (at least for the most part) under US domestic law - is a national embarrassment and symptomatic of a malfunctioning political system.

Sunday, November 22, 2009

The Rules of the Road

When social scientists study legal systems, they distinguish between the "law on the books" and the "law in action." The former refers to the written law in statute books and judicial decisions; the later refers to the rules around which people are actually observed the organize their behavior. Not infrequently, the laws in action deviate from, and effectively overrule, the laws on the books. The reason I mention this is because I notice something similar with respect to cyclists' training rides.

Frequently, a ride will be called for a certain average speed and/or as a "no-drop" ride - meaning that the group will stay together and the pace of the slowest rider will determine group speed. On some occasions, the ride leader may even specify power zones to be worked, as I did with a ride this morning. When the size of the group of riders is small, the specified rules are generally observed; but as the size of the group grows, it becomes more likely that the specified rules will, in effect, be overruled by one or more of the riders present, who will then encourage other riders to ignore the specified rules. The result is often the opposite of what was originally intended: instead of a no-drop ride at a speed determined by the slowest rider, ride speed is determined by the fastest of the hammerheads who show up, and the group becomes splintered into several small groups or individual riders strung out over a mile or more.

It is an interesting, if regrettable, phenomenon. It creates a problem for marginal riders (like me) looking for rides where they won't be dropped, which is a demoralizing experience. If riders cannot trust that a ride will be as advertised, their interest in participating is likely to diminish, and they will spend more time riding alone instead of with their friends.

That's why the leadership of my club, Team Nebo Ridge, has tried to improve "ride integrity" as a truth-in-advertising campaign about rides. Unfortunately, because of my increasing frustration over my teammates' inability or disinterest to enforce "ride integrity," I have decided to resign from various leadership positions on the team. The competitive race mentality increasingly is dominating the team despite the best efforts of leaders such as Larry Stevens, Dave Fouts, and Tim Wozniak to welcome non-competitive riders.

I should add, finally, that even if Team Nebo Ridge were  purely a competitive racing team, the almost pathological obsession with hard and fast riding is probably unconstructive. Too many riders spend way too much time riding in the high power zones (4, 5 & 6), when they would be better served, particularly during the winter season, to spend a fair amount of time on base (power zones 2-3) training.

Sunday ride

46 miles for the day, 5,000 on the nose for the year.

Hacked E-mails and the Supposed Conspiracy to Fake Climate Science

As the media has reported, hackers broke into servers at the University of East Anglia and obtained thousands of e-mails from various climate scientists that some claim prove that climate science is a conspired hoax. The media has reported the story as a grave challenge to climate science, without showing much concern at all for the illegal activity by which the e-mails were obtained or who might have an interest in disseminating cherry-picked contents from them. I have not read all of the e-mails, but the reports I have read about them hardly prove a conspiracy to foist phony climate change on an unsuspecting public. Instead, they display individual scientists acting like ordinary "crooked-stick" humans. has an excellent statement on the story.

Saturday, November 21, 2009

Rethinking the "Gravel Grovel"

After riding my relatively heavy Bianchi San Remo with knobby tires on 35 miles of mostly flat and paved roads this afternoon, I'm having second thoughts about tackling 60 miles of gravel roads, horse trails, and hills in Brown County next Friday. Seems like a fool's errand.

Sunderland v Arsenal

The match starts at 10 am. This is definitely a match The Gunners should win, but it will be interesting to see if they come out in the same 4-3-3 formation they've been using all season to great effect (36 goals in 11 Premier League matches). They might be forced to switch to a more common 4-4-2 because both van Persie and Bendtner are out with injuries. The loss of van Persie for at least a month is particularly regrettable as he has scored 8 goals and 8 assists this season. His assists, more than his goals, verify the effectiveness of the 4-3-3 formation. Eduardo is a very capable replacement as Striker, but he does not have the size and strength to play with his back to goal, take down long balls, and distribute. It will be interesting to see how Wenger organizes his team in the absence of van Persie.

UPDATE: It's 0-0 at halftime. If it stays that way through 70 minutes, I wonder whether Wenger might insert Abu Diaby upfront to take down and hold long balls. He's normally a holding midfielder, but he can play up front and score.

UPDATE: Full time: Sunderland 1 - Arsenal 0. It would be an understatement to say The Gunners missed van Persie. In any case, they did not play well enough to win. Fabregas was off his best. Ramsay looked slow and indecisive when he was on the ball. They didn't create nearly enough chances. Credit, though, to Sunderland, who have all the makings of a top-ten side.

Friday, November 20, 2009

Word of the Day: "lanthanine"

I learned a new word this evening, while reading CP Snow's, The Light and the Dark: Lanthanine. In response to Lewis's observation that Roy was "preternaturally silent when he dined" (in college), Roy responds that "'lanthanine is the word for me.'"

What could that mean? Surprisingly, Webster's New Collegiate Dictionary (at least the 1975 edition I possess) does not include the term. A search of the Oxford Reference Online site defines "lanthanide" (today  typically referred to as "lanthanoid") as any one of 15 metallic elements (atomic numbers 57-71) that are referred to in the aggregate, along with actinides, in the aggregate as "rare earth."  According to the Oxford English Dictionary, they are not especially rare, but are difficult to separate from one another. It seems likely that "lathanine" is some variation on "lanthanide" or "lanthanoid," but, even so, Roy's meaning in using the term remains far from clear.

A Google search turns up no dictionary definition of "lanthanine," but only a few,  botanical/chemical references. A UN Food and Agriculture Organization web page (here) uses the term "lanthanine" as an alternative to   "lantadine A," a toxic substance in the leaves of a certain wild sage. Could Roy have been asserting that he is "preternaturally silent" because he is toxic or poisonous?

Finally, there is some anecdotal evidence on a linguistic blog site (here) that "lanthanine" remains in use among lawyers in the City of London, but the reference does not suggest any definition or description of how or when they use the term.

UPDATE: I believe Jonas's reference to the Greek root, in a comment to this posting, solves the puzzle. Thanks Jonas.

Cyclocross Season

I just put some 35 cm cyclocross tires on my 2001 Bianchi San Remo (a light touring bike) in preparation for next week's "Gravel Grovel," a 60-mile race and ride on gravel roads in the hill country of Brown County, Indiana.

UPDATE: I took the San Remo out on a short shake-down ride yesterday afternoon. Aside from needing an adjustment of the brakes, I think it's ready to go. But boy is it heavy and slow, particularly with those giant, knobby tires.

Thursday, November 19, 2009

Members of the Pigou Club Should Transfer to the "Coase Club"

Harvard economist Greg Mankiw reminds us (here) that today is the 132d birthday of Cambridge economist Arthur Cecil Pigou  (left), pioneer of modern Welfare Economics and the namesake of Pigovian taxes, which are designed to internalize externalities (e.g., polllution taxes). Mankiw is the leader of what he calls the Pigou Club, which favors use of taxes over other mechanisms (such as cap-and-trade) for dealing with climate change, among other environmental problems.

I have nothing against Pigou per se, but, if pressed, I suspect that Professor Mankiw would concede that he really favors what might be called "Coasian taxes" over Pigovian taxes. In his famous 1960 article, "The Problem of Social Cost," Ronald Coase (right) demonstrated that, in the presence of transaction costs, some externalities might be efficient because the cost of internalizing them might exceed the benefits. So, whereas Pigou would set the tax to internalize all externalities, regardless of transaction costs, Coase would seek to tax only inefficient externalities - those that could be internalized at net social benefit. A Coasian tax is, at least in theory, more efficient than a Pigovian tax.

Coase, by the way, will be celebrating the centenary anniversary of his birth in 2010.

Effect of Immigration on Productivity

A new paper (here) by Giovanni Peri (UC, Davis) finds robust evidence that immigration is positively correlated  with increasing total factor productivity and the adoption of unskilled-biased technology. Overall, a 1% increase in employment in a US state is associated with a 0.5% increase in income per worker.

Hat tip: Marginal Revolution.

Photo of the Day: A Spite Topiary?

Hat tip to Leann Pels and

Salzman and Ruhl on the Most Important Court Rulings in Environmental Law

Jim Salzman (Duke) and JB Ruhl (Florida State) have an interesting new article in The Environmental Forum (Vol 26, No. 6, Nov/Dec 2009) reporting the results of a survey of environmental law practitioners of the "greatest hits" in environmental law jurisprudence. Three things surprised me about this list: (1) There is less difference than I would have expected between practitioners with more than 15 years experience and those with less than 15 years experience; (2) The staying power of older cases, such as TVA v. Hill (The Snail Darter case) and Chevron (standard of judicial review of agency decision making), is impressive. And (3) the high ranking of the recent and not-all-that significant Supreme Court decisions in Rapanos (wetlands permitting) and Mass v. EPA (EPA has authority to regulate auto emissions of greenhouse gases under Clean Air Act), which could be explained by the salience of Supreme Court decisions, which are relatively rare in Environmental Law, and possibly some sort of availability heuristic based on their recent vintage.

China and Climate Policy

Many American politicians want US action on climate change to be linked to Chinese commitments and action because, unless China acts to reduce greenhouse gas (GHG) emissions, they rightly assert, global efforts will likely fail. China is now the world's leading emitter of GHGs, exceeding total US emissions, although not per capita. Thus, any effort to significantly reduce global GHG emissions without China would require far greater and more costly reductions from other large emitters, including the US.

What is often ignored is that China is truly a developing country, with many of the problems developing countries face. For one thing, China has approximately 254 million people (according to the World Bank) living on $1.25/day or less. Those people are not likely to be concerned with climate change, or to demand action on climate change from their government. Likewise, the residents of China's more prosperous cities, which still suffer from exceeding high levels of life- and health-threatening domestic pollution. Overall per capita income in China remains far below the level of the US and other industrialized countries. And China has contributed far less so far to the existing stock of GHGs in the atmosphere.

What does this mean for international climate policy? It means that China is highly unlikely to be cajoled into committing to enforceable GHG emissions reductions. Instead, it's going to have to be paid to play (although it should not be paid, a la Russia, in the very currency the international community is trying to reduce - GHG emissions credits). China's going to have to be offered something of value to it in exchange for a credible commitment to reduce its GHG emissions. Patricia McCubbins of the Southern Illinois University School of Law has suggested (here) that China might cooperate in exchange for more international assistance with its severe domestic pollution problems. That's strikes me as highly plausible.

In any case, it is worth noting that China already has undertaken voluntary commitments relating to climate policy. Over the past 10 years, it has certainly cooperated more with the international community on climate policy than has the US. Among other things, China has become a global leader in experimenting with in situ coal gasification and sequestration.

Finally, there is reason to believe that China is awaiting concrete action from the US before making greater commitments of its own on climate change. In effect, it seems that both countries are waiting for the other to take the next step. The good news is that the countries have been holding relatively high-level negotiations on climate policy. There is reason to hope that those negotiations might lead to a better international agreement than the international community ever could have attained by this December in Copenhagen.

Wednesday, November 18, 2009

"Superfreakonomics" Revisited

In an earlier post (here), I discussed the criticisms Steven Levitt and Stephen Dubner have encountered over their apparently casual treatment of climate science in their new book, "Superfreakonomics." Now that their book has been published, I have some anecdotal evidence, based on conversations with friends outside of the climate policy arena, that the clarity, confidence, and coherence of Levitt and Dubner's prose outweighs their  lack of  scientific understanding. That is to say, Levitt and Dubner's version of the climate problem, however inaccurate, seems to be gaining traction simply because of their popularity as writers and public intellectuals. Whatever their intentions might have been, they have provided ammunition to those who would derail US climate legislation at a fairly pivotal moment.

Goal for the Day

Figure out how to restructure my climate policy book, yet again, in light of domestic and international failures to move this year. I had planned separate chapters on US climate policy and a presumed "Copenhagen Protocol." Now, I have to move from Plan B to Plan C, whatever that might be.

UPDATE: Somewhat surprisingly, I have made some progress on this problem today. I think I can write one chapter about how the US and the international community should learn from the EU's relatively more cautious approach to emissions trading and, why, given the information we have so far, they are likely to repeat Kyoto's mistakes of comprehensive emissions planning and virtually unlimited offsets. Then, I would add a fifth and final chapter, most of which is already in fact written, on why climate policy involves various collection action problems, along with suggestions on how at least some of those problems might be ameliorated to allow for marginal improvements to climate policy.

Tuesday, November 17, 2009

Lunch with John Graham

I'm just back from lunch with John Graham, Dean of the School of Public and Environmental Affairs at IU, and former head of the Office of Information and Regulatory Affairs in the Bush Administration Office of Management and Budget. One of the most intellectually stimulating lunches I've had in some time. We talked a lot about  problems of climate policy and the methodology of benefit-cost analysis. John is scary smart, and I learned a lot from him over lunch. I was somewhat surprised to find that we seem to agree more than we disagree on policy issues.

Monday, November 16, 2009

Enforcement Mechanisms for Property Rights

I'm at the Workshop in Bloomington listening to an interesting talk by Prof. Derek Kauneckis, a young Political Scientist from the Univ. of Nevada-Reno, on "Re-thinking Mechanisms of Enforcement in Property Rights Institutions." He's looking at the wide spectrum of first- and third-party mechanisms for enforcing property rights in the absence of states. So, he's talking about enforcement by individual resource "owners" and enforcement by the non-governmental "community." Interesting, though I'm not sure how much it adds to preexisting knowledge.

UPDATE: Pace Hohfeld, I cannot abide any model of property rights that does not account for the emergence of property duties.

UPDATE #2: It never ceases to amaze me that such presentations do not attract anyone - not one person - from the Maurer Law School at IU-Bloomington. The Workshop is like a gorgeous flower garden in their own backyard that they simply ignore. Oh well, de gustibus non est disputandum.

Pats v. Colts

I turned off the TV and went to sleep when the Pats scored in the 3d quarter to go up 31-14. I just woke up to learn that the Colts won the game 35-34, thanks in part to a stupid decision by Belicheck not to punt on 4th and 2 from their own territory with 2 minutes left in the game. They didn't make it, and gave Manning a short field to work with. Unbelievable.

Sunday, November 15, 2009

Targets v. Institutions in Climate Policy

The new international climate change agreement scheduled to be signed in Copenhagen next month has been postponed for a year or more. The Conference of Parties simply could not agree on goals, i.e., emissions reduction targets. This is very disappointing for a variety of reasons, not least of which is that setting targets is far less important, and less difficult, than implementing an institutional framework that can achieve those targets. While policy makers debate whether (a) the ambient concentration target should be 550, 450, or 350 parts per million of carbon equivalent, and (b) global emissions reductions should be 15% or 20% by 2020, there is no evidence that they have the least clue as to how to attain those emissions reductions and ambient concentration targets. 

The Kyoto Protocol's preference for a comprehensive cap-and-trade regime with virtually unrestricted offsets (under auspices of the Clean Development Mechanism and Joint Implementation programs) has been an unmitigated disaster. On the plus side, the European Union learned from the Kyoto disaster by implemented a far more limited emissions trading scheme (ETS), that unlike the international community at Kyoto, paid serious attention to administrative (primarily monitoring and enforcement) costs. Because the EU's approach was more limited, it implicitly recognized that other policies, including tax mechanisms and traditional command-and-control regulations might be required as supplements to the ETS to achieve real, verifiable emissions reductions. Unfortunately, the more sensible and realistic EU approach has been ignored by legislators in the US, who are promoting comprehensive cap-and-trade a la Kyoto, as well as by the same international negotiators who cannot even agree on targets. Those negotiators want to improve, strengthen, and increase the scope of the Clean Development Mechanism and Joint Implementation, which should be dismantled entirely (probably politically unrealistic) or limited to trades in which emissions reductions are real and verifiable.  

The bottom line is that until the international community has a workable institutional framework in place for achieving real and verifiable emissions reductions, targets are irrelevant. Pick a number, any number, but focus on what's needed to attain it.

Sunday Ride

We rode the traditional Sunday route from Fishback Creek to Elizaville and Lebanon. Got a bit wet up towards Elizaville. The hammerheads were out in force dragging us into the wind at 22-25 mph. I threw out the anchor a few times to slow the group down, but after we made the turn at Elizaville, a group exploded off the front. With no inclination to hammer today, I sat back with a small group, and we pedaled into Lebanon at about 21 mph. At the SAG, where everyone regrouped, I just get going, heading  home; I didn't want to stop and get cold after getting wet. Overall, the average speed for the ride was somewhere between 20 and 21 mph, not including warm up and warm down rides to and from home.

All in all, it was a pretty discouraging ride. I just don't understand why some guys, like Jerry and even David W., feel the need to hammer every time out, as if all rides are races. Oh well, different strokes for different folks. Maybe I need to find a different group to ride with - me, myself and I?

This is Why Arsene Wenger Hates International Friendlies

According to, Robin van Persie will be sidelined for months after damaging ankle ligaments while playing for Holland in an international friendly. Arsenal's leading scorer this season, with 8 goals overall and 4 in the last 4 games, van Persie was rounding into form as one of the most dangerous strikers in the Premiership. Capable not only of getting his own goals but of holding the ball and making goals for others, van Persie also has 8 assists so far this season. With Nicklas Bendtner out as well with a groin problem, Arsenal currently lack a central striker capable of taking down long balls and holding them. They may be forced to shift from the formation that has brought them so much offensive success during the early part of the current campaign. Meanwhile, the likes of Eduardo and Carlos Vela will have to step into the breach and raise their games.

Saturday, November 14, 2009

Saturday Ride: Hills and More Hills

Rode the Saturday morning trainer from Zionsville this morning. 48 total miles. Average speed was only 17.4, but that's a bit misleading because we did a lot of hard climbing, totaling nearly 2400 feet. I'm beat.

Tomorrow morning's ride (of similar length) had better be nice and easy.

Friday, November 13, 2009

Bad Fat Tails

This figure from an article in the June 2009 issue of Nature illustrates why some economists, including Martin Weitzman, are increasingly concerned about potential climate catastrophes. The "bad fat tails" to the right of the probability density function (PDF) of an aggregation of climate sensitivity models indicates a low but non-negligible risk of global mean temperature increases in excess of 5 degrees (C) by the middle of the next century. Neither economists nor anyone else can tell us the likely socio-economic effects of such a temperature  change for the US or any other country because the globe has not experienced such a rapid warming in the entire history of human existence on earth. That is why Marty, quite sensibly, argues for near-term expenditures that might reduce the already low probability of potential climate catastrophe towards zero.

William Nordhaus has offered a trenchant critique of Weitzman's model of catastrophic climate change (here), to which Weitzman has responded (here). In my view, even if all of Nordhaus's criticisms hold, Weitzman's central insight about the importance of the "bad fat tails" of climate sensitivity PDFs remains valid.

Technology Change

I finally traded in my old, falling-apart Moto Razr for a Blackberry Curve (and a new 2-yr contract at Sprint). I hope I'll grow to like the Curve, which so far has been a bit of a pain to set up. No problem getting my gmail to forward to the BB, but I need some special connection at IU to download mail from the exchange server. It also took me too much time - and a couple of Google searches - to get the phone to connect by Bluetooth to my laptop. Otherwise, the Curve seems reasonably intuitive, especially for someone like me who doesn't intend to make use of all the bells and whistles. All I want is a phone that (1) works as a phone, (2) links to my car's Bluetooth system, (3) is e-mail friendly, and (4) allows me to check the weather radar before and during rides. Bottom line: I'm not a smart enough user for a "smart phone."

Calling All Clare Hall Alums in the Midwest

My friend and colleague, Andy Klein, is the new contact person for the Central US of the Clare Hall American Society. If you are a Life Member of Clare Hall and wish to get involved with the society, which among other things is attempting to facilitate a visit by new Clare Hall president Sir Martin Harris to Chicago, please get in touch with Andy at

Thursday, November 12, 2009

New Book on Environmental Governance in Europe

Oxford University Press just sent me a new book edited by the redoubtable Joanne Scott (UCL) on Environmental Protection: European Law and Governance. Contributors include, in addition to Joanne herself, Jane Holder, Maria Lee, and Ingmar von Homeyer. It looks to be an excellent book.

Review of Richard Barnes, Property Rights in Natural Resources

My review of Richard Barnes, Property Rights in Natural Resources (Hart 2009), has just been published in the Law & Politics Book Review. To make a long story short, Barnes's book is an excellent and comprehensive treatment of the property systems associated with international regimes governing marine resources. I am very pleased that he will be participating in the conference Elinor Ostrom and I are organizing next summer at the Lincoln Institute on the evolution of property systems in natural resources.

Wednesday, November 11, 2009

Adieu Lou

The New York Times is reporting (here) that Lou Dobbs is leaving CNN, where he rose from a lowly business reporter to chief blowhard (bloviatus maximus). He'll be remembered for bringing to "journalism" the kind of mean and xenophobic populism that Pat Buchanan brought to politics. There appears to be no truth in the rumor that Dobbs's 7 pm time slot on CNN will be taken over by an illegal immigrant in Atlanta or outsourced to CNN's China bureau.

What I Like, and Don't Like, About NYC (on This Trip)

A brief and partial list, compiled while waiting at LaGuardia for my flight to depart:

Good restaurants, especially old-fashioned diners, everywhere.
Well-stocked bookstores.
Washington Square.
Almost anything you might need is within walking distance and available at almost any hour.
General hustle and bustle.

Dilapidation and Grime.
Semi-shabby, 3-star hotels that describe themselves as "boutique."
A certain type of New Yorker (you know the type).
Too few parks.
Neighborhoods with little sense of community.
Anonymity to the point of invisibility. (Some may consider this a good thing.)

The Housing Crash in China

Photo by Bill Hopen. Hat tip to Mish Shedlock via Concurring Opinions.

Richard Tol on Climate Change and Policy

Richard S.J. Tol is among the very best economists working on the climate problem. He has developed his own integrated assessment model (AIM), called FUND, and very usefully aggregated and synthesized the climate cost and benefit projections from various models. In the presentation he gave yesterday at the IPI Workshop at NYU Law School, he provided several interesting findings. Among them, point estimates of the social cost of carbon range between $24/ton and $204/ton, with central estimates not far off the current price of carbon in the European Union's Emissions Trading Scheme. On mean estimates, global mean temperature increases of 1.0 or 1.5 degree (C) are consistent with improvements in global GDP, but just past 2.0 degrees (C) of warming, losses to global GDP begin - if global mean temps increase by 3 degrees (C), the loss to global GDP would amount to approximately 2.5%. Most of the damage would, of course, take place in developing countries whose economies tend to be more reliant on agriculture, tourism, and other climate-sensitive activities. Perhaps the most interesting graph he displayed showed that by 2050 the monetized impact of expected climate change is likely to be negative for the vast majority of countries in the world, with only a few exceptions.

Tuesday, November 10, 2009

What's More Important in Climate Policy, Targets or Institutions?

I put this question to the panelists on the Social Cost of Carbon (SCC) - Richard Tol, Simon Dietz, and Gary Yohe. Tol and Dietz strongly agreed that getting the climate mitigation institutions "right" was substantially more important than either determining the SCC or setting emissions reduction targets (although Dietz argued that determining the SCC helps along the political process towards implementing mitigation institutions). Made my day.

I may write more about more in a subsequent post about why I think economists, lawyers, and policy makers should be more concerned with getting the institutions right than with setting either the SCC or the proper level of carbon in the atmosphere.

Another Update on Blog from IPI

Richard Tol is giving a talk on the social cost of carbon (SCC) by Skype hook-up from Europe. It's a difficult topic, made even more difficult when you can only comprehend every third word the presenter speaks. Teleconferencing clearly remains an imperfect technology. Fortunately, I've read nearly everything Tol has  written on this topic, so I don't really need to hear what he's saying.

The next speaker will be Simon Dietz, also by Skype from Europe. Gary Yohe, thankfully, is here in person to present his views.

Update on Blog from IPI

Al McGartland, Chief Economist at US EPA, is giving an interesting talk about how economic analysis is done at the agency. For someone, like me, who is used to thinking of agencies like EPA as monoliths, it's interesting to learn about the level of diversity in ideology, approach, and methodology from one office to another.

Live Blog from IPI Workshop

We're into the second panel now at the Institute for Policy Integrity's Workshop on Cost-Benefit Analysis and Issue Advocacy. I was on the first panel and presented a paper on "Statutory, Methodological, and Political Barriers to More and Better Regulatory Benefit-Cost Analysis." My panel also included Jonathan Cannon from U.Va. Law School, Adam Finkel from U.Pa. and Vickie Patton, Deputy General Counsel at the Environmental Defense Fund. Ricky Revesz, the Dean of NYU Law School, served as Chair and Moderator.

Right now, Michael Steegman from the MacArthur Foundation is speaking about his organization's program on "The Power of Measuring Social Benefits." His panel also includes Jonathan Weiner from Duke and E. Donald Elliott, former General Counsel at the US EPA.

So far, the only disappointment is that Marty Weitzman could not come for this afternoon's panel on The Social Cost of Carbon. I thought Marty might finally state publicly how much he thinks society should spend on mitigating climate change. He's told me privately, but I'm not allowed to share it.

The Arsenal

Has anyone (besides me) noticed that the Gunners are now sitting second in the Premier League table behind only Chelsea? The Blues have a 5-point lead, but Arsenal have a game in hand, so the effective lead is only 2 points. Living up to their name, the Gunners have scored 36 goals so far in just 11 games. For those who are math challenged, that's more than 3 goals a game. In all competitions (including the Champion's League, FA Cup, and Carling Cup), the Gunners have 55 goals in 19 games. Who says there's not enough scoring in soccer? Now, if the defense, which admittedly has been better than expected, could just supply a clean sheet now and again, the Gunners would become clear favorites. In the meantime, it should be clear to everyone that the combination of Fabregas and Arshavin in midfield has created something very nearly as potent as the Xavi/Iniesta combo at Barca.

Last year, some in the media were begin to ask whether manager Arsene Wenger had lost the plot. No one's asking that this season.

Monday, November 9, 2009

"Selling Hot Air: Emissions Trading and Offsets in Climate Policy"

I have two chapters left to write for my climate policy book. Those two chapters are, respectively, on US climate policy and  post-Kyoto international climate policy. Six months ago, it appeared likely that both policies would be settled by the end of this year. Now, it appears that the US Senate will not take a vote on climate legislation until it finishes with health care, and who knows when that might be?  Meanwhile, world leaders have begun taking steps to reduce expectations that a successor to the Kyoto Protocol would be adopted this December in Copenhagen. Now, they are saying that a post-Kyoto agreement might take another year to hammer out. What's an author to do in the meantime? Perhaps this is a cautionary tale about writing on topics in real time, while the ground is still shifting.

New York, New York

I'm at the Indy airport, awaiting my flight to New York City. Before the advent of anti-anxiety medications, I hated NYC, so much so that I would avoid traveling there at almost any cost. When I could not avoid going, I sometimes managed to arrive and depart the same day.

Over the past several years, my dread of NYC has lessened; I've even managed to enjoy myself there on occasion. It's still far from my favorite big city to visit  - it doesn't hold a candle to London or Paris - but now I can find some pleasure in roaming the streets of lower Manhattan (assuming I can endure the cab ride into town from LaGuardia).

Sunday, November 8, 2009

Sunday ride

This morning's 40-mile ride was much better. We had a group of about 30 riders to start. I felt better and better as the ride went along. SI joints started complaining a bit only in the last five or six miles. I didn't do any work heading north (with the wind) but put my nose into the wind quite a bit heading south. Gives me some hope that maybe the fatigue is lifting.

Paths Occasionally Crossing

Since August, my wife Izabela has spent more time in Poland than in Indianapolis. She left on her most recent trip the day after I returned home from a conference in Washington. She returns home late tonight. Unfortunately, I leave for New York tomorrow. Hopefully, after I return to Indy on Wednesday, we'll both stay put for a while.

Saturday, November 7, 2009

Cycles in Cycling

As an older rider, no matter what my level of training and fitness, I seem to suffer through periods of mental or physical fatigue. Over the past several weeks, my mileage has fallen from an average of 120-150 miles per week to under 100 miles per week. For the past week or so, in both winter training and on the road, I have felt relatively tired and weak. At the pace of today's ride (18.7 ave mph), I should have felt comfortable for the entire 38-mile ride. In fact, I felt comfortable for very little of the ride. Part of that was due to a change in saddle, which, my SI joints told me, requires a bit of adjustment. Still, my heart rate was running higher than it should have, given the level of effort.

I've had such periods of mental or physical fatigue in the past, and I'm sure I'll have more of them in the future. The question for now is whether to continue with the twice weekly winter training sessions, or rest and ride easily on my own until the holidays, and then rev up for the second 8-week session of winter training.

Progress Report: Evolution of Property Systems in Natural Resources

Elinor Ostrom and I are organizing a September 2010 conference, sponsored and hosted by the Lincoln Institute on Land Policy in Cambridge, Mass., on the evolution of property systems in natural resources. Confirmed participants (so far) include (in addition to Lin and myself,  in alphabetical order):

Leigh Anderson (University of Washington-Seattle)
John Baden (Foundation for Research in Economics and the Environment)
Richard Barnes (University of Hull)
William Blomquist (Indiana University School of Liberal Arts, Indianapolis)
Karen Clay (Carnegie-Mellon)
Nives Dolsak (University of Washington-Bothell)
Thrainn Eggertsson (University of Iceland and New York University)
Richard Epstein (University of Chicago School of Law)
William Fischel (Dartmouth College)
Robert Ellickson (Yale Law School)
Peter Grossman (Butler University)
Shi-Ling Hsu (University of British Columbia)
Gary Libecap (University of California, Santa Barbara)
Bonnie McCay (Rutgers University)
Andrea McDowell (Seton Hall University School of Law)
Douglass North (Washington University, St. Louis)
Jouni Paavola (University of Leeds)
Anthony Scott (University of British Columbia)
Jason Shogren (University of Wyoming)
Henry Smith (Harvard Law School)
Gavin Wright (Stanford University)
Katrina Wyman (New York University School of Law)
Richard Zerbe (University of Washington-Seattle)

I'm particularly excited that we will have a panel revisiting the standard economic history of the California Gold Rush. The conference presentations will ultimately become chapters in a book Lin and I will edit.

I will post the conference program when it is finalized.

The Political Divide: Funding for NSF Social-Science Reseach Programs

The political scientist Brendan Nyhan has an interesting post concerning the Senate's vote on Senator Coburn's proposal to defund all political science programs at the National Science Foundation. The proposal failed by a 62-36 vote. The following graph (a Lewis-Poole Optimal Classification Estimate) contains a best fit line dividing yea from nay votes. Blue is for Demos and Red is for Repubs. Dark blue marks Demo nay votes; light blue marks Demo yae votes; dark red marks Repub nay votes; light red marks Repub yea votes. Do you think ideology played a role? (NSF political science programs as "wasteful government spending" that increases the national debt to be paid by our grandchildren, or subsidies to liberal academics) One could, on the merits, argue that social-science research is not the kind of real science the NSF should support. However, one would not expect such a clear political division on the merits.

Hat tip to Kevin Drum at Mother Jones via  Marginal Revolution.

Friday, November 6, 2009

Weekend riding

Indy is expecting warm but windy weather this weekend. I'm hoping to get in a least 100 miles on the bike before heading to NYC for a conference on Monday.

BTW, I saw a beautiful 2010 Pinarello Dogma at Nebo Ridge this afternoon. If you have to ask the price, you can't afford it. I had to ask the price.

Economists Surveyed re: Climate Policy

The Institute for Policy Integrity (IPI) has just published the results of a survey it conducted of economists'  opinions on climate policy. The sample included approximately 300 economists, all of whom had published at least one article on climate policy in a top-25 economics journal during the preceding 15 years.

Among the most interesting findings: 75% of respondents believe that uncertainty regarding the environmental and economic effects of climate change increases the value of emissions controls, assuming some level of risk aversion;  57% believe that the US should commit to greenhouse gas emissions reductions "regardless of the actions of other countries;" nearly 3/4 believe the US should commit to greenhouse emissions reductions pursuant to some multilateral emissions reduction treaty; and only 2.1% believe the US should do nothing regardless of the actions of other countries.

Not surprisingly, over 90% of surveyed economists prefer carbon taxes or cap-and-trade over traditional forms of regulation ("command-and-control"). Also not surprisingly, the surveyed economists recommended a wide range of discount rates for reducing future costs and benefits of climate policies to net present value. The median rate was 2.4%, but 36.8% of surveyed economists thought hyperbolic discounting should be used. A small, but in some respects surprisingly large, minority of 16.7% opposed discounting. The median estimate of the social cost of carbon was $50, but the estimates ranged widely.

The entire report can be found here.

Geoengineering as climate policy

My friend Alex Tabarrok, of the Marginal Revolution blog (probably the single best  blog on the web), has posted on one possible geoengineering solution to climate change: iron fertilization of the oceans to promote plankton blooms that would absorb carbon dioxide from the atmosphere. Alex gives credit to Steven Levitt and Stephen Dubner for raising the profile of geoengineering in their new book, Superfreakonomics, even though  Tom Schelling and Scott Barrett (among others) have been writing about it for a decade or more. [Apparently, nothing the Nobel laureate Schelling writes reaches public consciousness until it is repeated by, and credited to, the likes of Steven Levitt or Malcolm Gladwell.]

In my view, Alex is a bit too sanguine about the promise of ocean fertilization, which at best could absorb only about 1/7th or so of total anthropogenic carbon emissions (according to this report). Meanwhile, carbon has recently been found to increase ocean acidification, which can massively disrupt marine ecosystems (according to a 2005 study by the Royal Society, here). In other words, ocean fertilization is not a panacea.

Neither, more broadly, is geoengineering. It is one important part of the puzzle of climate stabilization. As Alex notes, it certainly does deserve more attention than it has received to date from policy-makers. But, just as with efforts to reduce carbon emissions,  institutional structures must be developed to ensure that (a) specific geoengineering techniques do more good than harm and (b) address potential liability issues.

For climate change, of all issues, there are no panaceas.

Thursday, November 5, 2009

How I Use Scarce Reading Time

One of the great myths about academic life is that professors have time to devote to reading and quiet contemplation. Some have more time than others for such pursuits, but in my experience, "reading time" is mostly "skimming" time.

I have made it a habit to devote at least an hour before bed each evening to real reading of works in which I have special interest, but which usually are not related (at least not directly) to anything I'm currently writing or teaching. These are mostly novels, histories, and biographies. Aside from that precious hour or so, which I guard pretty jealously, time for real reading is quite scarce, particularly when I'm working on a writing project, which is pretty much all of the time. Strange at it may sound to nonacademics, writing and reading are mutually exclusive activities. Virtually all of the "reading" I do that is associated with writing projects or teaching falls squarely into the category of "skimming." And I collect many papers that, however much they might interest me, I simply cannot find the time even to skim.

At the beginning of each summer, as I conduct my ritual organizing of home and school offices, I sift through all of the unread papers gathered on shelves or in vertical stacks on the floor, and decide which to keep in the hope of reading during the next year. The majority of papers do not make that cut. They wind up in the recycling bin. They become a measure of my inevitable ignorance.

Wednesday, November 4, 2009

THE DAILY SHOW on Cable News Election Coverage

The Daily Show With Jon Stewart
Mon - Thurs 11p / 10c
Indecision 2009 - Reindecision 2008 And Beyond

Daily Show
Full Episodes

Political Humor
Health Care Crisis

In Memoriam: Mary Harter Mitchell

The entire law school community was shocked and saddened this morning to learn of the death of our dear and esteemed colleague, Mary Mitchell. Mary had fallen ill on a trip several weeks ago, and had been in and out of the hospital since then without a positive diagnosis. She died this morning of liver failure. For the 18 years I knew Mary, she was a wonderful, compassionate, supportive, and thoughtful colleague; indeed, she was among the most caring people anyone could hope to meet. She also had a great reputation among her students as a teacher. Her passing leaves a gaping hole in the hearts of many people, and in the heart of our law school.

Late Breaking Election News

Apparently, elections were held yesterday, somewhere.

Cycling and Weight Loss

An article in this morning's New York Times, here, explains why I haven't lost much weight despite cycling more than 4600 miles so far this year.

Tuesday, November 3, 2009

Institute for Policy Integrity Fall 2009 Workshop

I'll be on a panel next Tuesday (11/10) at the IPI's Fall Workshop on Cost-Benefit Analysis and Issue Advocacy at NYU Law School. I'm particularly looking forward to listening to another panel discuss the Social Cost of Carbon. That panel features Marty Weitzman, Richard Tol, Gary Yohe, Simon Dietz, and Nathaniel Keohane.

A Reassuring Verdict for Cyclists

Yesterday, a Los Angeles jury convicted a doctor on six felony counts and one misdemeanor for assaulting a pair of cyclists when he abruptly stopped his car in front of them on a downhill last year. It was not the first time Dr. Thompson had been accused of intentionally menacing cyclists, but hopefully it will be the last time. The prosecutor opposed bail for the defendant until sentencing in part on grounds that “[i]n terms of public safety, there isn’t a cyclist in Los Angeles who would be comfortable if he were out on the streets.” reports on the verdict here

On the Inevitability of Regulatory Benefit-Cost Analysis

My friends (meant literally) at the Center for Progressive Reform have released a white paper calling for the general abolition of benefit-cost analysis (BCA) from regulatory policy-making. With all due respect, I find this idea rather silly.

Assuming society's goal is to maximize some social welfare function, then it is extremely unlikely that society would ever want to spend the first and last unit of national income to resolve or avoid the very first unit of some social-cost problem. In which case, some form of benefit-cost analysis (BCA) is inevitable. So, the question is not whether benefit-cost analysis but only the form of BCA. It can be formal or informal. The virtue of formal BCA, if it is done properly, is that assumptions are transparent, and therefore contestable, and the analysis is replicable. Of course, other important questions remain about the BCA methodology - what should be included in the BCA, valuations of non-market goods, parameter values, etc. - and how much weight the BCA should carry in decision-making. But the notion that social decisions can (let alone should) be made without some form of BCA strikes me as absurd.

Monday, November 2, 2009

To Go Or Not to Go?

I'm on the fence about attending the annual meeting of the Association of American Law Schools (AALS) in January. It is the law school conference, akin to the AEA/ASSA annual meetings, which are held the same weekend but almost always in a different city, unfortunately.

Reasons to go:
- The AALS is returning to New Orleans for the first time since Katrina.
- My sister and her family live in New Orleans.
- I haven't been to the annual meeting in several years.
- I would see friends I rarely get to see otherwise.
- Great food.
- New Orleans is fun.

Reasons not to go:
- As a conference, the AALS annual meeting is the absolute worst, regardless of price.
- The AALS is very expensive.
- I find law conferences less interesting, as a rule, than social science conferences.
- I find conferencing generally to be stressful.
- Flying my whole family to New Orleans would be expensive.
- I am behind on writing projects that need to get done.
- I don't care about "networking."

It's definitely a tough call.

Open for Business

The new Journal of Benefit-Cost Analysis, the official journal of the Society for Benefit-Cost Analysis, published by Berkeley Electronic Press, is now accepting submissions for its first issue to be published in summer 2010.

Measuring the Costs and Benefits of Climate Legislation

For those who have not yet seen it, the Institute for Policy Integrity (IPI) at NYU Law School has published (here) a concise and easily understood benefit-cost analysis of proposed climate policy legislation in the US. Utilizing conservative estimates and parameter values (e.g., a 5% discount rate), the study finds that the global benefits of US climate legislation would exceed the domestic costs by a factor of at least 9-to-1. The fact that the costs are domestic while the benefits are global simply confirms Tom Schelling's observation that, for the United States, measures designed to avert global climate change are mostly in the nature of foreign aid because the risk to material welfare in the US from moderate climate change is relatively low. Still, it would be useful to have a direct comparison of domestic costs to domestic benefits. [For the sake of full disclosure, I serve on the Board of Advisors of the IPI.]

Maturity and Methodology in Environmental Law Scholarship

Liz Fisher (Corpus Christi College, Oxford) and co-authors have an interesting and provocative new article in the Journal of Environmental Law designed to start a debate about the nature and methodology of Environmental Law scholarship. I'm not sure I share the sense that scholarship in Environmental Law is particularly immature, but writing about Environmental Law certainly is complicated by the inherently cross-disciplinary nature of the issues, which range from biology and ecology to economics, political science, and anthropology. Personally, I'm rather more positive about the inevitable dilettantism of Environmental Law scholarship than are Liz and her co-authors. Anyway, it's a very stimulating article.

Sunday, November 1, 2009

Society for Environmental Law and Economics

As a founding member of the Society for Environmental Law & Economics, I encourage everyone to attend the second annual meeting, which will take place on March 26 & 27, 2010 at Emory University School of Law in Atlanta. Proposals for paper presentations are still being accepted, but probably only for another week. See the conference announcement here.


I had my first outdoor bike ride in more than a week this afternoon. I rode with a small group of friends all of whom were intent on riding easy, but with a few sprints mixed in. The weather was great: 53 degrees, sunny, and almost no wind. Moreover, we found brand new pavement all the way from Elizaville to Lebanon; it was like riding on rollers. 47 total miles in 2.5 hours. Nice ride. Need more like that to go with the twice weekly, hard winter-training sessions at Nebo Ridge.