Category: EEcon

Sarah writes*

With only six years remaining until the Paris Agreement deadline, countries are struggling to meet their climate goals. Despite abundant scientific evidence calling for a dramatic reduction in greenhouse gas emissions, political parties continue to be exploited by neoliberal opportunists (The Role…).

Consequently, while larger economies such as the United States appear to fall behind in the sustainable development race, smaller economies like Bhutan are gaining momentum (Carbon Negativity…).  Known for its pursuit of Gross National Happiness, the Himalayan nation continues to impress with its success in both economic growth and sustainable development (Urbanization…). Under the Paris Agreement, countries are expected to achieve net-zero emissions by 2050 to limit global warming. Bhutan has already surpassed this target, having become carbon negative in 2011, absorbing more carbon than it emits, with a 9:2 million-ton ratio as of 2020 (Carbon Negativity…). What can other economies learn from Bhutan?

To answer this question, it is essential to recognize the limitations of comparing economies (The Role…). Bhutan’s institutional structure differs significantly from that of, for example, the Netherlands. Therefore, we cannot simply adopt a successful model from one economy and apply it to another. However, what we can do is analyze Bhutan’s model by examining its institutional history, which encompasses both political and economic dimensions. When assessing the sustainable development framework—specifically how economic growth and carbon absorption are integrated—we should focus on both its strengths and weaknesses. Questions that may guide this inquiry include: What role does Bhutan’s geographical location play? Which cultural factors have influenced the successful prioritization of sustainability over economic growth? What does the political landscape that facilitated such development look like? And so on.

Bhutan is an interesting case not only because of its environmental policies but also its unique history. Before the 1960s, the country maintained a closed economy (Sustainable Natural…). It was only when China entered Tibet that Bhutan responded by opening its market (The Role…). The country then transitioned from a traditional, agriculture- and forest-centered economy to one incorporating technological innovations and new energy solutions, the most notable being hydropower production, 70% of which is exported to India (Sustainable Natural…). Still, Bhutan partially relies on fossil fuels and biomass (Carbon stocks…). So, what is their secret?

In addition to sustainable energy, which constitutes a large portion of the consumption and production economy, forest conservation lays central to Bhutan’s strategy (Carbon Negativity…). Whereas other countries striving for carbon neutrality often need to downscale their economies or intensify conservation efforts, Bhutan has benefited from a “clean slate” by prioritizing forest conservation early in its economic history, with a 71% coverage rate (Aboveground biomass… ). Several experts argue that Bhutan’s religious (Buddhist) and cultural values have played a key role in this achievement.

Bottom Line: Bhutan’s unique institutional and geographical landscape have created powerful incentives to prioritize social and natural wealth. These incentives contribute to its environmental success by imposing ethical constraints on economic growth. Why have these values been displaced in many other nations, and who benefits from perpetuating this misalignment?

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Ness writes*

The intensification of conventional agriculture plays by far the largest role in deforestation, terrestrial biodiversity loss and greenhouse gasses worldwide. However, did you know that sustainable agriculture — especially through agri-environmental schemes — is actually flourishing in Europe? Yes, even (but more-so especially) the Netherlands with its current nitrogen crisis and extraordinarily biodiversity-poor agricultural lands!

Agri-environmental schemes can be defined as governmental programmes set up in order to aid farmers in managing their land in a sustainable fashion. These “eco-schemes” pay farmers to provide public goods by preserving ecosystems, which provide regulating services that are valued but unavailable in markets. In Europe, according to the Common Agricultural Policy reform, such schemes have involved attempts at organic farming, agro-ecological practices, precision farming, agroforestry and carbon farming. “Attempt” is truly the word here, given that 41% of eco-schemes are “completely misaligned”. Specifically within the Netherlands, misalignment is true for complex, high investment schemes like agroforestry, and organic farming, with cultural controversies within farm communities playing a large role in this pushback.

Additionally, alternative sustainable agricultural methods may not only have high costs, but may also be detrimental to farmer incomes. For instance, in the case of agroforestry, planted trees may end up shading crops in a cold and dark country.

Which brings us to wildflowers.

Perennial sown wildflower strips within agricultural lands are a nature-based solution that is cheap, scalable and biodiversity friendly. These strips are considered conservation areas within agriculture since they improve pollinator abundance for threatened species like beetles, moths, bees, butterflies as well as supplying food sources like seeds and invertebrates to birds. For farmers, benefits include increased pest control, and higher agricultural yields. Wildflower strips also sequester carbon and improve soil quality, but it’s unclear whether these benefits are worth their costs in the short and long-term.

Wildflower strips are becoming better known, but they are not common in conventional agricultural landscapes. Efforts mainly concentrate in urban areas in the form of insect hotels and highways (also called honey highways) due to the country’s National Pollinator Strategy. In intensively cropped agricultural areas, first of all, wildflower strips have a tough time competing for scarce space. Secondly, while they are easily implemented in term of buying and sowing seeds, management influences the effectiveness of wildflowers on pollinators. Farms which do not lay in the “Goldilocks zone” (surrounded by 25-55% natural habitat) are less likely to attract pollinators. So, is it worth implementing wildflower strips in intensively managed farms in the Netherlands, if wildflower may not even attract pollinators?

Bottom Line: Sustainable agricultural methods are growing, offering the potential for supporting functional agrobiodiversity and increasing farmer incomes simultaneously. Wildflower strips have been implemented to an extent in the Netherlands, but intensively managed farms could see higher costs than benefits, which also depends on their location.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Max writes*

As progressive individuals and politicians aim to remove themselves from the fossil fuel industry, Canada’s leaders have missed the memo in regards to public opinion around the Trans Mountain Pipeline Expansion (TMEP), claiming that “no country would find 173 billion barrels of oil in the ground and leave them there” (Tienhaara and Walker, 2021). Canada’s government has long been a key player in the energy sector, whilst maintaining a facade of pro-environmental policies and a green future.

The key motif in Canada’s energy-hunger has long been the Trans-Mountain Pipeline; a vital mechanism for bringing “crude and refined products” between Alberta’s oil-rich sands and British Columbia’s access to global shipping lanes (Wikipedia, 2024). Completed in 1953, with upgrades until 2008, the pipeline transported 300,000 barrels per day (mb/d) at peak capacity, allowing Canada’s energy-export to become globally competitive by having access to global markets (Government of Canada, 2024).

This access to global markets has proven lucrative for the TMP corporation, with revenues averaging C$330 million per year between 2014-2023.

With this in mind, the Canadian government opted to approve the expansion of the pipeline, citing “Canadian oil price worries, foreign competition, and long-term stability” (Janzwood, 2024). The project seemed relatively straightforward. A second pipeline would be built right next to the pre-existing pipeline, suppressing arguments of heavy land-loss for indigenous communities and massive deforestation. For the Trans Mountain Corporation (the publicly-owned, privately-run corporation in charge of the project), the basic logic was that, building a pipeline next to a pre-existing pipeline, would result in a reduced construction footprint.

Originally predicted to cost C$5.4 billion by 2013 (Janzwood, 2024), the pipeline’s cost had ballooned to over C$31 billion by 2023. Still, the Canadian government deemed it productive to follow-up on the project, potentially overlooking the ominous sunk-cost fallacy.

Nevertheless, project managers were eager to continue the project, hoping that an increased capacity of 890,000 barrels per day would result in benefits larger than costs (TransMountain, 2024).

As of April 2024, the pipeline has begun carrying oil between Alberta and British columbia, with the entire project being predicted to be completed by the end of 2024 (GlobalNews, 2023). Completion is currently delayed as a result of various indigenous communities claiming that the pipeline encroaches on their traditional lands, resulting in complex legal battles and ethical concerns (GlobalNews, 2023).

Bottom Line: The Trans-Mountain Pipeline has long been an economic opportunity for the Canadian energy sector. Although the expansion project should enhance economic benefits, it brings costs to indigenous communities, thereby slowing its progress towards becoming a fully operational and profitable venture.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Solène writes*

Goal 14 of the United Nations Sustainable Development Goals on protecting oceans, seas and maritime resources is one of the most underfunded SDGs. Yet the ocean covers 70% of the planet’s surface and is one of our most abundant sources of minerals, energy, oxygen, and medicines. Furthermore, 80% of the volume of international trade in goods is carried by the seas, not to mention the 99% of the world’s data traffic and intercontinental communications transitioning via undersea cables. In a nutshell, it would be complicated for humanity to survive without the services provided by the seas. Nevertheless, mankind cannot help but deplete and abuse the waters to serve its interests.

Small-Developing Islands States (SIDS) are particularly vulnerable to the destruction of the oceans. Most of their economies rely on tourism and fishing exports: SIDS need to reduce ocean pollution and extend their protected maritime zones. Thus the need for Blue Bonds, a pioneering invention in the world of finance and sustainability. Defined by the World Bank  as “a debt instrument issued by governments, development banks or others to raise capital from impact investors to finance marine and ocean-based projects that have environmental, economic and climate benefits,” the Blue Bond appears to have the potential to solve capitalism’s trickiest equation: developing a financial product that yields profits while preserving the environment and the oceans. In other words, a country borrows money and repays it with interest like any other debt, but the difference with a traditional loan is the purpose of the funds raised, i.e. to protect and manage maritime assets sustainably.

But wouldn’t borrowing even more money increase the financial debt burden borne by SIDS?

In theory, no. Organisations such as the World Bank offer guarantees and/or subsidies to reduce the interest burden, making debt less expensive. Furthermore, by investing in the protection of ocean spaces and resources, the SIDS hope to increase their income from fishing and tourism in the long term, contributing to their ability to repay their debts.

For example, in November 2021, an agreement was reached between the American NGO The Nature Conservancy (TNC), Belize, and its creditors. According to a TNC report, the NGO purchased part of Belize’s $553 million national debt from its creditors at 55% of its face value. Belize is then to repay TNC at a reduced price of $364 million, lowering its debt by $189 million, or 12% of its national GDP, while benefitting from its tourism and fisheries sectors that will profit from investments in coastal conservation. In return, Belize undertakes to use the savings to finance the protection of 30% of its territorial waters, with ongoing supervision by TNC.

On paper, everything sounds fantastic. However, there are several hurdles to overcome. Among them are the high costs of supervision and management to guarantee the transparency of the funds and prevent, for instance, illegal fishing activities or piracy. One could also mention the costs of quantifying impacts and the lack of standardised metrics for assessing the results of projects financed by Blue Bonds. Moreover, debt swap negotiations are long and costly. Finally, Blue Bonds are extremely recent (the first was launched in Seychelles in 2018), and therefore lack a clear framework, as well as sufficient recognition, which reduces the incentives for investors to participate in projects.

Bottom Line: Blue Bonds offer a promising financial tool for protecting ocean resources. Nonetheless, despite their noticeable economic and environmental potentials, barriers including high management costs, unclear framework, and low investor incentives hinder their widespread adoption.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Sarah writes*

Mangroves are trees in tidal tropical and subtropical ecosystems that are essential for providing storm protection to coastal communities in over 120 countries and territories (Conway and Mazza, 2019). The Dominican Republic (DR) is one of these countries where mangroves have been vital for protection against storms and erosion (Bryony Cottam, 2021).  In fact, conservationists in the province of Monte Cristi have seen a loss in shoreline, erosion and degradation in areas where mangroves have been removed (Bryony Cottam, 2021).

Even though mangroves are protected under the law in DR, weak enforcement has not stopped their removal (Bryony Cottam, 2021). Shrimp farms, fertilizer pollution, and other toxins have decreased mangroves by 30-50% (Chip Cunliffe, 2020).

This leads to the question: how do we encourage people to prioritize mangroves over tourism and agriculture?

Since tourism is one of the biggest industries in DR, it is more profitable to advance tourist infrastructure than protect mangroves (“Tertiary industries”, n.d.).  Thus, there needs to be a value placed on the mangroves to incentivize protecting them. In the insurance industry, new products are emerging to cover the $1.5 trillion global “blue economy” (Conway and Mazza, 2019).  Reinsurance companies such as Swiss Re implemented policies to protect dozens of km of coral reefs and mangroves in Mexico. These policies are putting a value on mangroves and coastal protection, which reduces the potential human and infrastructure loss. Axa XL also recognizes mangrove value. They found that a 100m-wide mangrove forest  can reduce flood damages by US$65 billion per year since mangroves can reduce wave heights by as much as 66% (“Tertiary industries”, n.d.).  Insurance companies will invest in mangrove rehabilitation when long-term benefits outweigh costs.

However, there are drawbacks to this insurance product. For one, insurance companies are likely to only provide coverage to areas that are mildly affected by global warming. Insurance companies are less eager to invest in protecting Dominican mangroves because there is more risk involved (Chip Cunliffe, 2020).

The second drawback is that pollution and over-fishing also contribute to the destruction of mangroves, which are difficult to value (Beck et al., 2020). Even if the mangroves are protected from being cut, they are not protected from pollution run-off. Additionally, over-fishing affects the balance of the food chain and, consequently, ecosystem health. Since it is difficult to quantify all the services that each aspect of an ecosystem offers, it is difficult to insure (Beck et al., 2020).

Although it is challenging, insurance companies such as Axa XL recognize the value of mangroves. They have already implemented policies in Mexico, and they are in the process of gauging the potential demand for an insurance product in the Dominican Republic and other locations in the Caribbean (Chip Cunliffe, 2020).

Bottom line: Mangrove protection is a nature-based solution to tropical storms that deserves investment. However, there are challenges in getting insurance companies to invest in countries that are highly affected by global warming. And it is difficult to implement a protection plan that not only prevents mangroves from being cut, but also reduces pollution and overfishing.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Max writes*

As the price of EU carbon permits hits an all-time high of 70 euros per ton, questions of whether the EU Emissions Trading System (ETS) is living up to its promise are resurfacing.

The EU ETS, the world’s first emission trading system, was introduced in 2005 [pdf] to put a price tag on carbon emissions. The mechanism is built on cap and trade which assigns a finite number of carbon allowances to various greenhouse gas emitters in the aviation, electricity, and energy-intensive sectors of the EU [pdf]. The premise is that emitters who emit beyond their carbon allowances [pdf] must buy additional carbon permits from emitters who have not used up all their carbon allowances. As a result, excessive emitters are incentivized to reduce their emissions so that they do not incur additional costs. That is how it should work in theory; however, reality has shaped out to be completely different.

To shield their industries from carbon paralysis, EU governments granted 99% of the carbon allowances between 2005 and 2012, or Phase I and Phase II of the project, for free — thereby giving up tens of billions of euros of potential auction revenue. This effectively made the cap-and-trade system void as emitters had no incentives to reduce their levels of pollution with the abundant supply of allowances. With the introduction of Phase III of the project, in 2013, this was set to change as permits would be primarily allocated through auctioning. Eight years later, they halved the number of free allowances; however, for most of the period, the price had been hovering between 5 and 15 euros per ton, considered by many economists as too low of a demand to incentive a significant change in emissions.  Albeit, some studies justify the lack of demand as a sign of polluters moving towards less pollution, therefore they did not need additional allowances as the supply was ample enough to cover their needs.  This leaves open the question of why did carbon prices double between 2020 and 2021 if the supply had not shifted that much?

The supply of allowances clearly remains way too abundant for major emitters to be incentivized to buy allowances. During Phase I and Phase II of the EU ETS the emissions of the 10 largest emitting sectors were 100% covered by free allowances, since 2013, there has been a gradual decrease to 60%. Despite a 40% decrease in free allowances, emissions, when accounting for emissions embodied in gross imports, i.e. gross leakage, have only decreased by 5-10%. In other words, the supply of free allowances remains far too ample to justify the EU ETS as an effective supply-constraining mechanism especially when considering that the majority of reductions were explained by the transition to natural gas from coal. Data for 2020 shows a familiar downward trend for emissions. Therein, the spike must have come from the demand side but not from emitters rather speculators. Speculators are anticipating that the price of permits will only continue to increase following the EU Commissions’ commitment in 2018 to pursue reductions more aggressively which has led to the price volatility that has been seen in recent years.  In times of price volatility, emitters postpone investment in low-carbon technologies as market signals are not clear and jumps in the price can backfire on abatement efforts.  In 2019, the EU introduced the Market Stability Reserve to soothe the worries of emitters, stabilize prices, and scare off the speculators; however, so far, the benefits have been scant.

Bottom line: The data for 2021, the year that carbon permit prices doubled, has not come in yet; therefore, the implications of the surge cannot be analyzed with certainty but, so far, ramifications in the EU have included a sharp increase in coal use (in response to permit price volatility) which can’t be good for the environment.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Stephanie writes*

Anyone interested in sustainable food systems should be familiar with the First Nations’ “three sisters” farming method, which leverages synergies among maize, beans and squash. It’s often viewed as the archetype of polyculture.

Allow me to introduce a relatively new form of polyculture: the “three cousins” system for cultivating salmon, mussels and kelp. In 2004, a Canadian research project called AquaNet gave it a far less poetic name: IMTA (Integrated Multi Trophic Aquaculture).

Many believe IMTA could resolve the adverse impacts of salmon farming on marine ecosystems. Salmon farming is classified as monoculture because only one species is harvested. Typically monocultures suffer from unsustainable nutrient deficits, however, the issue with salmon farming is that they add nutrients to the ecosystem.

Is it possible to have too much of a good thing? Definitely! For decades, there have been concerns over excess salmon feed contributing to coastal eutrophication. Just Economics estimated this harm caused $29 million in damages to Canadian ecosystems in 2019.

One of the main contributors to early IMTA research, Thierry Chopin, argues that “the solution to nutrification is not dilution but conversion”. By uniting the “three cousins”, the Canadian salmon farming industry would be transformed from a throughput to a circular economy. Once farmers implemented IMTA technology, they would not only be absorbing the negative externality of nutrient waste, they would actually be profiting from it.

I swear it isn’t witchcraft, but something more magical: ecosystem services. Bivalves (such as mussels and scallops) are filter feeders. By placing mussel rafts around the salmon cage, they act as a buffer between the farm and the surrounding ecosystem. The mussels are fed by the excess nutrients from the salmon. A 2012 study found that mussels grown next to salmon cages are meatier than mussels farmed apart from salmon cages. Mussel and salmon farming are both prominent aquaculture sectors. It’s as simple as placing two already-existing aquaculture technologies side-by-side. The addition of kelp to the system provides another filter, via “nutrient scrubbing.” While there is no traditional market for kelp in North America, kelp demand is expected to increase.

The most daunting barrier to commercial IMTA implementation is the operational complexity, however supporters of IMTA push that these transition costs would be repaid with new revenue streams. Fish farmers should think of IMTA as an opportunity to diversify their investment portfolio.

Bottom line: Polyculture has real promise. Unite the three cousins. We’ll all be better for it.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Juliet writes*

Policymakers and pro-climate groups want to address the climate crisis by replacing cars with internal combustion engines (ICEs) with electric vehicles (EVs). But can EVs be a true substitute for ICEs? Perhaps not. To fully grasp the potential benefits of EVs, it is important to know the extent to which EV owners actually end up driving them. This presents a challenge. Because EVs are primarily charged within homes, the existing charging data has been limited.

A 2020 study from the University of California – Davis [pdf] estimated that Californians drive their battery EVs 11,35o miles per year on average. These past analyses, however, were based on surveys and small sample sizes. Surveys are often inaccurate due to response bias, meaning that people have a tendency to respond to surveys with answers they believe to be more socially acceptable than true. This can be a subconscious phenomenon which skews the data. Small sample sizes can similarly affect data because a small subgroup may be unrepresentative of overall EV owners.

This year, another study at multiple universities including the University of California – Davis [pdf], using a much larger sample and direct measurements, indicates that EVs are being driven significantly fewer miles than their ICE counterparts. The study utilizes billions of California electricity meter measurements merged with address-level data about EV registrations in order to estimate the change in energy usage from EV charging. The result is an unexpectedly low change — a 2.9 kWh daily increase in electricity usage — signaling lower EV usage than previously thought. After adjusting for charging outside of the home, those results translate into battery EVs being driven only 6,700 miles per year. Data from the California Department of Public Health indicates that Californians as a whole typically drive around 9,000 miles annually.

The explanation for the low usage of EVs is not exactly clear, but the paper [pdf] cites a few possibilities. One possible explanation is that EVs might provide lower marginal utility per mile traveled when compared to ICE miles. The lower utility could stem from shorter distance range of EVs or insufficient charging networks. Another reason for less than expected charging could be that most EVs are owned by multiple-vehicle households. This would mean that EVs are a complement to ICEs instead of a substitute, and households who buy an EVschoose to drive their ICE more often than their EV. The last explanation I will touch on is that low charging rates could be a reflection of high electricity prices in California.

No matter the explanation, this information has important implications for future climate policy. The results indicate that policymakers should maybe reconsider making drastic commitments to EV technology in order to reach their decarbonization goals because it may not be as effective as it seems.

Bottom Line: EVs might not replace conventional gas-powered vehicles, so  policymakers might need to pump the brakes on EV promotion until they have better information and instead focus on other ways to  decarbonize society.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Anaïs writes*

I took the picture below from my apartment in The Hague. My quaint neighbourhood, Mariahoeve, has many identical apartment blocks and large populations of elderly people and trees. Greenbelts, ponds, parks, street trees and community gardens help compensate for the neighborhood’s dismal architecture.

I love waking up to the sound of birds, taking strolls through shady streets, and having a feeling of space and serenity.

Urban Green Spaces (UGS) offer residents many services and benefits These include water regulation, temperature cooling, and carbon sequestration, but cultural ecosystem services — often the most valued by residents — are the most difficult to represent in monetary values that must capture the benefits of mental and physical wellbeing, recreation and attachment to place. Why do we need to quantify these services and benefits? Well, many cities are growing rapidly, and densification of city space encroaches on existing greenery as a consequence. UGS tend to be ‘undervalued, underfunded and marginalized in favour of larger grey infrastructure development’ because decision-makers ignore these non-market values.

So how do we put a dollar value on the culture value of green space? Contingent Valuation is used to put a price on non-market services.

Most of the time, someone would come up to on the street and ask you some details about your income, education and occupation and then ask whether and how much you would be ‘willing to pay’ (WTP) for a park or green space, like in the picture I showed in the beginning. Since people are not accustomed to pricing environmental quality, it’s difficult to find accurate values. It also depends how much information you, as the respondent, are given. If, before asking, I told you that you are already paying 2.20 Euros for street cleaning and 1.5 Euros for maintaining green spaces through your city tax, maybe you would have a clearer idea of how to answer. The fact that the outcome of these surveys is so dependent on proper design makes them susceptible to a range of reliability and validity issues.

Your WTP depends on many factors, especially income. Budget constraints could prevent you from paying for urban green spaces. A study on WTP for improved water quality in a lagoon in Malawi found a genuine inability to pay among 33% of respondents. However, attempts to address this issue in low-income settings, by using ‘Willingness-to-Work’ instead of WTP, found little differences between these payment vehicles.

Bottom-line: Measuring the value of green spaces is difficult for individuals, never mind for those charged with valuing spaces for the community. Willingness-to-Pay, if used carefully, can help us include the cultural benefits of urban green spaces in cost-benefit analyses. Hopefully, Mariahoeve can always be home to ugly buildings, the elderly and trees.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Miqui writes*

While we are finding ways to recuperate from the current health crisis, another existential threat demands urgent action. In recent decades we have become kings of the world by dominating the natural environment. One of our instruments was the expansion of agriculture. Although agricultural production has become much more efficient in the use of the land (we need only 30% of the farmland relative to the production in 1961), agriculture now uses half of all habitable land, and it is estimated to be responsible for more than 20 % of the greenhouse gas emissions. An even more worrying prospect is that if we do not change the way we produce our food, we only have 60 years of farming left. Although conventional farming practices have spurred an extraordinary jump in our production efficiency, with this method we are simultaneously removing the foundation on which it all depends, a healthy soil and stable climate.

Instead of further explaining why the conventional farming poses an existential threat, I would like to look ahead and tell you about relatively new practice of food production that has the potential to significantly reduce the pressure we put on the natural environment. It is called vertical farming. NASA has been one of the first to explore this practice to potentially use it in their space missions, bringing us closer to what we see in science fiction. As the words already hint at, it is a practice that grows crops in vertically stacked layers. It often involves growing in soilless, highly controlled environments that optimize plant growth. As a result, it drastically reduces the need of inputs such as water and nutrients, eliminates the use of pesticides, has the potential to reduce emissions, and needs 10-20 times less land than conventional farming (WUR).

Besides the environmental need to shift some of our agriculture production indoors, it can also play a big role in food security. The pandemic has shed a light on how vulnerable our (food) supply chains are. With vertical farming we can bring our food production closer to our dense urban population to provide them with safe, sustainable, diverse and nutritious food.

Food supply diversity will also help cope with the imminent threat from climate change. Farmers over the world are already affected by more extreme weather events like prolonged droughts and intense rainfall, which destabilizes our global food networks. By growing crops in controlled environment, we protect our food production, guaranteeing quality food all year long independent of the weather, climate and any other extremes (Al-Chalabi 2015).

Critics argue that vertical farming is very limited in providing us the food security as it mainly produces leafy greens while other more calorie dense crops are less easily grown. Moreover, it could seriously distract us from transitioning to organic farming practices. It is true that we cannot feed the world with salad, and there is also a dire need to change conventional practices to organic ones. However, like any other global challenge, there are no one-size-fits-all solutions to the crisis in the food supply system. Vertical farming could work in harmony with organic agriculture and at the same time return some of our farmland to its original ecological function.

Bottom Line: We have to start treating earth like an enormous space ship because our (natural) resources are finite. Treating it like anything else will eventually lead to the destruction of our species.

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* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).