Tom writes*

Everyone buckle up while I take you along on my dad’s daily commute to work. Before you ask yourself why you have to care about the travels of some middle aged man that you have never met, let me explain.

Passenger cars drove 100 billion kilometres in the Netherlands in 2020, emitting 5.3 billion kilogrammes of carbon. Emissions of passenger cars could be decreased if people like my dad switched to public transport. I will use him as an example to show that time, comfort, and prices play a deciding role in the choice of transportation for commuters.

My dad works for an insurance company in Eindhoven, which is 143 km from his house. Five days a week he drives 1.5 hours each way in his trusted Renault Mégane. The car uses diesel fuel and has a mileage of 5.6 litre per 100 km. Which, after a quick calculation, means that he uses 16 litres of diesel per day. This will be important once we start comparing prices. However, for now I would like to highlight that his car emits 118-129 grams of carbon per km [pdf]. Taking an average of that and multiplying it by the amount of kilometres he drives, we find out that his car alone emits 35.3 kilograms of carbon each day.

My dad cares about the environment, and is reasonably up to date about climate change consequences. So why does he keep using his car when he has the possibility to take the carbon-neutral train to get to work?

For this, he gave me three reasons: time, comfort, and money.

To get from his house to his work would take around 3 hours by public transport, depending on the time of day and available trains and busses. This is “such a waste of time” compared to his 1.5-2 hour commute. Public transport requires 20 minutes of walking and a lot of waiting.

“What if it rains?”

I did not have a counterargument to a man who has to give presentations and talk to clients all day. He also enjoys air conditioning in summer and heated seats in winter.

Then, as foreshadowed, we come to money. Getting to work (with a regular OV-chipcard) would cost a whopping €28, or €56 per day. Since diesel costs 1.67 euros per litre, his 16 litres of consumption adds up to €27 per day, only half of the cost of public transport. My dad is not willing to pay that difference.

Bottom line: Cars emit carbon and add to air pollution. Public transport is often suggested as a solution, but it’s not always the substitute we need it to be. The example of my dad has shown the mindset of a regular commuter, and how they are often not willing to give up their time, comfort, and money to decrease their CO2 emissions.

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

## Will we have a future with seafood?

Ami writes*

Seafood is popular globally. It is delicious, nutritious, and supports workers in numerous coastal communities. But overfishing threatens aquatic ecosystems and biodiversity.

Industrial fishing occurs across 55% of the oceans, an area four times the land area used for agriculture. Industrial fishing results in wasteful bycatch; trawling and longline fishing harm marine ecosystems and bioproductivity. Only 67% of fisheries are sustainable [pdf], and the Mediterranean fisheries are under the most pressure [pdf]. It is projected that the entire seafood ecosystem will collapse by 2048.

Japan is particularly dependent on fisheries. Japan was the second-largest importer of fish in 2017, after the United States. In 2007, Japan was also the fifth-highest producer of fish products in the world, and paid the largest subsidies for high-seas fishing. North-East Asian people depend on marine resources. China, Japan, South Korea, Taiwan and Spain are responsible for 85% of high-seas fishing.

Japan has imported most of its seafood from China since 1998. This relates to the illegal fishing problem. Every now and then, illegally fished fish species have entered the Japanese markets. ‘Illegal, unreported, and unregulated’ (IUU) fishing is difficult to monitor or control, leading to detrimental humanitarian and environmental impacts. In Japan only five fisheries are sustainable enough to be Marine Stewardship Certified.

Subsidies that encourage overfishing have increased despite resistance by conservationists. Captive breeding attempts to offset overfishing. Captive breeding for bluefin tuna in Japan aims to replace stocks that have fallen by 96% since 1960. But captive breeding is costly and ineffective (low survival rates). It also reduces genetic diversity [pdf], for example, with Atlantic salmon.

While this marine resource depletion continues, it could result in similar consequences seen with the Amazon forest, i.e., where nations ask for (or offer) funds to reduce overfishing. Even if funds are provided, they need to be complemented by policies that prevent other countries from taking the resources instead.

High demand, difficulties in monitoring and control, and climate change  will continue to harm fisheries. Fifty euro sushi menus may become the new normal for future generations.

Bottom Line: Marine resources have been depleted and marine biodiversity is in serious decline. Industrial overfishing in North-East Asian countries, difficult monitoring, and inadequate policies could result in a fish-free future.

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

## Gaps in the local nutrient cycle

Eva writes*

In June 2019, the Dutch government set the goal of having as much of a circular agricultural system as possible by 2030. European Union regulations state that objectives of organic agriculture include that distribution channels should be kept short, and that one should aim for a local approach. This means that closing the agricultural cycle should happen at the most local level possible [pdf]. With the current division of agricultural practices in the Netherlands, however, that will be a challenge.

To take an example, farmers in the region of West Zeeuws-Vlaanderen lack local supplies of manure. Therefore, a gap in the nutrient cycle appears: the rate of nutrients taken from the soil is higher than the rate of nutrients returned to this soil. Currently, farmers in the region close the gap with chemical fertilizers and manure imported from Noord-Brabant.

Because chemical fertilizers harm the environment, organic farmers try to  minimize the use of chemical fertilizers, meaning greater imports of manure from Brabant. However, the cattle farmers in Brabant often import their cattle feed from far away (Africa, Asia, and the Americas). How sustainable is this organic farming?

This example shows why it is so important to close the local cycle when we want organic agriculture to actually be a more sustainable option. The issue is that, with current practices, an unclosed local nutrient cycle is unavoidable. That is because of one consistent factor taking nutrients out of the cycle: human consumption. By consuming, we take nutrients out of the cycle, which end up in by-products: food waste, by-products of food processing and, well, our fecal matter. These nutrients are never returned to the soil, which is why manure needs to be imported to fill the gap. However, importing means that there will always be a gap somewhere in the world. Local solutions are needed!

The first steps towards a minimized gap in the local cycle should be the prevention of food waste. This still does not completely close the cycle: full recycling of all by-products is needed, including human excreta. Currently, human fecal matter is still seen as something we would rather dispose of. Nevertheless, seeing that a fully organic agricultural system with locally closed cycles is the goal for 2030, its recycling might be unavoidable. Other options include using legumes for nitrogen fixation. Nitrogen, however, is the only main nutrient that is present in the atmosphere: a fixation process cannot be applied for other main nutrients, like phosphorus and potassium. Therefore, it might become very difficult to find alternatives for all nutrients.

That is why it will probably be beneficial to consider the option of using human fecal matter. Current research shows that there are still some issues with emissions during storage and after spreading, and that human excreta contain contaminants of concern that need to be filtered out first: the development of a proper management system and additional research is clearly necessary. With the ‘local approach’ goal and the unavoidable gap caused by human consumption in mind, however, I would argue that investment in this research is definitely worth it.

Bottom line: By not recycling all by-products of human consumption, there will always be an unavoidable gap in the nutrient cycle. With organic farming being focused on a local circular approach, a way must be found to close this gap locally. Of the many possible strategies, the most obvious one is using our poop!

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

## Eating meat: choice or constraint?

Edde writes*

A high consumption of meat – and animal-based products in general – is a common practice all over the world [pdf] and over the past decades, global meat production has been rising. Whereas it is generally recommended for a person to eat not more than 70 grams a day, individuals in countries such as for example Argentina and Luxembourg consumed in 2013 on average 293.8 and 270 grams a day, respectively.

Understanding what induces meat consumption is important, as high meat consumption can negatively affect the long-term well-being of our ecosystems (a “market failure”).

Many factors influence meat consumption. These include, but are not limited to, an individual’s living situation, social identity, knowledge and skills, and one’s cultural and political norms and values. Although these factors determine to a certain extent why people consume meat, it is not always clear whether this is really a voluntary choice, or a choice encouraged by economic incentives.

Except for the factors above associated with individual dietary choices, a look at meat consumption from a national level can show how  “market dynamics” can increase meat consumption.

Meat producers respond to meat consumption. Economically speaking, the choice to consume meat can be seen as a vote to produce meat, which can explain record global meat production (see figure below). Higher consumption spurs investment in production (and subsequently sunk costs in capital and machinery) in the meat industry, which makes it easier to increase economies of scale, thereby making meat cheaper and meat alternatives relatively more expensive. Following the law of demand, a lower meat price – ceteris paribus – will lead to a higher quantity demanded. Furthermore, this will also likely reduce demand for substitute goods, such as more-sustainable meat alternatives. Consequently, this can engender a rather path-dependent process in which more meat is consumed and produced, thereby encouraging less-sustainable meat eating.

On the other hand, sustainable eating can also reflect incentives rather than choices. Considering that meat can be too expensive or not accessible, populations may be (financially/economically) incentivized to consume little meat. This may be better for animal welfare and ecosystems, yet it does not guarantee a more prosperous and equitable society. In poor countries, consumption of protein is low, yet it would be better for health and well-being (and thus economic prosperity) if these populations included more protein – such as meat – in their diet.

Therefore, when talking about meat consumption and sustainability through an economic lens, it is important to consider the impact of consumer choices on our environment as well as underlying mechanisms affecting those choices. To improve the long-term well-being of our ecosystems and economies, national and global economic policies need to consider all the factors encouraging (and discouraging) meat consumption.

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

## Review: Mine!

I heard about this book (subtitle “how the hidden rules of ownership change our lives”) via this Econtalk podcast and “acquired” a copy.

The authors (Heller and Salzman, or H&S) turn what looks like a simple topic — ownership (or property rights) — into an engaging and though-provoking essay on the vague borders between what’s mine, yours and ours. (I reviewed Salzman’s 2012 Drinking Water: A History.)

Their main points are that (1) ownership is not always clear and (2) some actors try to leverage this vagueness into profits and/or advantage, i.e., “as valued resources becomes scarcer, people compete more intensely to impose their preferred ownership story, and entrepreneurs find ways to profit” [p 5]. Theme (1) is important in most of the work I do on the commons (where ownership is either unclear or impossible to assert), so I found their examples — coming from both economic and legal perspectives — to be very interesting.

Here are some notes on the book’s contents:

1. Rights to private property are easier to understand, respect and protect than rights to “digital property,” which is both novel and non-rival. Non-rivalry occurs, for example, when I share my digital photo with you. Now both of us are “owners.” (Read more on different types of goods.)
2. There are six ways to claim ownership: grabbing it first, physically possessing it, applying effort to it, linking it physically to something you own, its attachment to your body, and inheriting it.
3. Ownership claims are often upheld by courts and governments, but they can impede larger social goods. Patent rights can keep a useful medicine (e.g., vaccines) from the poor. Slavery was terrible. Musical, fashion, artistic and technical innovations often depend on “stealing” from others. “Too much existing ownership can make it impossible for people to create new, more valuable things… creating ownership gridlock… When too many people own a piece of one thing, cooperation breaks down, wealth disappears, and everybody loses” [p 97].
4. “All property conflicts exist as competing stories. Each side picks the story that presents its claims as the moral high ground, and each side wants ownership bent toward its view. But don’t be fooled. There are no natural, correct descriptions that frame mine versus mine conflicts. There are, however, better and worse choices that we can make to solve these dilemmas. And if you are not the one choosing, then someone else is making the choices for you” [p 15].
5. Speaking of rights, their chapter title “who gets what and why” is a direct copy pasta of the title of Al Roth’s 2015 book. Thieves!
6. Since property rights are complicated (subjective), it’s common for politicians to re-assign them to friends, lobbyists, the rich and powerful. The assignment of rights to the poor, under-privileged and/or deserving  is more the exception than the rule. For example, “Being the first Christian European was what justified, as a matter of law, the claims of Spain to the Caribbean, Texas, Mexico, and California” [p 24] or “The ways some Native Americans hunted and gathered—moving in a seasonal pattern to follow wild game, fish runs, and ripening berries—simply didn’t count [for ownership]… labor led to ownership only if you made New England look like the Old England the colonists had left behind… [this shaky reasoning]… was enough for the Court to justify dispossessing the Native peoples of America” [p 83].
7. Rights based on possession often lead to over-exploitation of a “free” resource (e.g., water or animals) by those hoping to establish ownership.
8. Sometimes rights are “unfair” but efficient (e.g., fishers claiming a territory based on historic use), so it may be better to leave them in place.
9. “Caught food was an important nutritional resource [in Colonial America]. So states favored labor and possession [of animals] over attachment [those animals are on my land]… as a deliberate anti-aristocratic rebuke to England, which reserved rich hunting and foraging lands to large landholders and the Crown” [p 125].
10. Property rights should change if a resource’s scarcity or value is changing. When water is abundant, then anyone can use it. When it’s scarce, then rights need to change to reflect scarcity. (I wrote a book or two about such reforms 🙂
11. Employers try to limit employee’s right to work (and increase their profits) with “non-compete” clauses. One reason Silicon Valley is still productive is because California prohibits non-competes.
12. I can’t even tell you how disgusted I was reading about how Whites in the Jim-Crow South used inheritance laws to “trick” Blacks out of their lands, thereby impoverishing generations. Read this, this, this and/or this about “forced partition sales,” which are neither necessary nor common (German laws avoid the issue). Similar laws took land away from Native Americans. The English also used it against the Irish. I’d say these examples support claims of “systemic racism” more than respect for private property.
13. “The reality today is that, overwhelmingly, wealth in market economies is held not by individuals focused on exclusion but by groups of people working together. Think about marriage, condominiums and cooperatives, unitization, trusts, partnerships, and corporations. All these are successful examples of… “liberal commons property.” [snip] To be successful, every enduring liberal commons must address three trade-offs. The first is the trade-off between individual choice and group authority… The second is the trade-off between enforcing majority decisions and respecting dissenting views… The last is the trade-off between protecting group values and allowing individual freedom to exit” [p 211].
14. Lobbyists used lies and deception to convince Americans to weaken estate (“death”) taxes. How? “Nearly 40 percent of Americans mistakenly believed they were in the top 1 percent, or soon would be, and thus were potentially subject to the tax” [p 214]. This is not the first time America’s poor sided helped the rich: “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires” — a thought inspired by Steinbeck.
15. “America sustains the most unequal distribution of wealth of any major country on earth. Make no mistake: this transformation is not happening by accident, by magic, through the free market, or just naturally. It’s a brilliantly designed heist, engineered by family-dynasty lobbyists and accomplice legislators. And lower taxes for the super-rich mean higher taxes for everyone else” [p 227].
16. H&S give some examples of success (Individually Transferable Quotas with fish) and failures (Certified Emissions Reductions with HFC-23) in creating property rights to address environmental issues. The HFC one is deservedly notorious: “These companies…  duly incinerated every pound of HFC-23 they created. And for every pound of super greenhouse gas they destroyed, the companies were awarded CERs—which they then sold to polluting countries and companies in Europe and Japan” [p257].
17. Digital rights, micro-ownership, the “sharing economy,” streaming, and other innovations are aimed at profits and consumption, not sustainability and simplicity. Beware the marketers!
18. “And the sharing economy does not build wealth; for most of us, it consumes wealth. People lose the discipline of saving up for big purchases, taking out loans or mortgages, paying them off, and owning equity—in their jewelry, cars, and, most of all, homes… After mortgages were paid off, homes gave retired people a secure place to live or provided cash if they downsized. By contrast, renters pay month to month, and streamers day to day, accumulating nothing” [p 271].
19. “Communities also suffer if everyone streams accommodations rather than makes long-term commitments… Community solidarity is intangible, hard to measure, but its loss is a real cost nonetheless. In this tragedy of the commons, individual homeowners rationally choose to profit by listing on Airbnb, but collectively we all lose connection to our sense of place, to what makes us feel truly at home” [p 271]. Read my op/ed  on Airbnb’s assault on community.

Although the book is a bit heavy on examples, my one-handed conclusion is that anyone interested in prosperity, sustainability and the rules underlying our cooperation and happiness (as well as racism, inequality and corruption) should read this book. FIVE STARS.

Here are all my reviews.

## Interesting stuff

1. Read: Are “super fast” (~50kph) e-bikes bikes or motorcycles? Related: Read how cars did NOT rescue cities from a flood of horseshit.
3. Watch: This episode of Tegenlicht (Dutch, Dutch subtitles) has a very interesting discussion of the shortage of “manual” labor in NL. It seems that many students choose pride (and poverty) over challenging jobs in the trades.
4. Listen: Corruption: How Power Changes Us
5. Listen: Is Venture Capital the Secret Sauce of the American Economy? (Yes, but there are other factors, e.g., risk-taking, bankruptcy, etc.)
6. Read: The migrant workers cleaning up (in the US) after climate chaos
7. Read: Misunderstanding risk and the Peltzman effect
8. Read: The great organic food (certification) fraud
9. Listen: How to hold companies (and governments) accountable? Charge individuals with criminal “ecocide” (I think this is a good idea!)
10. Listen (a lot!) to Darknet Diaries. I’ve been binging, and these episodes are interesting: (12) The US Government tries to block (pretty) good encryption, (16) a guy gets pissed off when he can’t watch a DVD and hacks the algorithm, (23) the Russian who pulled the first online bank robbery and (24) police take over Hansa and Alphabay (I tested that market just before it was seized), Israel’s Unit 8200 (28), and stealing naked selfies (34).

## Information & efficiency (Demsetz 1969)

I heard about this paper [pdf] when it was mentioned in a podcast, in the context of comparing a real market failure to an imagined government intervention to fix that failure.

Demsetz starts off his paper by noting that he will be critiquing Kenneth Arrow’s claim that an imperfect market allocation invites government intervention to fix it. Demsetz (rightly) points out that government interventions, in reality, might also fail, i.e.,

The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing “imperfect” institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.

What’s crazy is that this delusion (the one Demsetz opposes) is still prevalent in many policy debates. For example: “we can’t tax carbon because we don’t know the right price, but we can definitely subsidise “energy efficiency” because that’s going to produce a predictable fall in use.”

Demsetz goes on to list a number of ways in which the nirvana fallacy leads to misguided policies, e.g., ignoring issues with information, people’s aversion to risk, moral hazard (taking risks with others’ money), and human’s general propensity to behave less as mathematical automatons and more as emotional, limited and conflicted individuals who may (not) follow social, legal and economic cues.

Demsetz also makes the obvious (and often overlooked) case for governments being composed of individuals — all with their own views and foibles — rather than the efficient calculating machine (the “social planner”) assumed by many academics — and interventionists.

He also repeats the (often ignored) argument in Hayek (1945) regarding information and innovation, i.e., that a central planner cannot hope to have as much information as many different people in distributed settings, locations and positions. The implication is that a less-than-humble planner  will make errors in calculating and implementing decisions that can be handled by those individuals.

The last part of the paper has some relatively simple maths and figures to support Demsetz’s points.

I recommend this paper to all economists — and many activists — for the important points it makes, i.e.,

I have stated elsewhere what I believe to be the basic problem facing public and private policy: the design of institutional arrangements that provide incentives to encourage experimentation (including the development of new products, new knowledge, new reputations, and new ways of organizing activities) without overly insulating these experiments from the ultimate test of survival. In the context of the problems discussed in Arrow’s paper, these institutional arrangements must strive to balance three objectives. A wide variety of experimentation should be encouraged, investment should be channeled into promising varieties of experimentation and away from un-promising varieties, and the new knowledge that is acquired should be em-ployed extensively. No known institutional arrangement can simultaneously maximize the degree to which each of these objectives is achieved

## Interesting stuff

1. Read: Why is drip irrigation so popular while useless at conserving water? “…some of the key players who continually support the ‘zombie idea’ include those who sell water-use efficiency equipment; politicians who prefer simple popularist solutions; and donor organisations who want easy investable options, rather than dealing with hard and unpopular choices.”
2. Read: Facebook’s quest for profits over society echoes the era when US automakers prioritised profits over lives
3. Read: Worried that supply chain problems are stopping people from getting essential goods (everything from machines to medicine)? Good, then stop buying useless crap that’s taking space on ships.
4. The founder of Trader Joes on governance: A deeply troubled company is always the fault of the CEO, the board of directors, and the controlling stockholders who appoint these worthies,” he writes. “It is never the fault of the frontline troops.”
5. Read: Social media is bad for people because it puts us into too many conversations with too many people — as I said in 2010.
6. Watch: This deep fake of Dutch PM Mark Rutte explains the climate policy the Dutch should pursue for sustainability. Sadly, short termism and greed are the actual policies. Not wise when your country will be underwater in the foreseeable future.
7. Read: A case study of lies turning into policy in Montana. Read: How German social workers are helping those caught in social media delusion back to reality. Related: Facebook employees know how to fix the site, but management will not act.
8. Read: Declining (Covid) antibodies are a GOOD thing.
9. Read: 20 years ago, the iPod changed the way we listen to music
10. Read: Watson and Crick stole credit for discovering DNA from their female colleague.

H/Ts to CP and RB

## Reviews: Up mountains & over seas

A few months ago, I came across a list of outdoor/adventure books and acquired six of those that I still wanted to read.*

I am writing brief reviews of two to give you a feel for their variety and  encourage you to do more reading and less doom-scrolling in your social media feeds. Most books can be downloaded in the open source .epub format that is useable by various reading apps (I use Apple Books).

Eric Newby’s A Short Walk in the Hindu Kush (1956) recounts his “walk” with an exuberant, slightly mad friend to Nuristan, a remote part of Afghanistan. Most of their journey involves pain, confusion and surprises. Only a few chapters actually deal with their attempt to climb a tall peak. To me, the book reminds me the rarity and difficulty of recreational travel — an idea that arose when the British combined colonialism, romance and oddity. I am pretty sure that it is still difficult to get to Nuristan, but their overland journey in a wreck of a car from England to Afghanistan shows how much safer, cheaper and easier it is to travel these days (Covid permitting). Recommended to anyone with a passion for hiking, dry wit, and polluted water sources (4 stars).

Joshua Slocum’s Sailing Alone Around the World (1900) tells how he sailed his 11.2m (36 foot) wooden boat, the Spray, from Boston to Gibralter to Brazil to the Cape Horn (where he was trapped by storms for 40 days), to Australia (sailing 73 days without hitting land), and then around the Cape of Good Hope back to the US. The book is deservedly famous among sailors for his solo voyage (made possible by the Spray’s extremely stable cruising configuration, which allowed him to read or rest while the boat “sailed itself”), as well as his “first” of solo circumnavigation. Slocum’s fluid writing about sailing as well as his ports of call gives readers a number of interesting insights. (I personally am not going to be making that trip anytime soon!) Slocum and the Spray, by the way, disappeared at sea in 1909. Like many old school sailors, he had never learned to swim, and I am pretty sure he saw no tragedy in going down with his ship. Recommended to anyone who has thought of sailing into the deeps (5 stars).

* Try Project Guttenberg, Open Library or — for those still under copyright — Library Genesis, but be careful about what you download from LG.

Here are all my reviews.