Transcript L11 policy - University of Vermont

Economic approaches to
Sustainability:
Goals, Principles and Practices
Goals?
Opening Policy Windows
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Problem stream
Defining existing condition as a problem
Getting policy makers to accept definition
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Policy Stream
Develop consensus around policies
necessary to solve problem
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Politics stream
National mood; leading politicians accept
gravity of problem and willing to implement
necessary policies
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Activists Fight Green Projects, Seeing U.N. Plot
Focusing events
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Financial crisi? Sandy?
Problem Stream
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Ecological economics in general?
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Scale
Distribution
Efficiency
Examples from your papers?
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GDP?
Food and water systems?
Monetary system?
Policy Stream: Tools
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Prescription
Payments
Penalties
Property rights
Persuasion
Power
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Concrete examples from your macro
pieces?
Current Events
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Switzerland's Proposal to Pay People
for Being Alive
Yellen to Back Stimulus Plan in
Remarks to Senators
New Catfish Inspections Are Posing a
Problem for a Pacific Trade Pact
Policy Stream: General Design
Principles
Every independent policy goal
must have an independent
policy instrument
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What should our policy goals be?
● Sustainable scale
● Just distribution
● Efficient allocation
● Others?
➲ Example of scale policy detrimental to
distribution?
➲ Examples of policies that meet several
goals?
Macro control with maximum
micro-level freedom/variability
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2 types of freedom
Is micro-level freedom always appropriate?
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ESA, POPs, HCFC-22, Fracking, etc.
Essential and non-substitutable resources
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Incentives (payments, penalties) vs.
prescription
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Electricity, water
Empirical evidence is critical
Human behavior is key
Examples from projects?
Leave a Margin of Error When Dealing
with the Biophysical Environment
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Uncertainty and Irreversibility
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Precautionary principle
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Climate change
Europe vs. US
Is democracy appropriate when we live
close to the edge?
Other examples?
Start from historical conditions
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Market system
➲ Existing property rights
● Create property rights were none exist vs.
taking away/changing existing rights
● Tax rent (unearned income) when property
rights exist
➲ Public property rights
➲ Government regulation
➲ Sovereignty and international policies
Adaptive management
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Complex adaptive systems or simple
deterministic systems?
Uncertainty
Evolution (ecological and technological)
Need to change our policies as we learn
more and as conditions change
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Treat policies as scientific experiments
E.g. policies implemented after great depression
Institutions at the scale of the
problem (subsidiarity)
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Global reach of financial markets and
financial contagion; climate change;
oceanic fisheries, etc.
Decentralized decision making for
decentralized problems
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The market is a decentralized decision
making process for activities that affect
only individuals
Policy sequence
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Scale
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Distribution
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determines how much there is to be
distributed
Requires end to economic growth
Pareto optimal outcome possible from any
initial distribution
Must be decided before allocation
Allocation
Politics Stream
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Focusing events
National mood
Changing administrations
Getting politicians to accept gravity of
problem, implement necessary policies
Any examples from projects?
Focusing events
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A Jolt to Complacency on Food Supply
South Florida Faces Ominous
Prospects From Rising Waters
National Mood
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G.O.P. Maps Out Waves of Attacks
Over Health Law
Policy Stream
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Persuasion: Campaign Seeks to
Recruit Top Students to Become
Teachers
Power: Voter Suppression’s New
Pretext
Property rights: Patenting Their
Discoveries Does Not Pay Off for Most
Universities, a Study Says
Penalties: JP Morgan Pays
Payments: Why Food Stamps Are a
Great Investment
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As compared to tax breaks for lavish
business meals
State of the Political Stream
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Huge changes in concern over just
distribution
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Income Inequality May Take Toll on
Economic Growth
Workers Must Get a Bigger Slice of the
Pie
To Reduce Inequality, Tax Wealth, Not
Income
Decreasing concern over
environmental issues
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May be changing
In Poll, Many Link Weather Extremes to
Climate Change
Why are we failing on the
political stream?
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Strong media coverage of climate
change skeptics?
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Influence of large corporations?
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NYT headline: “Use Energy, Get Rich and
Save the Planet”
“Dissenter on Warming Expands His
Campaign” http://climatedepot.com/
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“Online Cloud Services Rely on Coal or
Nuclear Power, Report Says”
Powell Memo and ALEC
“Embarrassed by Bad Laws”
Media emphasis on unknown rather
than known?
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Poor communication skills by scientists?
Lack of advocacy by scientists?
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Journal article title: Dragnet Ecology--"Just
the Facts, Ma'am": The Privilege of Science
in a Postmodern World
Lack of a focusing event?
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“the political system’s inability to address
long-term challenges without a thunderous
precipitating event “
How do We Open the Policy
Window for Ecological
Economics?
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Move beyond academia to think-tanks,
advocacy and activism?
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Think tank approach
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Repository of policy pieces—for politicians and
media
Rapid dissemination
Student involvement and leadership: Roosevelt
Institute
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Problem based integration of research,
teaching and service
Strong policy focus
Effective communication
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To policy makers, media, public
Steady exposure, available, rapid response
Policies for Sustainable Scale
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Food system; GDP; Energy
systems/waste; Money systems;
Wetlands;
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Penalties
Payments
Property rights
Prescription
Persuasion
How do we get politicians/public to
accept policies?
How do we deal with transboundary
issues?
Policies for Just Distribution
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Projects
Minimum income?
Maximum income?
Common ownership of our shared
inheritance from nature and society as
a whole?
Policies for Efficient Allocation
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How do we define efficiency?
Scale, justice and efficiency
VCAT
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Commons assets trust (CAT). Third sector in
addition to private and public.
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Resources “created or inherited together”
“common assets essential to life”
Why third sector?
Legally binding mandate to use resources for
the common good, for this and future
generations
Requires window of opportunity, not enduring
political will
VCAT
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Vermont currently considering CAT legislation
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Directly influenced by Barnes’ Capitalism 3.0
Senate: 2007
House: 2011
VCAT :“proposes to make it clear that state policy is to protect
certain common assets (such as air and water) for the benefit of
present and future generations, and to establish a framework
pursuant to which certain users of those common assets may be
assessed fees that would be deposited into a common assets trust
fund, which would be managed so as to protect those assets and
serve the interests of present and future people of the state”
What?
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“the list of assets that should belong to the people
in common …include[s] natural assets such as
undisturbed habitats, entire ecosystems, biological
diversity, waste absorption capacity, nutrient
cycling, flood control, pollination, raw materials,
fresh water replenishment systems, soil formation
systems, and the global atmosphere; and also to
include social assets such as the internet, our legal
and political systems, universities, libraries,
accounting procedures, science and technology,
transportation infrastructure, the radio spectrum,
and city parks”
How?
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Create common property rights to unowned resources
(e.g. waste absorption capacity) and publicly owned
resources (e.g. airwaves, water)
Tax away rent (unearned income), e.g. land tax
Common provision of non-rival resources (e.g.
information, culture and other public goods)
Allocation
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Access to rival resources (e.g. waste
absorption capacity) must be rationed.
Tragedy of open access
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“doctrine of res communes provided that the
king could not grant exclusive rights of access
to a common resource”
Cap and rent (periodic auctions with no resale)
Open access to non-rival resources
(culture, information)
Revenue generation
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Annual permit revenue from 11% reduction in
CO2 emissions: $720 million
Annual auction value of broadcast airwaves: $375
million
Annual increase in land values: $330 million
Fiscal deficit: ~$110 million
Revenue expenditure: Dividend or
Investments in Common Good?
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Example of CO2 permit auction
Dividend: Pros and Cons (Conventional
Wisdom)
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More politically feasible
Rebound effect (via imports) but more equal
distribution
Investment: Pros and Cons (Conventional
Wisdom)
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Greater CO2 reductions
Regressive
Dividend would not redistribute
wealth in Vermont
Political Feasibility: Vermonter
Poll
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95.2% Vermont’s atmosphere is a resource that
belongs to all Vermonters equally
78.1% believe the atmosphere is threatened by
pollution
82.5% believe individuals or companies should
be charged money if they pollute the
atmosphere
Political Feasibility
Efficiency Investments
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People are irrational
$0.03/KWhr for efficiency investments in Vermont, vs. $0.12/KWhr
for electricity
Reinvesting the revenue into efficiency has 5-7 times greater
impact on reducing carbon emissions than the price signal alone
(Cowart 2008).
RGGI results suggest that every dollar invested in energy efficiency
and renewable energy yields $3-$4 in savings
Investments targeting low income groups could improve
sustainability and income distribution
Conclusions
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Important to move policies into practice
One step at a time
Must treat implementation as scientific
experiments that test our hypotheses
Institutions needed at scale of problem.
VCAT is only pilot project