Wednesday, November 4, 2009

NZIER report rocks

NZIER has released a report on sustainability and the environment in New Zealand. Excellent. Were I teaching Econ 224 again next year, it would be on the syllabus for my week on environment and sustainability. Long story short, the report reminds us that resources for use in improving the environment are scarce and we're wasting many of them on initiatives that will provide little benefit. Consequently, we ought to reallocate resources away from carbon abatement and waste minimization and towards addressing air and water pollution. Very sensible.

The last government put in place some surcharges for landfill uses predicated on an "all landfill is bad" philosophy. Says NZIER
Waste policy in New Zealand has achieved much over the past decade but further extensions for sustainability purposes are questionable. The new Act’s levy on wastes disposed to landfill bears no relation to measurable externalities coming from landfills, most of which are now relatively new and managed to high standards, and as a revenue raising device it is simply inefficient. It has no appreciable benefit in reducing the depletion of environmental stocks or their contributions to economic welfare. Pursuing targets for waste minimisation and maximising material recovery, reuse and recycling, without explicit consideration of the costs and benefits, will itself be wasteful of non-material resources such as labour, energy and capital, diverting them from other activities of value to the community.
Which is pretty much what I say in lecture as well.

View the report as being Lomborg's Copenhagen Consensus applied to New Zealand. It could be better, of course: tied for top priority is reducing pressure on biodiversity, but no mention is made of policies that currently hinder private efforts to breed endangered species (Roger Beattie's excellent work case in point). But it's a great start.

For students: 224 is off next year. I'm on sabbatical first half of 2010 and first half of 2011, with a half teaching load in the second semester of each year (with some parental leave added in for 2010). So I'm teaching the second half of intermediate micro theory next year, with Erskine Visitor Max Stearns covering my 336 class, and then likely 224 and 336 in 2011.

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