Of Booze and Bags

The Austin City Council is about to outlaw the paper and plastic bags you get at the grocery store. Retailers don’t like the ban. One particularly clever argument by liquor retailers is that it will encourage people to buy less — not a good thing, so they argue, when unemployment is high. 

This is a bad argument for so many reasons: 1) Booze demand and bag provision are at most only a tiny bit complementary — one can always carry the six-pack out by hand; 2) To argue that high unemployment is a reason for anything other than macro stimuli is totally self-serving.  I think all universities should hire more economists to reduce unemployment (although others may differ). The best argument against the ban is that it is not efficient—the environmental improvements don’t justify the extra resource cost of schlepping reusable bags into stores.  I don’t find even that argument to be very persuasive.

(HT to TC).

Is Good Corporate Citizenship Also Good for the Bottom Line?

Our latest Freakonomics Radio on Marketplace podcast is called “Is Good Corporate Citizenship Also Good for the Bottom Line?” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

The short answer: yes. That's the finding of Robert G. Eccles, Ioannis Ioannou and George Serafeim from their recent paper "The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance" :

"We show that there is significant variation in future accounting and stock market performance across the two groups of firms. We track corporate performance for 18 years and find that sustainable firms outperform traditional firms in terms of both stock market and accounting performance."

A Rose By Any Other Distance: A New Marketplace Podcast

Our latest Freakonomics Radio on Marketplace podcast is called “A Rose By Any Other Distance." (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

With Mother's Day coming up, we thought it'd be interesting to look at the cut-flower industry. Americans spend about $12 billion a year on them. Mario Valle, a wholesaler at the L.A. Flower District, tells us that Mother's Day is easily his biggest day of the year: "It's 30 percent of my year. Everyone has a mother!"

Green-Collar vs. Blue-Collar Jobs: A Difference in Name Only?

Amid ongoing inquiries into the prudence of government loans to failed solar firm Solyndra, and a spate of other bad news on the green jobs front, there is growing concern that the green economy may not be the juggernaut President Obama promised when he vowed after his election to invest $150 billion to generate “five million new green jobs that pay well and can’t be outsourced.” To counter critics, the administration is greenwashing large swaths of the economy—defining “green jobs” down to the point that they are virtually indistinguishable from what we used to call “manufacturing jobs.”

Green jobs are central to arguments that new environmental regulations should be pursued even in a down economy. Supporters of the policies, like California’s carbon cap-and-trade system, claim that even if the cost of regulatory compliance causes job losses in the traditional economy, the regulations will create jobs in the green economy. And green jobs are better jobs, as the President says: high paying, reliably American, and yielding environmental benefits.

Success of the green economy supports the economic defense of environmental policy, which may explain why administration officials were on Capitol Hill last week defending the notion that millions of Americans, from bus drivers to car makers, are employed in “green jobs.”

Deforestation, and the Incentivized Eco-Crime of Indonesia

There are books that governments keep officially, and then there are the other books - accounts of what people are actually doing and profiting from that are never mentioned in any legal context. A team of researchers from MIT, the University of Maryland, the London School of Economics and the World Bank cleverly used MODIS satellite imagery to uncover this kind of discrepancy as they investigated deforestation in Indonesia.

The satellite pictures allowed for comparison of legal and illegal logging operations. What they found (and write about in a new paper for NBER) shows how an increasingly decentralized government, coupled with very real monetary incentives for local officials, leads to eco-crime.

Indonesia contains one of the largest pieces of tropical forest in the world, rivaled only by Brazil and the Democratic Republic of the Congo. It's also the third largest producer of greenhouse gases behind the U.S. and China, due largely to its "forest extraction" practices. The paper examines three main forces that affect the decision-making and corruption of bureaucrats and government officials in charge of the logging-heavy jurisdictions of Indonesia.

The "Solar Panel" Effect on Home Sales

Our recent podcast on "conspicuous conservation" looked at the "Prius Effect" -- that is, how valuable it is for green-leaning consumers to signal their devotion to the environment by driving an obviously-hybrid Toyota Prius. (BTW, you can also fake it with an "instant hybrid conversion kit.") The episode was based on an interesting paper by Alison and Steve Sexton called “Conspicuous Conservation: The Prius Effect and Willingness to Pay for Environmental Bona Fides." It included some talk about solar panels as well, and how some people mount them on the street-facing side of their homes even though the sun shines more strongly on the rear.

"We Are Creating Magic" With Trees and Grass

From China Daily:

A successful forestation and grassing program in Ngari prefecture in the Tibet autonomous region is effectively battling sandstorms and improving people's livelihoods.

"We are creating magic, because no one has successfully planted good trees and grass in an area sitting 4,000 meters above sea level," 45-year-old Han Junwen, an expert with the agriculture and animal husbandry bureau in Gar county told China Daily. ...

Local government statistics show the average elevation in Gar is 4,500 meters and it has an annual precipitation of about 73.4 mm, which makes plant seeding extremely difficult.

But after six years of research and planting, Han and his team have now successfully planted 267 hectares of Lucerne grass.

Though land reclamation, grass seeding and forestation are increasing, there is still a long way to go. Tibet still ranks third in the list of areas suffering desertification in China, even though more than 11 percent, about 14 million hectares, is covered with forest.

Because the Consumption of Green Cleaning Supplies Isn't Very Conspicuous

Sales of eco-friendly household cleaning products have tanked thanks to the recession. Turns out our green conspicuous consumption habits only reach so far.

"Conspicuous Conservation" and the Prius Effect

This month, Toyota sold its one millionth Prius hybrid in the U.S. In 10 years, this strange-looking vehicle with the revolutionary engine has claimed a spot among the best-selling cars. Pretty impressive. But are all those Prius owners thinking mainly about better mileage and a smaller carbon footprint, or is there another incentive at work?

A Mandate to Be Inefficient

This week, the United States Supreme Court delivered a decisive blow to Mayor Michael Bloomberg's plan for New York City taxicabs to go green, to switch to hybrid cars. This all started a few years ago when Bloomberg announced a plan to mandate that the famous New York City taxi fleet go all-hybrid. The classic Crown Victoria gets about 12 miles per gallon, whereas a hybrid taxi gets 30 miles per gallon. Quite a difference! So this is great for the environment.