{"id":237,"date":"2012-02-09T19:28:50","date_gmt":"2012-02-10T01:28:50","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=237"},"modified":"2012-02-22T23:36:32","modified_gmt":"2012-02-23T05:36:32","slug":"environmental-accounting-for-pollution-in-the-united-states-economy-one-sided-view","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2012\/02\/09\/environmental-accounting-for-pollution-in-the-united-states-economy-one-sided-view\/","title":{"rendered":"Environmental Accounting for Pollution in the United States Economy: One Sided View"},"content":{"rendered":"

I came across <\/span>this report<\/span><\/a> from the American Economic\u00a0Association (AEA)\u00a0as I am following a bunch of really interesting people on twitter.\u00a0\u00a0\u00a0The people I follow don\u2019t always agree on subjects; but why would you follow people who believe what you believe.\u00a0\u00a0 Where is the fun in this?\u00a0 How will you get color and perspective following the people who believe the same thing?\u00a0 This report was done by academics from Yale and Middlebury College.\u00a0\u00a0 My qualifications certainly do not match them, but at some point common sense and reason should prevail. <\/span><\/span><\/p>\n

The report was to analyze the cost of externalities, and apply that to each industry to get the gross external damages (GED) from pollution and to compare the \u201cvalue-add\u201d(VA) from each industry.\u00a0 The purpose of the ratio of GED\/VA in their own words \u201cThe purpose of this comparison is to determine whether correcting for external costs has a substantial effect on the net economic impact of different industries\u201d.\u00a0 They further point out on the same page when the ratio is greater than 1 \u201cThis indicates that the air pollution damages from these industries are greater than their net contribution to output\u201d.\u00a0 They are indicating industry such as coal plants, sewage treatment, etc\u2026 \u00a0may not be worth the value for the harm they produce.<\/span><\/span><\/p>\n

The report did a great job going over the details of how they were going to compute the GED.\u00a0\u00a0 In fact the majority of the report was to describe and show the GED calculation.\u00a0\u00a0 Once again they use a controversial adder to put a value on pollution <\/span>\u2013 mortality rates as a result of pollution<\/span><\/a>.\u00a0\u00a0 Overall, I am willing to agree upon their GED calculations, but the problem I feel is that they have one-sided the ratio.<\/span><\/span><\/p>\n

Their only reference to how the value add was computed came from two sentences \u2013 \u201cThe VA of an industry is the market value of output minus the market value of inputs, not including the factors of production\u2014labor, land, and capital. The VA data are gathered from the BEA and from the US Census Department Economic Census.\u201d\u00a0Adding mortality consequences to pollution is essential, \u00a0how about adding value for mortality increases as a result of electrification and sewage treatments?<\/span><\/span><\/p>\n

Many sectors produced a ratio greater than one which could lead the layman to believe those sectors should be destroyed.\u00a0 In the report, they note this should not be the case.\u00a0\u00a0 However they make a point to say that\u00a0the high ratios would indicate these sectors should be further regulated.\u00a0 Therefore, I believe it is important they put the same amount of work in the denominator (value add) as they did with the numerator (GED). \u00a0\u00a0The oddity of the ratios can be accounted for by their one sided calculation.<\/span><\/span><\/p>\n

We positively and evocatively challenge the current thinking involving any aspect of energy use. We look for projects that offer meaningful, transformative, with impactful outcome to the marketplace or society.<\/span><\/p>\n

Independent analysis and opinions without a bias is what we offer to our clients. Please consider and contact All Energy Consulting when you need consulting services.<\/span><\/p>\n

Your Energy Consultant,<\/span><\/p>\n

 <\/p>\n

David K. Bellman<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

I came across this report from the American Economic\u00a0Association (AEA)\u00a0as I am following a bunch of really interesting people on twitter.\u00a0\u00a0\u00a0The people I follow don\u2019t always agree on subjects; but why would you follow people who believe what you believe.\u00a0\u00a0 Where is the fun in this?\u00a0 How will you get color and perspective following the […]<\/p>\n","protected":false},"author":1,"featured_media":216,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[80,81,79,37,78,77,369],"class_list":["post-237","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-power","tag-aea","tag-american-economic-association","tag-american-economic-review","tag-economics","tag-mortality","tag-pollution","tag-power"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=237"}],"version-history":[{"count":10,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/237\/revisions"}],"predecessor-version":[{"id":273,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/237\/revisions\/273"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/216"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}