Tuesday, March 04, 2008

ECON 260: Comment Tread for 3/5 class

Nearly every environmental policy debate inevitably ends up framed, at some point, as a trade off between jobs and the environment (e.g., jobs versus fish, jobs versus owls). Many, including several of my co-workers at ECONorthwest, argue that this framing is incorrect and that the discussion should be framed as jobs versus jobs (e.g., jobs for farmers versus jobs for fisherman, or jobs for loggers versus jobs for techies). We'll discuss the details of these claims in class, but here are some questions to ponder and discuss below until then:

(1) How do you feel about the framing or focus of the debate on jobs? Does this framing lead to jobs receiving too much weight in the determination of policy? Are there consequences for policy when jobs receive an "extra" weight relative to costs and benefits?

(2) How should we tradeoff the jobs/incomes of one group of people versus the jobs/incomes of another group of people? E.g., in the West there are big fights over dam removal -- farmers "need" the dams to irrigate their crops, while fisherman need the water trapped behind the dams to maintain fish stocks. How should we account for job "gains" and losses to two competing users of natural resources? Furthermore, should it matter if one of the competing groups isn't currently working at these jobs? That is, often environmental protection will lead to the creation of new jobs. Should place a lower value on new created jobs than we do on old lost jobs?


I do feel that the myopic vision on jobs lost or created does not allow policy makers and residents to see the full consequences of a particular action. Suddenly "jobs" becomes the only basis for or against-- without discussion about other factors.

I really appreciated the Whitelaw article on Breaching the Dams for this reason. He points out the flaws with the fixation on jobs, and how the narrative can be told in many ways (ie the Corps taking a snapshot of 1995 vs. over the long term).

In regard to environmental legislation, it does an enormous disservice to pit protection against jobs. As in the Spotted Owl controversy, this is often not the case. However, it enables the age-old animosity between environmentalists and laborers. However, I don't think Whitelaw does a sufficient job addressing this at the bottom of page 2 in the first column: for jobs lost in the timber industry, he argues that the Pacific NW economy has boomed nonetheless. However, for the loss (albeit a very small percentage), was there adequate revitalization in those specific communities? As far as I am aware, the economies in rural Oregon and old timber towns are pretty depressed... So, how can we value jobs as indicative of the welfare of communities, but also see them (perhaps as less sacrosanct) in the overall picture?
I wanted to bring up a rather interesting twist to this “jobs vs environment” debate in the context of wine-making and the environmental/economic effects of cork vs. screw tops. I have discussed the issue with a friend but also now have found a few sites here to describe the situation. Essentially, there has been a recent trend for wineries to switch from traditional cork closures to ones of aluminum and plastic (proponents stating that cork taint compounds affect the quality of the wine). The WWF however, has argued for a need to switch back to cork because: first, the cork oak forests are a sustainable and renewable resource (the cork is peeled off the trees without the felling of any actual trees), second, a lack of oak tree forest use will economically devastate these communities causing a loss in thousands of jobs, and third, without human maintenance of these cork forests, the trees pose environmental threats such as fire.

Requiring wine producers to use cork to seal their bottles of wine shows just one example of how an environmentally-friendlier option actually leads to a greater number of jobs in the economy. The WWF article states how without the wine industry using cork tops (which accounts for ~70% of use of these oak forests), thousands of jobs are at risk of being lost in countries such as Portugal, Spain, Morocco, and Algeria through the mechanized plastic making top industry. This ties back to the jobs vs. jobs concept and now leads us to wonder how to compare the jobs in producing plastic tops to cork tops. In debating which option is better, can we use a consideration of mere number of jobs created (like safety standard and mere number of lives saved)? But with ecosystem health at risk, how can we determine which job gains or losses are better in the consideration of a possible cork regulation? Here, it seems the old jobs have a more sustainable relationship with the environment...

WWF Review http://www.wwf.org.uk/filelibrary/pdf/corkscrewed.pdf
First of all, I agree with Alexa that a consequence of only weighing loss of jobs is that you lose sight of other factors - environmental or otherwise.

Like Eban discusses in the text, the argument that environmental regulation results in a "minimum of 200 thousand" jobs loss - the environmental-jobs trade-off, is an inaccurate one. There has been little evidence of actual layoffs. While there may be a restructuring of employment nationwide, the percentage of jobs lost due to environmental regulation is minimal. However, in the short run, plant shut-downs and layoffs can be particularly hard on the individual. I would argue, since economy-wide employment is more affected by fiscal and monetary policy, economist who argue jobs have more weight than environmental policy is unnecessarily pointing their finger. In terms of costs and benefits, jobs loss is not really a significant cost. So the more weight put on jobs as cost, the less benefits or money allocated for environmental policy will be.

There should be no more valuation on old jobs as there is on new jobs. While loss of jobs on a peoples or community might temporarily put a lot of financial stress on them, jobs will eventually be restructured. New environmental policy will most likely create new jobs for them or someone else in the economy. So on the national scale, new and old jobs should have equal valuation and the unemployed will theoretically find new jobs eventually. One idea I would suggest to alleviate the individuals suffering is compensation by environmental groups or the government until the "new" jobs are created.
Well put, Alexa. I agree that the dualistic "environmentalists versus loggers" battle is tired and detrimental to both parties. It's easy to see enviros as outside city folk who don't actually have much connection to "nature" outside of visits to pristine preservations, and loggers as backwoodsmen who don't have any grasp on the larger ecological consequences of their bread-winning money. Framed in this light, there's not much room to give either way. But I do think we need to value jobs that don't exist yet (ie, ones that could be created with new uses of natural resources, whether preserved or not). Environmental protection shouldn't just be about preserving an ancient forest or endangered species; it needs to also take into account the communities who have made their livlihood off of the area they are trying to protect. This doesn't mean keeping things the way they are, but rather reevaluating what can be done to help both sides.

Some areas are trying to have these kinds of conversations. Douglas County in southern Oregon is just such a timber town, but the residents have been working on developing solutions to their intensive logging that keeps jobs there. They're looking into the possibility of producing biomass for energy locally, which, if successful, would be much closer to a pragmatic solution than a deadlock of jobs vs protection.

I think jobs need to be kept at the forefront of cost-benefit analyses of this kind, but *both* kinds of jobs - future and current. It also can't be just about that. My hope is that a conversation about jobs and jobs can allow us to focus more attention on the real issue - how important it is to protect the environment, what about it needs protecting, and what that might look like.
Shellenberger and Nordhaus’ new book Breakthrough provides another take on the idea that there is no environment v. jobs tradeoff. The authors would take this argument to the next level though, in that they believe the success of the environmental movement is contingent upon its ability to create jobs. To date the environmental movement has stagnated in what they call the “pollution paradigm:” we spend too much time proselytizing about our issues like global warming and not enough time thinking about the opportunities associated with them. They believe that the environmental movement would be much more successful if it spent less time talking about the destruction of nature and spent more time talking about meeting peoples material needs. When people’s material needs are met, specifically if they are in an affluent situation, they are more likely to support environmental causes and desire pristine forests and clean air. One way to meet these material needs is to focus on maintaining livelihoods. As we know, environmental problems (global warming, energy crises, etc.) provide a lot of potential for new job markets. Shellenberger and Nordhaus think that the only way environmentalism will draw any substantial support is if we can think of environmental problems as opportunities— much of which, could consist of job opportunities.

I know a few other students in this class have also read Breakthrough. Is there anything you’d like to clarify or add?
I agree with the article from ECONetworks. To put the trade offs in terms of jobs versus the environment doesn’t always make sense. In this framework there is only an option between two choices where the option not chosen will lose. However, there can be scenarios where, while not a win-win for everyone, there needs not be a complete ‘lose’ in the jobs or with the environment. When these jobs receive extra weight it influences policy decisions to make that choice between jobs and environment, instead of a policy decision that may have net benefits for both in the long term.

I think that lose of old jobs should be weighted a little more heavily than the new jobs available, because there is a loss for certain people that may not have the qualifications for these new jobs and there is also a lag time between the lose of a job and applying and finding a new one. However, I don’t think this should have a huge weight, because there can be a net benefit or perhaps an even net value in the change of jobs. Another important part of the benefit side is the benefit outside of the change in types of jobs. So the slight loss in the weight given to old jobs can be made up through the ecosystem services, or aesthetic value of the river that now runs free. When these benefits are included along with the actual gain or loss in change of jobs, a policy can truly be decided on.

Another thing I noticed from the article was the language used against the breaching the dams. As Whitelaw pointed out "disastor", nightmare", and "sledgehammer" were far too harsh of terms to use in this instance. Whether or not those who used the terms truly believed these terms were necessary it seems to me, they were used more as a way scare tactic for the less informed. This seems to be a major component of anti environmental arguments, instead of all of the facts. (Though not always)
I think this discussion is pretty similar to the former discussion on valuing human life; in that, if one loses their job, their livelihood and way of living is basically gone. Sure there are other options, but if an industry is essentially destroyed, it is hard to find many other options outside it. However, the employees of the competing industry are better off. So the questions that need to answered for policymakers is will there be other jobs available for the ones who get put out of work, and that is a difficult question to answer. So maybe the framework needs to be jobs v. environment.

I'm not entirely sure where I'm going with this, but I'll post it anyway.
This comment has been removed by the author.
"Should place a lower value on new created jobs than we do on old lost jobs?"

I'm guessing that some people will want to say yes, lost jobs should matter more because no one like's loosing what they already have. I would sooner think the opposite because new jobs could easily be much more valuable to society. If environmental policy kills one occupation for another one which encourages a "more healthy" relationship with the environment, I would want to value it more. In the short run it may seem bad to loose jobs. But, if they can be replaced for a "better" job, the long-run picture may be sweeter.

That all being said, I suppose it frightens me to start thinking about decisions being made by economists (and based on JOBS) that will greatly effect ecosystems. It seems ridiculous to try to determine environmental policy (something that has to do with ecological interactions) with a persons income. Maybe I don't understand how these calculations are made and for exactly what reasons, but it looks like apples and oranges to me.
Eban’s “Environmental Regulation and Jobs: Myth and Reality” examines the relationship, or rather the lack of significant connection between environmental regulation and job loss. He states that “on an economy-wide level, there is simply no trade-off between jobs and the environment.” Along with citing several examples highlighting the fairly insignificant effect environmental regulation has on national job loss (one tenth of a percent in the 80’s), he argues that the media is at least partially responsible for this “myth”. The media often reports on job small loss due to regulation while ignoring huge job loss due to exportation of industry. Unfortunately, this creates a fear among the public that their job will be lost because of environmental regulation. This fear then influences policy.

Because regulation and job loss do not face significant trade-offs I believe that job loss should not be as heavily weighted when determining the costs of regulation. When it is considered, I believe that old and new jobs should be valued about the same because there is evidence that regulation does indeed create many new jobs in the form of cleaner technologies. Despite regulation’s small effect on the entire economy, I do recognize that it can have short-run devastating effects on local economies. I agree with Amber in that the government should provide short term compensation to help alleviate this problem like the retraining fund created after the Clean Air Acts of 1990.

Eban's article:
I think that we assigning costs and benefits to the new vs old jobs, we have to, as Kim noted, take into account the costs of retraining the people who have lost their jobs and the training of people taking on the new jobs (as these are not necessarily the same people). These costs are probably not prohibitive but I think they are useful in both reminding skeptics that new jobs are created through environmental policy and reminding proponents that there are costs associated with these choices beyond the initial ones. I'm not sure how we could calculate the value of jobs that have yet to be created accurately and fairly. I assume you would use a sort of hedonic regression method, comparing these new jobs to similar ones, but I think it would end up being far too easy to over or undervalue these jobs to bend the results to your preferred option.
I feel that the problem with the arguments being jobs vs. the environment is that jobs will inevitably win, since as humans we are most concerned with humans. Jobs will have a lot more weight, since humans might suffer. When it concerns human being affected by some pollutant, the environmental concern is more likely to win, but when it is pure nature vs. humans, and jobs are concerned, there is almost no way that jobs will win. I like the idea of it being the jobs that will be created vs. the jobs that are lost, with them having the weight of how much it will be beneficial to anyone and everyone. The issue of how to deal with trade offs between two groups of people is a lot harder to deal with. How can we justify helping one group over another? Yet it happens all the time. This decision has to be made, since they are competing for different uses of the same resource, and there is no way to split it. How do we come to terms with this? Is it what we feel is more important to society at that time? Maybe we can look at which is harming the environment more, and add it to the costs side of the equation. This is about all I can think of to help aid the issue. The issue seems impossible and whatever decision is made, it is bound to cripple either side of the problem. So how do we even begin to think about it? Does it make us cold to question what we need more? Does it make us less or more human to consider this all? These are just my thoughts.
While I agree that compensation programs for lost jobs are an important aspect of alleviating the costs associated with environmental regulation, it seems like the issue of determining the value of new jobs versus old is somewhat irrelevant.
It seems that as long as new jobs are created as a consequence of regulation (which according to both Whitelaw and Goodstein is almost guaranteed) and considering the goal of environmental legislation is to provide significant benefits to communities, I agree with megan that while in the short run old jobs may have more value to individuals, in the long run new jobs will provide benefits to the greater community that far outweigh these costs.
It seems that "valuing" old versus new jobs needs to take into consideration all the other factors that we are distracted from when the issue is framed strictly as jobs vs. environment. The value should be judged more by considering the long term ecological and economic benefits that come as a result of the environmental regulations than the costs to individuals in the short run.
More jobs are not always better. During WWII the United States created lots of new jobs but we required a war to do it, likewise if we require a "war on the environment" through environmental exploitation those jobs are all that beneficial.looking at the environmental movement solely based on job creation has its serious limits but in the public debate I am willing to agree that it might have some use.

Here is a interesting article on the cost of cars which puts the cost of one person driving per year at over $13,000, factoring opportunity costs and roads.
I agree with what most people have been saying in that looking strictly at Jobs vs. environment distracts us from the bigger issues at hand. I think the text supports the Jobs notion when it explains how not that many jobs are actually lost through new policies. When it comes to the debate between valuing new and old jobs I like what m.garvey brings up in that the new jobs should provide a much higher future benefit that the old jobs and should therefore have the same valuation if not a greater valuation that the old jobs they replace. In addition, I feel that people working the old jobs in a way had it coming to them or should have seen it coming. By taking a job that is destructive to the environment you are taking the risk that one day your occupation will be regulated or restricted because of its nature. You cant take a job as a logger and expect to be able to cut down every tree. The people in these fields should no the risks they are taking by getting into this field and not be surprised when efforts are made to regulate dirty industries.
There seems to be an element in the evaluation of environmental policies that makes jobs into a pure status almost to a religious level. The prioritization of employment over the environment, non-market goods appears to be a flawed perspective for it seems to be contributing to the degradation of the environment that we see today.

The consequences for placing a high status on current jobs typically are weak policies or no policies at all.

Instead of measure gain between jobs created and jobs lost, it should be a comparison between the measurable and non-measurable benefits. People have the ability to more resilient than the environment over time, especially as human population increases. Employers in the field of business downsize fairly frequently based on the markets status. While it is unforntunate they adjust to the market as such, environmental policies adjust to a moral judgement, or even emotional response to the thought of removing people from their prized jobs. The fact is their jobs that most likely are contributing to the situation that exists.
I feel that no matter how minimal job loss is in relation to environmental regulations, it is still important to take into consideration. Even though regulations will inevitably create new jobs that may or may not be of greater importance, there is no guarantee that the people who previously lost their job will receive one of these new jobs and job loss is obviously an incredible hardship for anyone. So I think we should place a slightly lower value on the newer jobs then on lost jobs. However, with that being said, the newer jobs may and probably will provide cleaner technologies, and improved environmental conditions which everyone will benefit from.
It's a hard topic to tussle with, but I do think that jobs play a very important part in the discussion.
I agree with what a lot of people have said, believing that evaluating job v. environment is not a great way to make policies and that the system should be re-tooled. When evaluating old jobs v. new jobs, however, I think it is important to not only look at the number of jobs lost/gained, but also the quality and accessibility of those jobs as well. It's true that getting rid of a bunch of old jobs may have a negative impact on thousands of lives. On the other hand, the new jobs that are being created may benefit even more people, including some of those who lost their job. Additionally, it is also possible that the new jobs being created may be both better for the environment and the people receiving the jobs, thus making both parties better off. It seems like the potential for this occurring has been lost in the discussion, and I think it is something important that needs to be considered.
I think I may echo the statements of most of the other posts, but I'll chime in.

1) Axiomatically, if the debate over the environment comes down just to jobs v. jobs, then environmental costs versus benefits are obscured. As Lillie mae noted, this debate is likely to continue, as humans are those who are making the determination on what environmental policies to implement. The problem, though, as noted in the prompt before the blog questions, is that the tradeoff of jobs versus the environment doesn't necessarily exist, nor does a tradeoff of the environment v. jobs. As such, when jobs v. jobs gets weighed, and it is likely that jobs will grow either way, then environmental policy still could be implemented. Perhaps the dichotomy between jobs and jobs, then, would promote environmental protection. As long as there is some compensation to the 'losers'' from the policy, people may be more amenable to enacting environmental policy. In then end, it would be good to weigh all costs and benefits, but that just doesn't seem to be the paradigm policy makers use to make decisions.

2) Jobs that don't exist may need to be given a smaller weight. Uncertainty that exists in creating new jobs/industries means that the expected value of the jobs that are coming is smaller than jobs that exist now. Likely, though, there could be an efficiency gain from regulation that would mean that the expected value of future jobs would still outweigh the cost of eliminating existing jobs.

The way to deal with competing claims to a natural resource is to include in legislation re-training or relocation programs. Farmers would are unemployed due to structural changes (or perhaps sectoral shifts) can be compensated with fiscal revenue to mitigate the cost of the change. This would allow for more environmental policies to be pareto improving, as some of the allocational benefits of creating new jobs can be taxed away and used to mitigate distributional concerns.

The problem with that proposal might be,though, that the gains from regulation are not revenue-generating. In that case, it may just be a fiscal hit that fills in the gap to fund worker relocation/retraining programs. If, as a society, we determine that such regulation is important, then we should also be able to dip into the federal or state coffer to ensure that we don't leave a large 'loser' population from gains that benefit a large potion of society.
Framing environmental policy on the basis of jobs vs. the environment pits environmentalists against people concerned with unemployment, specifically economists. I think that if job loss is going to be the primary concern then we have to look at jobs vs. jobs. Environmental policy does not just benefit the natural environment, it also opens up new kinds of jobs. The creation of new jobs needs to be weighed just as heavily as jobs lost. In some cases, environmental policy could lead to better protection of the environment and possibly create more jobs then jobs lost. Therefore there would be an overall benefit from economists’ and the environmentalists’ perspective.
Our culture and economy is all about progress. If the new jobs created by environmental policy contribute to this progress then they could actually be placed at a higher value then the old jobs lost. Individually, it is difficult to justify losing one’s job and feeling okay about it because someone else found a job. But looking at it from the big picture, it might be beneficial to the land and economy as a whole.
The framing of jobs vs the environment is wrong over the long term. However, in the short term it makes sense for there to be concern. The people who are working as loggers would need to be completely retrained and reeducated before they could take up jobs as techies and by that point the jobs that have replaced them are likely to be filled by people who are ready to work immediately.
1) I believe policy should focus on the greatest benefits over a reasonably long amount of time. The loss of jobs should be considered (possibly through providing a month or two of compensation while they find work elsewhere) but should not be the deciding factor in policy decisions. These people will eventually fill other spaces in the economy.
2)Taking into account sustainability and what the economy currently "needs" should be given more weight than the jobs of either group. i.e. the jobs of the group that the economy 'needs' more should be given more weight. We should not place a lower value on new created jobs that on old lost jobs. If anything, the value placed on created jobs should be greater if it is taken in conjunction with the overall gain from the policy change.
Potential jobs created or lost should certainly be taken into account when making policy decisions, but to frame the entire debate as "jobs vs. jobs" neglects the non-productive value of environmental goods. Not every resource we feel is worth producing has an associated job. Any cost-benefit analysis should take into account both the net change in jobs/gdp, and whatever valuation of environmental impacts we decide is appropriate.
Please correct my assumptions if they are wrong. It seems that the creation of new jobs increases GDP, as long as it can offset the loss of old jobs/unemployment. Also, if more jobs are lost than are gained, then it can signal a recession.
As environmental policy is affecting/creating a socially constructed "environment", then it makes more sense to not think of it as a trade-off between the environment and job availability because it is a human preference of work environment we are delineating. The framework of environment(again, socially constructed) vs. jobs is not useful, as many have commented, which seems to leave us with jobs vs. jobs. In terms of environmental (and all) policy, I support not only detailing out the new jobs that will be available, but internalizing the loss of old jobs and somehow maintaining the old work force in another sector. I concede that this is easier said than done, and predictions of benefits and costs well into the future are often miscalculated. If jobs are seen as a market then from an efficiency point of view, then we run into transaction costs and free-riding problems when trying to defray the negative externalities/ compensation. Furthermore, we need to question the feasibility of finding a encompassing scale we can place both non-market benefits/costs (e.g. aesthetic appreciation) and market benefits/cost (e.g. jobs).
I am in agreement with Cam. We can never really ignore the issue of job loss, whether it is due to environmental regulation, or some other governmental policy. Despite the possibility of creation for new jobs, we must understand that those people who lose their current jobs are inevitably going to be faced with some economic hardship, as there is no guarantee that they will be successful in landing one of the newly created jobs. But, as Cam said, it is possible that the new jobs may provide newer, cleaner technology that may benefit society and the environment. Naturally, this new technology would prove beneficial. But, do these benefits outweigh the costs of job loss? It is a hard issue to look at in a general perspective. Any issue regarding job loss or creation should be looked at and examined on a case by case basis.
"At 4:56 PM, Anonymous said..."

That was me.
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