Contingency Valuation

This week's assignment posed the following two questions:

Describe 2-3 environmental problems that you think might be conductive to using contingency valuation. Briefly describe why CV would be appropriate in this case.

Contingency valuation is a method of assessing value by surveying people what they are willing to spend on a given thing such as an object, a project, or program. The contingency valuation method has been a matter of debate for its of assessing environmental projects, programs, and events. One area I do think should be conductive to contingency valuation is the amount of land we are willing to allocate to county, state, and national parks. The public should come up with the value they are willing to spend to have these resources in the country. Like you can see with my assessment of endangered species protection below, I am also hesitant to subject the protection of national parks to contingency valuation because I do not think the general public values nature as much as it will in the future when we see more of the effects of environmental neglect, but I am more abliged to put park protection under the valuation of contingency valuation because I believe that the public will project more accurate numbers due to the tangibility of parks and the ability for us to refoster park environments if natural areas start to disappear. We are not able to rehabilitate an extinct species. I think that the public not only values the use of the parks but I also think they attribute an existence value to these areas and I think these numbers should be used in calculating the contingency value of parks. An existence value is a value the public puts on a good for it just existing. For instance a person may never see Niagra Falls, but that does not mean that person does not gain value from the knowledge of its existence.

Another area that I think can successfully be assessed with contingency valuation is the area of clean air and clean water. Although I do not think a certain level of cleanliness should be calculated this way, because I don’t think you can put a price on our ability to breath and sustain ourselves with water. I think asking the public what price they would put on increasing the cleanliness of air and water “one more increment”, with the term increment indicating a generic amount used just to illustrate this case, could be calculated with contingency valuation. This is because the levels already provided allow them to live a normal life, but the study would leave it up to the public to determine their value of more purer resources of air and water over other commodities.

As a note, I am unsure of my idea of contingency valuation altogether. I have doubts about the general public’s value of nature and I think a great many people at this point would “free ride” from those that really care about the environment. It also would be nice if we could just say that a clean environment is priceless, but practicality and the concepts of economics and scarcity force us to put values on things that we’d like to call priceless.

Describe 2-3 environmental problems that you think would definitely not be conductive to using contingency valuation. Briefly describe why CV would not be appropriate in this case.

Areas that I do not think it is appropriate to use for is the protection of threatened and endangered species as well as the prevention and cleanup of oil spills. The reason I think that it should not be used for threatened and endangered species protection is because one cannot put a value on the disappearance of a species. One could argue that that is the case with clean air and clean water but I think these areas are more appropriate to subject to contingency valuation because we can assume a certain level of toxins in the environment and take on a risk for small levels without disrupting our lives at all. On the other hand, scientists can predict with some level of certainty if a species can survive or not without adequate amounts of their habitat or how long a few animals left can survive without human intervention. With the knowledge that certain species will become completely extinct, it is essential that we allocate a level of funds to the cause regardless of what the public is willing to pay because once a species is gone it is gone. I am also hesitant to subject endangered species protection to contingency valuation because I do not think the general public values nature as much as it will in the future when we see more of the effects of environmental neglect and when it is too late to bring a species back from extinction. I think we should allow the Department of the Interior, the Fish and Wildlife Department, and other environmental agencies make judgements for what value is needed to protect species. It seems like the government has agreed with my judgment since a look at the Endangered Species Act of 1973 allocated an infinite amount of funds to the protection of threatened and endangered species.

The other arena that I do not think should be assessed with contingency valuation is the clean up and prevention of toxic spills including oil spills. The reason behind this is because on don’t think one can practically put a value on an accident of this level. For instance, consider the Chernobyl disaster. How can one value the loss of life and the disabilities that people have suffered as a result of the disaster.? The United States tried to value the 1986 Exxon oil spill in Alaska this way and although the payment was over one billion, experts have calculated the costs to be more along the lines of 3 billion. Overall, I think these situations are far too complex to attribute them to contingency valuation. Perhaps some of the estimates can be completed with contingency valuation such as the destruction of concrete property, but I do not think the more intangible costs such as loss of life, disability, and even loss of animal life associated with disasters can be calculated in this manner.

Engaging the Public

This week in class we were asked: "Should public managers and environmental planners engage the public when they know that the public’s knowledge is limited about the science of an environmental issue? If so, how would you go about doing that? If not, what are the consequences of not including them?"

Public managers and environmental planners should absolutely engage the public with environmental issues even if the public’s knowledge is limited about the science of an environmental issue. By nature, environmental issues are public issues and affect broad populations so I think in a democratic society, the public should always be informed and involved in making decisions. In a case where the public is not involved in decision making and just needs to be informed about an environmental issue then the public should be informed via print or some other medium in a way that breaks down complex subject matter for the audience to digest. If the public knowledge is both limited about the science of an environmental issue and they are involved with decision making regarding the issue then they need to be effectively educated on the subject and presented the different sides to the decision and the impact each decision could have.

Unfortunately, most of the time different interest groups do the educating on an environmental issue that the public is voting on often presenting the information in a way that is confusing to the public in order to achieve their objectives. For instance, a business that would prefer a chemical not to be categorized as toxic will present only one side of the issue, for instance how categorizing the chemical as toxic will have a negative impact on the industry and cause prices of products that depend on this chemical to go up, but will not present the dangers to public health that are affiliated with not labeling the chemical as toxic. This may not be the best example since the public will likely not be involved in categorizing chemicals as toxic or non-toxic, but it gets my point across that interest groups are not the best educators. Instead, I propose that the EPA or a public agency should be required to put out appropriate and effective educational materials regarding environmental issues. I emphasize effective educational materials because I think many times the information regarding complex subject matter is not scaffolded appropriately - in other words presented in a way where the public can digest starting from the basics - and instead is presented in a complex manner which alienates most of the public from getting involved.

If the public is not informed and unbiasly educated on environmental issues that they are to make decisions about, this will end up affected the general public negatively. Regarding issues that the public is not involved in decision making for, it still has a right to be informed since all environmental issues are by nature public issues. Furthermore, even if the U.S. public is not directly involved with a specific environmental issue they still should be in the know since they have the ability and right to get involved in interest groups to influence decisions and it votes in representatives who are involved with the direct decisions.

A look back at Environmental Policy

The history of environmental policy from the 1970’s through 2008 was marked by a great deal of change. Before the 1970’s environmental policy was not given much thought, however with the 1970’s came an increased awareness for quality of life issues including protecting the environment. This awareness came from both the public as well as lawmakers and was not only present in the United States, but internationally as well. Environmental policy has been approached differently by each of the eight administrations (Nixon, Ford, Carter, Reagan, G.H.W. Bush, Clinton, G.W Bush) since the 1970’s and although it has improved, instead of progressing consistently since then, growth in this arena has been quite irregular.

Until the 1970’s, the federal governments role in regard to protecting the environment had been to preserve areas of land such as national parks and wildlife refuges and led to several acts regarding preservation, the first being the Wilderness Act of 1964. In addition to land preservation, the United States also began to put efforts toward reducing world population growth. Air and water pollution as well as solid waste until 1970 were considered for the most part to be local and state concerns, but were slowly working their way into the federal agenda.
The 1970’s were entered with the passing of The National Environmental Policy Act (NEPA) that was signed into law on January 1, 1970 by Nixon who then proclaimed the 1970’s as the “environmental decade”. Shortly thereafter, Earth Day was observed worldwide by 200 million people on April 22, 1970. The 1970’s marked a highly progressive era in terms of environmental policy. The number of Acts during the Nixon, Carter, and Ford administrations marked a progression past mere land conservation to include waste disposal, emissions, water pollution, pesticides, coast protection, threatened and endangered species, drinking water, toxic substances, forest management, mining, clean air and water, and energy conservation.

The 1980’s brought a new presidency with a different set of goals. Reagan’s republican-flavored administration focused on cutting back federal funding for environmental objectives and sought to move environmental responsibilities to the states. This attitude caused a backlash of public activism around environmental issues. Yet, the election of republican George Bush Senior surprisingly led to the Clean Air Act Amendments of 1990.

1992-2000 saw the office of Bill Clinton and a pro-environmental vice president in Al Gore. Although many environmentalists were disappointed with the successes of the Clinton administration, the 1990’s marked a period of several world conferences, including the United Nations Conference in 1992 held in Rio de Janeiro, Brazil often referred to as the “Earth Summit.” A major accomplishment of this summit was the UNFCCC treaty which led to the Kyoto Protocol.

While momentum for the environmental movement gained from the 1970’s to the turn of the century, the most recent Bush Administration slowed and even turned back much of this progress from the environmentalist’s perspective. The most significant backtracking occurred with the administration’s withdrawal from the Kyoto Protocol. Overall, the Kyoto Protocol is an extension of the UNFCCC treaty that was created to control greenhouse gas concentrations in the atmosphere that cause global warming and threaten the stability of our climate system.
As an environmental policy scholar in the year 2012 writing an op-ed piece for the New York Times, I look back at the first 4 years of the Obama administration’s approach to environmental policies with great admiration. It has brought and era of great change similar to the 1970’s. Since the Obama presidency was paired with a majority Democratic control in the Senate as well as in the House, environmental laws were passed with ease. In addition to passing environmentally focused laws, the laws that were in place found the funding and passion they needed to be enforced properly.

Specifically, in the wake of the public’s increased concern for the cost of oil and prolonged dependence on foreign sources for this commodity, President Obama was able to garner support towards improving the emissions standards. With this attitude, we also rejoined the Kyoto protocol thus improving our standing with other equally minded nations. Another major initiative the Obama administration tackled was the quality of our drinking water and fresh water supplies in the U.S. Shortly after entering office, $5 billion was allocated toward immediate improvements to the Great Lakes. One of the laws that was passed by Congress consisted of another $26 billion dollars for futher restoration of the Great Lakes including enacting a zero tolerance for invasive species, which required closing a major contributory waterway to the lakes. Energy policy initiatives passed under Obama both spurred the economy and brought great promise to energy independence and the reduction of greenhouse gas emissions. From the stimulus package $100 billion dollars were allocated to support green technologies. A stipulation was written into the auto industry bailout that made the companies use a portion of the money to research and adapt more fuel efficient and emission conscious technologies. In essence, President Obama was able to take both the advantages and disadvantages of the times when he entered office and fashion them towards a more environmental approach to national policymaking.

Great Lakes Preservation Funding

I found two articles that I found particularly interesting regarding speculation about how the Obama administration will approach the environmental policy issues moving forward.

http://www.jsonline.com/news/wisconsin/32530574.html
http://www.jsonline.com/news/opinion/36078824.html

These articles indicate that Obama will take a strong stand on water quality issues throughout his term, particularly involving the Great Lakes, the largest fresh water bodies in the world. Being from the Milwaukee area in Wisconsin, and moving to Cleveland, Ohio next year, I am particularly interested in the cleanliness and sustainability of the Great Lakes.

The first article indicates that the Obama administration will restore taxes from the rolled back levels for oil and gas companies to fund a $5 billion dollar “jump start” effort to protect and restore the Great Lakes. This effort should not be confused with the $26 billion plan to restore the great lakes that has been initiated within Congress, rather it is a commitment on the part of the Obama administration to make major changes with the Great Lakes. The article refers to the Great Lakes as a “national treasure” and even compared them to the Florida Everglades. The article mentions that funding to preserve them has take a back seat for a long time leading to the severe degradation from invading species and pollution. The Obama administration seeks to employ a “zero tolerance” policy for invading species.

I do not agree with the opinion piece I posted which argues that we should preserve the “Great Lakes” in a balanced way. The author argues that we can look at cleaning and preserving the Great Lakes while at the same time expand the oil refining industry along them. I do believe in balance between environmental preservation efforts and a strong economy, yet I do not believe it is necessary to increase the oil refining business along the lake to build the economy in the region. The author of this piece does mention that the country needs to move toward alternative fuels, and yes oil is needed now, but I do not believe Canada is the better supplier if it requires polluting Lake Superior, removing pristine wetlands, and risking disaster. After all, one out of three Canadians and one out of seven Americans receive their drinking water from the Great Lakes. If we want to move away from oil then why would we build this infrastructure to support it if we want to phase use of oil out? Yes we’d get oil from Canada, a conflict free source, but would we need to build this same risky infrastructure if we continue to get oil from our current sources? Growing the oil refinery business along Lake Michigan will provide jobs in Northern Wisconsin, but people in Northern Wisconsin also tend to be the environmental friendly types and I do not think these jobs would be ones that they would want (although a study to back up my opinion here would be in order to validate this thought). I believe we can protect the Great Lakes as well as build a strong economy if we focus on building greener industries in the area.