Category Archives: M.Sc. Environmental Economics

CEFO Workshop with Marina Fischer-Kowalski

In the beginning of March, CEMUS had yet another prominent guest: Dr. Marina Fischer-Kowalski. As the director and “designer” of the Institute of Social Ecology at Klagenfurt University and senior lecturer at the University of Vienna she has published numerous texts on social ecology and social metabolism. Marina has also worked for the United Nations Environmental Program and she used to be the president of the International Society for Ecological Economics.

CEFO – the research forum of CEMUS – had organized a workshop on social metabolism with Marina and I was lucky enough to be able to participate in it. While the concept of social metabolism was relatively new to me, it is apparently tackling many familiar issues. So the workshop was a very enriching experience. Many things were discussed in detail that day, but to keep it “readable” I will focus on some main points here.

Marina explained that social ecology is about how society behaves towards its environment. Her model of social metabolism considers the natural and cultural sphere of causation and how they interact. She claims that other existing models do not connect these two spheres at all, or in the wrong way. She visualized these approaches somewhat like those two for instance:

Marina claims that her model is more holistic and looks at different levels of interactions. It reminds me of Jay Forrester’s System’s Thinking.

The whole cultural sphere – including the overlapping part – forms our society. For all those of you who wonder what belongs to the coinciding part: that’s for example the world population, but also artefacts and life stock. A lot is happening between those two spheres. Through our labor we change the natural realities and experience feedback from that. In the cultural sphere, we develop programs within subsystems like economics, law, etc. – as a reaction to natural feedback, for instance.

Social Metabolism

After a really stimulating discussion and a fantastic Turkish lunch, Marina held a lecture in the afternoon. That was the part I was really most interested in, as it was about decoupling environmental impacts from economic growth. Probably this is THE dream of every economist these days (and if it is not, it should be!). Marina promoted an idea of a tax shift from labor to resources brought forward by Prof. Robert K. Weizsäcker. She highlighted that one needs to distinguish between resource and impact decoupling. When presenting material use and GDP growth over the last century, one can see a “spontaneous” (not following a certain policy) decoupling of these two indicators since the 1970s in the developed countries. Marina presented several possible explanations for this phenomenon: (1) slower economic growth, (2) outsourcing of material production (to developing countries), (3) increasing income inequality, which reduced mass consumption to a certain extent or (4) maybe even a saturation of material needs. Some of these suggestions deserve attention, but with respect to the second point: outsourcing of production to developing countries, it would have been interesting to look at consumption-based resource use. I wonder how much decoupling we could have seen then. The saturation of material needs also is an argument limited to the developed world.

That is something I need to criticize about this lecture in general. Marina often gave examples from Europe. Due to global trade and supply chains the approach to decoupling should always be global, though, in my opinion.

GDP growth and material extraction. The “metabolic rate” is the amount of resources required per year and capita.

We also talked about productivity a lot during this presentation. Marina mentioned in the beginning that technology is one of the key factors when it comes to decoupling economic growth from resource use and pollution, actually. She showed some graphs where one could see how much faster labor productivity increased compared to energy and material productivity. This is where the proposed shift of tax burden comes into play. It would make labor cheaper relative to materials or energy. As Rob Hart suggested in our latest course on sustainable economic growth, the main reason why labor productivity increases so much faster is that the relative factor share of labor is much higher than that of resources within global production.

However, there are many ways of looking at resource consumption and it was really inspiring to discuss this with Marina. I want to thank her for a very pleasant and informative day and I hope that she will visit us again.

/Franzi

Happy Holidays & Some Other Stuff

A very late merry Christmas to everyone! I hope you have enjoyed your holidays with family or friends and if you are as lucky as me, you are still on a break (more or less).

The last weeks before Christmas had been super busy for me. We’ve finished up the Cemus course, which came with many hand-ins, assignments and studying for the exam, of course. In this course we had a collective exam, where the whole group needed to work together to collectively pass (or fail) the test. It was a great experience: fun but very stressful at the same time. I must really say that “The Global Economy” was one of the best classes I have ever had and I can only recommend all Economics students to take a course like that. It felt like stepping out of a bubble (for once) and putting your subject into perspective with other disciplines. It surely didn’t train my Math skills, but I got a lot of ideas and inspiration from it. Hopefully I can manage to use this motivation for my upcoming master thesis and job search.

Apart from that, I have been (and I still am) taking the course “Economic Growth and Sustainable Development” at SLU, where we have the exam in January. After that the “only” thing I have left is my thesis, so I am planning on giving a little feedback on the program courses soon.

Hopefully I will have the time to post regularly again once I get back to Uppsala. For now I want to wish you a happy new year 2017. Take care everyone and remember that the deadline for applying to the master programs in Sweden is the 16 January (for the autumn semester!). Find more information here.

Vi ses nästa år!

Franzi 🙂

The Great Global Experiment

Last night was all about climate change and its consequences. We had Kevin Anderson as a guest lecturer in our CEMUS course. He is the new holder of the Zennström Visiting Professorship in Climate Change Leadership here in Uppsala. This professorship is funded by UU alumnus Niklas Zennström and his organization Zennström Philanthropies. Apart from the visiting professorship he currently holds, Kevin is a professor of Energy and Climate Change at Manchester University as well as Deputy Director Tyndall Centre for Climate Change Research.

Kevin started off his lecture with some general information and “basics” about the weather and climate, which I was very grateful for. Of course, there are many factors which drive the weather and climate of our planet, such as gravity, topography or volcanic activity.  But it’s not only geological factors rather than life itself as well. That can be plants, animals or you and me. Nowadays the terms Greenhouse Effect (GE) and climate change tend to have a negative connotation and they are likely to be confused a lot. But we should recall that they are natural and partially even necessary in the first instance. Remember that without the GE we would all (literally) catch our death out there at an average temperature of -18°C. While it is uncontested that GE and climate change are real, the existence of anthropogenic climate change is still contested by some, even though there is evidence like the tight correlation between the increase in atmospheric CO2 concentration and anthropogenic emissions, or the declining ratio of carbon 14 in the atmosphere, suggesting that anthropogenic climate change is actually real.

Why the math does not suffice

Some of the big issues no one really expected some decades ago are positive feedback effects. Formerly, it had been calculated that doubling the CO2 concentration in the atmosphere to pre-industrial levels would lead to some 1°C rise in average temperature. Today we know that it will actually rather cause a 3°C change due to positive feedback effects. One example for this is the sea. Since polar ice is white, it reflects much of the solar radiation. When this ice melts due to global warming, the bright area decreases and the dark surface of the sea increases. This in turn leads to an even higher absorbance of heat and thereby more global warming. It is a vicious circle.

Global Warming Potential

Some of the drivers for climate change – and probably THE driver for anthropogenic climate change – are greenhouse gases (GHGs). There are many GHGs resulting from different sources (like water vapor, carbon dioxide, methane, etc.), so one is trying to make them comparable by looking at their global warming potential (GWP). That is how much a GHG warms the atmosphere within a certain period of time. If you are checking these numbers, the trick here is to look at the underlying time horizons very carefully. As the GWP is measured relative to CO2 and the gases have different lifetimes, the warming potential can vary a lot when using different time periods.

How to react to climate change?

If anthropogenic or not, climate change is real and already demands strategies today. There are generally two ways to tackle this issue: mitigation (= preventing CC) or adaptation (= adapt to CC). According to Kevin, not much – and definitely not enough – is happening in mitigating climate change today. At the moment we are focusing more on adaptation strategies. This has become necessary at the moment as a result of more extreme weather events, which lead to floods, food shortage, etc. In the medium to long term climate change will be likely to cause huge migration flows, increased military tension and other problems as well.

Why focus on 2°C goal?

A temperature rise by 2°C was formerly estimated to be on the border between acceptable and dangerous warming. Today it seems more likely that 2 degrees are way within the dangerous warming zone. We know that the impacts will be worse than anticipated, but today we have already reached an increase in temperature by 1 degree. Last year’s Paris agreement was an important step into the right direction because almost every single country agreed in written form to keep global warming well below 2°C above pre-industrial levels. Yet, this text is far from enough to save our planet. It doesn’t include any references to fossil fuels or decarbonization, it exempts aviation and shipping, it relies on negative emission technologies, and so on. So this agreement doesn’t provide a solution, but it provides some leverage for everyone engaging in climate change mitigation.

Possible scenarios

Pursuing the lecture, there are two possible future scenarios. The first one is that we start mitigation right now, as the only thing that’s missing is the will to act. This might enable us to actually stick to the goal of a 2°C warming. The second scenario will unstoppably occur if we do not react and will include temperature increases of up to 3-4°C. Under these conditions, summer heat waves in Europe for example will most likely melt roads, train tracks and kill thousands of people.

 

Some comments

This was surely one of the greatest lectures we had in the CEMUS course so far. It provided a nice density of information about climate processes and scientific basics, combined with a very inspiring discussion of the relevance of climate change and its possible future impacts. For my part I have learnt a lot yesterday. Many thanks to Kevin Anderson for visiting us!

I hope you guys felt like this was interesting. You probably knew a lot of it already (I knew at least sooome of it), but the lecture gave me some hope with respect to what is actually possible technologically and it also provided some new things to think about, like the sense or absurdity of negative emission technologies.

Sorry also that I didn’t manage to finish this last night. At least now I can almost wish you a good weekend!

 

Cheers,

Franzi

CEMUS – The Global Economy

Hej, hej!

I am sorry for not posting anything on Wednesday, but I had a very busy week and you might still not be done reading my last entry since it became soooo long. Today I would like to tell you about one of the two courses I am currently taking.

With my first year during the master – as many study years before – being a little loady on math and statistics, I was looking for something different this semester. Even though most of the courses I did felt necessary, education in economics tends to be somewhat unilateral. With that in mind, I decided to try out a course offered by CEMUS, the Centre for Environment and Development Studies. CEMUS is a student-initiated, transdisciplinary center of Uppsala University and SLU.

The course I am taking is called The Global Economy (GEC) and it is split into three parts: (1) The birth of the global economy, (2) Understanding economies and (3) Possible (R)Evolution(s). The participants are Bachelor and Master students from various countries with different academic backgrounds and we have altering guest lecturers according to each week’s topics.

There are mainly three reasons why I am thrilled about this course. The first one is the style of teaching. While as a student of economics I am used to traditional chalk-talk teaching, GEC is much more interactive, by adding seminars, workshops and debates, film reviews and discussions to the regular lectures. Even though I appreciate most of the traditional lectures I have attended over the years, this is a very welcome variety for me. The second factor is the transdisciplinarity of the course: different backgrounds mean different opinions. I really, really appreciate the discussions that we have in class. Economics is omnipresent to all of us, whether we are aware of it or not, and if you ask one hundred people about a current economic issue (say the European financial crisis or the Brexit), you will get one hundred different answers. I think that it is very important for us economists to sometimes step out of our bubble of economic models and just try to see the world through someone else’s eyes (that last part holds not only for economists). In class my sentiments range from anger to curiosity, but there’s always something new to learn. The third reason why I enjoy this course so much are the topics we talk about. With some of them being more interesting than others – obviously – GEC covers many topics that I find are often neglected in the studies of economics (e.g. alternative economic theories or current issues touching upon economics).

The first module gave quite some insight to the past. We heard and talked a lot about the history of globalization, finance and economic theories. I actually used to have a class in economic history on the Bachelor level, but the topic changed every semester, so unfortunately I only learned about the era of the Great Depression. That was of course dramatic and important to be familiar with, but it also provided a rather restricted view on overall economic history, I must say.

However, even though I could increase my knowledge on economic history to a certain extent in the following years, there was still much to learn for me in the first module of the CEMUS course. Most appreciated is that I had the feeling to take a step back from detailed modelling and look at the whole picture again. I forgot how useful that can be every once and a while.

For everyone who is interested in sustainability or development issues, you should really pay a visit to the CEMUS site. I am also planning on posting about this course further and in more detail regarding the content soon!

I wish you a lovely week!

Franzi

Electives – The Econometrics Triplet

There was only one mandatory course for us during the second semester – Environmental Policy – which means there were 22.5 credit points to be chosen freely. Since I hadn’t done much Econometrics during my Bachelor studies, I decided to focus on that over the course of the last spring semester. I.e. I made the bold choice to take Econometric Theory, Applied Econometrics and Topics in Econometrics. I apologize for this super long post, but I wanted to make sure to put everything up at least a week before the application deadline.

 

Econometric Theory

I started off with a more basic course in Econometric Theory, taught by Luca Di Repetto. Before actually covering econometric modelling, the first half of the course repeated some necessary basics from statistics. That was very helpful for everyone whose last statistics/econometrics classes dated way back – like me.

The statistics part covered some probability theory and large sample theory, but mainly random variables (discrete & continuous, bi- & multivariate). During the second half of the course we essentially looked at the Linear Regression Model (quite extensive), non-linear regression functions and limited dependent variable models (Linear Probability, Probit & Logit Model). So I guess if you already have a strong background in econometrics you might consider skipping this course. For everyone who hasn’t done econometrics or who needs a fresh-up I would really recommend this course though.

I don’t know if Luca is going to teach the class again this time, but I was very pleased to have him as a teacher. His lectures were very clear and concise and he was open-minded towards the students’ ideas. In addition to the lectures we had exercise sessions every week, where we applied the theories on exercises and some real life examples.

You can find the course page here!

 

Applied Econometrics     

Applied Econometrics was organized as a follow-up course on Econometric Theory. In the lectures we talked a lot about possible threats to external or internal validity of analyses – and how to avoid them; about panel data, fixed effects regression, instrumental variables regression and (quasi) experiments.

This course shifted from theory to practice in so far as the exercise sessions were now “computer labs”, where we learned how to use the statistical software STATA. Many people had already used STATA for their Bachelor theses or on other occasions, but some of us were completely new to it. Our teacher, Niklas Bengtsson, started more or less from scratch, but as the labs were not mandatory you could skip them if you were familiar with STATA. There were two voluntary assignments to collect points for the exam, which was really helpful. It “forced” me to actually sit down to practice and deal with the software.

Honestly, if what you want to do after your studies is in any way related to economics, you should be able to perform what we did in this course. In case you already know all the above mentioned things: that is awesome. If not, I strongly recommend you to take this class.

And this is the course page!

 

Topics in Econometrics

For everyone who didn’t have enough after the first two econometrics classes there was Topics in Econometrics. The teacher, Adrian Adermon, stated the purpose of the class as to be able to identify good research. So what we did was to look at many different articles and try to evaluate their approaches and methods. Usually, for the lectures Adrian would pick two or three papers to point out and explain specific problems or methodological issues. Those could be omitted factors, robustness of the results, data mining, use of weak instruments, publication bias, etc.

Adrian often designed the lectures a little more interactive by giving us a question or issue to discuss amongst each other. Also we sometimes saw really surprising results, so it was quite an interesting course.

Besides the lectures we all had to attend a seminar, where we were supposed to present a scientific paper or an associated replication of it, respectively. Then we discussed the problems of these papers in class. The topics were really diverse, ranging from taxation of cigarette consumption over marginal returns to medical care or the relationship between economic shocks and civil conflicts to the economic impacts of climate change.

Probably the greatest challenge in this course was that we had to do our own replication of a scientific paper. Here we could choose from several topics as well. I won’t lie: for me as a STATA beginner this was really, really hard! (At least there was no exam though!)

Looking back I am glad that I took this course, because I learned so much regarding the application of STATA. Even if you won’t use STATA after you finish your studies, this can come in handy at least for the Master thesis.

Here you can find the course page!

 

I think the deadline for course applications is October 17. This is given without liability, so please make sure to check that again and best apply even earlier at antagning/universityadmissions.

Apart from that let me know if you are interested in further details regarding any of these courses. I will try to answer your questions!

Take care!

Franzi

Electives – Macroeconomic Theory

Macroeconomic Theory at UU was the second subject I picked and to be honest, it might have been the most challenging course I took last year. Partly this was due to the fact that most of my macro classes from the Bachelor level dated back incredibly far – yes, I am getting a bit long in the tooth. But the course covered quite a number of complex macro models in depth and I am not going to lie: there were lots of derivations.

The first part of the course dealt with economic growth, going through some neoclassical growth models like the Solow Model, the Ramsey-Cass-Koopmans Model and the Diamond Model. We also somewhat touched endogenous growth models in one lecture here. Afterwards we turned to consumption, especially the Permanent Income Hypothesis, so there was quite an emphasis on intertemporal consumption behavior.  We then spent two lectures on budget deficits and fiscal policy including tax smoothing and the Ricardian Equivalence, for example, and a debt crisis model.

The third part of the course was working towards explanations of economic fluctuations. It included the Real Business Cycle Model, but also the New Keynesian DSGE Model with sticky prices and imperfect competition.

The last two lectures then dealt with inflation and monetary policy.

Last year the lecture was held by Teodora Borota Milicevic, who in my opinion was an excellent and inspiring teacher. Unfortunately, she is not doing any teaching at the department this semester (as far as I know), so it is hard to tell whether the course will be similar to the one last winter.

However, if this year’s lecturer covers the same topics at least, you should be prepared for a really intense macro course, which will demand you to think abstract, do many mathematical derivations and remember several complex models. Though it was tough, I am really happy that I picked this course because it has widely enhanced my understanding of macroeconomics.

This is the link to the course page. Feel free to comment if you have further questions on this course!

Franzi

Electives – Management of Biological Resources

You might have realized that not all courses within Environmental Economics are mandatory. Actually only very few are. That offers you the opportunity to specialize the way you want to, but honestly: you’re also spoilt for choice. During my first year I more or less followed the recommended track. Still, I think reading about how I felt about my elective courses might help you guys making your decision. I will post about each of the 5 subjects I took last year before the application deadline on October, 17th (See antagning/ universityadmission for more information).

These are Management of Biological Resources, Macroeconomic Theory, Econometric Theory, Applied Econometrics & Topics in Econometrics.

Management of Biological Resources

After Analytical Methods and Microeconomics I was really excited about having my first course at SLU one year ago. Not that the first two courses weren’t interesting, but still I was thrilled to finally learn more about natural resources.

Regarding the content, the course equipped us with many basic definitions and distinctions between different types of resources, applied mathematical tools on resource economics and had a strong focus on time extension. Each week had a certain topic on which we had lectures as well as seminars (exercise sessions). The first of these topics was forestry, which mainly dealt with optimal rotation lengths of planting and harvesting forest. After that we learnt about fishery, especially about differing impacts in open access versus private fishery models. This part also included a discussion of various policy instruments. Following that we talked about nonrenewable resources and how these should (or should not) be extracted. Also, sustainability has become a big buzzword during the last years, so of course there was one week dedicated to that as well. Here the emphasis was on ethics, welfare economics and different concepts of sustainability. The last class was about stock pollutants and mainly explained how the use of resources can lead to stocks of various pollutants and which policies there are to counter this process (like emission taxes or permit trading).

In my opinion the course covered quite a broad range of topics, albeit rather superficial. So for me – who had never done any resource management before – it felt like a good introduction. However, if you have done some of the above-mentioned topics before, it might be a bit repetitive. Another interesting point is that even though Prof. Ing-Marie Gren is the course leader, all lectures and seminars were held by advanced PhD students.

The class size was quite small (< 10 students), which enabled an intense and open learning environment. Apart from that and the highly interesting content, I liked the application of economic modelling on environmental issues the most.

If you think that sounded interesting I would really recommend you to take this course. Feel free to comment if you have further questions about this! Also you will find more information at the course page.

Take care!

Franzi