Wednesday, June 26, 2013

Taking action on climate change

The Obama administration is side stepping congress and finally doing something about climate change.  The "action plan" has a nice outline of strategies, but no specifics.  It will be interesting to see what kinds of rules the EPA and DOE roll out in response to this initiative and how they will be justified under existing laws like the Clear Air Act.

Precedent for this kind of action was established by the Supreme Court awhile back.  If the Obama administration didn't take action soon, agencies would be sued by environmental groups and forced to do something.  So this kind of thing was bound to happen, one way or another.

In response, Paul Krugman makes an interesting and surely controversial point.  The new rules, whatever they turn out to be, will make energy more costly.  That's not to say action shouldn't be taken, but that there are tradeoffs involved with curbing climate change.  Krugman argues, however, that because these are not ordinary times, the costs may be considerably less.  Indeed, these rules may actually benefit the rest of the economy, not hurt it.  In other words, action on climate change could be free lunch.

Yes, this violates one of the first principles of economics.  But that sort of thing might actually happen when we have a depressed economy and vast inefficiency to begin with.  His reasoning is that we have too little demand right now, so that investments into alternative energy or carbon capture would employ resources that would otherwise sit idle.  And once those idle resources are employed, the economic activity they would generate would grow real income.  Put another way, since aggregate demand is insufficient, investments to curb global warming do not displace other kinds of investments and instead just add to GDP.

Environmental economists don't think this way, probably because depressed economies don't happen very often, and so the field pays little attention to macroeconomics.  But since the economy is depressed and likely to stay that way for at least another year or two, it does seem like a good time take action. After all, as Krugman likes to remind us again and again,  the latest evidence shows Keynesian ideas to be stronger than ever.  Maybe we should eat that free lunch while we can.

Wednesday, June 12, 2013

Varieties for droughts meet testing and doubts

There have been lots of interesting papers in the literature lately. More than I can keep up with for reading, much less to blog about. For example, some very nice work looking at land saving effects of productivity, an improved understanding of rainfall changes in the Sahel, and work on farmer perceptions of climate change. Plus the AgMIP efforts are starting to generate publications, such as this comparison of 27 wheat models.

But two I wanted to highlight concern the evidence on whether new “drought tolerant” varieties are outperforming other varieties. They especially caught my attention because we are currently analyzing some datasets for the US, partially to look at this issue. One of the papers, by Jason Roth and colleagues in Agronomy Journal, field tested some of DuPont Pioneer’s “Aquamax” varieties vs. other Pioneer hybrids without the special drought genes. The tests were done in Indiana for 2011, a pretty normal year in this location, and 2012, which was very dry and hot. They found no statistical difference between grain yields (GY), and also very little difference in terms of other outcomes like photosynthesis rates or transpiration. So their basic message is that the label of “drought tolerant” did not translate to any real differences in performance, although they emphasize that “Conclusions regarding the lack of superiority of drought-tolerant hybrids during the drought year are pertinent only to the specific environmental conditions encountered in the particular location tested.”

To me, there are a couple of possible ways to interpret this. One is that the newer varieties being marketed by companies are not really much better in general. Or these results might indicate that the types of droughts the newer varieties were designed for are somehow different than the type of droughts they were exposed to in this experiment. In particular, as we’ve discussed in prior posts, 2012 was a drought characterized by very high temperatures and vapor pressure deficits, the kind of droughts that one expects more of with climate change.

How much does the type of drought matter? Another interesting new study by Cairns et al. in Crop Science sheds some light on that question. They tested varieties developed for drought tolerance in eastern and southern Africa across multiple sites around the world. What was particularly novel was that they tested them not only in “drought”, but also in “heat” treatments (usually by planting late), and also for combined “drought+heat” treatments. The table below summarizes their results by showing the correlation between variety performance in different treatments (they also include a “well-watered” treatment intended to look at yield potential).

What’s really interesting is how remarkably low the correlation between performance in “drought” and “drought+heat” is (0.08). Like with the Roth study, it’s important not to extrapolate this too quickly beyond the particular sites and kind of treatments used in the study. But it certainly does provide support for the notion that very hot droughts require a different kind of variety. (What exactly that variety should look like is something I plan to focus on over the next year, including (I hope) a stint in Australia.)

Tuesday, June 4, 2013

Rainfall, sex, and HIV

The Economist tell us that times are tough for sex workers in the UK (HT: Sol).  A sluggish economy and has dried up demand for paid sex, and high unemployment has increased the supply of people willing to sell it.  As a result, the street price for sex has plummeted, and women appear to be offering increasingly risky -- and presumably better compensated -- services in response.  

This relationship between economic conditions and sexual behavior is something that is increasingly studied by economists and other social scientists.  The goals in this research are both to understand the determinants of sexual behavior, as well to understand how these changes in behavior affect key health outcomes.  A recent focus has been on the role of economic conditions in the HIV epidemic in Africa.  Over 2 million people continue to become newly infected with HIV every year, and the vast majority of these new infections occur in Sub-Saharan Africa through unprotected heterosexual sex.  So if economic conditions shape sexual behavior in Africa (as they appear to in England), then it is plausible that this could in turn shape the trajectory of the HIV epidemic.  

Such a finding would really matter for policy.  If changing economic conditions are found to affect rates of HIV infection -- for instance,  if economic downturns result in a lack of alternative employment that in turn causes women to enter the sex trade, and that this in turn increases the number of people infected with HIV -- then this would suggest policy approaches for HIV prevention that are pretty different from current efforts to expand access to antiretrovirals, to increase male circumcision, and to change behavior through information campaigns about safe sex.   However, as the Economist story suggests, it's not at all clear how the economic effects would play out in terms of overall disease transmission.  If tough economic conditions lead to an inward shift in the demand curve for sex and an outward shift in the supply curve, the equilibrium price of sex will fall (as in the story) but the effect on the equilibrium quantity of sex could go up or down, depending on how the demand and supply curves are sloped and which shifts more.  If riskier (e.g. unprotected) sex is being transacted, that will clearly matter for infection risk too.  

Research in Africa has increasingly documented the first part of the story, that economic conditions shape sexual behavior.  For example, Jon Robinson and Ethan Yeh somehow persuaded a sample of Kenyan women to keep detailed diaries of their sexual activity, and document that these women increase their supply of risky (and better compensated) sex when faced with income shortfalls.  Similarly, Nick Wilson shows that when economic times are good in Zambian mining towns, rates of transactional sex decline.  Nevertheless, these papers do not tell us how these changes in behavior translate into to actual HIV outcomes, which for many is the outcome of interest. 

In a recently updated working paper, Erick Gong, Kelly Jones and I explore how local variation in rainfall -- a oft-used proxy for rural incomes -- affects rates of HIV infection across sub-Saharan Africa. To do this we match gridded weather data to information on the HIV status of over two hundred thousand individuals across 19 African countries (as gleaned from the Demographic and Health Surveys).  We then compare whether rates of HIV prevalence are higher in locations where recent growing season rainfall had been particularly low (relative to average), as compared to nearby locations where growing-season rainfall had been closer to that location's normal rainfall.

We find that exposure to a single "rainfall shock" increases local HIV prevalence by 11%, where a shock is defined as a year in which growing season rainfall is at or below the 15th percentile of historical realizations at a given location.  This is a large effect, and it passes a number of "sniff" tests:  the effect is larger when we adopt a more severe definition of "rainfall shock", it is larger in rural areas where incomes should be more sensitive to rainfall, and it is larger in areas where baseline HIV prevalence is high (i.e. where there is actually HIV to pass around).  Running a similar analysis at the country level on a different HIV dataset and across all African countries, we find that rainfall shocks explain up to 20% of the variation in HIV prevalence at the country level.  

While we believe these results are unlikely to be spurious, they are clearly very "reduced form":  we are effectively regressing HIV on rainfall at either the individual or country level.  A reasonable concern would then be that variation in rainfall could be affecting all sorts of other things (beyond the market for transactional sex) that might also affect HIV.  For instance, perhaps negative rainfall shocks lead to more civil war and in turn that war-related sexual violence increases HIV rates, or perhaps rainfall shocks induce migration and that in turn spreads HIV, or perhaps rainfall shocks lower individuals' nutritional status and this directly affects their susceptibility to HIV infection.  

Using available data in the DHS and evidence from the literature, we do our best to show that these alternative stores are probably not what's going on, and instead that rainfall affects HIV through its effect on how individuals cope with changes in income.  In particular, we show that self-reported measures of sexual activity (being sexually active, having sex with multiple partners or a non-spouse partner) increase in response to rainfall shocks.  We also show that changes in HIV rates are concentrated among women working in agriculture, who would likely suffer the largest income drop in response to a rainfall shock, and among men not working in agriculture, who would be less likely to suffer the drop in purchasing power that would limit their ability to purchase sex.  

Overall, we interpret our results as further evidence that poor people have a lot of trouble coping with negative income shocks, and that in the absence of the sorts of financial tools available to people in wealthier countries (savings, credit, insurance), they sometimes have to resort to behavior that helps maintain incomes in the short run but could be very costly in the longer run.  In terms of HIV, this again implies approaches to stemming the HIV epidemic that are different than current policy focuses.  Our results add further impetus to efforts aimed at reducing farmers' sensitivity to weather (e.g. through drought tolerant varieties), and aimed at providing tools (e.g. savings or insurance) to help them smooth consumption when their incomes fall.  Our findings imply that the failure to provide these tools could have large and previously unrecognized effects on the HIV epidemic.  

The paper is here.  Comments very welcome!