MOST RECENT TALK
Talk at University of St. Gallen Swiss Institute for International Economics and Applied Economic Research (SIAW-HSG): Noisy Trade: The Impact of Shipping Noise on Marine Mammals
M. Scott Taylor, Fruzsina Mayer
Recent Research Papers
Is Free Trade Good for Renewable Resources: Brander & Taylor Redux
M. Scott Taylor
NBER Working Paper No. 33113 version, issued in November 2024.
I wrote this paper in honor of my friend, mentor, and co-author, James Brander, on the occasion of his retirement. Without early help and guidance from Jim and Barbara (Spencer), my career would have been nasty, brutish, and short. I would like to thank Hanqi Liu for excellent research assistance, and participants at the Brander Festschrift at the Sauder School at UBC, including my very helpful discussant Werner Antweiler for very helpful comments.
This paper generalizes the original Brander and Taylor model of open-access renewable resource use and trade to address three common critiques. First, I introduce heterogeneity across agents in harvesting productivity to smooth out the model's extreme specialization patterns while maintaining its Ricardian structure and tractability. Second, I move beyond the original assumption of open access by constructing a policy stringency function allowing for partial, first-best, and endogenous resource policy. Third, by exploiting the smooth substitution possibilities generated by agent heterogeneity and the insight that policy stringency functions are likely to vary across countries, I show how the model's core predictions can be evaluated using empirical methods related to those in growth econometrics.
Important related work:
Bulte, Erwin H, Richard D Horan, and Jason F Shogren. 2003. “Elephants: Comment.” American Economic Review, 93(4): 1437–1445.
Durlauf, Steven N, Paul A Johnson, and Jonathan RW Temple. 2005. “Growth econometrics.” Handbook of economic growth, 1: 555–677.
Erhardt, Tobias. 2018. “Does International Trade Cause Overfishing?” Journal of the Association of Environmental and Resource Economists, 5(4): 695––711.
Kremer, Michael, and Charles Morcom. 2000. “Elephants.” American Economic Review, 212– 234.
Quaas, Martin, and Anders Skonhoft. 2022. “Welfare Effects of Changing Technological Efficency in Regulated Open-Access Fisheries.” Environmental and Resource Economics, 82(4): 869–888.
Shapiro, Joseph S. 2016. “Trade costs, CO2, and the environment.” American Economic Journal: Economic Policy, 8(4): 220–254.
World Exports Network, 199 countries, 2016
The world trading system is a very complicated network comprised of shipping routes that link many connecting ports or nodes. In such a networked setting, the economics of regulation is challenging because the efficiency of a networked system depends on both the set of active nodes (ports) and the volume of activity flowing through its links (trade). In this Kühne Impact Series, I discuss how a standard environmental policy such as taxing carbon emissions may have the unintended consequence of lowering overall network efficiency. As a result environmental policies need to be designed carefully whenever network interaction effects are large. When they are large and positive, as seems to be the case, then the optimal carbon tax is below the marginal social cost of carbon.
Important related work:
Bovenberg, A Lans, and Lawrence H Goulder. 1996. “Optimal environmental taxation in the presence of other taxes: general-equilibrium analyses.” The American Economic Review, 86(4): 985–1000.
Brancaccio, Giulia, Myrto Kalouptsidi, and Theodore Papageorgiou. 2020. “Geography, transportation, and endogenous trade costs.” Econometrica, 88(2): 657–691.
Goulder, Lawrence H. 1995. “Environmental taxation and the double dividend: a reader’s guide.” International tax and public finance, 2: 157–183.
Goyal, Sanjeev. 2023. Networks: An economics approach. MIT Press.
Heiland, Inga, Andreas Moxnes, Karen Helene Ulltveit-Moe, and Yuan Zi. 2019. “Trade from space: Shipping networks and the global implications of local shocks.”
Hendricks, Ken, Michele Piccione, and Guofu Tan. 1995. “The economics of hubs: The case of monopoly.” The Review of Economic Studies, 62(1): 83–99.
Kosowska-Stamirowska, Zuzanna. 2020. “Network effects govern the evolution of maritime trade.” Proceedings of the National Academy of Sciences, 117(23): 12719–12728.
Lipsey, Richard G, and Kelvin Lancaster. 1956. “The general theory of second best.” The review of economic studies, 24(1): 11–32.
On the Economics of Extinction and Mass Extinctions
M. Scott Taylor and Rolf Weder
Figure Source: Barnosky et al. (2011)
Buffalo Hides Export
Human beings’ domination of the planet has not been kind to many species worldwide. This is to be expected. We have radically altered natural landscapes, harvested heavily from the ocean, and altered the climate in an unprecedented way. Recent concerns over the extent and rate of biodiversity loss have led to renewed interest in extinction outcomes and speculation concerning our potential role in any future mass extinction. We discuss the economic causes of extinction in two high-profile cases - Sharks and the North American Buffalo - and then extend our framework to allow for multiple species and the possibility of mass extinction. Throughout, we present evidence drawn from authoritative data sources to ground our analysis. Despite large gaps in our data, the available evidence suggests extinction risks are rising for many species.
Important related work:
Barnosky, Anthony D., Nicholas Matzke, Susumu Tomiya, Guinevere OU Wogan, Brian Swartz, et al. 2011. "Has the Earth’s sixth mass extinction already arrived?." Nature 471, no. 7336: 51-57.
Ceballos, Gerardo, Paul R. Ehrlich, and Peter H. Raven. 2020. "Vertebrates on the brink as indicators of biological annihilation and the sixth mass extinction." Proceedings of the National Academy of Sciences 117, no. 24: 13596-13602.
Kolbert, Elizabeth. 2014. The sixth extinction: An unnatural history.
Pauly, Daniel, Villy Christensen, Johanne Dalsgaard, Rainer Froese, and Francisco Torres Jr. " 1998. Fishing down marine food webs." Science 279, no. 5352: 860-863.
Rockström, Johan, Will Steffen, Kevin Noone, Åsa Persson, F. Stuart Chapin III, Eric Lambin, Timothy M. Lenton et al. 2009. "Planetary boundaries: exploring the safe operating space for humanity." Ecology and society 14, no. 2.
Smith, Vernon L. 1975. "The Primitive Hunter Culture, Pleistocene Extinction, and the Rise of Agriculture." Journal of Political Economy 83, no. 4 (1975): 727-755.
Mass Extinctions in the News:
B.C. researcher says liver oil, meat trade threaten deepwater shark populations (The Globe and Mail, 2024)
An Asteroid Wiped Out Dinosaurs. Did It Help Birds Flourish? (The New York Times, 2024)
Ancient Fires Drove Large Mammals Extinct, Study Suggests (The New York Times, 2023)
Animals Are Running Out of Places to Live (The New York Times, 2022)
A ‘Crossroads’ for Humanity: Earth’s Biodiversity Is Still Collapsing (The New York Times, 2021)
Humans Are Speeding Extinction and Altering the Natural World at an ‘Unprecedented’ Pace (The New York Times, 2019)
International Trade, Noise Pollution, and Killer Whales
M. Scott Taylor and Fruzsina Mayer
Summary of Research in 3 Easy Steps
The current version of the paper
Noise Disturbance Shocks in SRKW Critical Habitat
Orcinus Orca is the world’s largest predator, and simultaneously a significant tourist asset and cultural icon for much of the Pacific Northwest. In the past two decades, the Southern Resident Killer whale (SRKW) population has declined by more than 25 percent, putting them at risk of extinction. The cause of this decline is hotly debated. This paper employs novel data, an innovative noise pollution model, and quasi-experimental methods borrowed from environmental economics to solve this puzzle. We find consistent evidence that vessel noise pollution from international shipping has lowered fertility and raised the mortality of the SRKW significantly. Had noise pollution remained at its pre-1998 levels, the SRKW population would be 30% larger. Noise pollution is a growing threat to marine mammals worldwide.
Important related work:
Chay, Kenneth. Y., and Michael Greenstone. 2003. “The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession.” The Quarterly Journal of Economics.
Graff Zivin, Joshua, and Matthew Neidell. 2013. “Environment, Health, and Human Capital.” Journal of Economic Literature, 51(3): 689–730.
Schlenker, Wolfram, and W. Reed Walker. 2016. “Airports, Air Pollution,and Contemporaneous Health:.” The Review of Economic Studies, 83(2): 768–809.
Veirs, Scott, Val Veirs, and Jason D. Wood. 2016. “Ship Noise extends to frequencies used for echolocation by endangered killer whales.” PeerJ DOI 10.7717, 4:e1657: 1–35.
Williams, Rob, Andrew W. Trites, and David E. Bain. 2002. “Behavioural responses of killer whales (Orcinus orca) to whale-watching boats: opportunistic observations and experimental approaches.” Journal of Zoology, London, 256: 255–270.
Williams, Rob, Christine Erbe, Erin Ashe, Amber Beerman, and Jodi Smith. 2014. “Severity of killer whale behavioral responses to ship noise: a dose-response study.” Marine Pollution Bulletin, 79(2): 254–260.
Killer Whales in the News:
Whale song mystery solved by scientists （BBC, 2024)
Lolita the Orca May Swim Free After Decades at Miami Seaquarium (The New York Times, 2023)
Why 23 Dead Whales Have Washed Up on the East Coast Since December (The New York Times, 2023)
A Rising Tide of Noise Is Now Easy to See (The New York Times, 2012)
From 9/11, a Lesson on Whales, Noise and Stress (The New York Times, 2012)
International Trade and the Environment: Three Remaining Empirical Challenges
Jevan Cherniwchan and M. Scott Taylor
We review the progress that has been made in our understanding of the relationship between international trade and the environment in the 30 years since Gene Grossman and Alan Krueger published their now seminal working paper examining the potential environmental effects of the North American Free Trade Agreement. We use their original paper as a guide to highlight key developments along three main branches of research that all stem from their analysis: (i) the interaction between international trade, economic growth, and environmental outcomes, (ii) the role of environmental regulation in determining trade and investment flows, and (iii) estimating the relative magnitudes of the scale, composition, and technique effects induced by trade. We discuss key developments along each branch, with a particular focus on the empirical challenges that have impeded progress. We also highlight an area along each branch that is ripe for further study. We refer to these areas as the Three Remaining Challenges.
Important related work:
Conconi, P. (2003). Green Lobbies and Transboundary Pollution in Large Open Economies. Journal of International Economics, 59(2):399–422.
Deardorff, A. V. (2013). Growth or Decline of Comparative Advantage. Journal of Macroe- conomics, 38:12–18.
Greenstone, M. (2002). The Impacts of Environmental Regulations on Industrial Activ- ity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures. Journal of Political Economy, 110(6):1175–1219.
McAusland, C. and Millimet, D. L. (2013). Do National Border Matter? Intranational Trade, International Trade, and the Environment. Journal of Environmental Economics and Management, 65:411–437.
Shapiro, J. S. and Walker, R. (2018). Why is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade. American Economic Review, 108(12):3814–54.
In the News:
Just How Many People Will Die From Climate Change? (The New York Times, 2024)
Globalization and the Environment
Brian R. Copeland, Joseph S. Shapiro, and M. Scott Taylor
Handbook of International Economics, Volume V, edited by Gita Gopinath, Elhanan Helpman and Kenneth Rogoff
How should international economic policy address climate change? Does trade cause deforestation and endangered species depletion? How does globalization affect air and water pollution? Do trade and investment create a race to the bottom in environmental policy? How important are environmental impacts of transporting goods? We review theory and empirical work linking international trade and the environment with a focus on recent work and methods. We discuss the literature linking trade to local and global pollutants, the impact of emissions from transportation, the effect of trade on the sustainability of renewable resources, and the interaction between trade and climate policy. To shape our review, we present nine new stylized facts that, together with our review of past work, highlight questions for future research.
Important related work:
Acemoglu, D., P. Aghion, L. Bursztyn, and D. Hemous (2012). The environment and directed technical change. American Economic Review 102(1), 131-166.
Autor, D. H., D. Dorn, and G. H. Hanson (2013). The china syndrome: Local labor market effects of import competition in the United States. American Economic Review 103(6), 2121-68.
Costinot, A., D. Donaldson, and C. Smith (2016). Evolving comparative advantage and the impact of climate change in agricultural markets: Evidence from 1.7 million fields around the world. Journal of Political Economy 124(1), 205-248.
Frankel, J. A, and A. K. Rose (2005). Is trade good or bad for the environment? Sorting out the causality. Review of Economics and Statistics 87(1), 85-91.
Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6), 1695-1725.
In the News:
EU carbon border tax will do little to cut emissions, ADB study says (The Globe and Mail, 2024)
Presidential Address at the 2021 Canadian Economics Association Meetings: The Orca Conjecture
M. Scott Taylor
Source: Brian R. Copeland
In this Address I argue that the Southern Resident Killer Whale (SRKW) population has been negatively affected by booming commercial vessel traffic, tied to international trade, in the post 1998 period. I present new data showing a dramatic increase in the volume of km travelled and the composition of vessel traffic in the Salish Sea. By exploiting recent work in biology linking vessel noise to changes in foraging and socializing behavior, I conclude the negative shock has degraded their habitat significantly. Surprisingly, the competing population of Northern Resident Killer Whales (NRKW) may be an unwitting benefactor of this negative shock; and as a result the SRKW are now on a slow-motion path towards extinction.
Important related work:
Bigg, M. A. (1982) “An assessment of killer whale (Orcinus orca) stocks off Vancouver Island, British Columbia.” Report of the International Whaling Commission 32, 655-666.
Colby, J. M. (2018) Orca: How we came to Know and Love the Ocean’s Greatest Predator, Oxford University Press, UK.
Ford, J. K. B. (2006) An assessment of critical habitats of resident killer whales in waters off the Pacific coast of Canada, Fisheries and Oceans Canada, Science.
McWhinnie, L. H., P. D. O’Hara, C. Hilliard, N. Le Baron, L. Smallsahw, R. Pelot and R. Canessa (2021) “Assessing vessel traffic in the Salish Sea using satellite AIS: An important contribution to planning, management and conversation in southern resident killer whale critical habitat,” Ocean and Coastal Management 200, 105479.
Olesiuk, P. F., M. A. Bigg, and G. M. Ellis (1990) “Life history and population dynamics of Resident killer whales (Orcinus orca) in the coastal waters of British Columbia and Washington State,” Report of the International Whaling Commission 12, 209–243.
Ward, E. J., E. E. Holmes, and K. C. Balcomb (2009) “Quantifying the effects of prey abundance on killer whale reproduction,” Journal of Applied Ecology 46(3), 632–640.