I attended the Berkeley Bioeconomy Conference some time ago, and would like to relay some notes and observations. It was interesting, as I am not a regular of the bioeconomy research community. First of all, the term bioeconomy (seldom or never bioeconomics, notably) seems to mean the economics of biofuel. A couple of highlights:
- A carbon tax in the US has become slightly less unlikely because of the huge budget deficit. A tax on carbon would generate a lot of revenue. So, the financial crisis still has positive effects on the climate. First, it slowed down economic growth. Now it can lead to a carbon tax in the US. Well, a carbon tax is at least not as unlikely as before, but still unlikely. A couple of further moments are that the budget deficit did not origin within the financial crisis, but the situation did become worse after the crisis hit. And, the crisis has probably had a number of negative effects on the climate as well, like switching to dirtier fuels and perhaps less public and private money for research.
- If production of crops for biofuel has adverse effects on food production and prices, it is difficult to pin down empirically (at least in one study from Brazil).
- When one delves into sustainability, it could unleash an array of potential issues to worry about, of conceptual, theoretical, philosophical, and regulatory nature. One second thought, any issue one could delve into could unleash any number of issues of different natures, a part of the art of getting anything done in research is not to engage all at the same time perhaps.
- Few places are as ideal as Brazil for biofuel production. If it does not work there, it will likely not work anywhere.
- Is a non-parametric estimate the same as a spline?
- Electricity generated from shale gas is cheaper than hydropower(?!), and it is better to use natural gas to make electricity than to run cars (electric cars have great milage).
- Voting is not necessarily an efficient tool to decide upon labeling of genetically modified food; willingness to pay could be higher in the minority. How the issue is framed is also of importance (a lesson from Kahneman there).
- Price volatility of fussil fuel correlates with the business cycle (it is demand driven). Volitility in biofuel does not correlate with the business cycle and hence a bad agricultural year (bad weather) could deepen a recession.
- Tinbergen, apparently (revealing some holes in my background here), told us that one should have one policy instrument for each policy target. Is that really true? It is at least easy to imagine a policy instrument active (in lack of a better word) in several dimensions.