Category Archives: Environment

302 – India impressions

In February I spent two weeks on holiday in the north of India, visiting Delhi, Agra, Jaipur and Jodhpur. For many years, I had been reluctant to go there, afraid of being overwhelmed by the culture shock and the poverty. In the end, there was plenty of both, but perhaps less than I expected, and I really enjoyed the visit.

Here are some quick impressions about some of the main things that stood out to me.

Poverty and prosperity

There is plenty of evidence that India is developing rapidly. Between 1980 and 2014 its Human Development Index increased by 68 percent, and its Gross National Income per capita (in constant dollar terms) increased from $1255 to $5497. Their economy is continuing to grow rapidly: at 7.6% (real) in 2016.

Still, there are many people doing it very tough – e.g. sleeping under overpasses or in train stations. There was more begging on the street or at traffic lights than I had previously encountered elsewhere.

On the other hand, there was less of that than I expected. We were able to give to many of the beggars we encountered without feeling like it was overwhelming.

The huge majority of people look like they are doing OK. And there are plenty of people who are clearly doing very well indeed.

Traffic and crowds

The population of India is 1.27 billion, and it’s growing at 1.19% (15 million people) per year. It will overtake China as the world’s most populous country in about 2022.

Sometimes in Delhi it feels like they are all on the streets! Indian traffic is like nothing else I’ve ever encountered. Countless millions of cars, tuk tuks, motorbikes, trishaws, and sometimes buses and trucks. Not to mention cows and pedestrians.

The congestion is absolutely terrible of course, but just as remarkable is the way the traffic works. It feels like one is in a school of fish rather than a flow of traffic. Lanes are completely ignored. One moves forward into any available gap, seemingly no matter how narrow it is. When roads intersect, the cars just sort of inter-mesh and weave their ways through. You can’t wait for a break in the traffic before you cross, because there will never be one. I never got used to the alarming way that our drivers turned left onto roads or into roundabouts – they just drive on, seemingly without even looking whether there is room for them. The traffic just has to make room.

People are also quite relaxed about driving into oncoming traffic if doing so would be convenient. Our own drivers did it several times, and we once encountered a large truck coming straight at us in our lane: the inside lane of a dual carriageway road! Pauline screamed, but our driver was quite unruffled. He just shuffled to the left as if it wasn’t surprising. Because it wasn’t.

Apart from the traffic, it can be pretty crowded for people as well. Walking through the market area in Old Delhi it sometimes seemed about as crowded as being inside a bus in peak hour in Perth, but we were in the open.

Crowding was most intense inside some of the vehicles. I was part of a group of three, and we felt quite packed in in the back of a tuk tuk, but I saw plenty of tuk tuks with about eight passengers and one that surely had more than 10. It was common to see three passengers in the front with the driver, and he only has a single seat. One person would often be sitting under the driver, the other two teetering on a few inches of seat on each side.

On the other hand, we did manage to find plenty of relatively uncrowded places too, particularly some nice parks. The crowds are intense but not continuous.

Animals in the street

I’ve never seen so many different types of animals in urban areas: cows (of course), dogs, camels, horses, donkeys and monkeys are commonplace, and in Jaipur there are elephants. I witnessed a pitched battle between rival monkey gangs near the Taj Mahal.

 Environment

Delhi is famous for its poor air quality. According to the World Health Organisation, Delhi has the worst air quality of any major city in the world.  I had previously visited Beijing and experienced its appalling air quality, but Delhi is 43% worse (in terms of fine particles, which are the most damaging to health).

Fortunately it wasn’t too terrible while we were there, but on average air pollution kills about 1.5 million Indians per year – their fifth highest cause of death.  There is increasing awareness of the problem, but they’ve got a long way to go. For example, burning rubbish (including plastics) in the streets is still common.

The other local environmental issue that stood out was garbage in the streets. Particularly in Delhi and Agra, the garbage situation is absolutely woeful. Jaipur and Jodhpur were much better, apparently due to official efforts to raise awareness and clean things up. They are also much better for air pollution. Hopefully, rising incomes will result in people in other cities wanting to follow the examples of those two.

With so many people to fit in, you have to go looking for relatively natural areas. We went to Keoladeo National Park south of Agra, and it was absolutely fantastic. The range of birds, especially water birds, was just amazing, and there are plenty of other animals as well. We saw jackals, mongooses, deer, antelopes and bats. Highly recommended.

Selling

I’m completely hopeless at haggling. When buying small items, my heart is not in it, because fundamentally I am quite happy not to pay the lowest possible price, on the basis that it is still cheaper than I’d be happy to pay in Australia, and these people need the money more than I do. Add to that the fact that Indian sellers are masterful and incredibly persistent persuaders, and you can see the risks I faced. Oh well, it was an experience. I’ve always wanted 12 crudely hand painted plastic elephant key rings.

Food

I’ve always loved Indian food and I was not disappointed. Absolutely delicious. Lots of great dishes you never see at an Indian restaurant in Australia.

Health

I used to always get really sick in developing countries, but over time I’ve developed a relatively effective strategy: carry hand wash and use it regularly, be cautious when choosing where to eat, and take Travelan before each meal. (And of course only drink bottled water.) I’ve now used this approach in Indonesia, Vietnam and India without getting a single serious stomach problem. In India I added another element to the strategy: only eat cooked vegetarian food. This was no hardship at all, given how good their vege food is.

Crime

We read a bunch of horror stories about the dangers before we went there, but never felt in any danger (apart from on the roads). Our guides warned us a lot about pickpockets, but we kept our valuables in pickpocket-proof bags, with metal reinforcing, so felt safe.

Overall, it was a great experience. Despite the various challenges, I’m really glad I went.

299 – Are higher house prices a benefit or a problem?

In the research reported in PD298, we used the impact on house prices as an indicator of the benefits of an investment in a public amenity. This is a well-established approach, but twice in recent times I’ve encountered an attitude that higher house prices are more of a cost than a benefit. Could that be right?

The issue that people have in mind when they raise this concern is housing affordability. This certainly is something that is worthy of attention. House prices in many parts of Australia (and other developed countries) are often so high that they place great financial stress on buyers with relatively low incomes or they result in too many people being excluded from the housing market.

However, talking to a former government minister last year, she said that measuring improved local amenity by the resulting rise in house prices was not acceptable because rising house prices are a problem for housing affordability.

housingAlthough I applaud her concerns for the welfare of low-income groups, her rejection of rising house prices as a measure of community benefits is not sound at all.

For one thing, it implies that rising house prices are a bad thing regardless of the cause of the rise. The logical extension of that thinking is that we would prefer completely impoverished suburbs with no amenities or services for residents. Let’s encourage crime, leave road potholes unrepaired, remove all street trees and encourage toxic industries to set up in urban areas. That would certainly result in affordable housing! This is obviously not the solution to the housing-affordability problem.

The second flaw in the politician’s logic was that it confused measurement with objectives. Improving the amenity of a suburb does result in benefits for the residents, and these benefits are reflected in the prices that people are willing to pay to become residents in that area. So the change in house prices that is attributable to the improved amenity is a sound quantitative measure of the benefits. There may also be spillover effects that are viewed as being negative, but the requirement then is to measure those negatives as well, not to reject the valid measurement of the benefits.

Thirdly, the politician is implicitly suggesting we should aim to achieve two different policy objectives (affordable housing and improved urban amenity) using only one policy mechanism, the decision about whether to invest in urban amenity. An important economic insight, known at Tinbergen’s Rule, says that you need at least one policy mechanism for each policy objective – in this case, one related to urban amenity (e.g. investment in drain restoration) and a different one related to affordable housing (e.g. increased land releases). If you try to achieve two objectives with only one mechanism, the community will end up worse off overall than it might have been.

I was completely unprepared for the ex-minister’s comment at the time, and so dazzled by its many problems that I wasn’t able to quickly provide a very coherent counter-argument. I’ll be better prepared if it comes up again.

Further reading

Borrowman, L. Kazakevitch, G. and Frost, L. (2014). Measuring Housing Affordability: What Types of Australian Households are in Stress? Discussion Paper 42/14, Department of Economics, Monash University. Full paper ♦ IDEAS page

Polyakov, M., Fogarty, J., Zhang, F., Pandit, R. and Pannell, D. (2016). The value of restoring urban drains to living streams, Water Resources and Economics Journal web site ♦ IDEAS page

298 – Potential value from restoring urban drains

I remember as a child playing in the stormwater drains near my home in suburban Perth. The drains were straight, steep-sided, fenced off (to keep us out) and the banks were bare grass, but the water contained little fish, called gambusia, that we loved to catch, not caring that they were actually feral pests.

These days, there is growing interest in restoring urban drains to something approaching a natural stream, including natural vegetation on the surrounding land. In a study funded by the CRC for Water Sensitive Cities, we set out to measure the benefits from restoring a particular drain in Perth.

gambusiaThe drain in question was Bannister Creek, which is really close to my childhood home and those other drains I played in.

In 1979 the creek was straightened, deepened, and made into a traditional drain. During the 1980s and 1990s, the area was urbanised, leading to loss of the wetland system and riparian vegetation, nutrient-rich runoff from lawns and gardens, runoff from industry, and increased erosion and pollution problems in the catchment. Additionally, during high-rainfall events, the increase in the volume and speed of water surging through the now straightened and steeply-banked Banister Creek main drain had become a public-safety risk.

In response, a volunteer group formed (the Bannister Creek Catchment Group), with the aim of improving the creek/drain, including a project to rehabilitate a section of it to a “living stream”. The aim was that this would provide flood-mitigation, local amenity benefits, improved water quality, and slower flow velocity.

The restoration project, from 2000 to 2002, involved giving the creek a more natural shape, with meanders, riffles, fringing sedges, gentle sloping banks, and thick vegetation on the banks.

The transformation from drain to living stream can be seen in Figure 1, which tracks the evolution of the area through time.

living1

Figure 1. Drain restoration over time.

Figure 2 shows the changes at ground level. They were pretty dramatic.

living2

Figure 2. Before and after drain restoration.

To estimate the impact of these changes we examined changes in house prices in the area. We used a statistical model to separate out the various influences on house prices, so that we could isolate the influence of the drain restoration.

This approach means that we are capturing the benefits to local residents, but not possible benefits to others, and not ecological benefits that local residents are unaware of. We expect that the measured benefits would include aspects of amenity, recreation and environmental values.

The results were really interesting, and somewhat surprising in their magnitudes. We found that the restoration project had an influence on property prices over a distance of about 200 metres from the creek. Given that the restored section of the creek was about 320 metres long, quite a large number of property values were affected.

In the first few years after project commencement, property values in the area actually fell, probably reflecting a negative attitude to the substantial earthworks that were required.

However, by 2007 the impact had become very positive. On average, the sale prices of houses in the area rose eventually by an average of 3.9 to 4.7% due directly to the restoration project. Considering only these benefits, the costs of the project were only about 25 to 50% of the benefits.

Overall, the results were very encouraging about the prospects for this type of project to deliver worthwhile benefits to the community.

Further reading

Polyakov, M., Fogarty, J., Zhang, F., Pandit, R. and Pannell, D. (2016). The value of restoring urban drains to living streams, Water Resources and Economics Journal web site ♦ IDEAS page

297 – You can own a critically endangered species

Here’s another quick follow up to my post on Monday about the value of a threatened species. Ross Allen contacted me to say that he had received a present of a Wollemi Pine in a pot. The interesting thing is that the Wollemi Pine is one of Australia’s 148 critically endangered plants.

It turns out that you can buy a Wollemi Pine pot plant online. Here’s the short blurb from www.wollemipine.com.

The Wollemi Pine is one of the world’s oldest and rarest plants dating back to the time of the dinosaurs. With less than 100 adult trees known to exist in the wild, the Wollemi Pine is now the focus of extensive research to safeguard its survival. 

And here is why they are doing it:

wollemi

Photo: Akerbeltz

Assist in the conservation effort by growing your own Wollemi Pine and becoming part of one of the most dramatic comebacks in natural history.

The mission of Wollemi Australia Pty Ltd is to distribute the Wollemi Pine worldwide ensuring the longevity of the plant for future generations and returning royalties to fund conservation of the Wollemi Pine in the wild and assist other threatened and endangered species.

The Botanic Gardens Trust (Sydney) has licensed Wollemi Australia Pty Ltd to propagate and market the Wollemi Pine in Australia and internationally. 

That’s a pretty interesting use of the market economy to help preserve a species. It looks like they are even selling them into Europe and soon Japan. I hope they don’t become a feral species over there!

Obviously, this strategy wouldn’t work for all threatened species. Luckily for Wollemi Pines, they’re interesting looking, apparently can be successfully propagated, and it’s not the end of the world if Ross doesn’t have a green thumb. I don’t think I’ll be allowed to buy a Western Swamp Tortoise any time soon.

296 – Endangered species stamps

Walking past the post office this morning I saw that they are selling a new collection of stamps featuring endangered wildlife. “What a coincidence”, I thought. As a quick follow up to my last Pannell Discussion, I thought I’d share images of the stamps here.

The fact that Australia Post has put these  stamps out seems to support my observation that endangered species are one aspect of the environment that connects relatively well with the general public.

stamps

There are seven stamps, including four animals from Australia, two from Asia and one from Africa.

speciesmap

Australia Post has done a beautiful job in the design of these stamps. It seems like they’ve also done a good job in providing materials for school teachers to base lessons on these stamps and on the general issues of endangered wildlife. Their web site provides some basic facts and a range of resources that look pretty interesting. The pity, though, is that so few physical letters get posted these days that the impact of a stamp series like this can’t be all that large. I wonder how many people will actually receive one of these stamps in their letterbox.