by Dr. Roy Cordato
Senior Economist, Emeritas
Weekly John Locke Foundation research division newsletter focusing on environmental issues.
The newsletter highlights relevant analysis done by the JLF and other think tanks as well as items in the news.
1. New study out of the UK shows little risk of water contamination from natural gas drilling technique known as "fracking"
A new study published by the UK’s Department of Energy and Climate Change concludes that "’the likelihood of contamination of drinking water in aquifers due to fractures when there is a separation of more than a kilometer is negligible’ because there is no path for fracking water to reach ground water…" This is according to a news report in the Wall Street Journal and reprinted here. The study examined eight different hydraulic fracturing operations in Europe, the US, and Africa. Optimal geological conditions occur at a depth of 2 to 3 kilometers below ground water aquifers, much deeper than what the study considers to be a safe depth. This study has particular relevance for North Carolina because of possible natural gas deposits that can be accessed using the hydraulic fracturing technique and that are thought to exist in Lee and Moore Counties. At the present time, use of the technique is not allowed in North Carolina, but the General Assembly will be considering lifting the ban and creating a regulatory regime under which exploration and drilling can proceed.
2. Catch shares could help protect NC fisheries — fighting the tragedy of the commons
It is a well-known proposition that ocean fishing suffers from what economists call a "tragedy of the commons." This is the idea that when there are not specific property rights to a resource, in this case fish in the ocean, the resource will be over-consumed. The problem that this creates with ocean fishing is that there is a "race to fish." Any given fisherman will try to catch as many fish as he can as fast as he can because he knows that, if he doesn’t take the fish, another fisherman will.
My colleague, JLF’s Director of Regulatory Studies Jon Sanders, takes a look at a program that is being implemented in fisheries around the United States called "catch shares." The idea is to try to solve the commons problem by establishing property rights to fish. This is done by establishing a total allowable catch in a fishery and then distributing guaranteed rights to a portion of that total to individual fishermen. This creates an incentive to space out one’s catch over time and to take only fish that are the most profitable. Part of this program would include permit trading, which would imply that fishermen who may not be able to use their entire allotment could sell what they are not able to use to others who would bid for the "shares." This would establish a market for the shares themselves with prices established by supply and demand. According to Sanders, "Catch shares’ potential to halt and maybe even reverse this collapse of fisheries would have resounding economic effects."
3. Ozone Report
The 2012 ozone season began on April 1 and each week during the ozone season this newsletter will report how many, if any, high ozone days had been experienced throughout the state during the previous week, where they were experienced, and how many have been recorded during the entire season to date. The ozone season will end on October 31. All reported data is from the North Carolina Division of Air Quality, which is part of the state’s Department of Environment and Natural Resources. During the period April 23rd to April 29th there were no reported high ozone readings on any of the state’s monitors and there have been none thus far this season.
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