Wednesday, March 26, 2014

An Agricultural Law Jeremiad: The Harvest Is Past, the Summer Is Ended, and Seed Is Not Saved

James Ming Chen, An Agricultural Law Jeremiad: The Harvest Is Past, the Summer Is Ended, and Seed Is Not Saved, 2014 Wisconsin Law Review (forthcoming), available at http://ssrn.com/abstract=2387998 or http://bit.ly/SeedIsNotSaved, and to be presented on March 26, 2014, at the University of Michigan Law School's Intellectual Property Workshop:

SoybeansThe saving of seed exerts a powerful rhetorical grip on American agricultural law and policy. Simply put, farmers want to save seed. Many farmers, and many of their advocates, believe that saving seed is essential to farming. But it is not. Farmers today often buy seed, just as they buy other agricultural inputs. That way lies the path of economic and technological evolution in agriculture. Seed-saving advocates protest that compelling farmers to buy seed every season effectively subjects them to a form of serfdom. So be it. Intellectual property law concerns the progress of science and the useful arts. Collateral economic and social damage, in the form of affronts to the agrarian ego, is of no valid legal concern. The harvest is past, the summer is ended, and seed is not saved.

Thursday, March 20, 2014

Flagging prospect theory

Prospect theory

James Ming Chen, Flagging Prospect Theory, available at http://www.ssrn.com/abstract=2216916 or http://bit.ly/FlaggingProspectTheory:

The basic tenets of prospect theory, a bedrock principle of behavioral economics, can be illustrated by what Daniel Kahneman has called prospect theory’s "flag": an asymmetrical sigmoid curve whose inflection point occurs at the origin (thus reflecting human beings' adaptation level relative to their starting economic position), whose slope to the left of the origin is discernibly steeper than its slope to the right (thus reflecting loss aversion), and whose upper and lower asymptotes reflect diminishing sensitivity to losses as well as gains.

This paper describes a surprisingly simple and supple method for parametrically modeling prospect theory with closed-form expressions and elementary functions. It accomplishes this task by transforming the cumulative distribution function of the log-logistic distribution. In plainer language, this paper “draws” the flag of prospect theory with the simplest available mathematical functions and the minimum amount of algebraic manipulation needed to generate that flag. The resulting formula can expressed with exactly two parameters. That formula can be readily modified to fit empirical data garnered in support of nearly any hypothesis informed by prospect theory.

Friday, March 07, 2014

Louis Fisher, The Law of the Executive Branch: Presidential Power

Oxford University Press has kindly added a new item to the Jurisdynamics Network's bookshelf: Louis Fisher, The Law of the Executive Branch Presidential Power, part of the new series, Oxford Commentaries on American Law. A description of Presidential Power, drawn from Oxford's blurb, follows.




Presidential PowerFrom the framing of the Constitution to the present day, politicians, scholars, and the public have disputed the precise scope of presidential authority in the United States. Epic struggles have tested the bases for presidential appointment and removal, the President's power over the military and as Commander-in-Chief of American forces, and the President's ability to conceal the identity of those who have advised him in evaluating and making policy. The law of the executive branch covers not just the White House, but all executive staff and all of the agencies of the United States.

This book reviews all sources of the law of the executive branch, from the text of the Constitution and the intent of its framers through more than two centuries of practice and tradition. Louis Fisher reviews case law, presidential initiatives, congressional statutes, and public and international sources to inform his own interpretation of legitimate versus illegitimate exercises of power, The book addresses the full range of presidential controversies, including unilateral presidential wars, the state secrets privilege, claims of "inherent" power beyond the reach of the other branches of government, and executive privilege.

Monday, March 03, 2014

Daniel Shaviro, Fixing U.S. International Taxation

Oxford University Press has very generously added Daniel N. Shaviro, Fixing U.S. International Taxation (2014) to the Jurisdynamics Network bookshelf. A brief description, drawn from Oxford's blurb for this book, follows.




Fixing International Tax

Through Fixing U.S. International Taxation, Daniel Shaviro has undertaking a thorough reconceptualization of the United States' approach to international tax law and policy. The United States has compounded the longstanding and sterile debate over international taxation, which is stuck in an obsessive rut over putative "double taxation." The current debate locks tax policy into an all-or-nothing choice between global or residence-based taxation of American companies coupled with foreign tax credits, on one hand, and outright exemption of foreign source income, on the other hand. Rejecting both solutions and, indeed, the entire framework, Shaviro proposes a complete reformulation in the hope of reshaping the treatment of foreign taxes and the determination of tax rates on foreign source income. As a matter of methodology, this volume unites international taxation with the literature on public economics and international trade.

Wednesday, February 05, 2014

Arbitration as an article of constitutional faith

James Ming Chen, Arbitration as an Article of Constitutional Faith, available at http://ssrn.com/abstract=2391075:

Arbitration and the ConstitutionScarcely any legal question arises in the United States that is not resolved, sooner or later, through arbitration. If Alexis de Tocqueville could survey contemporary American legal culture, he would rub his eyes with amazement at the privatization of adjudication across a wide swath of issues previously committed to judicial resolution. From trade disputes posing serious questions of economic diplomacy to consumer contracts adhering to cell phones and credit cards, mandatory arbitration has displaced conventional adjudication. In the country that de Tocqueville characterized as driven by its dedication to constitutional lawmaking through litigation, arbitration has become a dominant form of dispute resolution with little if any direct doctrinal influence by federal constitutional law. This is the overriding theme of Peter B. Rutledge’s new book, Arbitration and the Constitution.

I also discussed at the American Enterprise Institute and Federalist Society's March 26, 2013, forum on Arbitration and the Constitution. The video archive of my contribution to that forum appears below:

Sunday, February 02, 2014

Pinwheel of Fortune

Geico pig

James Ming Chen, Pinwheel of Fortune, available at http://ssrn.com/abstract=2389555 and http://bit.ly/PinwheelOfFortune:

In principle, neither the global environment nor personal health should come down to gambling. In practice, however, both the law of global biodiversity protection and the constitutional debate on the Patient Protection and Affordable Care Act (PPACA) rest on astoundingly risk-seeking assumptions. Charged with conserving the global biospheric commons, the international community seems eager to place deep, out-of-the-money bets on bioprospecting of rare and endangered species for pharmaceutical gain. The truly desperate state of biodiversity and climate change law has apparently prompted some very rich countries (especially the United States) to behave as if these sources of truly irreparable environmental harm defy meaningful precautions.

Within America’s own borders, the constitutional law of public health strikes a comparably risk-seeking pose. Although National Federation of Independent Business v. Sebelius upheld the PPACA as an exercise of the federal government's taxing authority, it reasoned that a directive aimed at uninsured individuals to buy health insurance lay beyond the power of Congress to regulate interstate commerce. If Congress may not compel people to buy health insurance, precisely because those individuals believe that they are better off bearing the relatively modest risk of catastrophic illness or injury, Congress may not have constitutional power to compel wage-earners to accept annuities or annuity-like income streams.

International environmental law and American health law act perversely precisely because they force life-and-death choices at the very points where emotion overrides reason. These otherwise baffling phenomena manifest different facets of prospect theory, the leading behavioral account of risk aversion and risk-seeking. These two bodies of law provide enough material to cover the entire pinwheel-shaped “fourfold pattern” that defines prospect theory. So spins the law’s pinwheel of fortune.

Saturday, January 25, 2014

Coherence and elicitability in measures of market risk

Black swan

James Ming Chen, Coherence Versus Elicitability in Measures of Market Risk, available at http://ssrn.com/abstract=2385137 and http://bit.ly/CoherenceElicitability:

The Basel II and III accords prescribe distinct measures of market risk in the trading book of regulated financial institutions. Basel II has embraced value-at-risk (VaR) analysis, while Basel III has suggested that VaR be replaced by a different measure of risk, expected shortfall. These measures of risk suffer from mutually irreconcilable flaws. VaR fails to satisfy the conditions required of coherent measures of risk. Conversely, expected shortfall fails the mathematical requirements for elicitability. Mathematical limitations therefore force a choice between theoretically sound aggregation of risks and reliable backtesting of risk forecasts against historical observations.

This research note is a condensed version of Measuring Market Risk Under Basel II, 2.5, and III: VaR, Stressed VaR, and Expected Shortfall, a full working paper posted at http://ssrn.com/abstract=2252463.

The Jurisdynamics bookbag: Flinders, Defending Politics, and Fatovic & Kleinerman, Extra-Legal Power and Legitimacy

Jurisdynamics is pleased to note two books from its mailbox, one from a little while back; the other, brand new.

Matthew Flinders, Defending Politics: Why Democracy Matters in the Twenty-First Century posts a classic apologia for politics. From the Oxford University Press blurb:

Defending Politics

Citizens around the world have become distrustful of politicians, skeptical about democratic institutions, and disillusioned about the capacity of democratic politics to resolve pressing social concerns. Many feel as if something has gone seriously wrong with democracy. Those sentiments are especially high in the U.S. as the 2012 election draws closer. In 2008, President Barack Obama ran — and won — on a promise of hope and change for a better country. Four years later, that dream for hope and change seems to be waning by the minute. Instead, disillusionment grows with the Obama adminstration's achievements, or depending where you fall on the spectrum, its lack thereof.

Defending Politics meets this contemporary pessimism about the political process head on. In doing so, it aims to cultivate a shift from the negativity that appears to dominate public life towards a more buoyant and engaged "politics of optimism." Matthew Flinders makes an unfashionable but incredibly important argument of utmost simplicity: democratic politics delivers far more than most members of the public appear to acknowledge and understand. If more and more people are disappointed with what modern democratic politics delivers, is it possible that the fault lies with those who demand too much, fail to acknowledge the essence of democratic engagement, and ignore the complexities of governing in the twentieth century? Is it possible that the public in many advanced liberal democracies have become "democratically decadent," that they take what democratic politics delivers for granted? Would politics appear in a better light if we all spent less time emphasizing our individual rights and more time reflecting on our responsibilities to society and future generations?

Disillusionment with politics is a perennial, even perpetual theme. When even Glenn Beck laments its excesses, books such as Defending Politics will find a welcome home on our shelves.




Of more recent vintage is a volume edited by Clement Fatovic and Benjamin A. Kleinerman, Extra-Legal Power and Legitimacy: Perspectives on Prerogative. Again from Oxford University Press's blurb:

Extra-Legal PowerConstitutional systems aim to regulate government behavior through stable and predictable laws, but when their citizens' freedom, security, and stability are threatened by exigencies, often the government must take extraordinary action regardless of whether it has the legal authority to do so. Extra-Legal Power and Legitimacy: Perspectives on Prerogative … examine[s] the costs and benefits associated with different ways that governments have wielded extra-legal powers in times of emergency. They survey distinct models of emergency governments and draw diverse and conflicting approaches by joining influential thinkers into conversation with one another. Chapters by eminent scholars illustrate the earliest frameworks of prerogative, analyze American perspectives on executive discretion and extraordinary power, and explore the implications and importance of deliberating over the limitations and proportionality of prerogative power in contemporary liberal democracy.

Though more narrow in its focus than Defending Politics, this collection of essays highlights a core concern in the post-September 11 era. From covert intelligence to overt power, contemporary politics transcends traditional legal limits on the use of force. Jurisdynamics commends both of these volumes to its readers' attention.

Friday, December 27, 2013

Recent additions to the Jurisdynamics Network's bookshelf

The Jurisdynamics Network has received two radically different but equally intriguing new books, both from Oxford University Press.

Regulating obesityW.A. Bogart, Regulating Obesity? Government, Society, and Questions of Health (2014) is a worthy successor to the same author's 2010 monograph, Permit But Discourage: Regulating Excessive Consumption. Bogart, a professor of law at the University of Windsor, argues that laws aimed at promoting healthier lifestyles by encouraging weight loss have mostly failed. Instead of preventing obesity, these laws have merely fueled prejudice against fat people. Oxford's summary captures the essence of Professor Bogart's call for "shifting norms away from stigmatization of the obese and towards more nutritious and healthy lifestyle habits in addition to the acceptance of bodies in all shapes and sizes":

Part of this challenge lies in the complex effects of law and its relationship with norms, including the unintended consequences of regulation. Regulating Obesity? begins by arguing for the protection of the overweight and obese from discrimination through human rights laws. It then examines three other areas of interventions — marketing, fiscal policy, and physical activity — and how these interventions operate within the context of "health equity." Professor Bogart evaluates the effectiveness of legal regulation in addressing obesity and concludes that a healthier population is more important than a thinner population. Regulating Obesity? is the first book to engage in the comprehensive evaluation of this role for law and the implications of society's fascination with regulating consumption.

Oxford's second offering is Robert H. Wagstaff, Terror Detentions and the Rule of Law: US and UK Perspectives (2013). Again, from Oxford's summary:

After the 9/11 terrorist attacks, the United States and the United Kingdom detained suspected terrorists in a manner incompatible with the due process, fair trial, and equality requirements of the Rule of Law. The legality of the detentions was challenged and found wanting by the highest courts in the US and UK. The US courts approached these questions as matters within the law of war, whereas the UK courts examined them within a human rights criminal law context.

In Terror Detentions and the Rule of Law: US and UK Perspectives, Dr. Robert H. Wagstaff documents President George W. Bush's and Prime Minister Tony Blair's responses to 9/11, alleging that they failed to protect the human rights of individuals suspected of terrorist activity. The analytical focus is on the four US Supreme Court decisions involving detentions in Guantanamo Bay and four House of Lords decisions involving detentions that began in the Belmarsh Prison. These decisions are analyzed within the contexts of history, criminal law, constitutional law, human rights and international law, and various jurisprudential perspectives. In this book Dr. Wagstaff argues that time-tested criminal law is the normatively correct and most effective means for dealing with suspected terrorists. He also suggests that preventive, indefinite detention of terrorist suspects upon suspicion of wrongdoing contravenes the domestic and international Rule of Law, treaties and customary international law. As such, new legal paradigms for addressing terrorism are shown to be normatively invalid, illegal, unconstitutional, counter-productive, and in conflict with the Rule of Law.

Tuesday, September 17, 2013

CPRBlog: House Republicans to hold hearing on climate change, can I get a witness?

Wednesday, July 17, 2013

"Fundamentally Changing the Conversation About the Economic Value of Legal Education"

Like any educators, law professors need to be open to criticism. We need to find ways to make legal knowledge more accessible and effective, to serve the public interest. To the extent the costs of education are too high, we need to address that, too. However, we also need to fully understand the data fueling calls for cost-cutting. A paper co-authored by a former colleague of mine is a major step toward such clarification. In fact, I agree with Brian Leiter that it should "fundamentally change the conversation about the economic value of legal education." From the abstract:
[G]iven current tuition levels, the median and even 25th percentile annual earnings premiums justify enrollment. For most law school graduates, the net present value of a law degree typically exceeds its cost by hundreds of thousands of dollars.
We improve upon previous studies by tracking lifetime earnings of a large sample of law degree holders. Previous studies focused on starting salaries, generic professional degree holders, or the subset of law degree holders who practice law. We also include unemployment and disability risk rather than assume continuous full time employment.
After controlling for observable ability sorting, we find that a law degree is associated with a 60 percent median increase in monthly earnings and 50 percent increase in median hourly wages. The mean annual earnings premium of a law degree is approximately $53,300 in 2012 dollars. The law degree earnings premium is cyclical and recent years are within historic norms.
I plan on blogging about various aspects of this paper in coming weeks and months. At the outset, I just want to note: I don't share Simkovic's outlook on many matters, including, say, his proposal for risk-based student loans (which is a bit too close to Rick Scott's education agenda for my comfort). I am much closer to the Bady/Konczal view of the role of education (and the state in funding it). I think Simkovic & McIntyre may be too sanguine about the politically driven changes in demand for legal services. (Regardless of how well law schools teach and train, there will be less demand for lawyers in an era of corporate impunity.) Nevertheless, I am deeply impressed with the paper (and the authors' PowerPoint presentation anticipating many critics' concerns). This is important work that should be carefully considered by anyone proposing deep changes in legal education.

Saturday, April 20, 2013

Portfolio Theory as a Pattern of Timeless Moments

Timeless moments

Jim Chen, Portfolio Theory as a Pattern of Timeless Moments, available at http://ssrn.com/abstract=2254244:

Quantitative finance traces its roots to modern portfolio theory. Despite the deficiencies of modern portfolio theory, mean-variance optimization nevertheless continues to form the basis for contemporary finance. The term "postmodern portfolio theory" expresses many of the theoretical advances in financial learning since the original articulation of modern portfolio theory. Any complete overview of financial risk management must address all aspects of portfolio theory, from the beautiful symmetries of modern portfolio theory to the disturbing behavioral insights and the vastly expanded mathematical arsenal of the postmodern critique. This article surveys portfolio theory, from its modern origins through more sophisticated, “postmodern” incarnations, according to the first four moments of any statistical distribution: mean, variance, skewness, and excess kurtosis. Mastery of these quantitative tools and associated behavioral insights holds the key to the efficient frontier of risk management.

Wednesday, April 17, 2013

Measuring Market Risk Under Basel II, 2.5, and III: VAR, Stressed VAR, and Expected Shortfall

Returns

Jim Chen, Measuring Market Risk Under Basel II, 2.5, and III: VaR, Stressed VaR, and Expected Shortfall, available at http://ssrn.com/abstract=2252463:

Each of the most recent accords of the Basel Committee on Banking Regulation, known as Basel II, 2.5, and II, has embraced a different primary measure of market risk in global banking regulation: traditional value-at-risk (VaR), stressed VaR, and expected shortfall. After introducing the mathematics of VaR and expected shortfall, this note will evaluate how well the reforms embraced by Basel 2.5 and III — stressed VaR and expected shortfall — have addressed longstanding regulatory concerns with traditional VaR.

Part I describes the calculation of VaR in its conventional form. For illustrative purposes, Part I will describe parametric VaR on a Gaussian distribution. Part II summarizes known weaknesses in VaR, from inherent model and estimation risk to VaR’s failure to perform under extreme economic stress and VaR’s failure to satisfy the theoretical constraints on “coherent” measurements of risk. Part III describes how to calculate expected shortfall as an extension of conditional VaR. It further describes how expected shortfall, but not VaR, provides a coherent measure of risk. Part III then reverses field. It explains how VaR, but not expected shortfall (or, for that matter, nearly every other general spectral measure of risk), satisfies the mathematical requirement of “elicitability.” Mathematical limitations on measures of risk therefore force regulators and bankers to choose between coherence and elicitability, between theoretically sound consolidation of diverse risks (on one hand) and reliable backtesting of risk forecasts against historical observations.

Monday, January 07, 2013

CPRBlog: The Long Goodbye: On Seeing the Sundarban Islands

CPRBlog: The Long Goodbye: On Seeing the Sundarban Islands

The Ganges River begins at the foot of the Gangotri Glacier in the Himalayas and culminates at the Sundarbans Delta, a massive sprawl of swamps, lakes, and scores of islands. (Find an earlier post on the Ganges here.) It’s the largest river delta in the world—home to endangered Bengal tigers, miles of mangroves, and nearly 12 million people (4.5 million on the Indian side and 7.5 million on the Bangladeshi side).
A student of the Mississippi River Delta, I had long wanted to visit the Sundarban Islands. So after giving a series of lectures in Kolkata, I accepted an invitation to visit some of the islands on a medical boat, operated by the Southern Health Improvement Samity, an organization in West Bengal that delivers health-care services to island villagers.

The experience was one of the high points of my semester sabbatical, which has now drawn to a close. The people were lovely. I chatted with a group of young girls about their new school building, which doubles as a safe house in times of flood. I learned about off-the-grid power from a farmer who had recently installed solar panels on the thatch of his mud hut. A local activist taught me about a program that employs women to grow mangrove saplings and replant them on fragile shores. And the lush forests were idyllic (once you looked past the plastic netting designed to keep the tigers in).

Still, it was hard to ignore that these wonderful people and beautiful surroundings are slowly being swallowed by rising seas—just one of the many casualties of climate change. Some islands have already slipped below the water line. In the last decade thousands of villagers have been displaced. The consequences will unfold over decades.

It will be a long goodbye.

And not the only one. So many places, from Micronesia to Miami, are at risk. Part of letting go will involve complex logistics: identifying the places and species to abandon, orchestrating our retreats, planning the resettlement. The other part will be the heartbreak.

How will we deal with the pain of saying goodbye? Will we behave like the orphaned children in psychological studies, the ones who refuse to attach to anyone nice for fear of being abandoned again? Will we stop caring about our favorite coastlines, our storied cities, the world’s cultures, because the possibility of losing them (and knowing we’re to blame) is just too much for us to stomach?

I hope not. If we give up now, we’ll lose what we might have saved with reasonable efforts. And we will have surrendered the reward of knowing and loving the things that matter.

In times like these, we need a shot of Rabindranath Tagore, the Bengali poet and Nobel laureate:

Let me not pray to be sheltered from dangers,
but to be fearless in facing them.
Let me not beg for the stilling of my pain, but
for the heart to conquer it.


Robert Verchick, Gauthier-St. Martin Chair in Environmental Law, Loyola University, New Orleans. Bio.

Thursday, December 20, 2012

Sweating the Small Stuff: Indiam Villages Plan for Climate Change

Sweating the Small Stuff: Indian Villages Plan for Climate Change

Cross-posted from CPRBlog.

In October, I wrote about the city of Surat, the diamond-polishing capital of India, and its battle against climate change. Recently I had the chance to visit another municipality working on adaptation, a place known more for its postage stamp farms and wandering livestock than jewelry and textiles. It’s called Gorakhpur, and is located in the flood-prone state of Uttar Pradesh, near the India-Nepal border.

I first visited Gorakhpur nearly 25 years ago--when I was a long-haired backpacker and Gorakhpur was a muddy stop on the way to Kathmandu. Some things there haven’t changed. The streets are still muddy. Tea stalls and tarpaulin tents still line the streets, illuminated by the blue flames of cook stoves. At my business hotel, electricity was as unreliable as ever, and the telephones still crackled and hissed. Each morning, I would greet a dozen or so cows grazing on a hillock of garbage outside the hotel gate. (The city still has no regular solid waste collection).

But Gorakhpur has also changed in important ways. The city has over four hundred thousand people, with millions more in the surrounding district. There are malls, cineplexes, fast-food joints, and pizzerias! What began as a small urban core has spread erratically, encroaching upon lakes, marshes, and scores of farm villages—all held together by a hectic flow of traffic and a mighty, tea-stained dome of hydrocarbons.

Like many communities in these arid plains, Gorakhpur suffers from flash floods in the rainy season which lead to “water logging,” a saturation of poorly drained soil that can ruin a season of farming. Faulty drainage channels and unmanaged garbage increase water logging as well as the related incidence of disease. Residents—who have always battled malaria and dysentery—are now seeing a rise in diarrhea, hepatitis, and Japanese encephalitis. These trends will increase as population and development grow. In addition, the rising temperatures and stronger rains associated with climate change will intensify these effects in dangerous but unpredictable ways.

To learn more, I met with a long-time community organization called the Gorakhpur Environmental Action Group (GEAG) that is now helping farmers in the urban fringe to prepare for these growing risks. (GEAG released a preliminary report, “Toward a Resilient Gorakhpur,” in 2010.) Like the climate initiative in Surat, GEAG’s work is supported by the Asian Cities Climate Change Resilience Network (ACCCRN) and funded by the Rockefeller Foundation.

GEAG knows that Gorakhpur presents a spider’s web of institutional, environmental, and technical challenges, of which climate change is just a part. So the group wisely focuses on issues that, while related to climate, immediately and tangibly affect the lives of village residents. GEAG also emphasizes community activism and government accountability.

Accompanied by GEAG members Monojeet Ghoshal and Pragya Tiwari, I toured a couple of villages were progress is being made. I spoke with farmers about changes they have noticed in rain patterns and I saw an array of compact innovations designed to deliver high benefit at affordable cost. Residents here are learning to sweat the small stuff.

For instance, stone-and-brick storm drains now line most pedestrian roads and alleys; and, unbelievably, nearly all appear to be functioning. New buildings are elevated and built to standards suggested by GEAG engineers. The hand pump at the neighborhood well had been reset on concrete steps many inches above the flood line to insure that drinking water is available even after harsh rains. Many vegetable farmers have begun growing two sets of crops—one on the ground, which is still prone to flood, and another on a frame of overhead “lofts” to support plants that grow on climbing vines. (One popular crop looked something like okra.)

But this is a story about much more than technology. Even the smallest changes to public space, from repaired drains to elevated pumps, require consistent pressure on the municipal government that too often avoids “village issues.” With the help of GEAG staffers, villagers I met had learned to organize efficiently, monitor their village infrastructure, and hold officials responsible. When plastic bags and other waste clogged their storm drains, the community appointed members to patrol the roads each week and record every instance of a blocked gutter or malfunctioning well; they would then deliver the information in a binder to the official in charge—repeatedly—until action was taken.

To be sure, India needs big ideas too. Some, like environmentally sensitive irrigation techniques and improved seed varieties could yield large benefits. Others seem misguided. (Investors, for instance, have encouraged the Indian Parliament to open financial markets to weather derivatives, an idea I mentioned in an earlier post. Some economists believe derivatives trading could help village farmers hedge against poor harvests due to bad weather. But the financial and agricultural experts I’ve talked with in India are doubtful. Making good financial “bets” requires access to meteorological data and statistical skills that village farmers just don’t have, and such markets might invite corruption.)

But climate adaptation is coming to India—to rich cities like Surat and poor transitional cities like Gorakhpur. The key, as with many important ideas, will be sound implementation and improved governance.

Robert Verchick is the author of Facing Catastrophe: Environmental Action for a Post-Katrina World.

Wednesday, November 21, 2012

Happy Thanksgiving

Happy Thanksgiving

Currier and Ives, Home to Thanksgiving (1867)

Wednesday, November 14, 2012

Delhi Blues

Delhi Blues

Cross-posted from CPRBlog.

Last weekend my son took part in a set of Boy Scout activities with his local Delhi scout troop. On the grounds of the former residence of the U.S. ambassador, the boys prepared a kabob lunch, practiced fire making, and even built a Medieval-style trebuchet. But all I could think about were the little striped mosquitoes that seemed to follow the kids everywhere—Asian Tiger mosquitoes, to be exact, the kind that carry dengue fever.



In New Delhi, dengue (DEN-gay) has reached epidemic proportions. The scouts, I’m happy to say, completed their tour without infection, thanks to lots of lotion, spray, and smoky coils. But not everyone was so lucky. I know at least five people who have been confined to bed for two weeks of fever, headaches, and joint pain. (My medical traveler’s guide says it feels as if “knitting needles have been driven into every joint of [your] body.”) The New York Times reported last week that Delhi hospitals “are overrun and feverish patients are sharing beds and languishing in hallways.” The illness, which in extreme forms can require blood transfusions and even kill, is breaking out all over the country. Official reports say that this year 30,002 people in India have fallen ill with dengue through October. But experts believe the real number is around 37 million.

And last week, we had what I call the “Monster Smog,” a week-long haze of smoke and diesel fumes that the Financial Times described as “the worst occurrence of air pollution in a city long accustomed to dirty air, with the density of dust particles in some places reaching 30 times the guidelines set by the World Health Organisation.” City hospitals were once again overrun. Three Supreme Court Justices pledged to investigate the affair. The cause of the Monster Smog apparently involved some mix of tailpipe emissions, field burning in neighboring states, a lack of wind, and an unusual amount of moisture in the air.

Now with events like these, my “climate” radar goes up. I think of the mounting concern among health experts that warmer temperatures could broaden the reach and lengthen the season of mosquito-borne illnesses in some parts of India. Or the possibility that changes in air temperature and wind patterns will thicken India’s urban smog. (For examples of both, see this report.) And I think of how cities like New Delhi must begin to adapt to a changing climate.

I know such thinking just adds to the moral and logistical complexity of modern life. In this way, I am only slightly less annoying than that guy at the seafood restaurant who consults his “Seafood Watch” phone app at the table and warns his guests about the Chilean Seabass. (O.K., I did that once, but never again.)

Causing annoyance is one thing. But in my conversations on climate policy in India, I have sometimes felt that climate adaptation strikes people as tedious and boring. For instance, at a recent gathering of development experts here in New Delhi, I asked one of the speakers how global development strategies in Asia might change as interest in climate adaptation grows.

After expressing skepticism toward the international adaptation agenda (“code,” he said, for relieving rich nations of their duty to curb emissions), he explained that in developing countries increasing climate resilience was not that different from ordinary development. It was important, yes, but not conceptually challenging. As a policy, adaption was “just not that interesting.”

I can appreciate the point. Development has always been about insulating society from the vagaries of nature. That’s what air conditioning and insurance polices are for. Why burden basic development efforts with extra tweaking? It’s one thing for New York City to wonder how to protect its subways from higher seas in 2050. But many cities in India don’t even have public transportation. Or sewage treatment plants, or sufficient air quality monitoring, or available hospital beds, or any number of basic services Americans taken for granted. Isn’t any improvement in water management or air quality or health care also, at this stage in the game, a step toward climate resilience?

Yes, but it’s not nearly enough. In order to cope with climatic change, developing nations need to some idea of what the vulnerabilities are and what regions are more at risk. That requires huge investments in regional climate modeling, ecosystem evaluation, and public health monitoring. Few countries in the developing world have adequate resources in these areas. Understanding the possible effects of climate change on the spread of dengue in India, to take one example, would require regionalized information about trends in temperature, humidity, rain patterns, land surface hydrology, insect life-cycles, and human behavior. Experts now studying the issue are still in only the beginning stages.

In addition to assessing vulnerability, developing countries will also require decision-making tools that allow citizens and their representatives to manage climate-based risk in the face of uncertainty. They will need strategies, appropriate to their regions and cultures, for evaluating performance and revising their plans when new information arises.

My fear is that many in the halls of power and finance will see fancy computer models and special decision-making tools as “luxuries” that only cities like New York and London can afford. That would be a shame. Remember the motto: Be Prepared.

Robert Verchick is the author of Facing Catastrophe: Environmental Action for a Post-Katrina World

Friday, November 09, 2012

The 2012 elections' biggest winner? In a landslide, big data and Nate Silver

A CBS News profile of Nate Silver, author of 538.

Lest the signal be lost amid the noise, we should now acknowledge one of the most decisive victories of the 2012 elections:

It was not on any ballot, but one of the biggest election contests this week pitted pundits against pollsters. It was a pitched battle between two self-assured rivals: those who relied on an unscientific mixture of experience, anecdotal details and “Spidey sense,” and those who stuck to cold, hard numbers.

When the results were tabulated, it became clear that data had bested divination.

The election results that delivered a second term to President Obama on Tuesday left some well-known pundits, many of whom have a partisan bent, eating crow on Wednesday morning — including analysts like Karl Rove, Dick Morris and Michael Barone, all of whom had confidently predicted a victory by Mitt Romney.

The results were much kinder to pollsters and the data devotees who aggregate and average polls, or who use mathematical models to make projections.

The triumph of polling over punditry was staggering in its scale. Nate Silver, author of 538 and The Signal and the Noise: Why So Many Predictions Fail — But Some Don't, ruled supreme. The following comparison of Silver's "538" model and actual vote tallies shows how the "king of the quants" nailed 50 states out of 50:

538 versus the final tally

Those interested in winning future presidential elections — I'll even give the benefit of the doubt to a Republican Party that otherwise seems determined to commit demographic political suicide — might consider treating the Electoral College as a strategic game demanding simple combinatoric theory with detailed political data:

Electoral College strategy

If this election settles just one thing, it should be the end of Karl Rove's political credibility. Alas, like the mirage of grand transformation in the Grand Old Party, not all that glitters in this quantitative age of Silver … is gold.

Thursday, November 08, 2012

Now that the election is over, Sheldon Adelson's other shoe may drop

Sheldon Adelson

Casino magnate Sheldon Adelson bankrolled Republican candidates and causes in the 2012 election and rolled snake eyes. Recent legal developments may give this megadonor of the super-PAC era additional reason to worry: newfound competition from online gambling.

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), 31 U.S.C. §§ 5361-5366, has been widely regarded as a legal firewall against online gambling. If banks can't process payments for games of chance, that business would face a formidable legal barrier. Moreover, as Judge Thomas Shadrick of Portsmouth, Va., has reasoned, games such as poker are games of chance notwithstanding the element of skill, because each hand's success depends on an irreducible random element.

The first crack in this legal edifice appeared in December 2011. Reversing its previous position, the Department of Justice issued a new opinion that the Interstate Wire Act of 1961, 18 U.S.C. § 1084, applies only to sports betting.

In August 2012, Judge Jack Weinstein of the U.S. District Court delivered an even more serious blow to the UIGEA/Wire Act edifice. Judge Weinstein reasoned that poker is a game of skill and therefore falls outside the scope of the UIGEA. Judge Weinstein cited Rogier Potter van Loon et al., Beyond Chance? The Persistence of Performance in Online Poker. That paper's central finding, based on a deep database of poker hands, is as follows:

A major issue in the widespread controversy about the legality of poker and the appropriate taxation of winnings is whether poker should be considered a game of skill or a game of chance. To inform this debate we present an analysis into the role of skill in the performance of online poker players, using a large database with hundreds of millions of player-hand observations from real money ring games at three different stakes levels. . . . Our results suggest that skill is an important factor in online poker.

If John Boehner fulfills his pledge to bring America back from the brink of the fiscal cliff, the lame duck Congress may turn its attention to the proposed Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012. By offering individual states the ability to opt into permitting the processing of payments for online gambling, this bill may assign responsibility for resolving the legality of online gambling to individual states.

As if Sheldon Adelson and Karl Rove haven't already had a wretched month of November, Mr. Adelson's casino business faces a new phantom menace from online gambling and the big data that might tip the legal balance of power in the gaming industry.

Monday, November 05, 2012

Gotham gets it

Gotham Gets It: Mayor Bloomberg Calls for Government Action on Climate Change

Cross-posted from CPRBlog.

The most solemn commitment borne by an elected official is to promote the public welfare and keep the citizenry safe. As New York City struggles to rebound from one of the fiercest storms in memory, Mayor Michael R. Bloomberg rose to that occasion with an urgent call for government at all levels to forcefully address climate change.

Yes, folks, Gotham gets it.

In an editorial for Bloomberg View, the mayor wrote:

The devastation that Hurricane Sandy brought to New York City and much of the Northeast -- in lost lives, lost homes and lost business -- brought the stakes of Tuesday’s presidential election into sharp relief. 
The floods and fires that swept through our city left a path of destruction that will require years of recovery and rebuilding work. . . . In just 14 months, two hurricanes have forced us to evacuate neighborhoods -- something our city government had never done before. If this is a trend, it is simply not sustainable. 
Our climate is changing. And while the increase in extreme weather we have experienced in New York City and around the world may or may not be the result of it, the risk that it might be -- given this week’s devastation -- should compel all elected leaders to take immediate action.

He described New York City’s own efforts to fight climate change by reducing carbon emissions “by 16 percent in just five years.” He could also have noted his city’s impressive planning efforts to adapt to those climate effects that can no longer be avoided.

Then comes the kicker, which you’ve probably already heard about: the mayor called for the reelection of President Obama. Local governments “can’t do it alone,” he said.

We need leadership from the White House -- and over the past four years, President Barack Obama has taken major steps to reduce our carbon consumption, including setting higher fuel-efficiency standards for cars and trucks. His administration also has adopted tighter controls on mercury emissions, which will help to close the dirtiest coal power plants (an effort I have supported through my philanthropy), which are estimated to kill 13,000 Americans a year.

Is this the beginning of a tipping point? History shows that extreme events have the potential to focus people’s attention and energy in ways previously thought impossible. In the eighteenth century, the Lisbon Earthquake forced a dramatic rethinking across of Europe of the government’s role in hazard management. Portugal’s prime minister launched one of the first scientific inquiries into earthquake mechanics. The government imposed stricter zoning laws and Europe’s first seismic building codes.

Northeast governors whose states are receiving federal assistance after Hurricane Sandy have Herbert Hoover to thank. After the Great Mississippi River Flood of 1927, Hoover, then the Secretary of Commerce, helped establish the national role for disaster recovery in the United States. Less than a decade later, the federal government boosted hazard protection across the nation by taking charge of all flood control projects on all federal waterways.

Even Hurricane Katrina, for all the dysfunction that ensued, can be credited with impelling the federal government to strengthen and re-energize FEMA and forcing the city of New Orleans to seriously confront long-standing problems with crime, education, and political accountability.

For a brief moment Hurricane Sandy has seized the attention of citizens across the nation and around the globe. In a twist unimaginable even a few days ago, it’s possible that global warming could even influence next week’s knife-edge presidential election.

As followers of this blog know, I’m living in New Delhi this semester. On Halloween morning I awoke to an article in the India Times, titled, “Frankenstorms Can Get Worse as Global Warming Intensifies” (it’s not a subtle publication). “Hurricane Sandy,” the writer speculated, “could be an answer to many who've wondered when America would smell the climate change.” Global warming is a bitter brew. But it must be acknowledged, planned for, and minimized. Mayor Bloomberg, a successful businessman and an effective politician, has announced he’s ready to face the day as it really is. Who’s next?

Robert Verchick is the author of Facing Catastrophe: Environmental Action for a Post-Katrina World.

Wednesday, October 31, 2012

Their eyes were watching nature's God

Their Eyes Were Watching God

The wind came back with triple fury, and put out the light for the last time. They sat in company with the others in other shanties, their eyes straining against crude walls and their souls asking if He meant to measure their puny might against His. They seemed to be staring at the dark, but their eyes were watching God.

— Zora Neale Houston, Their Eyes Were Watching God (1937)

I have always been fond of this passage from Zora Neale Houston's classic, Their Eyes Were Watching God, so much so that the first edition of the book now called Disaster Law and Policy opened its chapter on social injustice with this quote. The trouble has always lain in the empathetic limits of the law. Disaster law continually lingers among the ruins, so to speak, because the architects of disaster policy rarely understand the perspective of vulnerable individuals like Janie and Tea Cake.

Into this void steps an essay by Walter Russell Mead, Nature and Nature's God, on the occasion of Hurricane Sandy:

Hurricane Sandy Manhattan is one of those places where nature seems mostly held at bay. Except for the parks, oases of carefully preserved nature deliberately shaped by the hand of man, every inch of the city’s surface has been covered by something manmade. The valleys have been exalted, the mountains laid low and the rough places plain.

Those who live and do their business there pay very little attention to the natural world most of the time. It can be hard to get a taxi in the rain, and the occasional winter snowstorm forces a brief halt to the city’s routine, but the average New Yorker’s attention is on the social world, not the world of nature. . . .

Into this busy, self involved world Hurricane Sandy has burst. Sharks have been photographed (or at least photo shopped) swimming in the streets of New Jersey towns; waves sweep across the Lower East Side; transformers explode on both sides of the Hudson as salt water surges into the tunnels and subways. For a little while at least, New Yorkers are reminded that we live in a world shaped by forces that are bigger than we are . . . .

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