Buffalo HealthCast
The official health equity podcast of the University at Buffalo’s School of Public Health and Health Professions.
Buffalo HealthCast
Journey into Environmental Economics and Sustainability
Welcome to Buffalo HealthCast, the official podcast of the University at Buffalo's School of Public Health and Health Professions 🎙️
In this episode of Buffalo HealthCast, Dr. Michael Shelly delves into the intricate relationship between environmental sustainability, economics, and public health. He explores how environmental policies and sustainable practices can influence economic systems while addressing pressing global health challenges. Dr. Shelly emphasizes the importance of balancing economic growth with ecological responsibility, illustrating how investing in sustainable infrastructure and renewable energy can yield long-term public health benefits. He also discusses the role of environmental justice, highlighting how marginalized communities disproportionately bear the burden of environmental degradation and advocating for equitable policy interventions.
Furthermore, Dr. Shelly sheds light on the economic aspects of sustainability, explaining the financial implications of pollution, resource depletion, and climate change. He underscores the need for interdisciplinary collaboration between policymakers, economists, and public health experts to create a future that prioritizes both economic stability and environmental well-being. The episode serves as a compelling call to action, urging listeners to consider how individual and systemic efforts can drive meaningful change in public health, economic resilience, and environmental sustainability.
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Hi. Welcome to Buffalo healthcast. This is Vennela Damarla, Podcast Producer today we have Dr Michael Shelley, a seasoned environmental economist with over 25 years of global experience. Dr Shelley is a research assistant professor at UBS renew Institute specializing in environmental impact analysis, recycling and the economics of sustainability. His work has shaped projects ranging from climate change mitigation to valuing ecosystem services, and he is passionate about preparing future leader in this critical field. We are excited to hear his insight on environmental economics and sustainability. Thank you so much. Dr Michael shelly for joining us today.
Dr. Michael Shelly:Well, thank you for hosting me.
Vennela Damarla:Thank you so let me start with the first questions. Can you share what inspired you to pursue a career in environmental economics and how your experience on five continents shape your perspective on sustainability.
Unknown:Okay, well, to tackle the first one, I ended up in environmental economics, sort of by accident. I started going out with a young lady in London many years ago who later became my wife, and it turned out she worked in environmental consulting, an environmental company, consulting company, and I got a job there too. And since I was an economist, I ended up doing environmental economics. So I ended up learning a lot about environmental economics through working on the job. Thing about sustainability is really about balancing two things. One is human welfare. In other words, people, how well people are living and and the environment, or the biosphere, you're sort of like trying to manage that relationship. So when I went to China, for instance, back in the 1990s there was still the viewpoint that smoking chimneys were a sign of prosperity. And I said, this was a good thing. Back here in the richer countries, there had been a movement to try and stop economic growth. It's very much a big concern about stopping economic growth because it was damaging the planet. And back in the 1970s when this view was very current over here, the people living in the not so rich countries, they sort of rebelled against this idea. They said, so you know, we were pretty poor, and you're telling us that growth has got to end. Does that mean we always have to stay poor? We would like to have the same opportunities as you? So that's where the whole Sustainable Development idea came from. And it's a little more possible to understand it if you've seen it from the perspective of some of the poorer countries who wish to raise the living standard of their people than it is from over here, where we're already pretty rich. And so the idea of ending economic growth and such like, it doesn't seem so bad to us. So that's how it affected me, also different concerns of different places. So when I teach course, when I teach students about pollution and air pollution and such like, here in the United States, I always have to begin with pictures of how it used to be here, 50 years ago, because that you don't see pollution in the United States. You don't the air isn't orange or, you know, so thick that you can't see across the street. You don't have streams that have got, like, greasy sheens on them, full of plastic and garbage. You don't really see that very much. You used to. You don't see it now. So so different parts of the world have very different view and what's meant by sustainability. So anyway, long answer, short
Vennela Damarla:yeah, that's an interesting story. Dr Shelley, question, yeah. So moving on to next question, with over 25 years in the field, how has the role of environmental economist evolved, particularly with the raise of climate change awareness?
Dr. Michael Shelly:Oh, it's changed a lot. Push going back to my earlier answer in the 19 early 1990s when I first started getting into this, the concern was very much about what they call conventional they call conventional pollutants. That would be your particulate matter in the air. That would be sulfur dioxide nitrous dioxides, it would also be water pollution, because they were seen as most immediate threat. But the science on climate change has moved on, and we now see that as the bigger threat, that and a loss of biodiversity. They're now seen as the two big, big areas.
Vennela Damarla:Okay, thank you. Dr Shelley, that was very insightful to know. So you have mentioned a lot about the projects, ongoing project, how the climate change is 20 years back. So what role that environmental economist have. Do you think that they might play a critical role in this aspects?
Dr. Michael Shelly:This idea of an externality. An externality is where I do something and it harms you in and I don't. Have to pay a cost for it. So for instance, if I'm driving a big diesel truck for an urban neighborhood, I'm going to be pushing out particulates, and I'm going to be causing health problems for people who live along that road. But I receive, I have no cons. It's no consequence to me. I don't have to pay a bill for it. I don't get told off for it. I don't get fined, it's no consequence to me. And one of the things we find with human behavior is that if we don't have to face the consequences of our own behavior, we will tend to overdo the damaging behavior. So one of the things the environment economics gives you is the idea where you're imposing a cost on someone. So it's one thing to say, Oh, I can't afford to change something, but then you should ask the other question, well, if you're harming people, what do you propose? How do you propose to reduce the harm you're causing? And so with climate change is a classic example. So we see that say certain Pacific islands are now worried that sea level is going to rise and engulf the entire island. They have to move away. We see terrific droughts in other parts of the world. We saw floods in Pakistan not so long ago, which were attributed to climate change. So we're imposing costs, enough that we don't have to bear any of those costs. Well, bear much of those costs, so we just ignore them. So one thing that the environmental economics does is it allows you to put things on the other side instead of I have to justify to you why you have to cut your pollution. I ask you, well, how can you justify harming people? You know, what are you going to do about it? So that's, I think it's probably one most important idea.
Vennela Damarla:Yeah,Thank you so much, Dr Shelley for simplifying it and then making us understand what actually Environmental Economics does and moving on to next question. At the Renew Institute, you focus on plastics and tire recycling, among other topics, what are some recent advancements or challenges in this area that you find particularly impactful?
Dr. Michael Shelly:Okay, so we don't do much recycling. Only about 8% of the plastic in United States is recycled, as I recall, and we don't really recycle tires. So using that argument about or that idea of the externality, we have to ask the question, What harm does my consumption of plastics and tires have on other people? What consequences Am I not paying for, and are they sufficiently large that I should change my behavior? And that an answer that varies in different parts of the world. So in the poorer countries of the world, they have a problem with trash collection. So things tend to get discarded into the environment. You know, when you hear about the all those bits of plastic floating in the Pacific, and you hear about the garbage past a lot that's actually come from that would be the sort of the Asian side of the Pacific, because they don't have particularly good garbage control. And it gets into the rivers and then gets washed out to sea. United States, we don't have the problem with the garbage so much. What we have a problem with is more than micro plastics. This is where plastic, some plastics do get released into the environment, and they get into small pieces. And we're finding that animals were affected by we're affected by and we've got bits of plastic. But as an economist, I didn't say, Okay, what's the substitute? If I'm not going to buy a plastic bottle of water, what's the substitute? Well, maybe we get people to renew, to change their containers, but then the incentives are all wrong. What I mean by that is that the reason we, for instance, went over from glass to plastic is because glass is more expensive to produce, so it's cheap to produce plastics, and we can make plastics very cheap. That's the problem with plastics. They're also likely to get relatively cheaper, because as we stop burning oil and gas for to produce energy for cars and heat in our homes, and all the rest of the producers of those substances are going to want to find another market, and so they're building big plastic plants at the moment to produce more plastic they want us to produce if you use more plastic.
Vennela Damarla:So you think banning plastics would make any difference.
Dr. Michael Shelly:Always, certainly make a difference. The thing is, what would we use as a substitute? So if we were to use glass, the glass is very energy intensive material. It's also heavy, and it would, and so therefore we'd end up using more energy. On the other hand, we might go over to more reusable containers. So sometimes, like with Starbucks, I used to have a reusable cup, and I'd go back, and then they started telling me, Well, for hygiene reasons, we can't take your cup back. So, you know, so I could, couldn't use the reusable cup. So we would have to change other behaviors as well to make these changes. Yeah,
Vennela Damarla:okay, your research also includes studying the social burden of power outages. Could you elaborate on this issue and its broader implications for sustainability?
Dr. Michael Shelly:The thing is that in in the richer countries, by. Our constant access to power is just a given. We just expect it. We built our lives around it. So if, for some reason, the power is cut, the electricity is cut off, it has bad impacts. So you really don't want that to happen now, as it's as a utility or somebody's looking to invest, you have to look at the benefits of an investment, and sometimes some of those benefits aren't expressed in market. Prices. Nowhere. There is no market. There is no you can't say, oh, this costs them $25 or whatever. Data isn't there. So what we've been doing is we've been interviewing people Texas and Puerto Rico, and we've been asking them about recent power, just recent to them. And so we would ask them, Well, how did it affect your ability to do this? You know, like to cook, your ability to communicate how much extra money, how much extra time and such like. And we try to find out how much harm it does to people to have their power cut off. And that can help to guide investment decisions. There is this idea that there are certain groups in society that would be most likely damaged, and you can easily identify them. We're finding that's not so easy to do so, so you have to basically do a survey, and you figure out sort of people who are harmed. And so we've been finding things like, it's people with children, it's between five and 17, it's people who live in rented accommodation. That should be a very big predictor of how much burden you're going to have.
Vennela Damarla:Okay, so how does your work with the ub carbon pricing group contribute to regional or global climate change mitigation of efforts. Okay,
Unknown:so putting up. Economists are very keen on putting the price on carbon because they're trying to capture that externality. They're trying to say, Well, if you emit a ton of CO two, although you may not be aware of it you're actually causing. Say, I think the late assessment is about $130 of damage around the world for each time you emit. So the idea is, if people have to face the prices for these if that's built into the price, that will change their behavior. What they'll do is they'll reduce consumption, or reduce activities produce greenhouse gasses or and they might switch. So for instance, somebody, if we put a higher price on gasoline to reflect it's the damage it's causing that might encourage people to go over to to an electric car. So that's, that's the idea. So you'd be wanting to do this. It's, it's hard to do within an organization, because we don't really have prices. If I if you announce to a certain department that you're going to now hit them with a bill for their energy use, there would be a lot of resistance, but also they would ask the question, well, what can I do to change it? So one of the things you have to do in designing a carbon price is you have to make sure the person who's bearing the price actually has the ability to change things. So with UB, we don't, you and I or department has don't have the ability to change the heating source. That has to be bad building by building. So it's more of a UB level thing. Yes, and and UB is already moving to reduce its greenhouse gas emissions by switching its energy consumption. So that's good, and so eventually you won't have to price it, because already COVID Reduce it so that say, yes,
Vennela Damarla:yeah. So moving on to next question. You employ diverse methodologies such as life cycle assessment and cost benefit analysis. Could you walk us through how this approaches inform decision making in environmental projects?
Dr. Michael Shelly:Okay, I don't do so much of the life cycle analysis. Obviously. Do that. I do. I've done the cost benefit. I teach cost benefit. Cost Benefit is a way of pulling the all the information together in order to make a decision. So what I would typically do when I was working in consulting was I would do the environmental cost benefit analysis of projects in in places like China and Morocco. And what my role was, sometimes, I'd have to do the financial analysis, which looking at the costs that companies actually pay out of pocket, you know, for energy, labor and all the rest, and put together a balance, balance, what they call pro forma balance sheets and income statements and such that it's not really my specialty, but sometimes how to do it, but I used it, but it was my specialty, was to take into account these externalities. So if, for instance, we were going to build or the Asian Development Bank or the World Bank was going to build a water treatment plant that would have health benefits, right so people now drinking health or clean water, there will be less cases of illness, maybe fewer deaths. And we would try and estimate, using literature values, how many extra cases of or how many cases of illness were prevented, how many deaths. Were prevented, we put a value on those, and we would typically use it again, literature values, because extremely expensive do your own studies, and World Bank and Asian development bank wouldn't pay the money required to do that. So you just use values from the literature. And then we would build those in. So it would make projects that improve public health, through improving the environment, would make them much more attractive. Projects where it was like we worked one, one which was a coke oven in China, make them much less attractive because they'd be generating a lot of pollution. And sometimes you get the strange situation where, with the coke oven, we were going to replace an old one with a new one, and the new one were much less polluting. So there's actually an environmental benefit in the sense of reduction in harm from moving to the newer technology. So I would work that out. Then we'd look at that over time, you know how it occur over time? And then we would discount it, would take the present value of that and bring it back. That would go into a report, which the World Bank and Asian Development Bank boards would then review. And so what would happen with environmental projects, sometimes is in terms of the financial side of things, it may not look like it's very good, because the cost would be greater than the financial benefits, but once you added in the environmental benefits, it became very beneficial, so I would obviously capture those costs that aren't captured the financial analysis, because they relate to externalities.
Vennela Damarla:Okay,can you share an example where valuing ecosystem services using willingness to pay methods led to actionable insights?
Dr. Michael Shelly:Well, yeah, some examples have come to mind. Just before I joined UB, I was working on some projects related to the impacts of oil spills. And the way that one went was, I think, in an example, some refuge the refugee beach spill in California in the mid 2010 there an offshore pipeline ruptured, as I recall, and oil came ashore, and people couldn't use the beach. So the question came, well, how much compensation should the pipeline company give to the state of California to compensate people for that lack of access to the natural resources. The way that was valued was a survey was done over the internet of people at Arsen where they went to in California. So we'd what they did was they would click on all the site they have a map, and they click on all places they visit, say when they visited, and they were to give some information about themselves, where they lived, and their income and such like. And from that, you could deduce a few things. You could deduce how much it cost them to get to an area, like in terms of the travel costs, and in terms of how much time they had to give up, and there's value to time. So we'd work that out. And then you would look at how the visitation rates were depended upon both their income and how far they had to travel and the characteristics of these various areas they went to. So I my particular job was to get all the information about the characteristics of all these alternative beach sites for people go to in California. Another I was also involved in hiring a helicopter pilot whose job was to fly 300 meters out, 100 meters up from from the coastline, and fly along every day and take pictures. And from that, we could figure out how many people were using the beach. This was, this is a year or two after spill, some people back using the beach. So we can get a sense of what the baseline visitation rate is. We would use all this information in a statistical model to figure out how many visits would go to a site, and how that was affected by its distance from people, the characteristics of that site and other sites they might go to. And then you could put a value on features of an area, like how big the beach is, how nice the view is, whether it's got picnic area, you know, this sort of thing. And you could figure out, if I added, if I had a site that didn't have, like, a picnic area, if I added the picnic area, how many extra visits would I get? So now you go back and you say, Okay, I've done my helicopter flight. I figured out how many people should have been using the beach on a good day. I know nobody was. I figured out how many trips are lost, and then looking forward to say, okay, the beach is now clear and restored, and it's looking okay. But you owe me, the pipeline company. You owe me or the state of California for all those visits that did not happen. So you need to do something to generate more visits to the to these sites in the future. So we have figured out from our model that these amenities at these sites will generate enough extra visits to compensate for the visits that were lost when you boiled the beach. So. So new, the pipeline company now have to pay for those you have to pay for the bike path, you have to pay for the picnic area. You have to pay for like, maybe put more sand on the beach. And that's, that's how we use environment economics to get at people's valuation of not only the natural things, but the things that we can control, like the amenities at the site. And what we do is we, what we did was we made the pipeline, we made the claim against the pipeline coming to make them change some of the characteristics of sites to increase number of visits to offset the loss.
Vennela Damarla:Yeah, it was very interesting to know all this factor come under consideration when you're deciding cost benefit analysis. Okay, moving on to next question, how do you incorporate habitat equivalency analysis in your project? And why is this method particularly useful for environmental impact studies?
Unknown:Okay, habitat equivalence analysis is something similar to what I just talked about. So if there's a pollution incident of some kind, then one of the first things that happens as part of a natural resource damage assessment processes, the ecologists will go out and they will figure out how much damage there is. They compare what's there after pollution compared to what should have been there. It's called the baseline. And they look at the trajectory of the damage. In other words, would it get better by itself? Will it not get better by itself? And then there'll be some remediation, but it might, but there's been a loss of of those natural resource services in a period when it was damaged, and there might be some continuing loss if we can't completely repair the damage. So in situations where a state or federal entity owns the land on behalf of the American people, there will be a law or there was, there will be a case before the court is going under the natural resource damage assessment process. And what we'll do then is just like I talked about how we would improve the beach areas, well, we will talk about, how can we improve that area. So I worked on a on an instance of this in the Middle East, back in 1990 91 Iraq released oil into the Arabian Gulf, Persian Gulf, and this damaged the beaches in Saudi Arabia and Kuwait. And so we developed, my company, developed a claim against Iraq on behalf of these two countries for nature preserves. The idea is we take a pair of pieces of the beach that had not previously been protected. We would protect it. We would then have biologists there to make sure it was stayed in a good condition. We'd have visitor centers. We'd have a research lab and things like this. And we would say this, you know, we've improved the service of the area. We've approved the access of the people to natural resource services. And then we sent the bill through the United Nations Compensation Commission to Iraq, there was a settlement, and Iraq ended up funding these, these nature preserves, coastal nature preserves,
Vennela Damarla:yes, okay, so environmental economist, it's not just restricted to Just giving the claims or giving the cost benefit analysis. It's like you take a lot of factor under considerations in order to give the cost benefit analysis. Okay, moving on to next question. You worked on high profile cases like assessing natural resource damage after the Gulf War. What lessons did you learn from this experience that inform your work today.
Dr. Michael Shelly:Okay, so I've worked on a number of aspects of that, but one that's most relevant to UB is that I was part of the team that developed a health claim resulting from the Gulf War from 1990 to 91 on behalf of the Kingdom of Saudi Arabia. And this had a UB component. There's a person called Dr Richard Lee from UB who was a member, leading member of the team. There were two parts of the team that work on the health claim. There was the epidemiological quantification team, I think you would call it. They were. Their job was to quantify the number of cases of illness and mortality arising from the air pollution from all these from a burning oil wells in Kuwait that the plume came over Saudi Arabia. So that was Dr Richard Lee, and he was working in conjunction with the Bloomberg, Bloomberg School of Public Health at Johns Hopkins, guy called Samit John summit led their team, and they organized a massive surveys Saudi Arabia, household survey, when I went around and asked people about their health, and asked them about whether their health had been affected by the smoke plumes. And so they developed estimates of the additional number of cases of things like lung problems, heart problems, etc, etc. I was my team's evaluation team, and our task was to put a value on all these extra cases. And this was not easy, because Saudi Arabia has a public health system where they don't actually charge people. So Dr Lee and his team. Came up with number of cases, and then we multiplied them by the prices that we had developed, and the claim that came out to be $18 billion back in 2005
Vennela Damarla:that's a really huge amount. And then it seems like a very complex process, because, and there is a lot of work that had to be done
Dr. Michael Shelly:oh yeah, we, you know, until the last minute. We didn't we pull it off. I can remember going over to going over to Saudi Arabia. We were flying through London. I had one of my team members, and he said to his we're going. I said, I know that you can get this done. And I said, Well, we've got no we've got no other plan, so we better get it done. And we did much get done, mostly because of the hard work of my colleagues.
Vennela Damarla:Yeah, it just seems like because here it's easy because we have insurance, and then there are so many such resources available where, like you said, that's a huge task, considering there are no insurance, and then you have to start everything right from step one, Yeah. How long did it take for you to to come
Dr. Michael Shelly:and that's what made difficult, because obviously there were other people involved in this process, so The Columbia School of Public Health was hired by the United Nations to sort of look at our claims. And of course, they had huge questions about the survey. And could you actually survey into conclusion that, or to make an estimate of the amount that people then about 10 years, 12 years after the event, and get meaningful answers? They had a health economist who was was so I don't know if it's the right way to value these things. So there was a lot of arguing back and forth, typically in the environmental claims, not the health ones, but the environmental claims. What this process would result in in quite getting 10 cents on the dollar. In other words, they get about 10 cents for every dollar they claimed. That was just the way it seemed to work out. you have mentioned, $8 billion
Unknown:beginning to from beginning to end, it was probably about seven months.
Vennela Damarla:Okay, that's, that's actually very long, yeah. Moving on to next question. Your work spans both natural and engineered system. What are the unique economic and environmental trade offs when working in these two domains? Well, every engineering project like a wastewater treatment plant or a water supply or a road or anything has an environmental consequence, so you have to trade off the benefits and the cost. So you have to say to yourself, how much benefit do we get from, say, a wastewater treatment plant compared to its cost? And so we have to, we have to look all these trade offs, and we have to ask ourselves, once you take into account the wider social implications of project? Is it worthwhile so? And usually it is. So I've done this on a minor scale. When the EPA in this country looks at changes in health regulations, you know, especially air pollution, they will look at the health benefits. And health benefits, by the way, are the largest single benefit, when you do it in dollar terms, benefit component, any cost benefit analysis, and they're nearly always so large with these things that they more than dwarf the costs. So when you get so and one of the things that always, I think is wrong is that whenever say EPA, that says it's going to tighten up regulations you'll get the industries will complain about, oh, we can't afford the extra cost and this. So the reporters will ask, you know, the epi Oh, of the government, how can you impose these costs on people? They say they're going to move their industries bubble, but they really need to ask another question, which is, of the people who are doing the pollution, they're going to get regulated. How can you justify continuing things as you're doing them, when you now know the health costs of all your activities, don't you think that maybe you should change your behavior, right? So you've got to put the, you've got to put the put it on the other thought. You've got to put it on the other party. Yes. So what advice would you give to students or young professionals aiming to make a meaningful impact in the field of sustainability?
Dr. Michael Shelly:Well, first of all, come to you because we've got a great sustainability course. I think what you're going to find once you get out the university is going to find that you're going to struggle to come into people. These things are important. It's not top of the mind priority because we're not aware of it. It's that externality thing again. So whereas in the 1960s 1970s it would be no problem getting someone in America to be to talk about pollution. Now it's harder to do so because it's far off and they're not quite sure they're rolling it and such that. So you can have struggle to get people's attention. Also, you've got to concentrate on what you need to achieve and why you need to achieve it. So that's where some of this cost benefit analysis, and let's think about externalities. So what can a company actually achieve? What can. Do, what's the benefit of doing such a such a thing? And often you're going to be in a situation where there isn't a financial benefit to the company. So you're gonna have to persuade people, and then you're gonna have to counter old ideas. You're not gonna get people. You're gonna have to deal with the doomsters, the ones who think the world is coming to an end, and you're gonna have to deal with the other people who think there's no problem. So you're gonna have to, sort of, you're gonna have to do a role of educating people to get a sense of what you can do and why you should do it.
Vennela Damarla:Well, that's the biggest part what you can do and what you should do, yeah. I mean, you really have to make people understand why that is really important,
Dr. Michael Shelly:yeah. And it may not be obvious. That's not because the sectionality thing,
Vennela Damarla:yes. So from an economist point of view. What are the most significant policy or market changes needed to accelerate sustainability practices globally?
Dr. Michael Shelly:The biggest changes we go on, we look at, look at, start with climate change. Biggest thing there is we need to move away from fossil fuels. We need to do it fast. We have the technology to do it. We just don't want to do it, and so we have really got to figure out how to do that. I've been thinking about this, and I see an analogy between and I sound strange, but between the need to reduce greenhouse gas emissions and smoking. The social norm has changed, and it was no one thing that did. It was a whole public education effort which people at UB were involved in. And we need the same sort of thing with climate change. It's just not at the top of people's minds, and it's more difficult with climate change, because the harm that you'd you know, the balance of the harm, is much more to other people than to yourself. So you can tell the smoker where you know you're smoking and, you know, make yourself sick. But you can also affect other people, but where it's going to affect them, that's really direct, right? But with climate change, it's not going to have much of an impact. You know, if there's 100% of harm, you're only going to get 1% of it. Everybody else is going to get the remaining 99% so it's a harder deal, but we need that public education. We need to bring it to the point where people ask themselves, oh, you know what, I'm I'm going to if I do this, I'm going to end up emitting more carbon dioxide and other greenhouse gasses, almost this, this climate change issue is almost like a public health issue. We need to educate the public about the harms of their behavior. It's behavioral change is going to be key to this. So I think there's a synergy there with the Public Health Health Department,
Vennela Damarla:yes, so you have mentioned that we have to stop fossil fuels as immediate. I mean, immediate action has to be taken. We do have resources. But you have also mentioned that you told nobody is really making any action to change about it.
Unknown:There's action, but it's not sufficient. Okay.
Vennela Damarla:Okay, so what do you think we should do more in order to do reduce that?
Dr. Michael Shelly:Well, on a on a personal level, what we can do, especially in the democracies, is we can start to take this as an issue that we have to take responsibility for, and we vote accordingly. So we wouldn't vote for people who don't intend to take action. We would tend to favor the person who would take action. But that, as I say, requires us to take on a certain personal responsibility. So that's the education part of it, that's probably the most important thing.
Vennela Damarla:So yes, that's true. Moving on to our next question, having worked across diverse geographies and industries, what motivates you to continue pushing boundaries in your research and teaching?
Unknown:Well, it's curiosity, really. I mean, you just get led by curiosity and also concern about issues, as I keep mentioning, climate change bias. These are these are these are costs we're imposing on future generations, and sometimes it's hard to change our ways to to reduce those costs, but sometimes it's easy. And I think we have to bear in mind that we we don't want to be complacent about future generations and pass with, like passing the bill to somebody else, just like sitting down at a restaurant having a nice meal, and then passing the bill to the this to another person, and just walking away. They were sort of, we're sort of doing that with just the future generations. So we're getting all the benefit and they get the bill. So we've got to, so that's what, that's what sort of drives me on I think we've got to change that. It's it's proving to be a frustratingly slow process, because I don't think it's as individuals, enough of us are actually taking this as a priority or even something we need to think about. I joke with my friends that if we worried as much about these issues as we worry about what we're going to have for dinner tonight, we would have this solved. Yes.
Vennela Damarla:Can you share your thoughts on future of carbon markets and their potential to drive global decarbonization
Unknown:carbon markets where they've traditionally with this two. Sorts. There's one is where you have some big polluters like power plants, and you get a what I call a cap and trade program, which is where the regulator uses the government will set a cap a total amount of greenhouse gasses that can be emitted in a year. And typically, what they'll do is they'll make that work. They will. They'll make this come down over time and industry when it's going to produce greenhouse gasses, has to go and buy an allowance for every ton, and those allowances going to be less and less every year, because the price, because the cap is going down, and the government's going to issue fewer allowances. So what happens then is the price to industry of buying those allowances goes up, so the price of pollutant goes up. So that's one example of car market, and that's worked quite well as worked well in Europe. They've got one in California. Issue with those typically is, is that the politicians don't wish to make the price too high. They get a lot of pushback from industry because some people don't like buying taxes, and so they've been a little too modest in their demands. Both the European system seems to be working. Then the other way you can get carbon markets is when you have a situation where one part of the world has to reduce its greenhouse gasses. In another part of world isn't under an obligation to do so. Another industry, perhaps isn't under an obligation to do so, but they do so anyhow, and then they get paid to do it. So for instance, if we had a situation where there was a country that was thinking about a poor country that was thinking about electrifying its system, and they could buy a coal fired power plant, or they could put in maybe solar panels and wind, and more expensive to solar panels and wind, if they did that and reduce greenhouse gasses, even though I didn't have to. Maybe someone, a regulated industry from the richer country might pay for those reductions, might pay them some money and then take the benefit back home, saying, hey, not only did I reduce my own pollution here in the United States, I also reduce pollution in that country over there, and I get some I should get some benefit. I can count that towards my pollution reduction. Those are two any the first sort of been working quite well. The second sort had where it's where you might have entities in different countries, or you might have one regulated industry and one not regulated industry that has not worked so well, partly because of concerns about would the unregulated entity have reduced its pollution anyhow? And that's hit a lot of problems.
Vennela Damarla:Okay, moving on to final question, if you could achieve one major milestone in your career related to sustainability, what would it be and why?
Dr. Michael Shelly:I would say the thing that gave me the most hope, it sounds weird, is the inflation Reduction Act of 2022 that was a US act that implemented, by international standards, a huge program to shift the United States away from generating greenhouse gasses. I think the target was to reduce greenhouse gasses by 30% by the end of this decade, and was sort of on course to do that, and that had some innovations in there. It was much more of this paying people to do the right thing, and much less emphasis on taxes and quotas and such like. And it seems to be working. So the United States is going to, is starting to put together battery factories for cars and moving especially on the car side of things, there's been more plans to do renewable energy and such always hits barriers. So in renewable energy, hitting barriers with with the permitting system and environmental assessment system. So that's creating barriers, and you get lots of pushback because this externality thing, what'll happen is somebody announces, oh, we're going to put a solar panel farm just across the road from where you live. And I don't want that. That's going to be an eyesore. Well, people don't think of the consequence. Well, if that wasn't built, then the extra energy would come from a gas fired power plant somewhere else. So you're by preventing this thing your produce, you're going to add to greenhouse gas emissions somewhere else. So there's a cost to what you're doing. And the other way we don't think about it also is we're like, well, well, they've got a case. I mean, if there's, there's going to be an ugly, ugly thing just across the street. And that's imposing. Why don't we compensate them somehow. Why don't we maybe reduce their property taxes, buy them a car, do something to compensate because otherwise what happens is a small group of people who are going to suffer relatively small costs will be so motivated they can stop something that everybody else would want to happen. So sometimes a little bit of bribery substitution might be coming handy.
Vennela Damarla:Yes, thank you so much. Dr Michael Shelley, any final concluding thoughts that you would like to tell to our audience?
Dr. Michael Shelly:Okay, well, your audience probably going to be in public health and only going to be an environment, and that's extremely important, I would suggest. That you should, you should link up with your local economists as well, because often they can help you to put some some costs on these things, and that will often swing the argument. It's one one thing people, there is something when you do economics, you find that something strange in happens in people's minds. When you put $1 or a pound or a rupee sign in front of a number, somebody that number gets some bigger significance, and perhaps it should. So it's one thing to say that, Oh, we will, you know, if implementing my idea will reduce cases of a disease by this much, or might we prevent this many deaths that will have an impact. But if you then try and monetize that, and you say it's going to be worth millions of dollars, or 10s of millions of some of that as a added benefit as well. So it's a good way to think about things. And sometimes, what if you're proposing something where you can have a health improvement, which is fairly minor, but it's going to cost an awful lot of money, well, maybe that's not such a good use of society's resources, because the money that's used on that health program, maybe that could have been more useful to use in, say, an education program or in another health program. There's always a cost to these things. See, you got to look at the costs and the benefits, and that's where your local, friendly economist. We have an economics department here. That's where they can help.
Vennela Damarla:Yeah. Thank you so much. Dr Michael Shelley, for your time and sharing the knowledge about environmental economics and then providing insights about a lot of things. Thank you so much for your time. Thank you. Thank you. See you in the next episode of Buffalo health cast