Archive for the ‘Economics’ Category

This was one of discussion questions of the Disasters and Ecosystems MOOC.

Actually the answer is simple. The formula for successful environmental degradation consists of 2 variables – overpopulation and capitalism.

When there are a lot of people – most of them a poor, uneducated and hungry. When you are hungry you will do everything to become less hungry today even if it can potentially lead to negative consequences tomorrow, which you may not even foresee if you are uneducated.

Humans are good in adaptation. When the adaptation is strong enough it leads to abuse (for example, if you are well adopted at the stock market you start abusing it to increase your profit even if it will cost dearly to the other stakeholders – people value their own well-being much more than the other’s and of course much more than the well-being of environment especially when they know that their own impact seems negligible compared to impact of the entire population).  When you live in condition of free market of capitalistic world – you are your only hope for not being hungry (or being more wealthy) now. And as you know from the economic theory – the capitalist economy needs a constant grows of consumption and production – so you need more and more resources to just sustain the economy. In conditions of capitalist market people value today’s profit much more than losses of tomorrow

You see – the capitalist economy needs people to consume more and more; more people – more consumption; more people – more poverty and lack of education; more hungry uneducated people people – more people willing to do anything to survive now and don’t even bother themselves about the future.

Overpopulation and a consumption society (created by capitalist economy) inter-stimulate each other and destroy the environment for the today’s profits or food and doesn’t care much of the consequences of tomorrow because most are either uneducated or doesn’t care at all plus you have to live through today to face consequences of your actions tomorrow (a day-by-day living).

Obviously there are 3 steps to improve the situation:

  • Decrease the population.
  • Educate people.
  • Create new sustainable economy model that would equally value tomorrow’s losses and today’s profits, and would not rely on constantly increasing consumption.
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I enrolled a MOOC titled “Disasters and Ecosystems: Resilience in a Changing Climate” which is organised by the UNEP (and other organisations… which names I’m going to learn by heart cause they have like 2 minutes of credits after each lecture O_o ). Not that I know nothing about disasters, risks or climate change (I’m a geographer and ecologist after all), but I was curious about the product that was made by organisation of this class.

The third video (and first video that is not an introduction) they teach us about the disasters; differences between hazard and disaster; and risks. Well… the thing they told, the graphs they showed – that what inspired the title of this post.

Terminology

Here see some definitions they use.

Disaster. When they say “disaster” they mean “natural disaster” that was enhanced by human [mismanagement].

Risk – a potential losses due to disasters.

Hazard – A dangerous phenomenon, substance, human activity or condition that may cause loss of life, injury or other health impacts, property damage, loss of livelihoods and services, social and economic disruption, or environmental damage.

Exposure – People, property, systems, or other elements present in hazard zones that are thereby subject to potential losses.

Vulnerability – the characteristics and circumstances of a community, system or asset that make it susceptible to the damaging effects of a hazard

Fails

The risk

They presented a “great” formula for (a disaster) risk evaluation that they use in the UN:
Risk = Hazard * Exposure * Vulnerability
where: Exposure = People * ExposureTime
Vulnarability – succeptability to hazard.
Well these characteristics do correspond to the risk, but the formula is stupid! I already wrote about that: Risk = Probability * Damage. And this formula actually corresponds to the definition they give (see Terminology section). We can’t get a monetary outcome from their formula. We can’t get numeric numeric output out of that formula at all: can you multiply flood by people? Can you???!!!

A Disaster with Disasters

The fail with the risk evaluation is a common mistake, but the fail with disaster – that is what really cool!
Take a look at this plot (which is from reading materials from the course):

What can you conclude from this plot? That the world is doing to hell and we all will fall to disaster? Let’s look closer. The exposure is growing faster for poorer countries (and it is the only conclusion they make in lecture)… but the total number of people exposed (and for each type of countries) seems to be the almost unchanged! Interesting… This means (see the definition for the exposure) that there are just a 150% increase of property value in the dangerous area of the poorer countries (and 25% for the richest) on a span of 30 years. Does this graph shows us only the economic grows? I think it does… (reminds me of my previous post).
Now to the most delicious part. Take a look at this two graphs from the lecture readings:
Deaths dynamics

 

Damage dynamics
This is interesting. Despite the population growth and all that questionable “climate change” staff people die less (in total numbers), see fig. 1, but the damage increases, see fig. 2. Did they take inflation into account for the damage graph? Do not know… I think they didn’t, otherwise they would use “discounted damage” term instead of just “damage” and would indicate the base year. So the second graph seems to demonstrate inflation and may be the economic grows.
Clearly disasters are not that disastrous. Despite the new on the TV on the subject the nature’s wrath even enhanced by human is less and less dangerous for human lives. The pockets are to suffer: the storm in port wrecking the humble fisherman’s boat or a trawler – that’s the difference.

Conclusion

From these graphs I can conclude one thing – it is safer to live now than in the past, a disaster should not be feared as a deadly havoc. To my mind the disaster nowadays is entirely economic issue. See, if we loose less people and (maybe) more money – we should just develop more advanced insurance techniques to cover economic damage and relax. The disasters should just be studied as phenomena to develop cheap early warning systems, let the property be destroyed (just cover the losses with insurance) and additional employment to be created (rebuilding).
This is my conclusion form the graphs I showed here: the disaster is an ancient myth! Just buy insurance! LOL
“Wow!” – I said to myself after reading R Helps With Employee Churn post – “I can create interactive plots in R?!!! I have to try it out!”

 

I quickly came up with an idea of creating interactive plot for my simple model for assessment of the profitable ratio between the volume waste that could be illegally disposed and costs of illegal disposal [Ryabov Y. (2013) Rationale of mechanisms for the land protection from illegal dumping (an example from the St.-Petersburg and Leningrad region). Regional Researches. №1 (39), p. 49-56]. The conditions for profitable illegal dumping can be describes as follows:

 

Here: k – the probability of being fined for illegal disposal of waste;

P – maximum fine for illegal disposal of waste (illegal dumping);

V – volume of waste to be [illegally] disposed by the waste owner;

E – costs of illegal disposal of waste per unit;

T – official tax for waste disposal per unit.The conditions for the profitable landfilling can be described as follows:

Here: V1 – total volume of waste that is supposed to be disposed at illegal landfill;

Tc – tax for disposal of waste at illegal landfill per unit;

P1 – maximum fine for illegal landfilling;

E1 – expenditures of the illegal landfill owner for disposal of waste per unit.

Lets plot the graphs (with some random numbers (except for fines) for a nice looking representation) to have a clue how it looks like.

 

Note that there is a footnote (this post provides nice examples on how to do it) with the values used for plotting – it is important to have to have this kind of indication if we want to create a series of plots.

Now I will show you the result and then will provide the code and some tips.

Playing with the plot

Tips and Tricks

Before I will show you code I want to share my hardly earned knowledge about nuances of the manipulate library. There are several ways to get static plot like that using ggplot, but some of them will fail to be interactive with manipulate.

  1. All the data for the plot must be stored in one dataframe.
  2. All data for plots must be derived from the dataframe (avoid passing single variables to ggplot).
  3. Do not use geom_hline() for the horizontal line – generate values for this line and store them inside dataframe and draw as a regular graph.
  4. To create a footnote (to know exactly which parameters were used for the current graph) use arrangeGrob() function from the gridExtra library.
  5. Always use $ inside aes() settings to address columns of your dataframe if you want plots to be interactive

The Code

<pre class="brush: r; title: ; notranslate" title="">library(ggplot2)
library(grid)
library(gridExtra)
library(manipulate)
library(scales)
library(reshape2)

## Ta --- official tax for waste utilisation per tonne or cubic metre.
## k --- probability of getting fined for illegal dumping the waste owner (0

(more…)

There is a quite interesting article about the corruption level in EU countries was published at BBC recentely. Of course the map is the most interesting part.

The thing that I totally noticed in the very first moment of observing it is that the countries with the highest corruption level have the lowest credit ratings (see this map).

When will all these bastards understand that corruption hurts everyone?

There was a press conference on Tuesday the 19-th about illegal dumping in Leningrad region (Russia). I was asked to be the main speaker there and to present to the press my recent study on illegal dumping prevention. I’ve already had two presentations on this subject recently at the international scientific conference in St. Petersburg State University and at the round tablefor the discussion of the upcoming “Let’s do it. Russia” clean up event.Some video from the press conference:

The main conclusion that I made by investigating possible impacts on illegal dumping prevention (such as penalty increase, chance of being caught increase and waste disposal fare decrease) is that decrease of the waste disposal fare for population is the most efficient way. And I managed to find two other publications that came to the exact conclusion (for example, there is an evidence that 1% waste fare increase leads to 3% increase of illegal dumping cases).

By the way I was able to assess probability of being caught for illegal dumping in Russia. It is about 10-5 (you can die while playing soccer with such probability).

The only way to reduce waste fares is to use waste as a resource. That means that the only way to prevent illegal dumping is to create waste management system that would be able to complete the zero waste goal.

And here is an abstract from my article:

Mechanisms of the land protection were discussed in this article. An algorithm of decision making whether to dump illegally or not was explained. Formulas for determination of profitable ration of expenditures per unit and amount of illegally dumping waste are substantiated. Effect from different types of impacts that can be used for land protection from illegal dumping were discussed (such as fares change, penalties change, penalty application probability change). Decreasing of waste disposal fares was acknowledged as the most effective way for illegal dumping prevention, but it is possible only if «zero waste» concept is implemented.

Today I had to replace a couple of lamps in my chandelier. As usual I had to choose in the market what kind of lamps I should buy: regular or energy-efficient. Energy efficient lamps are 5-10 times more expensive than regular, also they claim that they last longer, but… Often I heard that such lamps do not survive estimated time, and the last year I had to replace 2 energy-efficient lamps myself (but I do not know for how long they were in use).

Another problem is utilisation. There is no problem for utilisation of the regular lamps, but you can’t just throw away energy-efficient lamp because of the mercury in it. There is NO SYSTEM FOR UTILISATION OF ENERGY-EFFICIENT LAMPS USED BY POPULATION IN FUCKING RUSSIA (but it exists for juridical persons), even if this retarded president Medvedev ordered to get rid of the regular lamps in a few years. There is pathetic eco-mobile in St. Petersburg, which is supposed to collect 75 000(!!!) tons per year of hazardous waste from population. Who will search across the web to find out its timetable? Only guys from the Greenpeace and other greens like me. Normal (mindless) people just throw these lamps with other waste.

Ok, I decided to figure out whether the energy-efficient lamps worth its costs and additional efforts for its utilisation. I bought 2 lamps: not the cheapest frost-glass regular lamp from Philips and energy-efficient from Ecowatt (5 times more expensive than Philips). See the comparison at the picture:

Seems that single Ecowatt lamp is equal to 8 lamps from Phillips and consume less power. Ok, I will place both this lamps into my chandelier and will replace every broken Philips lamp with the same one. We’ll see how many Philips lamps will Ecowatt survive.

Public data, GDP and Google

Posted: August 15, 2010 in Economics
Tags: , , ,
There is interesting information source of public data, created by google. It is quite useful ’cause now you don’t have to waste time for downloading data and creation of a graph – google already did it. You just have to customize visualisation for your goals.
GDP per capita (current US$) – World Bank
While in Finland I’m trying to find out interesting facts about country that was too small for me to pay attention to it when I was in Russia. One such fact is that economy of Finland had a serious impact with USSR collapse. You can see it on the graph above. Thanks to trade with Soviet Union GDP per capita in Finland grown fast and was higher than in US in 1990 and then was a sharpen fell for 3 years. Only in 2007 Finland managed to overcome US with this parameter again – it took 17 years.
Now let’s look at graph below. There is GDP per capita too, but from another source – Organization for Economic Cooperation and Development (OECD). Graph for US is pretty much the same, but for Finland and Russia it is quite different. Finland does not best US and impact from USSR destroying is less significant, and numbers for recent years for Russia looks more promising than on previous graph. Looks like OECD failed (or didn’t wanted to) to recalculate numbers properly. So you should pay attention to sources and units for data you use.
GDP per capita – OECD Factbook 2009
Hope Google will add more public data soon and develop additional export, import and visualization options like in FactBook eXplorer for example;-)

I like maps and GIS. But I want to show you something that is neither one nor another, but quite similar. It is very nice flash animation for information about export from Africa to developed countries – exploitation in other words. You can play with it here and I will just provide a couple of screen-shots.

Here you can chose country of your interest and click to see stats

Example of the stats