June and July are the conferences’ months, and this year, I attended the European Environmental Economics meeting in Cyprus, the International Consortium of Applied Bioeconomy Research in Buenos Aires, and a one-day workshop on Circular Bioeconomy in Omaha and visited family in Israel. I got used to paying the price for international travel – flight cancellations and delays. I had to stay an extra night in San Francisco as our flight was canceled – and I stayed one extra day in Frankfurt because I missed the flight to Argentina.
I noticed several contrasts between Argentina and Cyprus. One hundred years ago, Argentina was one of the richest countries on earth, and Cyprus was a poor protectorate of England. Today, Cyprus is a member of the EU, and its GDP per capita is 2.5 times that of Argentina. Argentina has a high inflation rate and a chronically unstable economy. The meeting in Buenos Aires was amid cold and rainy winter. While we appreciated the wide boulevards, we couldn’t ignore the neglected sidewalks. Limassol is an up-and-coming modern city with high-rise buildings, a high-tech sector, and impressive archeological digs. The weather was hot, and people gravitated to the great beaches. In both cities, the food was fabulous, and the people were amiable, which enabled overcoming the language barrier. The third leg of my trip, Omaha, was a wonderful and pleasant surprise. It’s a clean city with incredible facilities and parks (boasting the largest zoo in the US), minimal traffic, and great restaurants.
The major topic at the Cyprus conference was climate change. All agreed that current policies wouldn’t keep the global average temperature rise below two °C above pre-industrial levels. There was a realization that carbon prices advocated by economists would not be introduced globally soon. Politicians, not economists, make policies, and economic policy design needs to consider political realities. For example, economic theory suggests that tax revenue should be spent independently of its source. Therefore, the income from carbon taxes may need to be spent on education, a crucial need. But the political reality requires packages where some tax revenues are paid to subsidize the adoption of green technologies or even returned to the taxpayers. Some of the presentations assess the performance of different policies in terms of impact on climate change, overall economic performance, and equity. Others introduced new policy proposals. There was an emphasis on policies protecting producers in countries with strong climate change policies against competition from other countries using tariffs. While climate change is a common threat to humanity, different avenues to address the challenge may cause divisions, and the challenge of building effective global policy arrangements recognizing differences in capacity between nations is greater than ever. Investment in technology research and development for mitigation and adaptation to climate change will be crucial to supporting more effective policies and meeting the climate change challenges. We need broad access to these innovations.
The meetings in Argentina were dedicated to the bioeconomy, which can be essential to meeting some of the biggest environmental challenges of our time. I define the bioeconomy as activities that use renewable natural resources and living organisms to produce goods and services. With this definition, the bioeconomy includes agriculture, agrotourism, biofuel, green chemistry, and much of the pharmaceutical and healthcare industries. It also relies on various technologies, from traditional agricultural practices to modern biotechnologies. But we found at the meeting that different countries have different definitions and limitations on the bioeconomy. Europe restricted modern biotechnologies, including GMOs and CRISPR, and moved to increase the share of organic agriculture. On the other hand, South America has a legislative agenda that reduces the limitations of using CRISPR (especially when gene editing eliminates genes rather than transferring genes among species). African nations depend on Europe and restrict the use of technologies to help them address food security and hunger. Biofuels are important in the US, Latin American, and European bio-economies. Electrification of the transport sector and building infrastructure will be costly and slow, and biofuel can be more effective in reducing GHG and decarbonization during the transition. In this way, electrification and biofuel can be complementary technologies.
It was suggested that agricultural biotechnology’s strict and costly regulations limit its utilization to a few crops controlled by major corporations and prevent it from reaching its potential. The strict European agricultural biotechnology regulations have impacts beyond its border, negatively impacting food security, and the capacity to mitigate and adapt to climate change, two global priorities in the EU agenda. With climate change, agricultural productivity may decline, and changes in climatic conditions may induce reallocation of production systems. These tendencies can be countered by increased research investment, and we need all the tools we can use. My presentations in both conferences emphasized the need to develop better modeling of innovation and supply chains, as we live in a world where markets are connected, technological change is frequent, and innovations that will be developed to address climate change will require building appropriate supply chains. Supply chains are more likely to emerge with proper incentives (carbon pricing) or policies that will provide initial demand for new products (mandates or even subsidies [the case of electric cars]).
The Omaha meeting was very novel. Agricultural engineers invited people from multiple disciplines as they developed a research agenda on the circular bioeconomy. Many current production systems are linear, where inputs are assembled to produce outputs without paying attention to residues and wastes with negative side effects. Circular systems aim to use residues of production activities as input for other activities. For example, insects can digest food waste to produce proteins used in aquaculture. Circularity is especially important in the bioeconomy, and the circular bioeconomy can contribute to sustainable development. As an economist, I’m always impressed by scientists’ and engineers’ creativity and sophisticated insights into nature and technology. Interacting with them provides the foundation for more realistic economic models and identifies new sets of practical problems that we can solve. The circular bioeconomy is desirable to a significant extent, but not always. Recycling and reusing all residues may be costly, and disposal of waste in a safe manner is the soundest policy. But circular solutions can address major and avoidable environmental problems such as food waste. Introducing policies to measure and combat pollution and other negative environmental side-effects of economic activities and continuous research will lead to a more circular economy, benefiting all of us.
Conferences around the world recharge my intellectual batteries, help to build alliances, and expand research networks, but they can also be great fun. An excellent band played Greek music at the conference dinner in Cyprus, leading to hours of dancing of our colleagues to demonstrate they have other skills besides writing economic papers. The conference dinner in Buenos Aires ended with an excellent tango show, where we enjoyed a unique combination of wonderful music and acrobatic dancing.