![]() | Author's Name: Leslie Martin Date: Tue 04 May 2021 |
Leslie Martin
Associate Professor Leslie Martin
Leslie Martin is an associate professor in the Department of Economics at the University of Melbourne. Her research lies at the intersection of environmental, energy, and industrial economics and international development. She is currently using a DECRA award to research the environmental impact of clustering manufacturing into special economic zones in rapidly-industrializing countries. Locally, she has also worked on consumer and firm responses to the availability of smart meter data in markets with retail competition and driver responses to road use charges. She is an associate editor at the Journal of Economic Behavior & Organization and co-editor at Environmental and Resource Economics. She has a PhD in Agricultural and Resource Economics from the University of California, Berkeley and a BA in applied math from MIT.
Website
http://www.lesliemartin.org/
Responses (10)
Housing Reform
Poll 65
Panellists are unanimous in believing Australia’s housing market is in crisis.
Offered a choice of 14 measures identified by the Economic Society of Australia as likely to restrain prices for buyers and renters, none of the 49 leading economists polled picked: “do nothing, the market will determine appropriate prices”.
I would focus on increasing supply: removing zoning? and planning regulations that limit high-density residences. Public sector interventions can focus on pairing high-density areas with convenient access to public transit and shared green spaces, creating more walkable neighbourhoods. I also support expanding and upgrading existing public housing, especially in areas with good public transit options, facilitating access to schools and jobs. These policies would benefit both renters and new homeowners.
Ease planning restrictions, Provide more public housing
Transition to net zero - ape the US Inflation Reduction Act?
Poll 62
Panellists were asked "Which of the options set out below best describes the kind of approach the Australian government should take to the US Inflation Reduction Act? (Pick 1)"
To support homegrown emerging green technologies
Provide more grants to innovative firms across the entire economy
I strongly believe that we should be supporting homegrown emerging green technologies, especially when it comes to large-scale renewables, large-scale battery storage, and initiatives to manufacture products for the "green" export market, such as steel, aluminum, and fertilisers, using renewable power. I don't think that Australia should specifically try to match US industrial policies, though, which is why, when I'm limited to the above choices, I vote in favor of general support for innovation, knowing that much of it is likely to end up directed at the renewable industries that Australia has a huge natural advantage in continuing to develop.
Reintroduction of the Carbon Price
Poll 61
Worried economists call for a carbon price, a tax on coal exports, and ‘green tariffs’ to get Australia on the path to net zero
Introduce an economy-wide cap and trade carbon price
The ideal would be to introduce an economy-wide price on carbon, either via a tax or a cap-and-trade mechanism. If there isn?t enough political support for a broad policy, then we should do as much as we can to mirror such a broad policy. The safeguard mechanism is a step in the right direction if extended to as many facilities as possible (i.e. smaller ones), with baselines not based on individual-facility outcomes but rather industry-wide best-practice benchmarks. In electricity, we need to make sure to provide enough financial incentives for grid services, like battery storage, that help balance the volatility of increased penetration of renewables. Relatedly, we need to make sure that producers and consumers face price signals that encourage them to shift production and consumption to times that minimize total social cost, i.e. that includes the cost of associated pollution. In practice, that means that residential solar households should receive higher compensation for electricity generated at peak times, which may lead households purchasing solar for the first time to face their panels west instead of north, and that households with electric vehicles need to face higher prices for charging at high-social-cost times. I don?t have a strong opinion as to whether Australia should build nuclear power plants domestically, but I strongly recommend thinking about Australia?s potential role in safely storing spent nuclear waste from facilities abroad, in order to tilt the balance away from the expansion of coal in countries where storage concerns are what holds nuclear back. When it comes to limiting the global production of greenhouse gases, I can see a role for Australia in attending to the full life cycle of uranium: not just in extraction but also in the subsequent collection and safe storage of spent fuel.
Leading economists back Federal Government action to curb rising gas and electricity prices
Poll 57
Australia’s top economists have overwhelmingly endorsed intervention to restrain gas and electricity prices, with only three of the 47 leading economists surveyed believing the best thing the government can do is to leave things to the market.
Photo credit: Wes Mountain/The Conversation, CC BY-ND
.
Increase taxation of resource rents for gas producers but use revenues for general tax relief, not t
There are windfall profits in the gas sector that could be used to provide relief for Australian households facing higher prices for consumer goods like electricity and gas that make up a disproportionate share of living expenses of lower-income families. But those revenues should be allocated via general tax relief programs and not be tied to levels of electricity or gas use. We want to protect vulnerable consumers without distorting incentives away from the conservation of what are largely polluting resources. There are arguments for rate reform in retail electricity, but these require careful design, stakeholder participation, etc. which take time. One option in that area that I would like to hear more about involves public sector-led competition in retail: an option for consumers who are not eager to engage in the retail market provided by an aggregator chosen via a competitive reverse bid process.
Is education or immigration the answer to our skills shortage? We asked 50 economists
Poll 56
Investing in Australians’ education is far more important than immigration in resolving the nation’s skills shortages, according to leading economists surveyed in the lead-up to this week’s jobs and skills summit.
The 50 top Australian economists polled by the Economic Society of Australia and The Conversation are recognised by their peers as leaders in their fields, including economic modelling, labour markets and public policy.
Wes Mountain/The Conversation, CC BY-ND
Care jobs Migration policy Green jobs
Prioritising issues for the incoming Government
Poll 54
Panellists were asked:
"From this list, please pick the three issues you think will be the most important for the incoming government and should be the most important in the election".
Wes Mountain/The Conversation, CC BY-ND
.
Intake of permanent migrants
Poll 52
"What do you think the intake of permanent migrants should be in coming years"
Australia’s leading economists have overwhelmingly endorsed a return to the highest immigration intake on record, saying Australia should aim for at least 190,000 migrants per year as it opens its borders, up from the target of 160,000 per year set ahead of COVID.
Photo credit "Wes Mountain/The Conversation, CC BY-ND"
.
190,000 is not enough
Australia’s top economists back carbon price, say benefits of net-zero outweigh cost
Poll 50
Ahead of November’s Glasgow climate talks, our panellists were asked
"Australia would likely benefit overall from the national economy transitioning to net-zero emissions by 2050"
Photo credit "Wes Mountain/The Conversation, CC BY-ND"
An economy-wide carbon price (either via a cap-and-trade scheme or an emissions tax)
Agree
Australia is at particularly high risk from damages from climate change: from increasing severity and frequency of bushfires to coral bleaching of the Great Barrier Reef, one of the country's most unique and valuable natural assets. Although Australia could possibly free-ride on the efforts of other larger economies, it would suffer disproportionately if other countries chose to do the same. Furthermore, Australia benefits when it diversifies away from an economy based on natural resource extraction to one more fueled by the development and adoption of new clean technologies. An economy-wide carbon price is the most direct and effective way of achieving a net-zero goal. It can be coupled with direct transfers to help lower-income households face higher costs of essentials like power and transportation (even though most carbon prices being discussed would actually only modestly increase those). A carbon price would favor green energy while also discriminating between sources of dirty energy that varying degrees of dirty. And it would also provide incentives for carbon capture and sequestration.
Promoting vaccination uptake in Australia
Poll 49
"What measures should Australian governments adopt to promote demand for vaccination once supply is no longer a constraint?"
Photo credit "Wes Mountain/The Conversation, CC BY-ND"
National advertising campaigns;Lotteries with cash or prizes for the vaccinated;Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);Mandatory vaccination for higher risk occupations
My decision to vaccinate involves both private and external costs and benefits. The unvaccinated are much more likely to be vectors of transmission (being both more likely to catch covid and more likely to transmit it if they catch it) and may reduce the level of hospital care available to others if that resource becomes congested. Personal choice is important, but should not come at a cost to others. I support vaccine passports: those who opt out should only be allowed to enter public spaces without causing disproportionate harm to others, i.e. with mask and face shield if indoors. Adults who choose to be unvaccinated, when vaccines are widely available, should also sign over their right to priority access to hospital care should they contact covid when the system is at capacity. It doesn't make sense to give access to the unvaccinated above others who have made decisions that put more weight on the safety of their community. To what extent should there be exceptions? According to the CDC, there are very few medical reasons to not get vaccinated. The personal risk of blood pressure complications (AstraZeneca) and Myocarditis/Pericarditis (Pfizer) is very low, and likely to drop as we gain experience protecting a very large already-vaccinated wealthy population. And although vaccines are less effective on the immunosuppressed, it is not a live vaccine and there is no evidence of harm. If anything, the private benefits of protection are likely to be higher for the immunocompromised. People with allergies to some vaccine components (Polyethylene Glycol ? Pfizer or Polysorbate 80 ? AstraZeneca) have other vaccines available. Of course, carrots can accompany or proceed sticks. Catchy advertising campaigns and prize lotteries are relatively low cost and potentially high benefit.
Transition to electric cars
Poll 47
This month, our panellists were asked whether Australia should take action to speed the transition to electric cars.
"As part of efforts to reduce carbon emissions, Australian governments should take action to accelerate the take up, or take no action to accelerate the take up of electric cars"
Photo credit "Wes Mountain/The Conversation, CC BY-ND"
Subsidise public charging points for electric cars
10
Although transport emissions are some of the most expensive sources of emissions reductions, almost 20% of Australia?s greenhouse gas emissions come from cars and trucks, so to make large emission reductions we will likely need to involve the transport sector. Most policies that promote electric vehicles (EVs) today do so in order to move particulate emissions away from high population density areas and get the long-lived vehicle stock and system of charging infrastructure ready for a future when the electrical grid will hopefully be much cleaner than it is now. Currently EVs are not really ?clean?. EVs substitute petrol/diesel emissions for electricity emissions. The cleaner the grid is, the more EVs will pay environmental dividends. In the meantime, the swap leads to greenhouse gas and particulate emissions moving out of cities, where cars are driven, to lower population density regional areas, where fossil fuel power plants are located. (See Holland, Mansur, Muller, Yates 2016 AER for excellent analysis of the geography of emission profiles changes with increased adoption of EVs in the US.) We don?t know exactly how much EV adoption is optimal today to be able to best take advantage of a cleaner future grid. We would ideally start by pricing all fossil fuels, i.e. both petrol/diesel and fuels used to generate electricity, at their true social cost. That is unlikely to be enough, though, because there are also network effects associated with charging infrastructure. In terms of specific policies, purchase subsidies (equivalently, the removal of the luxury tax) are problematic on distributional grounds. Like solar panels -- even more so -- purchase subsidies for EVs usually favor the highest income families. In the US the top income quintile have received about 90% of all EV credits (Borenstein Davis 2016 NBER) and primarily benefit home-owners over renters, even after controlling for income (Davis 2018 AEL), likely due to availability of fixed parking spaces and incentives to invest in home charging stations. Policies to target subsidies to lower income households have had decent success with hybrid vehicles, but very low take-up for more costly vehicles that are entirely petrol-free. (Muehlegger and Rapson 2020) Encouraging the conversion of public sector vehicle fleets, especially those that operate in high density areas, is one good policy that isn't regressive. I also recommend focusing on infrastructure: policies to develop the density and range of fueling stations. These could include encouraging apartment complexes to provide charging stations for owners and renters alike. But these policies should focus on expanding the network, not subsidizing its use. Free or heavily-discounted charging rates can be problematic as long as electricity is still disproportionately produced using fossil fuels. As EVs become more widespread and increases system load, we will also need to think more about how we price electricity. These prices will affect when people charge their vehicles, which determines which fuels get displaced, i.e. how clean the charging is in the short run, and the extent to which the extra load will increase or stabilize grid volatility, i.e. affect overall system cost. Links: Holland, Mansur, Muller, Yates 2016 AER: https://www.aeaweb.org/articles?id=10.1257/aer.20150897 Borenstein Davis 2016 NBER: http://www.journals.uchicago.edu/doi/abs/10.1086/685597 Davis 2018 AEL: http://faculty.haas.berkeley.edu/ldavis/Davis%20AEL%202018.pdf Muehlegger and Rapson 2020: http://www.erichmuehlegger.com/Working%20Papers/MR_Mass_EV_Adoption.pdf