NewGeography.com blogs

London's Daily Mail reports upon a May 11 fire in a shantytown (informal, illegal settlement) destroyed 800 dwellings and left 10,000 people homeless. The Mail article included 17 photographs of the fire, the ruins  people looking for belongings in ash suffused waters and man who has rescued a cat in debris filled waters. The fire occured in the Tondo district, which is two miles from downtown Manila on Manila Bay and two miles from the Doroteo Jose station on the Manila urban rail system as well as the principal commuter rail station.

More than 4,000,000 – more than one-third – of Manila's (National Capital Region) residents live in slums, shantytowns and informal settlements. Government projections indicate that the slum population will rise to 9,000,000 by 2050. More than one-half of Manila's population will be in slums.

Getting the Migration Story Straight: Analysts continue to misunderstand the recent metropolitan area census estimates. Much of the misunderstanding arises from a misinterpretation of a chart produced by the Brookings Institution, which indicates that the rate of population growth has fallen in exurban counties and was, last year, less than the rate of growth in what Brookings calls emerging suburbs and "city/high density suburbs." However, the Brookings chart characterizes  only total population growth, which is the combination of the natural growth rate, net international migration and net domestic migration. In other words, the Brookings Institution chart includes both people who move between areas of the United States and the net of those who move from outside the United States, are born or died.

Perhaps the most befuddled was the Arch Daily, which says that "people are leaving the suburbs and once again flocking to the cities..."  In fact exurban and suburban areas continue to grow, though their growth rates have fallen. The highly touted decline in exurban growth rates is for one year only (2010-2011) and represents only the first year in the last 20 that the exurban has trailed that of the "city/high density suburbs." It is also the first year out of the last 20 that the "city/high density suburbs" did not trail both the suburbs and exurbs.

However, aggregate growth rates say nothing about moving to or from cities. Only one of the components of population change, domestic migration, can possibility indicate movement from the suburbs and exurbs to the cities. People who migrate from outside the nation, for example, are not moving from suburbs to the city (the suburbs of Paris don't count). People who are born or die are not migrating from the suburbs to the cities (where they might come from or are going has been the source of endless debate through history). The only people who can possibly be moving from suburbs and exurbs to the city are domestic migrants ---people who move within the United states.

Figure 1 indicates the components of population change in the core counties of the nation's 51 metropolitan areas with more than 1,000,000 population (there are no city level migration data).

As we indicated in Still Moving to the Suburbs and Exurbs: The 2011 Census Estimates, there was net domestic migration to the suburbs and exurbs between 2010 and 2011. There was net domestic migration out of the central counties (there is no "city" migration data). This is illustrated in Figure 2, which has been annotated to make the actual moving of people clear.

If it should ever occur, it will be very clear when people are moving to the cores from the suburbs and exurbs. There will be PLUS domestic migration numbers to the core counties and MINUS domestic migration numbers from the suburbs and exurbs. Until that time any flocking (though that is too strong a word for current trends) will be away from the cores and to the suburbs and exurbs.

Of course, in the greatest economic downturn in more than 75 years, domestic migration has slowed considerably. It is not surprising, therefore that population growth rates in the exurbs and suburbs have fallen, since far fewer people are moving.

All Domestic Migration was to the Suburbs: Finally, all of the net domestic migration in the nation was to the suburbs and exurbs of the nation's major metropolitan areas (Also see Figure 2).

On the Health of Exurban Housing Markets

On a related subject, University of South Florida Professor Steven Polzin offered an interesting comment on the Planetizen site:

While I have not explicitly researched the distribution of home foreclosures as a function of the transportation costs of residents, I would caution analysts to more fully explore the nature of the housing foreclosure trend before jumping to the assumption that transportation costs were a significant contributor to geographically differential rates of foreclosure. Foreclosures were more prominent in homes purchased more recently relative to the housing crash. These new home purchasers were more often highly leveraged, had little equity in their home, and in many cases younger workers with less job seniority and more susceptible to layoffs. In addition, in fringe areas that had been growing there was a high concentration of homes all purchased recently. Thus, new growth areas were more susceptible to both foreclosures and the cascading effect of home depreciation spreading based on nearby foreclosed properties.

In a new suburb a young financially extended family may lose their job, have no equity in the house and quickly lose their house. Its depreciated value is soon reflected in adjacent appraisals cascading the stress throughout relatively fragile neighborhoods. On the other hand in established neighborhoods only a relatively small share of the homes changed hands near the peak of the building bubble. Thus, many of those homeowners had far more equity in their home and perhaps more job seniority and security enabling them to whether a housing downturn. In addition, the diversity of home ages and types and the less frequent occurrence of foreclosed properties will control the pace at which home value depreciation will cascade through the neighborhood.

If commuting cost was as big a contributor to suburban fringe foreclosure rates then one would have expected downtown condominiums to weather the housing bubble. In many locations like Florida large clusters of new downtown residential properties suffered the same rapid depreciation as did suburban fringe areas. The concentration of new units seemed to be more critical than the location.

Similar sentiments have been posted on these pages from time to time, such as here and here.

We recently partnered with Catherine Mulbrandon at VisualizingEconomics.com to create a series of treemaps that illustrate important aspects of the labor market. In this post we provide a sneak peek at two of the graphics she created. The remainder will be posted in An Illustrated Guide to Income in the United States, a booklet from Catherine set to be released this summer.

These two graphics are based on EMSI’s labor market database, which is a combination of over 80 public and private data sources. More specifically, the first table shows job change for all occupations by industry (based on 2-digit supersectors, as defined by the North America Industry Classification System) and the second shows occupation change by education level. The data is from 2001-2011.

Red indicates decline and blue indicates growth.

Each square on the graphic indicates a specific 5-digit occupation classified by the Standard Occupational Classification system. There are over 800 unique squares present on the charts. Large squares, like the ones on the upper right and in the retail trade sector, indicate a lot of jobs for the specific occupation code. Smaller squares indicate occupations with less jobs.

In the graphic above we have pulled together occupation data related to all 20 NAICS supersectors. Government, health care, and retail trade have the largest employment. Utilities, mining, and management of companies have the fewest jobs. Also note the size of the squares within each industry sector. Here are a few observations:

The graphic above shows the distribution of jobs across all levels of educational attainment. We use the same 5-digit SOC codes and group them according to what their typical educational attainment is. Where possible, occupation titles are included so you can get a sense of where certain jobs fall. Here are a few quick observations:

Differing views on the future of California urban areas are the subject of a California Senate Republican Caucus report (Briefing Report: Attack On The Suburbs: SB 375 And Its Effects On The Housing Market).

The report details differing views on the future of California urban areas as described by University of Utah Professor Arthur C. Nelson in a report for the Urban Land Institute with those of newgeography.com authors Joel Kotkin and Wendell Cox in recent editions of The Wall Street Journal.

Nelson's view is largely that the market for detached housing in California is in decline. Senate Bill 375's planning mandates are being interpreted to virtually ban further construction of detached housing in the state's metropolitan areas.

However, if Nelson's analysis were right, there would be no need for legislative intervention since people would not buy detached housing. In fact, however, the demand for detached housing remains strong. Between 2000 and 2010, detached housing accounted for 80 percent of new housing additions in California's major metropolitan areas.

Critics of Senate Bill 375 market interventions that would seek to steer the market toward hyper density housing (20 to 40 and more housing units to the acre) would increase traffic congestion, increase the intensity of air pollution and make California and encumber an already laggard economy.

The report concludes: "Clearly, before the California Legislature decides to take over the community planning duties of local governments and engage in social experimentation with the housing market, it should perhaps look at both sides of the argument to see if the experiment will be successful." 

It wasn't that long ago that the U.S. was cast as the global climate villain, refusing to sign the Kyoto accord while Europe implemented cap and trade. 

But, as we note below in a new article for Yale360, a funny thing happened: U.S. emissions started going down in 2005 and are expected to decline further over the next decade, while Europe's cap and trade system has had no measurable impact on emissions. Even the supposedly green Germany is moving back to coal.

Why? The reason is obvious: the U.S. is benefitting from the 30-year, government-funded technological revolution that massively increased the supply of unconventional natural gas, making it cheap even when compared to coal.   

The contrast between what is happening in Europe and what is happening in the U.S. challenges anyone who still thinks pricing carbon and emissions trading are more important to emissions reductions than direct and sustained public investment in technology innovation. 

— Ted and Michael

Yale 360

Beyond Cap and Trade: A New Path to Clean Energy

Putting a price and a binding cap on carbon is not the panacea that many thought it to be. The real road to cutting U.S. emissions, two iconoclastic environmentalists argue, is for the government to help fund the development of cleaner alternatives that are better and cheaper than natural gas.

by Ted Nordhaus and Michael Shellenberger

A funny thing happened while environmentalists were trying and failing to cap carbon emissions in the U.S. Congress. U.S. carbon emissions started going down. The decline began in 2005 and accelerated after the financial crisis. The latest estimates from the U.S. Energy Information Administration now suggest that U.S. emissions will continue to decline for the next few years and remain flat for a decade or more after that.

The proximate cause of the decline in recent years has been the recession and slow economic recovery. But the reason that EIA is projecting a long-term decline over the next decade or more is the glut of cheap natural gas, mostly from unconventional sources like shale, that has profoundly changed America’s energy outlook over the next several decades.

Gas is no panacea. It still puts a lot of carbon into the atmosphere and has created a range of new pollution problems at the local level. Methane leakage resulting from the extraction and burning of natural gas threatens to undo much of the carbon benefit that gas holds over coal. And even were we to make a full transition from coal to gas, we would then need to transition from gas to renewables and nuclear in order to reduce U.S. emissions deeply enough to achieve the reductions that climate scientists believe will be necessary to avoid dangerous global warming.

But the shale gas revolution, and its rather significant impact on the U.S. carbon emissions outlook, offers a stark rebuke to what has been the dominant view among policy analysts and environmental advocates as to what it would take in order to begin to bend down the trajectory of U.S. emissions, namely a price on carbon and a binding cap on emissions. The existence of a better and cheaper substitute is today succeeding in reducing U.S. emissions where efforts to raise the cost of fossil fuels through carbon caps or pricing — and thereby drive the transition to renewable energy technologies — have failed.

In fact, the rapid displacement of coal with gas has required little in the way of regulations at all. Conventional air pollution regulations do represent a very low, implicit price on carbon. And a lot of good grassroots activism at the local and regional level has raised the political costs of keeping old coal plants in service and bringing new ones online.

But those efforts have become increasingly effective as gas has gotten cheaper. The existence of a better and cheaper substitute has made the transition away from coal much more viable economically, and it has put the wind at the back of political efforts to oppose new coal plants, close existing ones, and put in place stronger EPA air pollution regulations.

Yet if cheap gas is harnessing market forces to shutter old coal plants, the existence of cheap gas from unconventional places is by no means the product of those same forces, nor of laissez faire energy policies. Our current glut of gas and declining emissions are in no small part the result of 30 years of federal support for research, demonstration, and commercialization of non-conventional gas technologies without which there would be no shale gas revolution today.

Starting in the mid-seventies, the Ford and Carter administrations funded large-scale demonstration projects that proved that shale was a potentially massive source of gas. In the years that followed, the U.S. Department of Energy continued to fund research and demonstration of new fracking technologies and developed new three-dimensional mapping and horizontal drilling technologies that ultimately allowed firms to recover gas from shale at commercially viable cost and scale. And the federal non-conventional gas tax credit subsidized private firms to continue to experiment with new gas technologies at a time when few people even within the natural gas industry thought that firms would ever succeed in economically recovering gas from shale.

The gas revolution now unfolding — and its potential impact on the future trajectory of U.S. emissions — suggests that the long-standing emphasis on emissions reduction targets and timetables and on pricing have been misplaced. Even now, carbon pricing remains the sine qua non of climate policy among the academic and think-tank crowds, while much of the national environmental movement seems to view the current period as an interregnum between the failed effort to cap carbon emissions in the last Congressand the next opportunity to take up the cap-and-trade effort in some future Congress.

And yet, the European Emissions Trading Scheme (ETS), which has been in place for almost a decade now and has established carbon prices well above those that would have been established by the proposed U.S. system, has had no discernible impact on European emissions. The carbon intensity of the European economy has not declined at all since the imposition of the ETS. Meanwhile green paragon Germany has embarked upon a coal-building binge under the auspices of the ETS, one that has accelerated since the Germans shut down their nuclear power plants.

Even so, proponents of U.S. emissions limits maintain that legally binding carbon caps will provide certainty that emissions will go down in the future, whereas technology development and deployment — along with efforts to regulate conventional air pollutants — do not. Certainly, energy and emissions projections have proven notoriously unreliable in the past — it is entirely possible that future emissions could be well above, or well below, the EIA’s current projections. But the cap-and-trade proposal that failed in the last Congress, like the one that has been in place in Europe, would have provided no such certainty. It was so riddled with loopholes, offset provisions, and various other cost-containment mechanisms that emissions would have been able to rise at business-as-usual levels for decades.

Arguably, the actual outcome might have been much worse. The price of the environmental movement’s demand for its “legally binding” pound of flesh was a massive handout of free emissions allocations to the coal industry, which might have slowed the transition to gas that is currently underway.

Continuing to drive down U.S. emissions will ultimately require that we develop low- or no-carbon alternatives that are better and cheaper than gas. That won’t happen overnight. The development of cost-effective technologies to recover gas from shale took more than 30 years. But we’ve already made a huge down payment on the technologies we will need.

Over the last decade, we have spent upwards of $200 billion to develop and commercialize new renewable energy technologies. China has spent even more. And those investments are beginning to pay off. Wind is now almost as cheap as gas in some areas — in prime locations with good proximity to existing transmission. Solar is also close to achieving grid parity in prime locations as well. And a new generation of nuclear designs that promises to be safer, cheaper, and easier to scale may ultimately provide zero-carbon baseload power.

All of these technologies have a long way to go before they are able to displace coal or gas at significant scale. But the key to getting there won’t be more talk of caps and carbon prices. It will be to continue along the same path that brought us cheap unconventional gas — developing and deploying the technologies and infrastructure we need from the bottom up.

When all is said and done, a cap, or a carbon price, may get us the last few yards across the finish line. But a more oblique path, focused on developing better technologies and strengthening conventional air pollution regulations, may work just as well, or even better.

For one thing should now be clear: The key to decarbonizing our economy will be developing cheap alternatives that can cost-effectively replace fossil fuels. There simply is no substitute for making clean energy cheap.

© 2010 Yale Environment 360