On August 13th, 2015, Professor Wolak was interviewed along with Monica Padilla and Ted Ko by KALW, a public radio station in San Francisco. The particular topic of interest for the hour-long segment was CCAs (Community Choice Aggregation), which provide an alternative way for communities to receive electricity other than the commonplace utilities. Although the CCA bill came out in 2002, there are only three remaining CCAs today. 

In a recent article by Sarah Tory, Professor Frank Wolak states that in the near term consumers should not expect a rise in electricity bills. This fear of soaring electricity costs comes from the decreased generation of Hoover Dam due to the low water levels of Lake Mead. However, Professor Wolak says that utilities frequently buy "future" contracts, which limits their ability to raise prices. Professor Wolak also states that, because of the mix of renewable resources in the West, other energy sources may help to alleviate the strain on the system from the loss of hydropower.

Professor Frank Wolak was recently interviewed by Julian Spector of CityLab regarding the use of nuclear energy in a zero-carbon grid. According to Professor Wolak, "It makes very little economic sense to phase [nuclear energy] out, particularly given how successful the U.S. nuclear industry has been over the past 30 years". Professor Wolak also points out that American nuclear generators are safer than ever while still boasting an impressive capacity factor.

Despite potential legal and enforcement challenges, California’s new vaccination law may set a precedent for other states, according to Stanford scholars.

The law, SB 277, ends exceptions to vaccination mandates based on religious and philosophical beliefs, leaving only medical exemptions as a path to avoid the vaccinations children are required to have before entering school.

David Studdert, a core faculty member at the Center for Health Policy/Center for Primary Care and Outcomes Research, and Michelle Mello, a core faculty member of Health Research and Policy, authored a report on the new law along with Northwestern Law School’s Wendy Parmet, which appears today in the New England Journal of Medicine. Studdert and Mello are both professors of law and medicine at Stanford.

Studdert, Mello, and Parmet discuss four factors that led to passage of the law. Strong advocacy by several members of the California legislature was one factor.  Another was the state’s efforts to publicize data showing that personal belief exemptions have doubled since 2007, enough to endanger the community. In addition, there is mounting evidence that the recent measles outbreak at Disneyland could have been prevented by better vaccination compliance. Finally, supporters of SB 277 highlighted the risks unvaccinated school children pose to vulnerable classmates. According to the report, “the bill’s proponents focused on the specific threat to schoolchildren who are too medically fragile to receive vaccinations, effectively framing vaccine refusal as a decision that endangers others rather than a purely ‘personal’ one.”

SB 277 could place pressure on other states to tighten their exemptions for school-entry vaccination requirements. At this time, only West Virginia and Mississippi have legislation that prevents personal belief exemptions for vaccination. Adding California may give such laws national attention, and Studdert said that this development may be an “indication that politics are starting to shift.”

However, opponents of the law are likely to challenge it in court. Challengers may argue that the law impinges on their First Amendment rights to free exercise of religious beliefs or that it violates unvaccinated children’s right to access public schools.  However, Studdert “would be very surprised if SB 277 ends up being struck down as a result of such challenges.”  In the past, courts have ruled in favor of public health agencies in similar cases. “For over a century, appellate courts accepted arguments that mass vaccination is crucial to the well-being of the community.”

A more difficult challenge is enforcement of the law. Unvaccinated children can still attend school as long as their parents pledge to complete the children’s required vaccinations, and schools are not penalized for failing to follow up. The authors argue that “state laws should instead task health departments with enforcement responsibility for vaccination mandates” in order to boost compliance. “Willing providers,” or doctors who sympathize with vaccination opponents, may also undermine enforcement if they choose a broad interpretation of the medical exemption criteria. Other ways around the stricter requirements include home-schooling and nannies. This would not affect school safety but could have implications for the larger community.

In a new study in the journal BioScience, a team of researchers including Stanford professor Roz Naylor links marijuana cultivation to widespread environmental damage in California and calls for greater regulation of the crop’s impact on natural ecosystems.

Recent debates about marijuana legalization have focused on the potential social, health and economic impacts, with little attention paid to environmental issues. The new study, spearheaded by the California chapter of The Nature Conservancy, brings environmental concerns to the forefront of the policy discussion. Between 60 and 70 percent of the marijuana consumed in the United States comes from California.
 

Water and wildlife

Marijuana plants require nearly twice as much water as do grapes or tomatoes, and the last five years have brought a 50 to 100 percent increase in the amount of northern California watershed lands used for marijuana production – figures that are causing growing concern among conservationists in the midst of a severe statewide drought.

The majority of California agriculture is subject to heavy water use regulations. Farmers of most irrigated crops help their plants through the dry summer months by filling water tanks in the winter, when streams and springs are full.

By contrast, many marijuana growers draw surface water during the plant’s summer growing season, when drought conditions are worst.

“Taking water directly from rivers and streams in the summer not only reduces the water available for agriculture but also threatens wildlife species, especially birds and fish, that depend on these wetland ecosystems for survival,” said Naylor.

Illegal marijuana plantations in California are associated with a wide range of other environmental impacts, including pollution, poaching, and pesticides that poison wildlife. Even legal outdoor cultivation can cause deforestation and soil erosion.
 

Policy options

The research team identified several opportunities to reduce the environmental impacts of marijuana cultivation in California. For example, states can:

• Offer incentives for growers to protect natural resources
• Enforce new or existing environmental laws,
• Use sales tax revenues to fund restoration projects
• Implement certification or labeling programs to encourage consumers to buy sustainably grown products.

“Regardless of the legal status of marijuana, the way we are currently managing its impacts on water and wildlife in California just doesn’t work,” said Naylor. “Bringing these impacts into future policy discussions about marijuana is critical for protecting California’s environmental resources given the high value and demand for the crop.”

Naylor is William Wrigley Professor of Earth Science at Stanford, director of the Center on Food Security and the Environment, and a senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies. She serves as a trustee of The Nature Conservancy California Chapter.

Media Contact

Laura Seaman, Communications Manager, Center on Food Security and the Environment: lseaman@stanford.edu 
Lisa Park, Media Relations, The Nature Conservancy: lpark@tnc.org.

The United States and European countries can take steps to avoid making the same economic mistakes that Japan committed during the latter's "lost decade," a Stanford economist wrote in a new paper.

The study, published in the IMF Economic Review, describes the reasons Japan was not able to pull out of its long recession in the 1990s, offering some lessons for U.S. and European leaders in the wake of the 2007-09 meltdown.

In particular, the delay in bank recapitalization and the lack of structural reforms in the economic sphere kept Japan from realizing a full recovery, wrote Takeo Hoshi, the Henri and Tomoye Takahashi senior fellow at Stanford's Freeman Spogli Institute for International Studies.

"Bank recapitalization" refers to a governmental reorganization of failing banks, often involving the use of public money to keep them solvent. "Structural reforms" describes how a government might overhaul its economic structures to increase business competition – such as deregulation to cut costs for firms.

The shortcomings in these two policy areas "retarded Japan's recovery from the crisis and were responsible for its stagnant post-crisis growth," said Hoshi, whose co-author was Anil K. Kashyap, an economics professor at the University of Chicago Booth School of Business.

Risky bank lending

Japan's "lost decade" originally referred to the 1990s, though the country has still not regained the economic power it enjoyed in the 1970s and 1980s. Some say Japan has actually experienced two lost decades if the 2000s are counted as well.

Faced with a huge financial crisis at the dawn of its lost decade, Japan had to navigate challenges that other advanced economies had not confronted since the Great Depression, Hoshi and Kashyap wrote.

However, government leaders made mistakes, Hoshi said. One was failure to rehabilitate the banks and another was to misunderstand the nature of the problems afflicting the Japanese economy. For example, much like the United States in 2007-09, the Japanese banks had made many dubious loans to risky customers.

"Instead of recognizing that major structural adjustments were needed, much of the policy response was calibrated under the assumption that Japan faced a simple cyclical problem that could be addressed with indiscriminate fiscal stimulus," wrote Hoshi, the director of the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center.

For example, on the demand side, monetary policy was not as expansionary as it could have been, he said. Deflation persisted for a long time. And fiscal stimulus packages – such as tax cuts – were inconsistent. Meanwhile, much of Japan's fiscal spending took the form of public works projects that had low productivity.

As for structural reforms, the Japanese government lacked a sense of urgency. For example, even in the reform-minded administration of former Prime Minister Junichiro Koizumi, only eight of the proposed 35 reform initiatives would have directly boosted growth. Of the others, 16 might have indirectly supported growth and 11 would have had no effect on growth, Hoshi said.

Drastic change needed

Unfortunately, some European nations seem to be following Japan's lead, Hoshi said.

"In France, Italy and Spain, bank recapitalization has been delayed and the structural reforms have been slow. Without drastic changes, they are likely to follow Japan's path to long economic stagnation," Hoshi and Kashyap wrote.

The problems that held back Japan seem to be less serious in the U.S., Hoshi said: "Employment protection is low in the United States and the labor market shows high mobility. The regulatory advantage for incumbent firms is smaller than in Europe or Japan and starting new business is relatively easy."

As the researchers noted, the United States and Germany are in a bit better economic shape, partly due to the fact that they did undertake structural reforms sooner rather than later. The U.S. was able to recapitalize its banks more quickly, for example.

Still, five years after the failure of the Lehman Brothers investment bank left the world's financial markets in chaos, the U.S. and Europe are not yet back to what had looked normal before the crisis, according to the research. For instance, employment levels have not reached the levels seen before the 2007-09 crash.

"The U.S. recovery has been tepid despite a number of extraordinary macroeconomic policies (at least in the traditional sense). This suggests that the U.S. economy also has problems, but they are just different from those in Japan and in Europe," Hoshi said.

In the years leading up to the financial crisis, the researchers wrote, U.S. growth was fueled by a consumption boom from rapid housing price increases and rising debt levels.

"In a broad sense, the U.S. economy before the crisis was similar to the Japanese or Spanish economies," noted Hoshi, adding that in Japan, the speculative investment boom in the late 1980s masked structural problems.

Clifton Parker is a writer for the Stanford News Service.