Agadir, September 13th, 2017
Allow me to introduce myself. I am the son of an engineer, who designed prostheses for the arm, and named after one of my father’s patients. I am also the son of a mapmaker, my mother studied cartography and filled our home with maps and globes. I am blessed with younger brother and a happy childhood, spending my early days drawing butterflies and maps to imaginary islands. Fast forward for about two decades, and I completed a PhD in economics at the Erasmus University in Rotterdam. After my PhD-defense one of the guests asked my mother whether my newly obtained degree made her proud, she replied: “Well… the degree not particularly, to some people studying comes easy. What does make me proud is to see a diverse group of the people with us to celebrate.”
Indeed, studying came easy, and the tenured position that followed at the University of Amsterdam as well. However, my newly obtained tenure led me to re-evaluate where I hoped to make a contribution with my research. In this process, I learned about the current wave of extinctions, the ‘Anthropocene’ and examples in line with Malthus his theory, which changed my perspective on what makes good economics.1 Changing schools of thought should not pose major problems in itself, however combined with feeling increasingly discouraged by my faculty over the past three years, it left me burned out. Surely, being broken up with trice over the same period didn’t help my emotional state either. So, I decided to buy some time-off to recover, to travel, and to write you these letters in which I hope to provide you with an ‘economics toolbox’ that is better equipped for the challenge that lies ahead of us than most textbooks.
While planning my travel, I imagined arriving in Marrakech by the end of my first week of travel. However, just before leaving home, I came across an advertisement for a climate change conference organized here from the eleventh, so I tried to make it to Agadir in time in four days. This may not sound like much of a challenge, as it is only a three-hour flight, but without flying Agadir is rather far from Amsterdam. The most common response I get to my recent choice of transportation is the question whether I’m afraid of flying, and some have called me crazy, but I appreciate the sense of distance you get by traveling with train, ferry, and bus. Not only does this way of travelling surprise you with spectacular views, it also seems to give more opportunity to meet beautiful people.
So, I started my travel with an Interrail ticket taking me to the south of Spain. Have you ever done Interrail?2 In case you haven’t, I can highly recommend it. I don’t know whether having made four such trips qualifies me as an Interrail-expert already, but I haven’t met anyone who has travelled more kilometers by train, and I believe it gives me enough experience to share some praise, annoyances, and things I find flat out ridiculous.
Let me start with the sweet. Usually you arrive in the city center, so for relatively short distances it may even be faster door to door than flying. For longer distances it does indeed take longer, but you can often find interesting stops on your way and Interrail has a decent app to help you plan your journey. For example, on my second day of travelling towards the port of Algeciras, I had a lunch break of a couple of hours overlooking the historical bridge in Ronda. On top, I find travelling by train more comfortable. However, my primary reason for choosing to limit my flights is environmental: one emits much less CO2 per kilometer. Now for the bitter, at the moment of writing, you can only reserve seats for a limited number of trains online, and every seat reservation adds to your travelling budget, while an Interrail ticket is already more expensive than flying for most destinations.3
This last point about the price difference brings me to what is, in my opinion, flat-out ridiculous and a failure of EU policy. The EU that prides itself for being at the forefront of making the carbon transition, allows airline companies to offer flights for prices below their social cost of carbon. For some reason, airline companies are still seen as a matter of national prestige and often injected with public funds.4 I’d rather see policy that lets failing airline companies go bankrupt, governments that spend public funds on public transport, and taxes set such that flights are at least as expensive (or more) as the same route by train. However, I’m afraid it will be a while before we see such a cultural change.5
Regarding the ‘economics toolbox’ I promised earlier, I have already introduced a rather important distinction implicitly. That is, there is a difference between the price of a ticket and cost of a flight. The ‘true costs’ of a flight include the costs of the environmental damage due to emissions, referred to as the social cost of carbon earlier. In economics jargon, this difference between the price and the full cost is called an externality. Currently, passengers pay a part of the environmental costs in the form of taxes, but it is mostly left to the discretion of the passenger to ‘offset’ their emissions. In this case, because people do not bear the full cost of the flight, they end up flying too much from a societal perspective. Externalities are a well-known form of a market failure.6
On my way to the climate conference, it didn’t take long before I had the pleasure to experience the Moroccan hospitality. Within hours of setting foot on the African continent in Tangiers, I was invited to sample some of the local hash on the night train to Marrakech. Judging from the cigarette burn marks, it was common practice to improvise smoking areas by closing the doors to the aisle and opening the door to the outside. Unlike the carton filters we use back home, the Moroccans simply take the end of a cigarette to roll their joints – so you can smoke it all the way down to the filter.
I woke up to a view of the sunrise over a red-colored misty desert, and a few hours later the train rolled slowly into Marrakech. During my 24 hour visit, I stayed mostly in the Medina, where I raced through the narrow streets on the back of a motorcycle and got lost several times on my way to a little oasis of peace called le Jardin Secret. In the Medina it seems rare to find someone that doesn’t want to sell you something; I had only one such experience with a Tuareg nomad, who invited me in for tea and showed his collection of compasses and photographs before wishing me a pleasant remainder of my journey.
Often economists make the claim that economics is a value free science, but as you’ll notice soon, there are many modeling choices that affect which outcomes can be considered optimal; for example, what weight one gives to trade-offs between the present and the future or how one values cultural and natural heritage. Thinking back on the classes I took during my undergraduate, there has been one theory that provided me with some sort of moral compass. I’m most grateful to my alma mater for introducing me to A Theory of Justice by John Rawls. Consider a situation where “...no one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. I shall even assume that the parties do not know their conceptions of the good or their special psychological propensities. The principles of justice are chosen behind a veil of ignorance.”7 Rawls argued that anyone would agree to two such principles from this hypothetical position. First, inspired by Kant: “Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.”7 And, second: “Social and economic inequalities are to be arranged so that they are both (a) to the greatest benefit of the least advantaged, consistent with the just savings principle, and (b) attached to offices and positions open to all under conditions of fair equality of opportunity.”7
Whom did you include in your abstraction to think about a just society? To Rawls, the theory of justice did not only include the current generation, but also future generations. The just savings principle refers to this, as he clarified: “The just savings principle can be regarded as an understanding between generations to carry their fair share of the burden of realizing and preserving a just society.”7 While the theory of justice provides some guidelines to discuss what is just, we may still disagree about which institutions and what distribution of public funds can be considered optimal. For example, the just savings principle can be used both to argue for focusing more resources to halt climate change – as otherwise future generations face more severe warming – while it is also used to argue for the reverse; that is, redirecting funds away from climate change mitigation to lift people out of poverty now, as a wealthier future generation will be better equipped to deal with the consequences of global warming.
Let us entertain the thought to include other species in our abstraction of a just society as well, extra-terrestrial if you like. What could be an acceptable right to all? Perhaps the best we can strive for from this position is maximizing the odds of survival for the most vulnerable species. Which institutions would you like to reshape from behind this veil of ignorance?
The climate change conference included presentations about a wide range of initiatives; for instance, the Feed Algae Morocco project, promising a plethora of benefits (algae cultivation absorbs CO2, produces fresh water and the algae can used as stock feed); les Sentinelles du Climate, coordinating citizen science and educational campaigns about the effects of climate change on biodiversity; and Green Hajj, creating awareness among pilgrims about their ecological footprint on the way to Mecca and offering suggestions how to minimize and compensate their emissions.8 Unfortunately, most sessions were in French, and while there were interpreters for some sessions, my lack of French prevented me from fully enjoying the networking drinks. From the small talk in between sessions I did discover that most non-local visitors were flying back home the day after the conference.
While the conference was interesting, the highlight of my first week was the bus ride from Marrakech to Agadir. Just after I found my seat, an angel boarded and found her seat next me. With her tanned cinnamon colored skin and her curly black hair turned golden by the sun, I had her mistaken for a local beauty. Luckily, she turned out to be a fellow traveler, so my limited French didn’t pose any problems this time. The three and half hours with Alef through spectacular mountainous deserts flew by, talking about her work as a chef on a boat crossing the Atlantic Ocean and her organic restaurant in Mexico, and about a map I’m currently working on.
At the moment of finishing this letter, I’m waiting for a word from Alef, hoping that I’m not waiting in vain. The past two days I met up with her again after the conference. Together with the friends she was staying with, we visited one of the largest covered markets of Africa (Souk El Had); a perfume-trader showed us his chameleon pet and we chose a chicken to be slaughtered and cleaned at the spot – so that you can see it was healthy – her host explained. On both evenings the feast was followed by a houseparty with an abundance of l’eau de vie, hash, and laughter. Thankfully, the good conversations kept me from constantly staring at my crush. And yesterday, just before leaving the party, I asked her to delay her trip to Essaouira with one day, so we could travel together. She didn’t give me an answer, but she did give me a little kiss. It has been a while since I felt butterflies.
"Le seul véritable voyage, le seul bain de Jouvence, ce ne serait pas d'aller vers de nouveaux paysages, mais d'avoir d'autres yeux, de cent autres, de voir les cent univers que chacun d'eux voit, que chacun d'eux est.”
Marcel Proust (1923, p. 275)
2. Interrail is for citizens or residents of Europe (including Russia, Turkey, and UK, see the terms and conditions for the full list of countries), and for visitors from outside of the Europe, there is a similar Eurail program.
3. This comparison is not entirely fair to Interrail. Depending on the plan you chose, you can travel on 7, 10, or 15 days within a month. However, I used the comparison with Interrail because their cheapest plan is often the cheapest option to travel between two European cities by train.
4. Bridger (2013) describes: “Since the economic downturn took hold at least 13 European governments had to bailout flag carriers, attempting to rescue the airlines.” And referring to a report by the International Air Transport Association (IATA, 2011), Gössling, Fichert, and Forsyth (2017, p. 1296) summarize: “IATA shows, for the period 1960–2010, that airlines have more often operated at a loss than at a profit.”
5. At the same time, there are some positive signs of such a cultural shift. For example, in May of 2012, the supreme court in India ruled that the largest subsidy for individual airfares, the Hajj subsidy, should be gradually reduced and abolished by 2022. The court also ordered that, instead, a similar sum should be added to the education and social development budget, see Mahapatra (2012).
6. For clarification, economists speak of a market failure when an economic activity that is left to an unregulated market does not give the socially optimal outcome. Other classic examples of market failures include public goods (e.g. street lighting or clean air) and asymmetric information.