Derek Lemoine, Associate Professor of Economics
July 9, 2018
Six Questions with Derek Lemoine
"Once we understand what policy should aim to do, we can have a discussion that is more than grunted beliefs: we can discuss the types of factors that are important for figuring out whether those costs are likely to be large or small."
What brought you to the Eller College in 2011?
The ambition and strength of the economics department, the broad strength in environmental research throughout the university, and the climate, mountains and desert of southern Arizona.
What is your current research, and what most excites you about that area of focus?
A large fraction of my work focuses on climate change. When economists study climate change, we usually focus on the level of emission control policies, on the role of innovation policies and on measuring the impacts of changes in temperature. I have several new projects that instead focus on the dynamics of information about climate change, at multiple timescales.
A first project focuses on short timescales, from days to weeks. Many economists have studied how especially cold and especially hot days increase mortality, hoping to extrapolate the effects to learn about the impacts of climate change. However, this work has largely ignored the role of weather forecasts, which is important because climate change looks a lot more like a forecasted hot day than like a surprisingly hot day. Laura Bakkensen (School of Government and Public Policy, University of Arizona), Jeff Shrader (NYU) and I are studying how forecasts of different horizons affect the temperature-mortality relationship and are developing a theoretical framework that can help us learn about climate change from these forecasted weather events.
A second project looks at seasonal timescales, on the order of months. The U.S. government provides many long-range forecasting products but has little idea of which ones are especially valuable and to whom. Sarah Kapnick (Geophysical Fluid Dynamics Laboratory, National Oceanographic and Atmospheric Administration) and I have figured out how to use the prices of financial options to learn which seasonal forecasting products are relevant to companies’ profits and to commodity markets. Ultimately, we will learn which types of industries use long-run information about weather and why. We just received a grant that will enable us to investigate this question, and we really have very little idea about what we’ll find.
Finally, a third project focuses on decade-to-century timescales. For many years now, the U.S. government has funded scientific monitoring systems, such as satellites and networks of ocean sensors, that help us learn about climate change. I have been working with current economics doctoral student Max Rosenthal and former economics doctoral student Ivan Rudik (now tenure-track faculty at Cornell University) to bring economic analysis to bear on science policy. We have developed a frontier computational model that captures how scientists learn about climate change from new observations. Solving this model required extensive use of the University of Arizona’s high-performance computing facility. We find that improvements in the quality of scientific observations are rather valuable because they allow us to more quickly adapt our emission policies to the true climate system, whether it is very sensitive to greenhouse gas emissions or not that sensitive to greenhouse gas emissions. Interestingly, the value of the next sensor or satellite can increase in the quantity of sensors or satellites that have already been funded, which suggests that monitoring networks should be fairly dense when funded at all. We are currently exploring follow-up work with NASA and with Arctic researchers that would allow us to concretely value particular monitoring systems.
What are you currently teaching, and what do you most enjoy about teaching?
I am finishing a sabbatical, so I have actually not been teaching for a little while. One course that I do regularly teach is a large (300+ student) general education class. As somebody who remembers the confusion and excitement of entering college without a clear path but with a wide-eyed appreciation of the range of options suddenly on offer, I enjoy the chance to reach students who may not have considered economics or environmental topics before. Some discover a new interest and direction, and I hope that the others learn a powerful way of thinking about markets and social issues that they can carry with them down whatever road they choose.
How do you bring your research into your teaching?
Climate change touches on so many areas of life and has so many moving parts. The topic can seem both enormously complicated and hopeless. I broach the issue in two ways. First, the basics of climate change are actually not that complicated. I present the fundamental scientific concepts along with information about how we know them to be true before opening the floor up for any questions students may have. I draw on my scientific training to clarify what is known and not known and draw on my economic research to clarify how knowing or not knowing the answers to various questions may matter for policy. Second, the societal challenge may seem daunting, but once we have an understanding of what markets do when they work well and what situations may prevent markets from working well, we then have a framework that enables coherent discussion of climate change policy. The problem ultimately boils down to the fact that greenhouse gas emissions impose costs that are not reflected in market prices, and policy needs to remove the hidden subsidy that we are giving to fuels that impose these costs. Once we understand what policy should aim to do, we can have a discussion that is more than grunted beliefs: we can discuss the types of factors that are important for figuring out whether those costs are likely to be large or small. Breaking down such a complicated topic into its simpler moving parts seems to be an eye-opening process for many students.
Beyond research and teaching, what are your passions?
I love getting outdoors, far from cities. Since moving to Tucson I have found a new passion for distance trail running, whether 30 miles or 70. There is nothing like pushing yourself hard through a day in the mountains.
What does the Eller Experience mean to you?
Connecting intellectual depth to the practical problems faced by individuals and society every day.