• Adaptation to climate change in coastal communities: findings from seven sites on four continents

      Berman, Matthew; Kofinas, Gary (Climatic Change, 2019-10-26)
      Climate change is causing wide-ranging effects on ecosystem services critical to coastal communities and livelihoods, creating an urgent need to adapt. Most studies of climate change adaptation consist of narrative descriptions of individual cases or global synthesis, making it difficult to formulate and test locally rooted but generalizable hypotheses about adaptation processes. In contrast, researchers in this study analyzed key points in climate change adaptation derived from coordinated fieldwork in seven coastal communities around the world, including Arctic, temperate, and tropical areas on four continents. Study communities faced multiple challenges from sea level rise and warmer ocean temperatures, including coastal erosion, increasing salinity, and ecological changes. We analyzed how the communities adapted to climate effects and other co-occurring forces for change, focusing on most important changes to local livelihoods and societies, and barriers to and enablers of adaptation. Although many factors contributed to adaptation, communities with strong self-organized local institutions appeared better able to adapt without substantial loss of well-being than communities where these institutions were weak or absent. Key features of these institutions included setting and enforcing rules locally and communication across scales. Self-governing local institutions have been associated with sustainable management of natural resources. In our study communities, analogous institutions played a similar role to moderate adverse effects from climate-driven environmental change. The findings suggest that policies to strengthen, recognize, and accommodate local institutions could improve adaptation outcomes.
    • Adapting to Environmental and Social Change: Subsistence in Three Aleutian Communities

      Schmidt, Jennifer; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2018-04-19)
      Our surroundings and society are both constantly evolving. Some changes are due to natural processes. People are responsible for other changes, because of what we do—for example, increasing the size of the population, expanding technology, and increasing mobility and connectivity. And some changes—like climate change—are due to a combination of natural processes and actions of people. In the Arctic, including the Aleutian Islands, marine and coastal ecosystems have seen the largest number of regime shifts with direct and indirect consequences for subsistence activities, commercial fisheries, and coastal communities (Council 2016). This paper describes current subsistence activities and changes local residents have observed over time in three Aleutian Island communities—Akutan, Nikolski, and Atka. As described more later, we did initial household surveys in 2016 and a second round in 2017, as well as more detailed interviews with some residents.
    • Alaska's Economy and Housing Market

      Goldsmith, Scott; Berman, Matthew; Huskey, Lee; Leask, Linda; Hull, Teresa (Institute of Social and Economic Research, University of Alaska Anchorage, 12/1/1986)
    • Comparing Alaska's Oil Production Taxes: Incentives and Assumptions

      Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2014-08)
      In a recent analysis comparing the current oil production tax, More Alaska Production Act (MAPA, also known as SB 21) to the tax it replaced, Alaska’s Clear and Equitable Share (ACES), Scott Goldsmith, professor emeritus of economics at ISER, found that MAPA would produce higher revenues in the future, if changing to MAPA causes producers to make investments that lead to more production than would have occurred under ACES.2 Professor Goldsmith did not advocate for either tax, but projected effects of each under a range of different future oil prices, production rates, and costs. He noted that comparative revenues are highly sensitive to future costs and oil prices. Oil prices are notoriously difficult to forecast. Future North Slope oil production, as well as lease costs that can be deducted from producers’ tax liabilities under both ACES and MAPA, are also highly uncertain. Proponents of either MAPA or ACES appear to make assumptions about prices, production, and costs that support their arguments. Given the inherent uncertainty about oil prices, new production, and expenditures for capital and operating costs, what assumptions would be most reasonable to make for assessing outcomes of the tax regimes? This note critically examines the relevant assumptions for projecting tax outcomes, and explores how the different taxes compare under a set of assumptions that seem most reasonable, given our best current information. The comparisons address not only the amount of revenue the state would collect, but also how the taxes differently share risk between the industry and the state, and administrative issues affecting the nature of the relationship between the oil industry and state government. The analysis also places the debate about MAPA vs. ACES in the longer term context of Alaska oil production taxes, comparing MAPA and ACES to the original petroleum profits tax (PPT) that preceded ACES, and to the old severance tax PPT replaced.
    • Contribution of Land Conservation and Freshwater Resources to Residential Property Values in the Matanuska-Susitna Borough

      Berman, Matthew; Armagost, Jeffrey (Institute of Social and Economic Research, University of Alaska Anchorage, 2013-02)
      Growing interest in quantifying values of ecosystem services has generated numerous studies attempting to measure the contribution of neighborhood environmental amenities to urban and suburban property values. Proximity to freshwater resources -- lakes and streams -- has also figured prominently in many of these studies. Alaska’s Matanuska-Susitna (Mat-Su) Borough, analogous to a county under state law, is a large and rapidly urbanizing local government jurisdiction adjacent to Anchorage, the state’s largest metropolitan area. As the population of the borough grows, and more land becomes subdivided and developed, an important question arises regarding the contribution of remaining undeveloped land and natural amenities to the economy of the borough. Visitors who are attracted to the scenery and recreation opportunities of the borough capture some of that value, and contribute to the borough economy through local purchases of goods and services. Private owners of borough real estate, who are willing to pay more for property located close to natural areas and recreation sites, also appropriate a portion of the value, however. This study focuses on this latter component of value of ecosystem services. It provides estimates of the enhanced value of private residential property and undeveloped land in the Mat-Su borough created by local protected open space and outdoor recreation opportunities. After briefly describing the Mat-Su Borough region, we summarize the valuation methods and the data available for the study. Then we present statistical results, followed by a discussion of the implications of the findings for valuing ecosystem services in the Borough. We conclude with suggestions for future research to improve the estimates.
    • Contribution of Land Conservation and Freshwater Resources to Residential Property Values in the Matanuska-Susitna Borough

      Armagost, Jeffrey; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2/1/13)
    • Economic Effects of Climate Change in Alaska

      Berman, Matthew; Schmidt, Jennifer (American Meteorological Society (AMS), 11/27/2018)
      We summarize the potential nature and scope of economic effects of climate change in Alaska that have already occurred and are likely to become manifest over the next 30-50 years. We classified potential effects discussed in the literature into categories according to climate driver, type of environmental service affected, certainty and timing of the effects, and potential magnitude of economic consequences. We then described the nature of important economic effects, and provided estimates of larger, more certain effects for which data were available. Largest economic effects were associated with costs to prevent damage, relocate, and replace infrastructure threatened by permafrost thaw, sea level rise, and coastal erosion. The costs to infrastructure were offset by a large projected reduction in space heating costs attributable to milder winters. Overall, we estimated that five, relatively certain, large effects that could be readily quantified would impose an annual net cost of $340-$700 million, or 0.6 to 1.3 percent of Alaska GDP. This significant, but relatively modest net economic effect for Alaska as a whole obscures large regional disparities, as rural communities face large projected costs while more southerly urban residents experience net gains.
    • Effect of Alaska Fiscal Options On Children and Families

      Berman, Matthew; Reamey, Random (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-02-01)
      Alaska’s state government faces an unprecedented challenge, with the need to close an estimated $3 billion gap between projected revenues and expenditures in fiscal year 2017. Total unrestricted state General Fund revenue in fiscal year 2016 (the 12 months ending June 30, 2016) was $1.3 billion, or about $1,800 per resident. That was barely more than the state dispenses annually to Alaska school districts, to support public education (Alaska Office of Management and Budget, Enacted Fiscal Summary). Despite low oil prices and declining production, petroleum revenues still accounted for 72 percent of these funds (Alaska Revenue Sources Book, Fall 2016, Alaska Department of Revenue, Tax Division). Alaska is the only state that does not have either state income or sales taxes. It is clear that Alaskans will soon have to accept some form of broad-based revenue measure to enable continued funding of basic public services. A 2016 analysis by ISER researchers discussed the potential effects on Alaska’s economy and households of various options to reduce expenditures and increase revenues.1 That study examined how the effects of revenue measures varied for Alaska households with different levels of income. These same revenue measures and expenditure cuts are also likely to have a much bigger effect on some households than others, depending on the presence and number of children in the family. This study extends the previous analysis by specifically examining how different options would be likely to affect families and children. Many large expenditures in the state budget can easily be identified as specifically benefiting children. These include state-funded programs such as the Alaska Public School Foundation program and the Division of Juvenile Justice and Office of Children’s Services, for example, as well as joint federal-state programs such as Medicaid and Denali Kidcare. Less obvious are the effects on children of potential measures to fund these and other state expenditures. This study focuses on describing and quantifying the effects of alternative state revenue options on Alaska families and children. In addition to considering how the revenue measures might affect families with children compared to households without children, we also consider how the burden of each measure might differ for rural and urban families.
    • Energy Costs and Rural Alaska Out-Migration

      Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-03-01)
      This report contains results of a formal statistical analysis of the association of high prices for home heating fuel with out-migration from rural Alaska communities, using data from Alaska Permanent Fund Dividend applications from 2003 to 2015. Although anecdotal reports have described hardships caused by the rising cost of fuel, this study is the first to subject the hypothesis of fuel-related out-migration to rigorous statistical testing. This study addressed five main research questions: 1. What is the evidence that out-migration from rural Alaska communities was associated with fuel prices? 2. How sensitive are out-migration rates to fuel prices? 3. Does the effect of high prices on out-migration in communities with the chronically high fuel prices differ from the effect across all communities of high-cost years? 4. How do effects of fuel prices on out-migration differ for regional hubs and smaller villages? 5. How does the magnitude of the effect of fuel prices compare to that of other drivers of mobility, such as employment and income? The study region was defined as the area of western and northern Alaska with neither road nor year-round water access. We divided this region into local areas consisting of the nine Census Areas/Boroughs in the region with the regional hub communities of Dillingham, Bethel, Nome, Barrow/Utqiagvik, and Kotzebue separated from smaller villages in their respective Census Areas/Boroughs. The statistical analysis examined five binary variables representing different types of potential moves that an individual could make outside the local area of residence: 1. Leave rural Alaska (yes or no, all residents of the rural region); 2. Leave the local area (yes or no, all residents of the rural region); 3. If leave the local area, leave rural Alaska: (yes or no, residents leaving local area); 4. If leave a village, leave rural Alaska: (yes or no, residents leaving local area who started in a smaller village and not a regional hub); 5. Leave rural Alaska (yes or no, regional hub residents only) Logistic regression equations were estimated for residents 18 years old to associate each of the five binary variables with fuel prices, controlling for age, gender, employment status and earnings, as well as several characteristics of the community of residence. Teachers, oil workers, mining workers, and pilots were excluded from the analysis. Alaska Department of Labor staff used the applicant’s Social Security Number to link individual Permanent Fund Dividend (PFD) applications across successive years and to 2 state employment security records. Data from PFD applications included age and gender, as well as place of residence. Employment records included earnings by occupation and industry. Retail fuel price surveys conducted by the Alaska Housing Finance Corporation and the Alaska Division of Community and Regional Community Affairs provided price data for home heating fuels. Fuel prices for communities not included in the surveys were estimated from wholesale diesel fuel prices published in Power Cost Equalization program reports. Additional community level data on labor force size, employment, and earnings supplemented data from individual records. Earnings and fuel prices were adjusted to 2015 dollar values using the Anchorage Consumer Price Index. The study found that high fuel prices were associated with more rural Alaska residents moving to urban Alaska, but the size of the effect was relatively small: less than 40 adults each year for each $1 rise in fuel prices. Observed increases in moves to urban Alaska triggered by higher fuel prices came entirely from regional hubs rather than from smaller villages. Although rural Alaska residents were more likely to move from both villages and regional hubs when fuel prices rose, higher fuel prices diverted more village movers to hubs instead of urban areas, so there was a negligible net effect from villages to urban Alaska. Other factors besides fuel prices that change over time also affect migration decisions. The study found that local labor market conditions, as well as the individual’s employment status and earnings had much stronger effects on out-migration than fuel prices.
    • Long-term benefits to Indigenous communities of extractive industry partnerships: Evaluating the Red Dog Mine

      Berman, Matthew; Loeffler, Bob; Schmidt, Jennifer (Resource Policy, 2020-02-21)
      Mining, and oil and gas companies developing resources on land historically occupied and used by Indigenous peoples have faced criticism for offering few benefits to local communities while inflicting environmental damage. The Red Dog Mine – a joint venture between Teck Resources, Inc. and the NANA Regional Corporation – has often been cited as an example for developing extractive industries in a way that does benefit Indigenous communities. The mine is located in an economically impoverished region in Northwest Alaska that has few other wage-earning opportunities for the largely Inupiat population. Although the mine has brought demonstrable financial benefits to the region, questions persist about its long-term benefits to local communities. This paper assesses a suite of long-term benefits of the Red Dog mine, based on findings from unique 14-year panel dataset. The paper focuses on the direct effects of the mine on the individual Indigenous workers of the region. Specifically, the analysis addressed the following set of questions: How does employment at Red Dog affect workers’ mobility and long-run earnings? How long do most local residents hired to work at the mine keep these jobs? What percentage of the mine workers live in the communities in the region, and what percentage of the total payroll do local workers receive? The findings illustrate the strengths and limitations of partnerships between Indigenous organizations and extractive industries, and offer insights relevant to Indigenous communities across the arctic and around the world as they plan development of local resources.
    • Overpaid or Underpaid? Public Employee Compensation in the State of Alaska

      Guettabi, Mouhcine; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-07-01)
      Are state workers better paid than their counterparts in private industry? That question is likely to come up more often, as the state deals with a huge budget shortfall. The answer is generally no, but there are exceptions. We analyzed the question in two ways, using different data sources for cash wages but the same assumptions about benefit levels.1 Using two sources helped us better answer the question, and each yielded the same broad conclusion: state workers are not on average paid more. That’s true, whether we consider just wages, or total compensation— wages plus benefits. But there are significant differences in pay and total compensation of public and private workers in individual occupations. We did this research for the Alaska Department of Administration (see back page). Below we summarize our findings, and inside report more details.
    • Short-Run Economic Impacts of Alaska Fiscal Options

      Knapp, Gunnar; Berman, Matthew; Guettabi, Mouhcine (Institute of Social and Economic Research, University of Alaska Anchorage, 2016-03-30)
      Today Alaskans are talking about how to close the huge budget deficit the state government is facing, with the oil revenues it has depended on for decades now a small fraction of what they once were. Alaska has had budget deficits for several years, and it has made budget cuts—but it has mainly relied on billions of dollars in savings from the Constitutional Budget Reserve and other funds to cover the deficit. Those savings are dwindling, and the state needs to take measures to close the deficit. An important consideration is how various ways of reducing the deficit might affect Alaska’s economy. This study compares potential short-run economic effects of 11 options the state might take in the next few years to reduce the deficit and that are sustainable over the long term. We looked at economic effects of several types of spending cuts and taxes, as well as reducing the Permanent Fund dividend— the annual cash payment the state makes to all residents—and saving less of Permanent Fund earnings. We’re not advocating or opposing any option: our purpose is to estimate and compare the magnitude of the short-run economic effects of different ways of reducing the deficit. Broadly speaking: • Different ways of collecting money from Alaskans affect those with lower and higher incomes in significantly different ways. • Anything the state does to reduce the deficit will cost the economy jobs and money. But spending some of the Permanent Fund earnings the state currently saves would not have short-run economic effects. Saving less would, however, slow Permanent Fund growth and reduce future earnings. • Because the deficit is so big, the overall economic effects of closing the deficit will also be big.
    • Short-Run Economic Impacts of Alaska Fiscal Options

      Knapp, Funnar; Guettabi, Mouhcne; Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 3/1/2016)
    • Treatment of Petroleum Refining and Other Energy-Intensive and Trade-Sensitive Industries in Pending National Climate Legislation

      Berman, Matthew (Institute of Social and Economic Research, University of Alaska Anchorage, 2010-02-03)
      One of the major issues confronting Congress as it deliberates about legislation to limit carbon dioxide and other greenhouse-gas (GHG) emissions is the effect on international trade. If the U.S. implements a cap and trade program, the cost of emissions rights becomes a new business cost for domestic establishments that foreign establishments do not face. This puts domestic industry at a competitive disadvantage in export markets as well as against imported goods. Over time, investments in U.S. industries decline, taking jobs oversees and undermining progress in reducing greenhouse gas emissions. The concern, often called “carbon leakage,” is most acutely felt in trade-sensitive, energy-intensive manufacturing industries. The main climate bills that Congress is currently considering include H.R. 2454 and S. 1733, commonly termed the Waxman-Markey and Kerry-Boxer bills, respectively, in reference to their original sponsors. H.R. 2454 passed the House on June 26, 2009 with a recorded vote of 219-212. The companion Senate bill was filed on September 30, 2009, and is at this writing (11/06/09) under markup in the Senate Committee on Environment and Public Works. S.1733 incorporates many sections of HR 2454 verbatim, but differs in some respects in the way it treats energy-intensive and tradesensitive industries. This policy brief analyzes the way that both bills approach the issue of carbon leakage, with particular attention to the petroleum processing industry. The next section outlines the general treatment of energy-intensive and trade-sensitive industries that is common to both bills. Then, the brief discusses the specific treatment of refined petroleum products. Following that comes an analysis of the limitations and deficiencies in the approach that Congress is taking. The brief concludes with a discussion of potential modifications -- an outline of proposed amendments -- that could address the deficiencies consistent with the overall approach of H.R. 2454 and S. 1733.