Electric Utilities

Brad Plummer has a fascinating article on utilities.

Solar Decathlon

If you live in the D.C. area you should go to the mall and check out the Solar Decathlon on the mall. Here is a blurb on the Solar Decathlon:

To compete, the teams must design and build energy-efficient homes that are powered exclusively by the sun. The houses are required to:

• Be attractive and easy to live in
• Maintain comfortable and healthy indoor environmental conditions
• Feature appealing and adequate lighting
• Supply energy to household appliances for cooking and cleaning
• Power home electronics
• Provide hot water
• Balance energy production and consumption.

Universities around the country, and a couple from Europe and Canada, participate. Houses are open to the public on Oct. 9-13 and Oct. 15-18. Go check it out.

Cap and Trade= Carbon Tax + Corporate Welfare part 1 million and five

I have previously stated my preference for a carbon tax over a cap and trade regimen. What I see as the weakness of a Cap and Trade program proponents see as its strength: its opaque nature. It is true that a cap and trade, were the emissions permits to be auctioned off, would simulate a carbon tax. All well and good. But the reason most cap and trade advocates prefer a cap and trade is not because it simulates a carbon tax, but that it does so and reformers can avoid saying the word tax. But as its opacity is a double edged sword, it is also much more susceptible to rent seeking as is evidenced in the form of the proposed Waxmen-Markey bill whereby 85% of the emissions permits would be allocated as opposed to auctioned off. I can imagine how rigorous the allocation methodology will be: 1. Do you pollute extensively? Check; 2. Are you headquartered in or provide service extensively in a key congressional district? Check; 3. Have you donated to my (insert namer or party) campaign? Check; 4. Here is a free emissions permit which you can now use to defray the costs of your pollution by either keeping or selling at a premium to a less politically connected power company.

Tyler Cowen on Climate Engineering

"I don't know much about the technologies but my worries are mainly political. Won't the Russians benefit greatly from a warming world, both because they are a bit cold and because they will access a warmer Arctic? Would the UN Security Council approve climate engineering? Probably not. If the United States did it on its own, could that be perceived as an act of war? If geo-engineering is cheap (which is part of its very promise), and unilateral action is acceptable, don't other countries also get to take their shot at influencing the environment and moving us toward an optimal climate? What does the resulting equilibrium look like? Who moves last? How would we feel if someone changed the U.S. climate to make many parts of the country colder?"

How to Reduce Carbon Emissions: EuroStyle

"The cost of the average used car in Europe is now cheaper than the cost of gasoline to drive it for a year."

The carbon taxes in Europe are vastly higher than they are here.

hat tip: Tim Harford

Disaster Response

The Freakanomics Blog hosted a "Disaster Response Quorom" and I found this bit from Lee Parrow particularly trenchant:

"What we need to do is reduce our vulnerabilities by downsizing the targets that have catastrophic potential. At one third of its pre-Katrina size, New Orleans could be protected from hurricanes and still serve its vital economic functions as a major port and oil and gas facility. By removing federal subsidies for wind and water insurance, and insisting upon appropriate building standards and land use policies (for example, those as good as Holland’s, which is mostly below sea level), huge cities in vulnerable areas such as Miami, Tampa, or Galveston would slowly shrink to manageable sizes. If we don’t limit their size, hurricanes such as Katrina will do it for us, and at enormous costs to human lives and property."

I think this is spot on. The FEMA flood insurance is a complete racket from a distributional sense but it also creates some horrible incentives. You have to step back and actually think of what it means to qualify for FEMA flood insurance. You are moving into an area that a private insurer has decided is uninsurable or to the extent that they offer an insurance policy, it is obscenely expensive. Are these folks really strong claimants for federal assistance? But beyond the merits of their claim, there is the question of incentives. To the extent you provide subsidized insurance you incentivize a tremendous exposure to risk, one that compounds as you are also incentivizing further development which is likely to harm the natural resources in place to mitigate the impact of a natural disaster (think of the wetlands surrounding New Orleans).

From a political perspective, my preferred policy is entirely unpalatable. I think it is morally unconscionable to build up this type of dependence, but once it's there, what do you do? We find the same situation with regards to our farm policy which harvests dependence at home and poverty abroad all the while making us fatter and spoiling nature. The best you can hope for is to slowly ease people off the dependence. But the question is how, I think in the case of people living in Disaster areas you could start to means test flood and wind insurance and then freeze reimbursement levels but index premiums.

Comments On Hillary and Obama's Energy Plans

First off I must give credit where it is due. I was surprised to see both Hillary and Obama propose a cap and trade whereby permits are auctioned off instead of allocated. As such they have both offered substantive climate change proposals. Frankly, I am surprised the press hasn't given this part of their proposals more publicity.

Now, on to my disappointment. Both Hillary and Obama have already gestured towards having one massive pork orgy with the proceeds from permit auction. It seems biofuels and liquified coal will be getting lots of handouts, not to mention other various and sundry renewable energies. I would have much preferred a revenue neutral proposal which dedicated revenues towards relieving lower income folks of their payroll tax burden (thus mitigating the impact of higher energy prices caused by a cap and trade and taxing something bad-consumption- instead of something-good- work). Further, once you have priced in the externalities caused by carbon emissions, whether by cap and trade or a carbon tax, the claim for subsidizing other energy forms is not compelling. In a sense other forms of energy are already receiving a subsidy in the form of not being subject to the carbon tax or cap on emissions.

Carbon Tax Center

Yes, there is an honest to goodness Carbon Tax Center. It has a website and it may actually have a physical existence, like brick and mortar.

Cap and Trade Abroad

China and Brazil are talking about the possibility of implementing a cap and trade system. It will be interesting to see if this amounts to anything. If either country does, especially China, the pressure on the US to follow will be immense.

The Ethanol Myth

hat tip: The Volokh Conspiracy

"When we assume the ethanol production process is fully renewable, it would take all the corn in the country to displace about 3.5 percent of our gasoline consumption — only slightly more than we could displace by making sure drivers’ tires are inflated properly. There are also ethical considerations. In particular, the United States is responsible for over 40 percent of the world’s corn supply and 70 percent of total global exports. Even small diversions of corn supplies to ethanol could have dramatic implications for the world’s poor, especially considering that researchers believe that food production will need to triple by the year 2050 to accommodate expected demand. Furthermore, ethanol would not necessarily be a more reliable source of fuel. By displacing gasoline with ethanol, we are displacing geo-political risk with yield risk, and historical corn yields have been about twice as volatile as oil imports. Finally, because high temperatures can simultaneously increase fuel demand and the cost of growing corn, the supply response of ethanol producers to temperature-induced demand shocks would likely be weaker than that of gasoline producers."

Al Gore Won

The Nobel Peace Prize with the IPCC.

Pipe Dream

I was reading a bit over at the Financial Times about a global warming conference Bush summoned with all of the other big polluters (side note: in German the word for polluter is umweltverschmutzer, which amounts literally to something like earth dirty maker). Bush seems to have transitioned from the earth ain't warming, to the earth is warming but it is unclear what the causes are, to ok, the science is settled. Now I don't think there is much likelihood Bush will actually do anything substantive (like a revenue neutral carbon tax) other than maybe propose another alternative energy R&D tax credit or a tax deduction for purchasing a energy efficient domestically produced washers or other electronic appliances (maybe Maytag is a political contributor to the bushes). But I think maybe there is a chance that he would like to leave office with some warm fuzzies and after the unmitigated disaster that this administration has been (read: Iraq, Katrina, Gonzalez, etc.), something like climate change would allow for a bold bipartisan action to put a prettier patina on Bush's legacy. That said, I am not holding my breath.

Toyota and GM in a Pissing Match

Autoblog chronicles the PR battle Toyota is starting to launch against GM on one of the car it is developing, the plug-in hybrid Volt. What this speaks to really is not that GM is about to take the world by storm with Green Cars but that it (and really all of the car makers) are starting to develop in earnest cars that will have a smaller environmental impact. Coupled with a carbon tax from the government I think this development could be accelerated significantly.

Oil Hits New High

Does that mean Edwards will call for a new round of investigations of oil companies while bemoaning excessive carbon emissions?

Pimp My JumboJet

I'm a bit late to the party on this one but this struck me as both incredibly cool and grotesque. Apparently, Lufthansa Technik is going to be doing a little side business of pimping out A380s (Airbuses JumboFlop) for CEOs and other assorted plutocrats. No word on whether Xzibit will be hosting a Pimp My Ride (JumboJets) episode.

I think I can hear Green Cowboy projectile vomiting.

More on Carbon Tax

Here is David Leonhardt on John Dingell's (D-MI) strained history with the environmental movement and newfound support for a carbon tax.

Here is Larry Summers in the Financial Times on climate change and the possible remedies. Here is a bit from the Summers article:

"Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. "

Where have you heard that before?

The West: "extreme-sport natives"

At lunch today (in a small Wyoming town) I read the Mountain Gazette. Several articles weighed in on moral dilemmas of mixing backcountry extreme sports such as whitewater kayaking, rock-climbing, skiing, etc with conservation and impending development.

While some of the articles made provocative, useful points, some instead held a "native" (native to the West, as opposed to somebody from San Diego or Boston) viewpoint I found frustrating, something I have encountered before in the West.

Take, for example, lamentations over latte-drinking yuppies on vacation, buying second homes and ruining mountain towns that are little slices of progressive, open-minded, green, sports-loving heaven.

First, it is not just your town to lament over. The fact that you or your parents moved there fifteen years before the tide of disposable income rose does not give you exclusive rights to living there. Think about how that town was likely founded in the first place - by miners who illegally prospected on Native American lands, found a valuable mineral, then petitioned the US Army to come kill off the indigenous population.

Second, as the cost of living goes up due to the influx of new money, yes, rent will go up and that will suck. However, if you are living a ski bum or climbing bum lifestyle that relies on part-time low-wage jobs so you have more free time to pursue your sports, my sympathy is limited. Choosing the asceticism of cheap apartments and unsteady work in Jackson Hole has its obvious risks and does not yield the same rarefied viewpoint as choosing asceticism for social benefit (volunteering for humanitarian work in a poverty-stricken area, for example).

Third, extreme sports does not a conservationist make. If you want to get up in arms over new condos being built on your favorite backcountry slope, go for it - but that doesn't make you a crusader for all that is natural and good in the world. Conservation is a complicated, sprawling issue that concerns the whole landscape, and it is not centered on your favorite gnarly lines and wicked chutes.

Upset extreme sport natives, those who live in mountain towns in the west mainly for the benefits of excellent skiing, climbing, and kayaking, make some damn good points: our growing and redistributing population needs some thought and recreation can be an excellent impetus for conservation. But in some aspects, the viewpoints just seem unrealistic.

The divided, turmoiled West

In my limited international travel experience, I’ve often found that people outside the US visualize our country as two coasts, with the West between. Think cowboys and Indians, snow-capped mountains, sagebrush, ski resorts, and Denver.

I do love the Midwest, but for four years I have lived out West. My life has been in an unstable zone somewhere between “tourist” and “local.” I live in a place long enough to know the back roads, to see the bars and the shops on a slow Tuesday afternoon, to absorb the landscape. But then I move. I do not stay not long enough to become part of the true social circles, to see how a town changes over time, or get anything more than a very in-depth portrait.

Tom Robbins wrote something like “geography determines climate, climate determines culture, culture determines morals.” Bernard DeVoto wrote of the West, “Its landscape is dramatic, its climate violent. Its history is dramatic and paradoxical…its inhabitants…are a volatile, expansive people, energetic extroverts at the base of whose conciousness are tensions and conflicts.”

Do we have any readers in the West? I’ve got a bee in my bonnet about this place, and I plan to post on it. I will tag “environment” and “culture,” because perhaps more so than anyplace else in the US, those two concepts intertwine out here.

Obama Says Something Sensible

Here is a snippet from an Interview over at Grist (go over and read the whole thing, he acquits himself quite well):


"Q: Do you believe that we need a carbon tax in addition to a cap-and-trade program?"

"Obama: I believe that, depending on how it is designed, a carbon tax accomplishes much of the same thing that a cap-and-trade program accomplishes. The danger in a cap-and-trade system is that the permits to emit greenhouse gases are given away for free as opposed to priced at auction. One of the mistakes the Europeans made in setting up a cap-and-trade system was to give too many of those permits away. So as I roll out my proposals for a cap-and-trade system, I will price permits so that it has much of the same effect as a carbon tax."

He makes an important point that I have been repeating ad nauseaum, you don't really have a cap in a cap and trade unless you auction permits. A good follow-up question would have been what Obama would intend to do with the resulting windfall.

Environmentalism revisited (based on a Bill McKibben essay)

It has been pointed out that I came to this blog with a manifesto: a view that environmentalism must be re-visioned as a basic value rather than a political or special interest. In an August 2006 essay published in National Geographic, Bill McKibben expounds on this line of reasoning.

He begins by declaring 2005 the year in which “we finally started to understand what we are in for,” in regard to global climate change.

In 2005, much attention was focused on an increase in powerful hurricanes, the loss of Arctic sea ice, and thawing permafrost in northern latitudes. In 2005, scientist James Lovelock stated we have passed the point of no return: too much CO2 has been added to the atmosphere, and runaway global warming is inevitable (global warming may be a positive feedback system that perpetuates itself). In 2005, a NASA climatologist discussing the instability of Greenland’s ice shelf told reporters that “we can’t let it go on like this” for another ten years, without causing changes that would constitute “practically a different planet.” In 2005, even a close friend of the oil industry (President Bush) declared the US to be “addicted to oil.”

Given the likelihood that we are facing a global catastrophe (whether or not 2005 was the year in which we started to "get it"), McKibben points out that environmentalism as we know it is not designed handle such an issue. The first modern environmentalists in the US set out to protect remaining wilderness areas and ameliorate damage to certain ecosystem services (i.e., the Clean Air Act). In these goals, they have been largely successful. However, planet-wide degradation of the climate from industrialization is operating on a vastly different scale, and thus far, has not been addressed in an even remotely satisfactory fashion. Why not?

Here’s how McKibben puts it:

“The old paradigm works like this: We judge just about every issue by asking the question, Will this make the economy larger? If the answer is yes, then we embrace whatever is in question – globalization, factory farming, suburban sprawl. In this paradigm, the job of environmentalism is to cure the worst effects, and endless economic growth makes that job easier. If you’re rich, you can more easily afford the catalytic converter for the end of the tailpipe that magically scrubs the sky above your city.

But it turns out that, above all else, endless economic growth is built on the use of cheap fossil fuel…Precisely the same fuels that gave us our growth now threaten our civilization.”

Or, to put an artistic spin on it, Tom Robbins discusses “The Lie of unlimited expansion” in Half Asleep in Frog Pajamas:

“We built ourselves a fine commercial bonfire, but then instead of basking in its warmth...we became obsessed with making it bigger and hotter, bigger and hotter, until if the flames didn’t leap higher from one quarter to the next, it was cause for great worry and dissatisfaction. Well, any Bozo on the riverbank could have told us that if you keep feeding and feeding and feeding a bonfire, sooner or later you burn up all the fuel and the fire goes cold; or else the fire gets too huge to manage and eventually engulfs the countryside and chars its inhabitants. Nature has always set limits on growth: limits on the physical size of individual species, limits on the size of populations. Did we really believe capitalism was exempt from the laws of nature? Did we really confuse endless consumption with endless progress?”

The point is this: unbridled economics have drastically improved the material quality of our lives, but at a tremendous cost. That cost is being borne by every inhabitant of our planet. Regardless of your political affiliation or personal beliefs, we all have to live here, thus, it is in your own interest – literally – to “be an environmentalist.”

This is a radical idea: for everyone to embrace a broader, deeper sense of environmentalism. McKibben: “For that to happen, we’d need to change…dramatically…We’d need to see ourselves differently – identity and desire would have to shift.” Those in the developed world would need to voluntarily reduce such luxuries as eating whatever produce we desire year-round, living in enormous houses, driving large cars whenever and wherever we please.

Can we actually do that? Can we truly reduce these luxuries? McKibben notes that since World War II, the American standard of living has nearly tripled (compare growing up in the 30s to growing up in the 60s to growing up in the 90s). However, in the same time period, the percentage of Americans who consider themselves “very happy” has remained steady. We don’t need these luxuries to be happy. They are not the bounty of our inalienable right to pursue happiness.

So, perhaps it is not too radical of an idea. If we can still live our lives with the same measure of happiness, and reduce our impact on the planet, it sounds downright reasonable. Perhaps we can even enhance happiness – many environmentalist ideas embrace holistic approaches that build a sense of community (i.e. community gardens), a tried and true source of happiness.