Econtalk: David Owen's Conundrum

So I took a two year hiatus from Econtalk.  But I'm back.  There's a lot at Econtalk that I think is pure milarky--not the data or the econ terms.  It's the editorializing that they do between the two.

Anyway.  I'm back.  For the podcast, go here.  And for David Owen's book, Conundrum, go here.

There wasn't much in this podcast that was news to me.  Maybe its because I live in New York City, maybe its because all of my friends are scientists, I don't know.  But there were a few things that bothered me.

First of all, the conceit of the book is simple.  There are unintended consequences to even the best efforts at conservation and efficiency.  Russ Roberts is a professor, and he deals with a lot of students, who maybe aren't that sophisticated.  So it can be forgiven that he holds up Owen's work as an example of how making fuel efficient cars, and seeking renewable forms of energy can have harmful consequences to the environment that they strive to protect.

However, I know better.  And all of my friends know better.  Again, with the caveat that my friends are scientists and politicians...

And the rub is this, we know there are unintended consequences.  The move to ethenol has euthanized the entire fishing population of the Mississipi River.  We know this stuff.  Windmills kill migratory bird populations and have harmful effects on bat colonies.  New popularity of natural sugars like honey have virtually made the honeybee extinct.  We got it.  More fuel efficient cars make people more inclined to drive more and make up the difference.  Well, duh.

But you've missed the point if you think that's a reason to stop trying, to stop innovating, and to stop efforts at conserving.  Russ Roberts makes the point in his podcast, towards the end, where he's saying, (paraphrased) "it doesn't matter if everyone in the world picked up their garbage and drove less, it still wouldn't be enough to fix the problem."  I hear that in Republican think all the time.  "Sure, you can tax the rich all you want, but its still not going to plug the whole in the deficit."

Well, you've all missed the point.  Every.  Little.  Bit.  Counts.  And if the one hundred water bottles that I didn't drink last year aren't in a landfill right now, or in the middle of the atlantic ocean, then that's a big deal.  And that's something to be proud of.  As I've quoted in the past, "The work goes on, the cause endures, the hope still lives, and the dream shall never die."  The work goes on.

Owen's larger point of course, is that it's consumption that drives the consumer binging that so plagues the landfills.  And sure, he's right.  But there's a fix to that too.  Education.  The reason for education isn't just to fill the seats at factories, or law offices across the country.  It's to engender good morals, good tastes, good scientific knowledge and reasoning skills, and to realize that great pleasure can be derived from very modest means.

One last point.  Owens spends quite a bit of time talking about how New York is the greenest city in America.  Yup.  We knew that.  Russ Roberts snarkily said (paraphrased) "and its not because of the raised conciousness," and Owens replies, "no, it's because of the subway system!"  Again, thanks for the snark buddy, but we knew that too.

I have a fantasy where in the future, most humans dwell in megapolises with flying, multi-level, public transit systems.  And outside of those gigantic geodesic domes?  Supporting farmsteads and factories, using recycled air, and funneling waste products into pits that recycle and reuse 100% of it, piping the materials back into those same farms and factories.  And even further, just at the horizon and extending hundreds of miles to the next megapolis?  Untouched wildlife, rainforest and desert, ice capped mountains, and oceans teaming with life.

Of course, wait, I've just given grounds to Russ Robert's real fear.  The tyranny of the left.  He's mentioned this in a few podcasts since I've been back, this oblique fear (paraphrased) "yeah, I guess we could live in a sort of tyranny, where environmentalists have all sorts of regulations.  I think they would (dramatic pause) do other things too. (insert: like rape all your babies)"  Yeah.  Cause there have been so many of us.  I mean, I guess they might cite Stalin, but Stalin was a political opportunist and a butcher, not an idealogue or even a polemist.  And it would be really atrocious if people like George Zimmerman wouldn't be allowed to procure guns, and join vigilante groups, in states that enforce rules like "stand your ground."  Seriously Russ, at worst, I think you're looking at less games like Doom 3-D and Grand Theft Auto 18.  Maybe more female empowered pornography.

After this diatribe, Russ then makes a very reasonable point:  Well, maybe we should get used to the idea that we are a consumerist society and try to come up with ways to cope with that.  Uh.  Wait.  Seriously.  Seriously?  WHAT THE HELL DO YOU THINK WE'VE BEEN TALKING ABOUT?!

Russ, no one wants to take away your lexis and force you to eat grass fed, locally raised beef.  We're all taking a stab at making things better, we're all working on it in our own way, at our own pace.  Maybe that's not enough to save the world, but its a better start than some people can even conceive of. I saw on a talk show the other day, and a woman proudly attested to the fact that she only drinks bottled water.  Said she goes through four cases of it a month.  Are there really people like that anymore?  I thought that was a hangover of the nineties!  That's what we're talking about Russ.  Helping that girl to realize the damage that she herself has caused, and hoping that she takes positive action, that really won't cost her a hell of a lot, will save her time, money, and will save us a whole lot of trash.

The podcast was crappy.  And I blame that on Russ Roberts.  He wasted a lot of time on these political sort of specious arguments and not enough on the details I usually tune in for.  I would have loved to hear more about how locavore isn't always efficient or desirable.  On the webpage they cite an article called "The Locavore's Dilemma: Why Pineapples Should Not Be Grown in North Dakota." That makes sense and confirms a whole lot of things I've thought about before.  But a read of the first 500 words of that article shows already that it isn't an article about economics, as much as it is a crybaby libertarian griping about the media.  Seriously, not a single number until about 1200 words in, and then--the number isn't even a statistic, it's a hypothetical.

Let me explain it to you again Libertarians.  You may hate us and find us annoying, think we're a freakin' broken record, repeating the same thing over again, but---we're not forcing you to do anything.  And to the extent that we can influence policy--that's called Democracy.  That's how the process works, and given the number of corporate dollars in it, its amazing we get anything accomplished at all.

Even the most extreme locavores I know, recognize that there are certain things that they want to eat that the local economy just doesn't produce.  They either skip it altogether, improvise with something else, or, wait for it...make an exception!  Just because you think in black and white, doesn't mean that we have to.  As to reforming the economy to make the improbable to the impossible happen where it oughtn't, that's not what locavorism is about.

Finally, Roberts absurdly states, that even if global warming is true (which he doesn't believe, his exact words are "I'm agnostic to the science") we should be spending our time and dollars on thinking of ways not to prevent it, but to deal with it as it progresses.  Again.

Wow, the resource bucket must be pretty shallow if we can't work on both problems at once.  Way to use your gray matter there Russ.

The Chevy Volt

Joe Nocera, one of my favorite financial writers, wrote a great piece for the Times this morning on the Chevy Volt, check it out.

As someone who wants to be really green, but fails often, I was excited by what he wrote about the Volt and then let down.  Look, just by living in NYC I am one of the most carbon-friendly people in the country, but when I leave the city, I drive long distances--in rental cars.

1)  NYC rental cars rarely have fuel efficient vehicles.  Everyone asks for them, and they're always sold out.  I've only ever managed to get  prius twice.  The new Obama gas regs have helped a lot, I use a lot less fuel on these nine hour trips, but its still cruddy that I want to use such a vehicle and cannot.  Why they don't have more cars in their fleet?  I don't know.  I've asked.  Sometimes its supply problems, sometimes its having a variety of small-to-midsize cars.  I don't know.  Garages are crowded, and they're filled with Kias and other crap cars.

2)  The Volt sounds great.  We may have to leave the city sometime soon.  Anywhere else but NYC we're going to have to buy a car.  It is unlikely that I'll be able to afford a Volt.  Not yet, but there again.  I am exceedingly likely (if I remain on the East Coast) to take drives of three hundred miles or more.  The Volt turns into a regular car after the first 100 miles.  I suppose its still fuel efficient at that point, but it still sort of sucks.

Anyway, food for thought.  Hopefully Michael Lind's fracking dream doesn't nip this in the bud.

Michael Lind - Fracking

So my buddy Michael Lind is again making the case for a resurgence in fossil fuels.  And I must say he's beginning to convince me.  I'm not won yet baby, I need more sweet talking.  I must say--he almost sounds like he's shilling for the Natural Gas Industry.  I hope not, one political betrayal at a time.  On the topic of WeinerGate (the first gate since Watergate which is truly awesome and appropriate.  Don't we all seek a weinergate after all?)  I might try that one on my wife soon as foreplay.  Sigh.  Ok.  Briefly, I really don't care about what goes on in a politician's bedroom.  None of them, whether or not he's a Republican or a Democrat.  It's the policies that matter, the men, are just men.

On to Fracking.  As you know, Lind is a fan of cars, driving, gas and energy.  He says that the use of "shale" gas, which was previously unrecoverable is six times as much as oil, cleaner and with modern technology easy to refine and produce.  He says that we could be witnessing the rebirth of the fossil fuel energy industry.

"If gas hydrates as well as shale gas, tight oil, oil sands and other unconventional sources can be tapped at reasonable cost, then the global energy picture looks radically different than it did only a few years ago. Suddenly it appears that there may be enough accessible hydrocarbons to power industrial civilization for centuries, if not millennia, to come."

Wow, how exciting!  He then goes on to say how all the reasons for sustainable energy are now irrelevant.  1)  Peak Oil is no longer an issue.  No imminent energy crisis. 2)  No political blackmail.  Shale gas, tight oil, gas hydrates are everywhere!  Wheee!  3)  The effect on the environment is no big deal, Natural Gas is clean, drink up!

This is where he loses me:

"The scenarios with the most catastrophic outcomes of global warming are low probability outcomes [Huh?  says who?]-- a fact that explains why the world’s governments in practice treat reducing CO2 emissions as a low priority, despite paying lip service to it [if by lip service you mean broadly denouncing global warming as a hoax, then yes] . But even if the worst outcomes were likely, the rational response would not be a conversion to wind and solar power but a massive build-out of nuclear power. Nuclear energy already provides around 13-14 percent of the world’s electricity and nearly 3 percent of global final energy consumption, while wind, solar and geothermal power combined account for less than one percent of global final energy consumption." 

Phew, boy am I glad that Lind is here to be rational for all of us.  There's a reason wind, solar and geothermal use less than 1% and Lind knows it.  Governments need to get on board and ask for them, governments are the major purchasers of energy resources afterall.  And then he whitewashes the nuclear disaster in Japan.

"The disasters at Chernobyl and Fukushima have dramatized the real but limited and localized dangers of nuclear energy."

A radiation plume spanning the entire Pacific ocean is a localized disaster?  The problem isn't that nuclear energy is unsafe, it's perfectly safe in controlled environments.  The problem is what to do with the waste, which will be radioactive for centuries, and when it all goes to shit (unlikely, but possible) a few of these "localized" disasters in different parts of the world could make the entire planet unlivable.  Or at least, hopefully medical science will keep up with the rising rate of cancer and will develope Battlestar Gallactica like radiation pills.

But I was serious, Lind really does make a convincing argument for Natural Gas, though his arguments consist almost entirely on debunking "alarmist" "Green" studies about the dangers of NG.  His most convincing arguments are political ones.  Namely that to develop sustainable energy will require an enormous governmental cost--which is true.  Wind/Solar had a tremendous boost in the Roaring Two-Thousandsees, when investment banks were using green companies as tax shelters for millions of dollars, but now that the investment banks are gone, and the economy is still staggering, the cost of propping up green energy to the levels needed to power our communities, might well prove too much.  Not when Natural Gas is knocking at the door with a plate of brownies.

Even so, he has a very dismissive, non fact-substantiated view of Green Energy:

"Eventually civilization may well run out of natural gas and other fossil fuels that are recoverable at a reasonable cost, and may be forced to switch permanently to other sources of energy. These are more likely to be nuclear fission or nuclear fusion than solar or wind power, which will be as weak, diffuse and intermittent a thousand years from now as they are today. But that is a problem for the inhabitants of the world of 2500 or 3000 A.D."
My friend, that's a whole lot of assumptions in one paragraph, I don't need to tell you that.  Let's ask my other friend, Andrew Leonard.  He comments on the exact same paragraph above!

"A better explanation for why the world is treating climate change as a low priority problem might be because the U.S. -- historically the largest producer of greenhouse gas emissions -- has refused to take any action at all."
Another goody of Leonard's:

"I'm not sure what definition of catastrophe Lind is using, but the unprecedented frequency of extreme weather events that we are already witnessing all across our planet is a strong indicator that global warming is already contributing to serious disruptions"
As to the relative safety of fracking, Leonard gives us some interesting tidbits:

"I defy anyone to read the New York Times' massive, exhaustively reported series on pollution problems associated with fracking and still not be concerned with threats to the nation's drinking water supply or the multiple failures of our regulatory system. "

Last but not least, Leonard lays it to Lind with Lind's alternative, nuclear energy:
 
"The more pertinent question to mull is why, if the economics of nuclear power make sense, private industry can't seem to make a go of it. The free market isn't very friendly to nuclear power -- it is most widely implemented, today, in countries where there is a strong state presence in the industry, like France or China. Building enough nuclear power plants to make a dent in climate change will be massively expensive. And if we're going to subsidize new sources of energy why not funnel that government funding toward sectors that do not have waste or potential meltdown issues -- like wind and solar."

PlanetMoney: The Pelican Bill

So, Planetmoney did an interesting post on July 30th, about the environmental costs of the BP spill.  It's an interesting piece.  As we've discussed environmental costs are not included in GDP.  One of the reasons for this is because its difficult to effectively cost the effects on the environment.

In this case, they decided to price a pelican.  In point of fact, a much more valuable way to have done it was to tally up the price of shrimp in the Gulf of Mexico, but hey, I guess they wanted something that was more esoteric in value.

There first stop was to a bird lover, who paid up to $500 for a Pelican.  One of the hosts scoffed at this, saying that what a rare bird collector and preservationist would pay isn't the best estimate.  The second stop was Hollywood.  Hollywood, being in the business of accurately fabricating real life, rents pelicans.  That price was even higher, at $4,500 a day.

But here's where it gets interesting.  They talked to Gardner Brown, of the University of Washington, about his work valuing a wild duck.  This theory, called contingent valuation makes some interesting points:  1)  Nature is a public resource, ostensibly, we are ALL owners.  So while, we may not value a pelican particularly highly, maybe a few cents, in aggregate, the value of that pelican can be quite high.  Also, and this is the reason for this post, Brown, whose work was done for licensing and wildlife hunting issues, would go up to hunters and ask what price would they pay for one more duck.  One of the planetmoney hosts again scoffed at this, implying that hunters aren't necessarily experts, or that they wouldn't necessarily be honest.  He further stated that a survey isn't the same as a live market.  While these are good questions, I think a really obvious point would be that:

If my government were really interested in conservation, then they would pay hunters to stop hunting.  Recognizing that hunting is the source of their livelihood, the price of a duck is the hunters gross income.  It's not preferable, for obvious reasons, I mean, you'd have to be able to prove that this was your only source of income, and then what?  You would get paid to sit around all day?  This isn't a big problem in North America, but in the African bush, it's a very big problem.  In fact, AIDS was probably loosed on the world through a very similar transmission, people hunting and eating infected chimpanzees.  Bush meat is very popular in developing countries.  Not only is it cheaper than going to the market, there is also a blackmarket value for interesting animal parts.  Completely aside from the blackmarket value, is the superstitious value of eating gorilla balls for virility.

Thoughts on the Environment

I've always held that there is no rational reason to believe that global warming is a hoax, or that concerns about protecting the environment are unwarranted.

Here's a simple test.  If you were taking a nature walk through your local preserve, and you decided to have a little mid-hike repast, let's say a candy bar, would you dump the wrapper on the ground?  Or would you put it away in your bag to dispose of later.

I'd like to think that even the staunchest global warming denier would choose to save the wrapper for the next garbage can he sees.  I could be wrong about that.  I'd like to think that anyone who is hiking in the forest would be offended by seeing someone else's wrapper on the trail ahead of him.  Hiking in nature is all about breathing fresh air, seeing, remembering that primal forces exist outside of the realm of man, looking for wildlife, enjoying the cheap showiness of nature, what better way to be dragged forcibly back to earth than a filthy three musketeers wrapper on the ground.

Whether or not you believe in the established science of global warming, whether or not you think the whole thing is a hoax or a giant conspiracy, if you pass that test, you should be all about passing environmental protection laws.  Let's put the wrappers in the garbage can please.  It's not just a courtesy, it's an homage, an ode, a benediction to the forces that keep us living on this planet.

The only rational argument to environmental protection has been that there is a tremendous expense to it.  An expense that would cause irreparable harm to the economy.

Where is the harm in factories not dumping waste chemicals into the sky, the sea, rivers and lakes?  It's an added expense to the bottom line, but environmental costs have economic repercussions.  Let alone the healthcare costs of widescale poisoning.  Our oceans are undergoing massive irreversible extinctions--that's a much larger cost to jobs, food prices, local economies than an added surcharge on the price of goods.  Moreover, these costs are largely projected.  The Clean Air Act of 1963, passed by the Kennedy White House, under the guidance of Sen. Ed Muskie (D) didn't uproot the financial underpinnings of the country.  The sixties were largely a period of economic prosperity, despite the turmoil of anti-war fervor.  GDP more than doubled in the next decade.  So why is there an assumption that these costs would cripple production?  Also, there is a very real possibility that these expenses would get recirculated as consumer spending in the new economy, increasing jobs, and overall GDP growth.

I know I know, what about jobs.  If Massey Energy decides to buy a mine in India and leave the USA, where will the jobs go?  I suggest we worry about that when it happens.  Increased regulation doesn't cause capital flight, it inhibits it.  Think about the economic crisis.  Did companies move their assets out of the U.S.?  Absolutely not, they moved their money into it, because our regulatory environment makes certain guarantees to corporations.

Lower costs encourage capital flight, but overall lower production costs have already caused some companies to move their operations.  Moreover, the U.S. economy is shifting away from these types of exports, and should shift away from them.  An educated populace is in demand over the world, and that should be our most valuable export.  Anyway, I'm going far afield from the topic du jour.

I keep coming back to it: Here is the reason for protecting the environment. Who is the only group to gain by deregulating, anti-regulation environmental protection laws? Mass industrialists. Everyone else stands to gain except for management. And mass industrialists do not want what we need. They have the money and the power to live the way they choose, wherever they choose to live it.  But clean air, clean water, clean food, and the continued survival of the all the genetic diversity our planet can muster, that's what we need. And that's in jeopordy because of the short term needs of less than one percent of the population.