Poverty & the Environment

A UN organization produced a new report out today authored by an apparently huge group of environmentalists economists including some of my heroes like Ed Barbier and Karl-Goran Maler who do environmental work in developing countries. I haven't read the whole thing yet, but it's being touted here as putting some large numbers on previously somewhat ignored places, including identifying what environmental services mean to the poor. If policymakers can be convinced of the value of their natural resources, whether they be the economic contributions of coral reefs (tourism & fishing) or of forests helping to pollinate nearby orchards, maybe they will act to protect them more. Governments of geographically large countries such as India and Brazil are signing on, while unsurprisingly the US is not. I'll be pretty surprised if this really changes policymaker behavior- how many million reports have come out in the past year?- but I like having an increased ability to build an economic case for protecting the environment.

Limiting Runoff: Another Way to Save the Bay

Today's Washington Post describes new regulations proposed for Prince George's County which are designed to force developers to set up better buffers on the edges of their projects. Environmental scientists talk about the share of land in a watershed that is "impervious," i.e. blacktop, concrete, etc., since water running off impervious land collects filth as well as picking up speed and mass en route to plunging into local waterways. Full, fast streams keep water plants from doing their filtering job, and the Chesapeake gets hit with more junk.

Everyone would like the Chesapeake to be cleaner, but the question is how best to accomplish that. Developers say that the new regulations are excessive.

The recession has led to businesses downsizing and an abundance of unoccupied office space, so developers are already struggling, though it's less bad in the DC area than elsewhere. Less development is needed now, but life is already tougher than usual for developers. No question higher costs will hurt a struggling industry, but there are clear benefits as well. I wonder if there has been any detailed cost-benefit analysis....

Corn shortage? Let's use more!

A day or two after an unexpectedly low harvest of US corn hit the headlines, the EPA announces that more corn will be dedicated to ethanol production. In upping the share of ethanol that can be added to gasoline, they're laying the groundwork for increased dependence on corn-based fuels. MSNBC describes the list of those opposed to the move as including, "the auto industry, environmentalists, cattle ranchers, food companies, and a broad coalition of other groups." Not very often that all these folks agree! This seems to be a pure sop to the corn belt, since no one else wants this policy, and it's not hard to understand why. Using more corn in our fuel raises prices on all types of meat, which in our society is mostly fed on corn. Also, E-15 (fuel that's 15% ethanol) is apparently harder on engines built for gasoline, whether they be vehicle engines or chainsaws. All this for a dubious to non-existent environmental benefit. At least Google seems to have more foresight than the Feds as far as energy policy!

Google Energy

I should've posted on this sooner: Google is joining some other investors in a $5 billion power transmission line off the coast of the Eastern US. With that infrastructure in place, it should be easier to set up offshore wind platforms. At least one other wind project has more or less died due to a lack of transmission capability, so this is a real "windfall" for the proposed offshore projects....

Hungarian Sludge

The environmental disaster in Hungary is sounding worse again, with another reservoir wall about to collapse. Any kind of mudslide is devastating enough, as we saw in southern Mexico last month, but these seem particularly scary, carrying toxics and heavy metals that are likely to cause lasting damage. The tributary "Marcal river is dead," according to one piece, and the effects on the Danube are still unclear.

Of course our first thoughts are with the victims, both those lost in the first release and those affected by the devastation to the environment. Our second thoughts, echoed by the Hungarian prime minister, are about how this could have come about. Eastern Europe under the Soviet Union was notorious for pollution; pictures like this one of Copsa Mica, Romania came out after the collapse of the USSR showing how industrial development had not been followed by environmental protection. The situation in general has been better under capitalism, but only when regulation has been effective. You don't have to remember back too far to the Tennessee Coal Ash flood around Christmas of 2008 or of course the Gulf oil spill a few months ago, which reemphasized how ineffective our government can be.

One popular idea from environmental economics is the Environmental Kuznets Curve. It's basically the idea that as countries get richer they first get dirtier, as they industrialize, and then get cleaner, as people are able to turn their attention to the state of the environment and complain about it. My former professor Michael Hanemann is skeptical of the EKC, and with good reason: while it's been found occasionally, it seems a stretch to assume that things will get cleaner on their own as people get richer. It seems more likely that governance is the key: we need a government that is both responsive to problems and effective as it engages them. These days our public discourse seems to focus on failures of government, and that's appropriate, but the solution is not to gut it completely, or we'll end up with more of these disasters.

Turning Over the new Leaf

This article in today's NYT talks about the heavy subsidies associated with purchasing Nissan's Leaf, the new all-electric, plug-in car. It's great to see this thing roll out and it seems appropriate that purchasers receive subsidies given the positive externalities it generates (such as less air and presumably sound pollution in the immediate area and less dependence on foreign sources of energy). The car's sticker price is apparently $32,780 and the car looks to be a compact or sub-compact, so making that cost comparable to other cars in the vehicle's size class is a job that takes some doing. I'm not sure whether that cost includes the vehicle's charger, which itself is subsidized to the tune of $2000 for those who weren't lucky enough to be in the group of 5700 that got theirs for free.

As great as it is to see this first step forward in terms of bringing electric cars to the rest of us, there are clearly some kinks to work out in addition to the likely $35000+ price tag. First and foremost for me is the 100 miles it can travel on one charge. While that will make the car a fine vehicle for a daily commute, many car owners won't be able to make do with just this one vehicle in their garages. Some places are installing charging stations along the highway, but getting a charge built up apparently takes about 8 hours, so unless you want to spend your day at a way station, I can't see that getting the job done.**(See below) Second is the cleanliness (or lack thereof) of the power sources that will actually be moving the car, which in today's society turn out to be mostly coal. It's nice that the power will mostly be domestic, since we can a) regulate it better to keep it cleaner, and b) avoid subsidizing regimes we would rather not support, but until we have more projects like the newly approved Cape Wind facility up and operating, we're just trading one source of pollution for another.

I have lots of questions! I wonder- how does it drive? A friend with a Prius claims that the car has poor acceleration: does this electric number do better? How much noise does it make? (Did they attach some kind of a noisemaker to it so people will notice it coming?) And more importantly, how long until the price comes down? I was shopping for a car in 2000 when the Prius was first due out, and there was an "early buyer's premium" of $5000 extra the car cost at that time. I wonder if the $33K + charger includes something like that, or if they're already pricing it as low as possible. Overall, though, I'm interested and a little excited. Something to watch!

Update, 10/11/10: Apparently the vehicle can recharge its batteries via... gasoline! While this is making some uncomfortable, it definitely makes the car more useful.

Wind farms going up

In spite of the best efforts of the people whose views will soon be permanently altered, the Feds have given their approval to the $1 billion Cape Wind wind farm. The lease pitted sometime environmentalist Robert F. Kennedy Jr. defending his home turf against an array of forces including advocates of green energy and apparent capitalists looking to profit from the windmills. Kennedy argued that the plant wasn't economic: that the costs per kilowatt hour were much higher than safe alternatives. Looks like we'll soon find out!