Home Solar Systems for Honda Customers

    Honda and SolarCity Corp. have recently signed a partnership agreement to make the installation and use of home solar panels more feasible for Honda customers and dealerships. The agreement states that Honda will provide $65 million in financing to SolarCity, which SolarCity will use for solar panel installation. We always hear about the various incentives car dealerships offer their customers such as free oil changes, 0% financing for the first few months, etc., but Honda plans to offer its customers a new kind of incentive: “Purchase a vehicle from Honda and pay little or no upfront cost for solar panels on your home or business.” Honda and SolarCity executives project that they will be able to install over 3000 solar panel systems on residential homes and 20 systems on Honda dealerships.
    The plan was initiated over a year ago by Honda when they were looking for a solar systems partner to supplement Honda customers who own Honda hybrid and electric vehicles. It wasn’t until recently that Honda decided that it wanted to offer a “solar-incentive” to all of its customers. This deal works for Honda because Honda has always been a huge promoter of environmental quality and it is now privately subsidizing the solar panel market which will generate a “modest” return for the company.
    This partnership isolates buyers that SolarCity is most interested in. Honda customers and potential customers are most likely able to qualify for solar panel leasing as they are likely to own their own home and qualify for a car loan which translates into qualification for solar installation and leasing. Demographic teams from both Honda and SolarCity agree that the partnership will put SolarCity in direct connection to a potentially huge market that qualifies for solar leasing.
    Like most alternative energy companies, SolarCity has only worked with financial lending institutions that only provide capital to the company. The key of this deal is that the partnership will provide SolarCity with the necessary capital and introduce them to a market that both companies believe they will fit perfectly.
In my opinion, I think the deal Honda and SolarCity struck together is a pioneering move for the future of solar and other forms of alternative energies. This shows the true power that incentives have on markets and what happens when government assistance begins to scour how the private sector reacts to the opportunity to invest. The problem many solar power (infrastructure) companies have is the diminishing government subsidies that are the major source of this industry’s capital. With government subsidy funds for solar running low, Honda stepped in and gave SolarCity a new, organized market to attack, and is creating opportunities that the public sector and its subsidies have failed to do. By diminishing the cost of solar power installation and giving customers the incentive to install solar panels on their homes, customers can avoid the infamous increasing monthly payment of the solar panel lease.
    Public and Private lenders have just thrown money at the solar companies and simply sat back and expected returns on their investment. Rather, Honda wants in on the action and their partnership with SolarCity will be mutually beneficial for both parties. This partnership move has the potential to influence other private corporations who share the same values as alternative (green) energy companies to turn a solid profit, help aid the future of energy, and eventually reduce the market power commanded by large oil companies.  
Questions:
1.    ESS guys: Although, in this case, Honda shares the same environmental values as SolarCity, do you think that this type of market incentive could influence other forms of private investment from individual investors or companies who maybe don’t care so much about the environment and only care about their bank accounts?
2.    ECON guys: This move by Honda and SolarCity obviously strives to reduce carbon emissions. But, do you think that if Honda invested the $65 million in their own technologies to produce more electric and hybrid cars or make the electric and hybrid technology better would have a larger impact on the reduction of carbon emissions?
--Alex Ricas
See also: Electric Vehicles & Cheap Solar from Honda

BG&E

Update on energy in Maryland from Alex Ricas:

So I just got off of the phone with BGE to set up an account for my new apartment. I asked about them buying energy from constellation (parent company) and they said that their now owned by Excelon who owns Constellation as well. They gave me rates to compare (8.765 cents per kw currently and 9.5 cents by June). They are sending me a list of their competitors to call and she said to compare the rates now and in June and a few other things. Maybe I can get energy cheaper than BGE!! Just figured I would tell you since its pertinent to our conversation in class today.

Thanks for the update, Alex! As usual, notes from you folks are not quizzable, but hopefully interesting....

I'll share my experience, since we're talking about it. Last year I asked BG&E to get my power from Next Era Energy, who sells wind power at I think 9.9 cents per kwh, a little more than BG&E's usual rates.

Call it good or bad, but I haven't received a bill from BG&E in over a year! NEE and BGE don't communicate well, and BG&E can't bill me until they get that straightened out. When I finally hear from them, chances are I'm going to have like a $1500 bill, at least, but I haven't paid anything for a year....

The Future of Coal

    “Clean Coal Finally a Reality?” is an article about a team of researchers at Ohio State University (OSU) that have developed a new method for harnessing the power of coal.  The newly discovered method is called Coal-Direct Chemical Looping (CDCL), and it utilizes iron oxide beads that will be used instead of traditional O2 oxygen.  The presence of iron oxides makes containing carbon dioxide (CO2) in the chamber much easier, and therefore less will leak into the environment.  This method exceeds all goals from the Department of Energy (DOE) and OSU has plans for constructing their large-scale pilot plant in Alabama that is set to begin operations in late 2013 using CDCL.
    The second article titled, “Economics of Coal Power Shifting” states that coal is losing its battle with other energy sources based mostly on its merits. The United States has decreased its dependency on coal.  Over the past six years, power generated from coal has dropped from 50% to 38%.  There are a few reasons for this according to David Schlissel, an energy economist. Schlissel states that the cost of constructing a new power plant has risen tremendously; from 1.8 billion to 4.9 billion in one example from last year.  Also the plummeting cost of natural gas has caused some plants to use their natural gas generators rather than their coal.  Due to the decreasing costs of natural gas, more money can be profited by the suppliers, and therefore natural gas is slowly becoming a supplier’s power source of choice.
    It makes perfect sense for power generating companies to prefer natural gas at this time due to its currently low price.  However, natural gas is not a permanent solution in my opinion. Fracking (method used for extracting natural gas) is just as harmful to the environment, if not more so, than mountain mining for coal.  Also, rural small mining cities (in West Virginia, for example) around the country would be devastated if their coal mines were closed. Natural gas may be a cleaner form of energy in regard to air pollution, but it is still a fossil fuel; therefore it is a limited natural resource. If the CDCL method is truly effective, and does not significantly raise the price of coal or combusting it, I believe it would be a better solution than increasing the demand for natural gas. I believe it would be cheaper to reconstruct the remaining coal plants to use the CDCL method rather than build completely new plants that surround natural gas combustion. Also if natural gas becomes just as popular as coal, humans will be destroying twice the land since coal and natural gas do not come from the same source typically.  Therefore, I believe developing a cleaner burning coal is a better option than increasing demand for natural gas.
--Stephanie Lowery

Invasive Carp

    Asian carp, introduced into such tributaries as the Mississippi, are an amazing hazard to local ecosystems and economies. Carp are a type of fish that thrive in low oxygen environments, and are especially good at filter feeding their diet of choice, algae. Asian Carp such as the Big-head or Silver Carp, which have been introduced into American waters, have a nasty habit of jumping out of water, or breaching, as a result of disturbances such as a motorboat passing by. After being introduced into many American water systems as a result of flooding of fish farms about a decade ago, they have slowly advanced towards the Great Lakes. In a recent article by The Washington Post, studies revealed DNA evidence that the notoriously invasive Asian Carp had made its way beyond electrically charged barriers protecting the lakes, which could spell disaster for the Great Lake’s seven billion dollar per year fishing industry.
    The fish are damaging the environment by outcompeting native fishes for resources, as well as the economy. Due to their lack of natural predators, they become very large and exist in mass numbers. As one may imagine, getting hit in the face at high speed with a large fish can cause considerable damage and discomfort. As a result of dangerous boating conditions, many boaters are refraining from using the waters. One of the only ways to respond to the massive horde of Asian Carp include fishing them out. Many local areas afflicted with the fish have created special fishing tournaments to attempt to collect as many as possible.                

    Despite the efforts of locals, the fish remain one of the greatest threats to the Lakes since Sea Lampreys or Zebra Mussels. Unlike the former, with proper preparation, they are acceptable for human consumption. [Editor: unlike the former? Lampreys are said to be edible, even tasty!] This can assist in the eradication of the species, especially if there is a demand to harvest them. The inherent problem with creating demand for a good which is invasive and harmful to a local environment is that when we have fished them to extinction, we will have to find a new good to meet that demand. Local economies can benefit in the short term from such practices, as well as the fishing tournaments, however, the fish are extremely harmful to the local ecosystems in which they invade, and ultimately do more harm than good. Personally, I look forward to the day that they are eradicated, regardless of the possible lost profit that could have been incurred by turning them into a commodity.

--Jack Valenti

Climate Protection Act & Sustainable Energy Act

Last Thursday, on the 14th of February, liberal senators Barbara Boxer of California (D) and Bernie Sanders of Vermont (I) told press of a new bill proposal that will tax carbon emissions. This bill includes two new acts: The Climate Protection Act, which would enforce a carbon tax of $20.00 per metric ton released, a rebate program that returns 60% of the revenues to consumers to offset higher energy costs, and the Pollution Reduction Trust Fund, which would see that the other 40% be used to fund new renewable technologies. The Sustainable Energy Act would eliminate certain fossil fuel subsidies. Also, the bill would give the EPA the power to regulate hydraulic fracturing under the Safe Drinking Water Act. This carbon tax targets big energy such as coalmines, oil refineries and gas production. The new bill models Alaska’s “Permanent Fund” which distributes royalties from the states oil industries to all Alaskan residents each year. Last year every resident received $872.00.

There is a very strong opposition to the bill with conservatives who believe that this tax would raise the price of all goods and services and end up devastating the economy, among other things. Many senators and representatives in our government have been sponsored by big business in their campaign financing. This can make it hard to not be unbiased or bipartisan with their decisions regarding new legislation that could hurt big business. 

In my opinion, we as a nation are long past due to jump on the climate change bandwagon. We have been talking about environmental protection and global warming for generations but have completely failed at passing and implementing any sort of legislation to combat this problem. I am fully supportive of this bill despite what may happen to the economy or my energy bill. The carbon tax would force people and industry to reevaluate how much energy they use and hopefully change our greedy, consumer driven lifestyles.

--Amanda Wayman

Food Miles

A quick Google search gave some numbers to the point made in class. This source from 2008 concludes that transportation accounts for 11% of lifecycle GHG emissions, while this source (date unknown) says that the number is closer to 6%. Production is really the lion's share of emissions!

Feeling congested

Two suggestions for improving traffic congestion:

A professor at the school I came from has an interesting paper: he finds an unexpectedly huge effect of public transit on relieving congestion.

Also, an op-ed in the NYT about the importance of increasing the gas tax.

One day later, the Washington Post chimes in, summarizing a study that finds that gas taxes are 6-14 times as effective as fuel standards. The problem? People find such standards less threatening: they don't worry about having to pay for more expensive cars down the road, while the prospect of paying more at the pump is something worth changing one's vote over!

Fish and gas

Two quick hits: cool study by the Oceana group reported on by the NYT and the SF Chronicle today. Basically, in a restaurant, half the time you don't get the fish you think you're getting. In a sushi restaurant, you almost never get what you order, and if you're in Texas, you literally never get what you order! Wow.

Also, on our current theme of gas prices, guess what gas prices affect? Walmart sales. Yep.

Parking in Canton

Alex pointed this article out to me, and since one of you found it first I won't quiz the class on it. Still, it's cool and I wanted you to see it.

In Canton (downtown Baltimore, not Ohio) they have a big problem with parking: too many cars and not enough spaces. So part of the area implemented a permit plan, which the Sun reports was really useful. (If you've used up your quota of Sun pages and you're in the class, I posted the piece under blog readings on Blackboard.) Residents that had been forced to circle for hours looking for a spot were able to get in much more quickly. It turns out that raising prices actually does the job! (And as a bonus, the reporter called Donald Shoop Shoup, the author of one of the articles we read earlier this semester, and quoted him in the piece.) So great: economics produces a solution.

However, the piece talks about how the parking permits were nixed, and further, the mayor has banned them for the next five years. What the heck?! Yes, the permits mean that some people had a harder time finding parking for visiting friends, but I couldn't believe that would kill the program. I mean, that's almost the point of the program: that spots should go to residents.

So I did a little more digging and uncovered the reason the parking permits were shot down. Turns out that the area is currently home to a burgeoning business: an internet startup in the area, Milennial Media, just went public to the tune of $1.8 billion. The workers at that company are trying to use street parking in the Canton area, which creates a conflict. Well, the mayor doesn't want anything coming between her and those tax revenues. (And I have to say that as a resident of Baltimore City, I want her to have those revenues: that's money to improve the city that isn't coming from my super high property taxes!) Anyway, she's trying to smooth the way for that company to stay, although it sounds like they are rapidly outgrowing their current space and are likely to be moving away soon anyway.

So economics solved the problem, but economics brought the problem back, unfortunately for the residents of Canton!

Electric cars

Although the average customer can save $3000 per year in gas costs, people still aren't flocking to electric cars, even in alleged eco-haven California. This in spite of a price tag as low as $19,000 and with other incentives such as use of high occupancy vehicle lanes and other tax breaks. Part of the problem is "range anxiety," people's fear that the battery will die and they'll be left somewhere unable to move their car. Sales are anticipated to rise, but people have been anticipating that for a long time. When will they finally take off? It's hard to say. What else do you think might make a difference? Oh, and by the way: if you are interested in doing some research on this topic, please let me know. I have a friend who works for the city of Baltimore who is trying to get a study going.

Conservacion Patagonica

  The title “In Patagonia, Caught between Visions of the Future” is a perfect paraphrase of the article. In the small town of Cochrane, Chile you can see two opposing movements. On one side you have environmental conservation and the other they are trying to exploit the environment for energy in the form of a large hydroelectric dam. The people in this small town are torn between sides. Many of the residents support the move towards energy independence but are not sure how the project will affect local culture.
  The hydroelectric dam project, known as HidroAysen, is a partnership between a Chilean company and an Italian- Spanish company. The $10 billion project is set to generate 2,750 megawatts, through a series of five dams. The Chilean government is in support of the project, but the people around the proposed sites are not exactly on the same page. HidroAysen has invested into the town of Cochrane, providing jobs and improved infrastructure. Those opposed to the project say the project would damage the ecosystems around the sites.
  Right next to the proposed project in Cochrane is the entrance to Conservacion Patagonica, a 660,000-acre National Park. Conservacion Patagonica is under the control of former chief executive of the Patagonia Clothing company. The fact that it is run by an outsider raises concern for many of the locals. Many view their efforts as an infringement on the lifestyle locals have had for hundreds of years. They are working to restore their reputation with the locals.
  Despite the local opposition, Conservacion Patagonica is doing a great service for the area. If they didn’t own the land I am sure other people would be looking to use the land for something. But they are conserving it for no economic gain; they have the best interests of the environment at heart.

  Since the previous article was released, HidroAysen has suspended the environmental impact assessment, which is required before construction can start. Colbun, a Chilean company and one of the two companies backing HidroAysen, has stated that the uncertainty in Chile’s long-term energy strategy is a major reason in suspending progress. Many believe Colbun is using this as an excuse to back out of the costly project, with other outside investors already showing interest. This would open the door for the project to be completely foreign funded.
  In my opinion it would be in Chile’s best interests to pursue alternate forms of renewable energy that are less impactful on the environment. Both the people and government seem to be on the fence regarding a $10 billion project that would not be reversible. Chile should first plot a long-term energy plan and follow it. A study by international energy experts show that Chile has the potential to generate renewable energy via much more efficient methods than HidroAysen.

--Matt Heilman

GMOs

A few articles caught my eye about GMOs.

Let me say first that I personally am in favor of GMO crops. People have been breeding animals and crops for hundreds of years in attempts to isolate desirable traits, so why shouldn't we do it faster when we have the technology to do so? Why put labeling restrictions on, for example, highly productive varieties of wheat? After all, if we use less productive methods, we have to cultivate more land. Shouldn't we limit the amount of land being cultivated? Still, the GMOs on animals make me nervous for some reason. See the specifics after the jump.

Japanese Whaling

  An international whaling moratorium was put into place 1986, but countries like Japan and Norway continue to ignore or bypass anti-whaling laws. Specifically, Japan hunts whales under the scientific research loophole and sells the whale carcass to civilians as research byproduct. The whale meat sold in Japan amounts to 5,000 tons in 2011, as opposed to 233,000 tons in 1962. In addition to the dramatic decrease, whaling culture only consists of about 1,000 people, but Japan has recently increased subsidies of the whaling industry to $400 million. The profit gained from whaling only amounts to about $45 million. Government officials say that whaling is an important cultural tradition and reducing subsidies would cause undue suffering in whaling communities with subsistence economies. There is much debate as to whether or not commercial whaling is further harming certain endangered whale species populations, but the number of whales killed has been significantly reduced since the moratorium. Alternatives to making whaling completely illegal include tradable whale quotas similar to the emissions cap-and-trade market.

  Comparable to the endangered rhinoceros populations in Zimbabwe, I think that whaling populations could be more easily maintained with strict property rights perhaps including marking whale herds that migrate globally or simply owning certain hunting or touring grounds. In regards to subsidizing a dying industry, perhaps the money should go back to disaster relief (from which a large sum was taken) and some of the money should be used to help whalers learn other trades that are more economically viable. Tradition and culture are generally not good reasons to mess with the market.

--Jacquelyn Picciani

Food Scrap Composting

The article “Composting efforts gain traction across the United States” from the Washington post discusses the rise in food scrap composting in the United States (Eilperin).  Private businesses and residential communities are the main groups that have set up food scrap recycling programs. As of 2010, only 170 communities in 18 states have a composing program. Only 97% of all food waste went to landfills, while only 3% was composted.
There are many benefits that come with increased food scrap composting. Primarily, composting reduces waste that would otherwise end up in the landfill, which results in for more land for other purposes. Composted food scraps also help enrich soil. Large institutions can make money by selling their food scraps to third party operators. The government has stepped in to increase the supply of food scraps and composting sites. In one community, the Office of Planning was given a $600,000 grant to build multiple composting sites. In San Francisco, residents are charged based on how much trash they generate. The option to compost for free, gives residents the incentive to increase their rate of recycling and composting. In one Oregon city haulers come once a week for composted material, while only coming every other week to pick up trash. This influences residents to sort their food scraps for composting, which decreases their trash output.
The main issue is that our country’s trash disposal system lacks the large-scale capacity to handle our food wastes. As a result, companies like Safeway are faced with the cost of shipping their food waste over 100 miles to be composted. The cost of shipping the food a greater distance is more air pollution emitted into the atmosphere. An increase in composting will have a negative cost for the trash industry as well. With less waste entering landfills, trash industries are now receiving less revenue from costumers who pay to put their trash there. Also, some communities that currently have contracts with incineration sites will not want to compost because they will still have to pay the incinerators despite their reduced trash output. The article “Cities Get So Close to Recycling Ideal, They Can Smell It,” from the New York Times points out some other costs of composting. Food scraps inevitably attract animals. In Oregon, large amounts of sea gulls are drawn to food scrap collection sites, causing a big problem for collection companies. The article also mentions how reduced residential trash pick up results in the increase of non-recyclable items sent to recycling plants (Yardley).

I think composting should be more prevalent on a national level. Earth’s land is limited. I believe that it is our responsibly to take whatever steps possible to preserve as much usable land as possible for future generations. By reducing trash output, we will reduce our need for landfills and thus decrease the rate at which we need new landfill sites. As a result, more land will be available to even more generations of the future.  I think that some of the problems that come with composting will be solved with increased demand. If more people generate compost, then the demand for composting sites will increase, so more will be built. As more composting sites are established, food scraps will not have to be transported to such great of distances. Increased composting will also result in the need for more organic processing facilities. Trash industries can use their additional space from reduced trash intake for the establishment of composting sites. Labor that is not needed for trash services can be used for composting services instead.

Discussion questions:
Would you take the time to sort your waste?
Should the government create more incentives?

--Amy Moore
Works Cited


Eilperin, Juliet. Composting efforts gain traction across the United States. 3 February 2013. 6 February 2013.

Yardley, William. Cities Get So Close to Recycling Ideal, They Can Smell It. 27 June 2012. 06 February 2013.

Offshore Wind Energy in Maryland?

            After attempting for the past few years to pass legislation for wind turbines in Ocean City, Maryland governor Martin O’Malley is expected to finally win approval from state lawmakers in the upcoming weeks. However, Washington Post writer Aaron Davis explains, that because of the small power potential of the proposed wind farm (it would only be able to produce the energy of half of one average power plant) “developers and banks probably won’t take the financial risk, experts predict." Although at least six wind farms have been proposed for the eastern shore in the recent past, Davis explains, not a single one has actually been built because of the bureaucratic, financial, and legal challenges that they face. Due to the scaled-back plan the governor has been forced to resort to, as well as the minimal subsidy that Maryland households would have to pay, leading offshore wind developer Peter Mandelstam has stated that it “may [be] difficult or, in a worse case scenario, impossible to build a project off the coast of Maryland” (Davis).  The problem extends to the rest of the nation, where environmentalists and others have argued that wind energy is a sustainable alternative to coal and gas. However, the “nascent wind industry” has been proven enormously difficult to get up and going (Davis). O’Malley’s current bill is his third attempt to pass offshore wind legislation, which calls to begin the project in 2017.

            The article was a bit on the shorter side and really required further reading to understand the issues. The amount of power the wind farm could possibly produce and its possible resulting impact on the state’s nonrenewable energy consumption was not discussed. Author Aaron Davis also describes one of O’Malley’s financing tools as a “model involving renewable energy credits that is unproven in the risky realm of offshore wind”, but does not enlighten the reader on what that scheme is either. Personally, (I presume many of my fellow classmates probably feel the same), I would be thrilled to actually see legislation for an offshore wind farm be pushed through, especially along the eastern shore. This proposed project reminds me of the common theme surrounding environmental economics and natural resource economics and policies- that most often, what is tried and true remains the go-to decision. In environmental economic policy, government interference and regulations in emissions abatement is usually determined as the solution, since newer, inventive market-driven programs (like cap and trade programs and others) tend to intimidate policy makers and the public. I think that this offshore wind farm proposal follows the same theme, and if the country is to truly start investing in sustainable energies, we need to experiment and get our feet wet somewhere.

--Kasey Bolyard

More on Chinese air pollution

A few articles popped up on the topic so I have a few more for you to look at: I noticed this article in Forbes that blames the problem on diesel engines. No doubt they're a contributing factor, but there are many more, such as heavy use of coal in China, desertification and sand storms, etc.

Then, on a related front, a few interesting papers have come out recently about the effects of air pollution, including this study that finds that burning natural gas saves children's lives by reducing air pollution, and another (by some friends of mine from school) that shows how damages caused by air pollution vary by context. (If those links don't open, just enter your towson.edu email address and they'll send you a link to the paper.)

Overfishing in Peru

In case you thought things were bad in the US Northeast, where new restrictions on the cod catch are cutting into farmer welfare, check things out in Peru, home to what the FAO calls, "The most heavily exploited fish in world history." This exploitation is having a number of costs, as the fish is at the bottom of the food chain. Economists working on marine resources need to take these into consideration!

Cans of air for sale in China

After talking about clean air days in class, I ran across these interesting articles on the sale of cans of "fresh air" in China: 

http://www.brisbanetimes.com.au/world/canned-air-for-sale-in-china-as-blanket-of-smog-returns-20130129-2dht3.html

http://news.yahoo.com/blogs/sideshow/cans-fresh-air-sale-china-234302171.html

Hope you all have a great weekend,
Daniela