Renewables coming on strong: will it be enough?

For the first time, the EU produced more energy from renewables (mostly solar and wind) than it did from fossil fuels. That's a big deal, but in the same breath this organization is reporting that they are still not close to reaching the targets for decreased emissions and later carbon neutrality. While definitely good news, it is somewhat undercut by today's other news that global ice is melting at an unprecedented rate, leading a glacier researcher to apocalyptically warn, "[T]hese feedbacks are kicking in faster than we thought." 

Carbon sequestration

One link between Maryland agriculture and climate change is carbon sequestration in agricultural soils. This recent article from the Washington Post puts names and faces on a problem that is pretty old: so old that I once contributed to a paper on the topic. (Just joking- obviously the science had been around WAY before I worked on that project!) Actually this one sentence in the WaPo article, fairly far down the page, sums up our finding: "But studies that sampled deeper soil layers revealed that carbon was lost there, wiping out most of the apparent gains." We weren't sure if that finding was real: it could have come from the functional form we used to model carbon accumulation, or could have just been swamped by the relatively small differences as we compared deeper samples. But that's what it looked like to us, and it's similar to the findings of more recent studies cited in the news article. One researcher concludes, "An overfocus on soil carbon is a diversion from the climate strategies that can have a bigger impact."

While I'm probably most jazzed to see my work continuing to be debated (and relevant!) it's also neat to see that policies are catching up with the science, paying farmers for their contributions in the fight against climate change. Are those subsidies worth it? That is the question....

Car cost & environmental impact widget

This NYT article points to this online app, an exploration of the long-term costs of various cars and their environmental impacts. One big takeaway that although up-front costs are higher for many electric vehicles (EVs), they are a lot cheaper to maintain and fuel than gas-powered vehicles. Of course the price of gas is going to be part of that calculation, but surprisingly it doesn't change things too much. (Click on the "Customize" button at the top to put in your own gas price.) It's pretty hard to get folks past the sticker shock and into seeing the full price of their purchases- kind of like the economics of printer ink!

On a related note, Biden has apparently signed a few executive actions that will promote electric vehicles. This could mean lots of American jobs, though unions grouse that gas-powered vehicles are better- because they require more assembly. Analysts duly note that EVs require more jobs throughout the longer supply chains, though the assembly time may actually be quicker (and hence require fewer employees).

Latest on Uber

My first class this year will be all about the economics of Uber- the benefits and (mostly hidden) costs of the service. I am updating my picture of the company via some recent news articles.

* This unexpectedly encyclopedic webpage covers everything from user reviews to their miserable profits. Another tidbit: "A report from MIT found that US drivers working for Uber and Lyft made an average of $8.55 an hour – higher than a previously reported figure of $3.37 (and the federal minimum wage of $7.25), though still below what any would consider a decent salary (and the minimum wage in 20 states)."

* Yahoo! finance pegs Uber as having an impressively bad profit margin of negative 50% or so.

* A bit about the new California law: the NYT opinion page in June of 2020 notes that "By one estimate, Lyft and Uber saved more than $400 million from 2014 to 2019 by not paying into California’s unemployment fund....One study found that, under the ballot proposal, hourly wages would be a meager $5.64 after factoring in driver down time and other expenses, like fuel and vehicle maintenance. Uber’s threat to halt operations in the nation’s largest state is implausible, particularly as it struggles to overcome billions in annual losses."

* Another NYT opinion article, this one in January of 2021, sums up the arguments against the new California Proposition 22, which passed in November. They argue that time between gigs should be compensated as it is for regular employees; as it is, gig workers don’t get traditional wage protections, workers’ compensation, health insurance, overtime, or unemployment benefits. They argue this is against other labor laws.

* An August article about business is going for the company: "Uber has consistently lost money....Uber said it still intended to become profitable sometime next year.....But in the United States, which is one of Uber’s largest markets, rides were down 50 percent to 85 percent in many major cities." 

* Obviously the pandemic has taken a huge toll on Uber's business, but the bright side has been Uber Eats. Unfortunately, (again from the encyclopedic page): "Uber Eats’ revenue contribution looks considerably less impressive .... it accounts for 10% of net revenue, while rides accounts for 85% (compared to 69% of gross bookings)."

* While Uber has held on due to investor's generosity, the recent spinoff of their automated car division, and a bit of help from Uber Eats, Uber is eating taxis' lunch. Grim times for cabbies.

* Meanwhile, a recent review finds that Uber vehicles continue to contribute to traffic congestion and increase car ownership, while incentivizing use of vehicles with low gas mileage and bad records of killing pedestrians. There is a bit of recent activity from the companies as far as encouraging connects with public transit.

* Seattle has recently implemented a 24% fare hike designed to ensure that drivers earn at least the $15 minimum wage. Meanwhile, Lyft has introduced a program cutting wages (while allegedly increasing rides). 

* During the pandemic, Oregon decided to treat unemployed gig workers as worthy of unemployment benefits. That was pretty nice of them- and it saved some of them a lot of stress- but of course it came from Uber's decision not to pay their part of unemployment payroll taxes, which in California alone would have been about $80 million/ year.

* Update, February 2021: Overall Uber lost $6.8 billion in 2020, but say they are "well on track to achieving our profitability goals in 2021."

Meat impact

 This has appeared on these pages in various forms over the years, but here's the latest version (from this paper):

The first takeaway is obviously how much worse cattle are than other types of meat, but on Twitter iconoclastic economist Emily Oster reminds us that it's also interesting to see that some crops have basically the same impact as some types of meat. 

New kid in town

While the coolest part of the inauguration yesterday was the fantastic poem, since this is a blog about resource economics I will focus on the topic at hand. There is much in the news already on the topic of transportation. In the confirmation hearing for Transportation Secretary nominee Pete Buttigieg, "Buttigieg said options to cover the costs of transportation spending 'could include revisiting the gas tax, adjusting it, and/or connecting it to inflation'....But after the hearing, a Buttigieg spokesman ruled out supporting an increase in the gas tax, saying a 'variety of options need to be on the table to ensure we can invest in our highways and create jobs, but increasing the gas tax is not among them.'" Interesting.

Meanwhile in the Atlantic, a commentator writes, "Rather than try to kneecap America’s oil and gas industries, Biden should pledge a subsidy-palooza that helps bring down the price of every technology in the clean-energy portfolio: hundreds of billions in guaranteed federal purchases of clean-energy tech, such as batteries and electric cars; more subsidies for solar and wind energy; and more R&D spending on clean energy and carbon removal." 

This is the difference between economics and political economics: the former is interested in finding what is most efficient, while the latter focuses on what is most politically palatable. Both matter!

News grab bag

 * 2020 was likely tied for the hottest year on record, and the increases in the past decade have been striking. At least as dangerous, hot temperatures in arctic regions released more CO2 as permafrost continues to melt, making it likely that the effects continue to compound over time: "[T]he world is seeing an increase in heat waves, storms and other extreme weather as the planet warms, and in disasters like droughts, floods and wildfires that result. Last year offered no respite, with record fires in Australia and California, and severe drought in central South America and the American Southwest."

* More on the difficulty of recycling plastic. This is just a post by an anonymous Reddit user but it talks about the various types of plastic, the need for great cleaning and sorting, etc. 

* From a little more reliable source: Ford (and also eventually Volkswagen?) have electric vehicles coming out. They are eligible for government rebates and otherwise match characteristics of Tesla. 

* Wind power and batteries are on the rise in Texas: "Since 2015, the amount of wind-generated electricity has more than doubled in Texas, and last year 23 percent of the state’s power came from wind turbines...Battery storage capacity in Texas is expected to grow more than seven-fold this year, from 215 megawatts of available battery storage last year up to over 1,500 by the end of this year...."

* Are organic foods better for you? No question that they are better for the environment, but I didn't think that it mattered much for people. Articles like this one, while stating the case for organics mostly on environmental grounds, in my opinion undercut their own case with their aggressive language- they recognize that the evidence is not strong but they insist on drawing strong conclusions anyway. However this peer-reviewed article concludes that although conclusions are tentative, there is some evidence that organic foods do help with a variety of conditions. (The preceding link is a meta-study putting together data from lots of studies like this one to draw a bigger conclusion.) I'm skeptical, but this evidence is definitely food for thought! 

COVID & meat-packing

"Up to 8 percent of coronavirus cases in the United States in the first five months of the pandemic could be linked to infections among meatpacking workers" (source) and an article from today's Washington Post says that "Coronavirus cases among meatpackers alone accounted for up to 20 percent of [Nebraska’s] cases over the summer." In Tyson's chicken plants in the state, "witnesses who worked in the plants testified that ... they are forced to breathe through blood-soaked paper masks for hours."

Pandemic-induced emissions drop

Remember back in March and April of 2020 when there weren't as many cars on the road? That really did have an impact, though unfortunately it hasn't been enough to meet goals. And of course, there's the small matter of the fact that we only achieved that decrease as hundreds of thousands died, millions were ill (and we aren't sure how long effects will last for the "long haulers.") Definitely not a drop anyone would choose, but hopefully we can learn something from it, at least.

From a longer-term perspective, the planet didn't get any cooler: 2020 was effectively tied with 2016 for the hottest year on record.

Agricultural productivity

From my inbox today: according to this site, agricultural productivity in the US is 2.5 times what it was in 1950, and that is done using almost the same amount of inputs (actually slightly less). That's impressive! More food for less inputs is definitely a good thing.

Better than offshore wind, it's... carbon pricing!

In a study comparing policies in Britain to Germany, the authors found that carbon pricing did more for less: setting a price for carbon helped the government reach the goal cheaper. Setting a price on emissions did more to get total emissions down than did Germany's heavy investment in renewables. The idea is that if you penalize coal consumption, for example, it will drop in the short term as well as the long term. 

Update 1/14: Norway is also hiking its own carbon tax, more than doubling it from US$94 to $235 by 2030. "It will be expensive, increase costs and weaken competitiveness of the Norwegian continental shelf," said a lobbying group, and they're not wrong!

A related example is stopping gas flaring, which I have heard is one of the cheapest ways to avoid emissions. If gas can be captured rather than being flared, that will keep emissions from hitting the atmosphere right away.

Food prices

The pandemic has messed up our food supply. After the well-publicized issues at meat processing plants, the supply chains for all types of food also have struggled as folks stayed away from restaurants and cooked more at home. I'm not sure what led to what there- maybe partly from supply chain disruptions, but also due to issues like drought in South America, in the end food prices have climbed. This article identifies many of the causes such as a spike in the price of palm oil (did you know that palm oil is in half of all supermarket products?). The UN's FAO index has food at a recent high, though not yet approaching the ridiculous levels it hit in 2011. Hopefully it comes back down, particularly for those hard hit by COVID. While food isn't a huge share of our household budgets, the story is different in poorer countries, and it could make a huge difference there.

Update 1/18: Just came across this article on palm oil. I've heard so much bad about its negative environmental consequences and just assumed it's pretty bad nutritionally. Well, it seems like it's a fat: not great for you, but not much worse than coconut oil, for example, and indeed some sources of it more sustainable. I should be more agnostic and less judgmental!

State of the Bay report: CBF gives it a D+

While it's better than two years ago, when flooding brought a surge of agricultural chemicals into the estuary, things continue to be grim for the Bay, and overall things are worse this year than last. Rockfish used to be a success story, didn't it? I guess not so much anymore, after water quality continues to decline; I would have hoped that the pandemic might have cut into the emissions produced. Maybe it's too early to see impacts like this: the press release makes some reference to changes as of 2017.

For and against meat

A lot of news articles on the subject of animal agriculture have caught my eye lately. The environmental impact of animal agriculture is pretty large, including the impacts of water pollution as well as on climate change. Animal source foods are an important part of child nutrition, though in the US there is no shortage.

* Starting off with a bang, here is the iffy source "Eco-watch" making a point about Tyson foods. While it may be a little ambitious to attribute the very real dead zone entirely to Tyson, the larger point is valid: crops in the US Midwest let a lot of fertilizer runoff into the Mississippi River, which then leads to algal blooms in the Gulf of Mexico.

* The same is true in Europe. Taking into account the costs of the environmental damage, the prices of meat and dairy products are much lower than they should be once external costs are taken into account. From Nature, a pretty legit source.

* A peer-reviewed article on nutrition and the environment- food systems FTW.

* Also Brazil is seeing a rise in vegetarianism even as Brazilian President Bolsanaro fueled the fires of deforestation in the rainforest that dominates the interior of his country.

* Animal-source foods are key to child nutrition.

* A peer-reviewed article from 2017 says that animal agriculture is key to human health in the US: particularly a few niche chemicals must come from (or at least are most accessible via) animals. 

* A 2019 article says that animals are key but right now they are too large a share of the US diet: having more protein come from plant sources would be better.  From the introduction: "According to the 2018 report, in the years 2015–2017, meat consumption in North America was an estimated 200 lbs per person per year. In comparison, annual meat consumption in Latin America and the Caribbean averaged approximately 130 lbs per person, in East Asia, South Asia, and the Pacific approximately 60 lbs per person, and in Africa only approximately 30 lbs per person."

* A 2020 article has nothing good to say about meat: they blast the chemicals, links to cancer, and environmental issues like the carbon footprint. 

* Update Jan. 26: Beyond Meat announced a partnership with Pepsi today that has given their (Beyond's) stock a boost. While this is promising news, it could also simply be a sign of the overheated stock market that the news has triggered an impact though, "The specific portfolio of products is still in development." 

Happy New Year!

Last fall semester was crazy: trying to provide my students with quality instruction in a new format as well as finishing up a couple of research projects, including this two year project on child health and this one on COVID co-authored by two other TU Econ profs, on COVID. (Disclosure: Prof. Shrestha was the heavy hitter on this one!)

Anyway, all semester when I saw an article related to Resource Economics I didn't have time to make a post, so here are a few all together.

* Fishing on the high seas only makes economic sense when it is subsidized.

* A relatively unknown cost of CO2 (a cause of climate change): decreases in vitamins produced by plants in high CO2 areas, such as this study showing decreased amounts of vitamin B and iron.

* A review on the causes and consequences of food loss and waste. Another in the same publication finds that the most waste comes from the foodservice sector: probably not true in 2020! Just a guess....

* The Bakken shale in North Dakota has been productive in terms of both natural gas and oil, but the costs to the area are piling up: the state has had to use money earmarked for COVID relief to plug some mines. Here's hoping the benefits to ND outweigh the costs.

* And now for something completely different: more energy may be available from geothermal sources than was previously known. That's good news for everyone but recent grads hoping to get into the oil industry.