Backstops

Another basic principle of resources in the same newspaper today: clean energy suppliers should be worried, apparently, because some of the raw materials they use in making products such as compact fluorescent light bulbs come mostly from China. In other news, we can mine them here, but it's not worth it, apparently even with China slapping a hefty tax on exports.

If it's cheaper to do it over there, the market says to do it over there. Yes, economic models will be off by the way they assume away the costs of getting back into the mining game, but is that so huge? Seems to me that if and when it's worthwhile, we'll do it, but apparently it's not worth it even for CFL manufacturers to get into the business. If they aren't worried about it enough to secure their own supplies, should the rest of us be?

When one resource gets depleted it gets more expensive, and when it's more expensive people look for alternate sources. The alternate source is called a "backstop." In this case it looks like US rare earths are a backstop for Chinese rare earths.

Economics: making tough choices

I'm finally done with giving grades and it's time for me to turn my attention to preparing for next semester, when I'll be teaching Resource Economics. That class starts off by looking at tough choices, and there's a great example of that in today's NYT. Water in California is scarce and most likely getting scarcer. So how can they balance the needs of their population for water for household use, with the needs of an endangered species of fish, with the demands of one of the country's most productive agricultural regions? The job of an economist is to sort these things out based on the estimated benefits of all of these uses: where will the marginal impact of lost water be felt the least? Of course, in this case and many others economists really aren't called upon: the stakes are high enough that no one wants a (relatively!) objective analysis. That's when politics takes over, for better or for worse.

Should society pay millions per life to save lives?

It's not often that the tradeoffs are made so clear in the mainstream media. Today's NYT:

The delayed smog rule would lower the allowable concentration of airborne ozone to 60 to 70 parts per billion from the current level of 75 parts per billion, putting several hundred cities in violation of air pollution standards. The agency says that the new rule would save thousands of lives per year but cost businesses and municipalities as much as $90 billion annually.

Tunnelling Luminescence in Feldspar

What's wrong with this picture?

Greenhouse Gas Emissions from Buildings

A couple of interesting tidbits in the news today: global standards for building emissions appear to be in the works. We don't think a lot about emissions coming from buildings, but as much as 30% - 48% of greenhouse gas emissions come from buildings while 71% of electricity is consumed there. Factoring in energy savings, improvements tend to pay for themselves, but since there are up front costs many improvements are never undertaken. That's too bad because costs are low: this estimate says that it costs as little as $9 per ton of CO2 abated here in the US, and demand reduction measures could halve growth in energy use and cut current use by 29% at no net cost (see page 5 of linked pdf). It's tough to do that when incentives are different from home builders and home buyers: prices go up when homes are made energy efficient, though the owners make the money back over time through energy savings. Simple awareness is a big issue: although buildings can be built according to "sustainable" standards at a cost premium of just 5% here in the US, builders and developers mistakenly believe costs to be about three times as high. Hopefully these and other relevant misconceptions will be somewhat reduced by the new set of guidelines for evaluating the carbon emissions of buildings currently under development by the UNFCCC.

On the other side of the world, building standards are hugely important right now as China is building the equivalent of Japan's existing building area every 3 years. If energy use in those buildings can be kept low, Japanese-style, energy use may be kept to half of what it would be if those buildings follow US practices. The practices aren't listed in this document, but a few I am aware of include hot water heating and home heating habits. Many of the Japanese homes I've visited and lived in had on-demand hot water heating that used little gas. For baths or large scale use, the inconvenience was limited to pushing a button on a thermostat a few minutes before bathing, and for small scale use it usually meant pushing a button immediately before turning on the hot water. Home and school heating patterns are centered on warming individual rooms: the schools I worked at didn't heat corridors or even bathrooms. You may not find the prospect of squatting over the john very enticing, but when the whole room is at about 40 degrees it's a lot nicer than putting your behind on a cold toilet seat!

No one is expecting the US to start heating houses room by room rather than using central heating any time soon, but there is much that can be done here particularly in the building development sector. Overseas, as the epic numbers of homes and business buildings continue to rise in places like China, they can choose the type of culture they develop. Hopefully they'll build in some energy efficiency and actually employ more of the solar and wind power generation capability they're producing.

Cutting government

While newly elected Republicans and Tea Party representatives struggle to name some government programs they would cut, I have an idea that will at least get the ball rolling: how about we identify government programs that effectively work against each other, and choose the one we want the government to work for? Today's NYT focuses on Dairy Management, an advocacy group funded by the dairy industry that is part of the USDA. While the marketing arm is out pushing increased consumption of dairy products, the Department's Center for Nutrition Policy and Promotion is pushing decreased consumption. The money quote in the piece is this:

“If you want to look at why people are fat today, it’s pretty hard to identify a contributor more significant than this meteoric rise in cheese consumption,” Dr. Neal D. Barnard, president of the physicians’ group, said in an interview.

Generally choices about consumption are made by the individual, and we give advertisers free reign to push people to consume most any product. Does that change as soon as the government gets involved as advertisers? Should the government be required to do all it can to promote healthy consumers? If so, it would be unethical for a government program to advocate for increased cheese consumption, but then dairy farmers would be abandoned by their government.

I think that a lot of this would be solved if government marketing boards were made private. Right now a number of crops including beef, blueberries, cotton, eggs, avocados, honey, lamb, mangos, mushrooms, peanuts, popcorn, pork, potatoes, sorghum, and soy all do some of their marketing through boards set up by the government. While I don't think anyone objects to the the marketing of most fruits and vegetables, many of these products should not be a large part of a healthy diet. (Especially cotton- I really don't recommend eating much cotton at all.) Historically, the government has been part of the process, but I'm not sure why they need to continue to be. That said, these marketing orders are fully funded by the industry- it's not an issue of taxpayer dollars being used against taxpayers. If we are looking to save money and make the government speak with one voice, the only way to do that is to cut nutrition programs. I personally support research and the spread of information about how to live a healthy life, so I guess that's why I'm not a Tea Partier!

Nothing sweeter

Quote of the day, from the Thomas Jefferson memorial in DC: