A Modern Hero

Next time I teach Resource Econ I'm going to make all of my students read this short obituary of Norman Borlaug. Too many people are unaware of the massive life-saving implications of what he did. Yes, we are starting to see some negative implications too on the environmental side, and we need to address them, but the underlying accomplishment earned him a justly deserved Nobel Peace Prize. Take a few minutes!

Emissions trading more damaging than previously thought

A team of researchers has looked at the sulfur dioxide trading program in the US and Canada, and finds two big results: first, the cost savings are not as large as was previously thought. Simple emissions standards can be met in a few different ways, so plant operators can actually make things cheaper without being able to trade emissions. When those extra cost savings are factored in, the program doesn't get as much credit for saving money.

Second, and more importantly: as we learned in class, costs include not only money paid by plant operators, but also damages to the environment and people in the area. Power plants that are trading emissions still don't take those extra costs into consideration. That's a problem, because some of the plants buying pollution permits turned out to be upwind of big population centers, so their pollution did more health damage than would pollution from the other plants.

Emissions trading schemes still have the chance to reduce the cost of meeting a pollution standard, but as always, we must consider ALL costs when trying to find the right amount of a good to be produced, and also when we think about where that right amount should be produced.

Complicated problems!

Power is too cheap

Well, at least it is in Puerto Rico. While it sounds great to have an organization producing power and providing it free to the people, the problem is that someone is going to have to pay for that power. To make power, it takes capital (i.e. machines) and, in most cases, fuel. In addition, the machines and the power infrastructure has to be maintained. All of that costs money! If no one is paying, it's not sustainable, and at some point it's going to end. Hopefully PR can ease it out gently rather than bringing it crashing down!

Gas is too cheap

Great blog entry by energy economist Max Auffhammer. He notes that if we include all of the external costs, the amount we pay today for gasoline is less than half the true costs imposed on society of producing that gas. He points out that a certain government has set a minimum price for gas, to be sure that enough money is collected to pay for infrastructure (and maybe pollution remediation?). Guess where, and then go read his short piece!

Energy: changes in the sun and oil markets

Last night the pundits I saw were declaiming about the role of dropping oil prices in the stock market decline. Matt Yglesias (on Twitter) says this "makes zero sense." I've been complaining about this awhile to colleagues and such, but the bottom line is that, apparently, more companies produce and sell oil than use oil as a big part of their production process. I like this little summary on Vox of why oil prices are where they are.

Another piece on Vox caught my eye partly since it starts off discussing my home state of Nevada. As you might guess, a state that's largely desert gets a lot of sun, and a lot of sun means a lot of opportunity for solar power. Recently, regulations have cut into the profitability of solar panels, and hence curtailed industry investment in the state. Yes, that's right: I'm complaining about regulations being too burdensome on business. Clearly I'm a right wing convert!

I hope that we all recognize the need to balance regulations with respect for the important role business plays in our economy- it's very easy for supporters of government action to overlook it!

Two things that surprised me: poop and phones

TIL, res-econ style....

Grand Junction, Colorado, is getting its power by processing waste, including food waste and manure as well as human waste. Wow! Apparently you just stir in some bacteria, catch the resulting methane, and burn it like the natural gas it is. There are a number of reasons this won't be feasible everywhere, with the chief one being that the fuel source is expensive to transport, but it's exciting to think about. If we can build more such plants near sewage treatment plants, maybe we can get more use from this already greenhouse-damaging emissions source.

Did you know that it's not a good idea to charge your phone in the car? If every car in the US was charging a single phone all the time, the emitted CO2 is equivalent to having over 185,000 extra cars on the road! Wow. Although the amount of energy used is relatively small, it cuts your miles per gallon by about 0.03. Apparently it's much more efficient to charge it at home.

GMOs

Long time, no write! Sorry about that: my research has really gone in another direction lately, so I'm spending less time on environmental issues other than climate. This one caught my eye, though: a friend shared this article about Monsanto going to court. Although some of the claims are overstated, they also make some good points. In particular, Monsanto defending their intellectual property to an extreme extent at the expense of small farmers is pretty egregious. Also, to the extent that Monsanto enables the current system of industrial agriculture, it contributes to climate change.

At the same time, it overlooks a lot of benefits that people have seen because of GMOs, such as cheaper food. Yes, cheaper food is bad for farmers, but it's good for consumers, and particularly the poor. This article is a pretty good response to the first one.

Have a great 2016!