Business & Technology

A litmus test for good economic policy

Pro-business vs. pro-market

Much of the debate around the big issues of our day -- from energy to healthcare -- hinges on whether one is "pro-market" or "pro-government," with Cato and the Wall Street Journal op-ed page lining up on one side and any number of PIRGs on the other. Unfortunately, neither side appears to understand the pro-market position. Herewith, my attempt to add a bit more rigor to the debate. So what does a market look like? At the most basic level, a market is defined by its characteristics. There are various definitions out there, but they all come down to the same basic tests: No barriers to entry No barriers to exit Price transparency (e.g., prices reflect costs) No participants can independently affect price Meet these tests and Adam Smith's magic starts to work, whereby the self-interest of each participant leads to social benefit for all in the form of better products and services, at lower prices. Why? Because life in a perfect market sucks! If you're running a firm in a market as defined above, you don't sleep well at night. New entrants keep cropping up. If you can't stay competitive, you're going to lose your money. Tiny changes in raw material costs have big impacts on your profits, which you are completely powerless to change. This causes you to do two things:

Wal-Mart releases its first “sustainability report”

Hugemongous retailer Wal-Mart released its first “sustainability report” yesterday after having delayed its release several times. In it, the company touts its recent efforts to green its operations, while also admitting it has a long way to go. “We make no claims of being a green company,” said company CEO H. Lee Scott. No argument there. But Wal-Mart said it met its goal of selling 100 million compact fluorescent light bulbs since last November and claimed to have increased the energy efficiency of its buildings and its truck fleet by 15 percent since 2005. The company has also set a …

Shameless self-promotion

RED positioned to fund $1.5 billion of recycled energy projects

While humility makes it awkward for me to be posting this, David said it would be OK. (I swear!) More seriously, this is a day of great pride at RED and I wanted to share a bit with you -- and perhaps explain the lack of time I've had for more insightful posts lately. We've just completed a pretty substantial equity raise, with funds available to invest in recycled energy projects that convert waste heat to power. The target for our investments are places where we can simultaneously generate profits, lower energy costs, and reduce greenhouse-gas emissions - in other words, all the things I've blogged about here before. But now instead of just being an academic idea, we have the financial resources to go out and prove the concept. And, it bears noting, quite a bit of financial pressure to do so. More important than that, though, is that we have a platform to change the way the world makes power. Lots of good press today in Bloomberg, the Chicago Tribune, and The International Herald Tribune, among others. (Or, if you're a stickler for original source material, our press release is here.) But perhaps the best piece -- and the one that really gets what we're out to do -- is on the Dow Jones newswire, printed below the fold ($ub req'd, or else I'd give the link).

Frito-Lay hopes to manufacture eco-friendly potato chips

You know it’s crunch time when a potato-chip factory goes green. A Frito-Lay factory in Arizona has plans to produce, yes, carbon-neutral potato chips: sliced, fried, seasoned, and bagged in a plant nearly entirely off-grid and powered with renewable fuels. The company’s Casa Grande plant will make do in its desert locale by recycling water, and will advertise that it’s using solar power to make SunChips. Frito-Lay — which is owned by PepsiCo, the nation’s biggest buyer of renewable-energy credits — hopes to replicate successful measures in other factories.

Big Auto unveils efficient cars, continues to fight against strict efficiency standards

When the L.A. auto show opens to the public on Friday, automakers will flaunt hydrogen cars, super-efficient engines, electric vehicles, and hybrid SUVs — leading some to wonder at the disconnect between car manufacturers’ public-facing “green” ambitions and their vocal opposition to a significant increase in federal fuel-economy standards. “They’re definitely saying one thing to Congress and one thing to consumers,” says Phyllis Cuttino of the Pew Campaign for Fuel Efficiency. The head of the Alliance for Automobile Manufacturers protests that the slew of fuel-efficient technologies at the auto show proves that automakers are “putting their money where their mouth …

E.U. Parliament approves plan to require airline emissions reductions

A European Union plan to bring the airline industry into its carbon-trading market has just passed the E.U. Parliament, angering many airlines, the United States, and other countries. Parliament voted to require steeper emissions cuts than the E.U. Commission’s relatively weaker airline plan. Under the amended version, by 2011, all airlines flying within or into the E.U. would be required to reduce their emissions 10 percent below their 2004-2006 average or buy credits from other airlines that came in under the target. The proposal must now get approval from E.U. country governments and E.U. ministers before it can become law. …

Who will reincarnate the electric car?

Automakers want to delay the transition to electric vehicles

The following is a guest essay by Marc Geller, who blogs at Plugs and Cars, serves on the board of directors of the Electric Auto Association, cofounded Plug In America and, and appeared in Who Killed The Electric Car. ----- The IEEE Spectrum Magazine for November 2007 touts on its cover: "Battery or Fuel-Cell Cars? A California Cabal Will Decide." Interesting choice of headlines. Surely a strong argument can be made that something approaching a cabal turned a practical electric-cars-on-the-road mandate into a research and development program for hydrogen fuel cell vehicles. Carmakers are desirous of delaying the inevitable but problematic move to electric drive. Oil companies shut out of electric markets are exploring biofuels and hydrogen as potential markets they could control. Academics awash in government and corporate grants analyse and research biofuels and hydrogen. The problem with electric is it is here now. Proven, ready to market. No significant need for research. Batteries could always use a nudge, but the 100-plus-mile battery has existed for over a decade. Price needs to come down by a factor of two at most, not a factor of 100. Economies of scale, baby! Facts are facts. Not five years ago we had thousands (about 6,000, to be exact) of battery electrics as daily drivers for consumers like you and me and utility fleets like PG&E and SCE. Thanks to Plug In America's predecessor, about 1000 of those cars still drive today on the original batteries using existing electric infrastructure. Their owners love them, and when one appears on the used car market it sells for more than the $42,000 original MSRP.

Climate change could put millions out of work, says U.N.

Not only is climate change not a hoax manufactured by dirty hippies who hope to put every American out of a job, global warming is real enough to, um, put millions of people out of jobs, United Nations officials said yesterday. At a meeting of the International Labor Organization, the heads of the U.N. climate and weather agencies noted that work in the tourism and fisheries industries could be particularly threatened by climate change. And that’s not to mention those who could be forced to leave their jobs — and homes and communities — because of severe weather. On the …

Just the big-box facts

New tool helps groups assess large retail proposals

Big-box stores have significant impacts on a community's economy, environment, and character. The Big Box Evaluator (created by the Orton Family Foundation, which offers numerous programs that aid good land-use planning) is a new online tool designed to help citizens, activists, and municipal officials get the basics on these impacts in an unbiased manner. It's interactive, and lets you plug in variables like tax rates, community demographics, size of a hypothetical big-box proposal, and much more. The outcome is a well-rounded assessment of probable impacts, the good as well as the bad, which will help its users ask important questions when proposals like this come to town.

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