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L.A. solar vote could measure nation’s appetite for renewables

Next week Los Angeles voters will vote on an ambitious solar energy plan that would add solar panels on rooftops and parking lots across the city and require the city’s energy utility to rapidly increase the amount of solar power it uses. The vote could give a snapshot of public support for renewable energy, just […]

The myth of the universal market … debunked!

Communication among economists, other social scientists, natural scientists, and lawyers is far from perfect. When the topic is the environment, discourse across disciplines is both important and difficult. Economists themselves have likely contributed to some misunderstandings about how they think about the environment, perhaps through enthusiasm for market solutions, perhaps by neglecting to make explicit all of the necessary qualifications, and perhaps simply by the use of technical jargon.

So it shouldn't come as a surprise that there are several prevalent and very striking myths about how economists think about the environment. Because of this, my colleague Don Fullerton, a professor of economics at the University of Illinois, and I posed the following question in an article in Nature: how do economists really think about the environment? In this and several succeeding postings, I'm going to answer this question, by examining several of the most prevalent myths.

One myth is that economists believe that the market solves all problems. Indeed, the "first theorem of welfare economics" states that private markets are perfectly efficient on their own, with no interference from government, so long as certain conditions are met. This theorem, easily proven, is exceptionally powerful, because it means that no one needs to tell producers of goods and services what to sell to which consumers. Instead, self-interested producers and self-interested consumers meet in the marketplace, engage in trade, and thereby achieve the greatest good for the greatest number, as if "guided by an invisible hand," as Adam Smith wrote in 1776 in The Wealth of Nations. This notion of maximum general welfare is what economists mean by the "efficiency" of competitive markets.

Opportunity for a defining moment

The inauguration of Barack Obama as the 44th President of the United States is a defining moment in American history. For most Americans and countless others around the world, this is an inspiring political transition. The question we must face, however, is whether compelling inspiration will lead to effective action. As I wrote in a Boston Globe op-ed (November 12, 2008) one week after election day, environment and energy issues -- particularly climate change policy -- provide a microcosm of the forces that are shaping and will shape the actions of the new administration and Congress.

About eight years ago, President-elect George W. Bush promised to be President for all the people, not just those who had voted him into office. Bush's ability as Texas governor to bridge differences across the political aisle provided cause for optimism.

But hope for a centrist and sensible presidency dissolved under the influence of White House political operative Karl Rove and Vice President Dick Cheney. The Bush Administration moved not to the center, but toward solidifying its base on the political right. Nowhere was this more apparent than in energy and environmental policy, with Vice President Cheney running energy policy, and EPA Administrator Christie Whitman virtually driven from office.

Obama’s first budget includes green spending and anticipated revenues from a climate plan

President Barack Obama on Thursday outlined his first proposed budget, notably including billions of dollars for renewable energy investments and taking into account billions in expected revenues from a carbon pricing scheme. In his remarks on Thursday, Obama also reaffirmed his directive to Congress to send him legislation putting a price on carbon. The “climate […]

British recycling site to feature celeb cast-offs

This just in: MySkip.com, which as near as I can tell is the British version of Freecycle (TM!), is hosting a 24-hour Celeb Throwaway next week to show users just how sexy recycling can be. While the names of the participants have been revealed, their items have not. What will Boy George donate? Sheryl Crow? Cuba Gooding Jr.? The cast of Mamma Mia? One's imagination hardly dares wander.

Salazar withdraws leases for oil shale development

Interior Secretary Ken Salazar on Wednesday reversed the Bush administration’s move to open up tens of thousands of acres in Colorado, Utah, and Wyoming to oil-shale development, the latest in a series of energy policy overhauls out of his department. Salazar — who as a senator was the most vocal opponent of the Bush administration’s […]

Advances in climate science took a nosedive in NASA satellite crash

By now you’ve probably heard about NASA’s carbon-measuring satellite, the one that went kerplunk into the ocean near Antarctica in a disastrous launch attempt Tuesday morning. I was feeling bummed that my “gee, this is going to be really cool and useful” pre-launch story is now very much irrelevant. Then I realized NASA’s team of […]

Solar hot water heating's day in the sun

The California Center for Sustainable Energy is implementing a pilot solar water-heating incentive program in San Diego. The success of the pilot will go a long way in determining how the program gets rolled out to the rest of California -- which is important because, as you can see from this great study by CalSEIA, the value of solar hot water is quite high. That's why it was nice to see a weatherman from a local news station get in on the act, climb up a roof, and tell people just what they should be doing with a sunny day. (Video here.)

[Note to Al Roker: I also heard the San Diego TV guy say there's no way you could do as good of a job. He dared you to try to promote solar nationally as well as he did locally. He also called you a punk.]

Also of note: a local solar installer has announced a $0-down financing program, with payments set at avoided energy cost (estimated at a 7-year payback). That's the first time I've heard of a program like that for solar water heating, and is the kind of innovation that will be necessary for the technology to find its place in ... wait for it ... the sun.

Congress starts to outline how they’ll meet Obama’s directive on climate and energy legislation

President Barack Obama issued a directive to Congress in his address on Tuesday night, calling for a climate bill and energy measures. Now we’re getting a clearer ideas from Congressional leaders about how they plan to respond. On Wednesday, Senate Majority Leader Harry Reid told reporters that he plans to achieve three legislative priorities to […]

Higher productivity and lower health costs outweigh additional spending

Grist has discussed the consensus among most economists that the net cost of solving the climate crisis will be around 1 percent of gross domestic product (GDP). Basically this consensus says that total expenditures in various greenhouse gas emitting sectors will increase by 1 percent for the same economic output if emissions are controlled.

To be fair to economists, these estimates are based on studies that include substantial increases in energy efficiency -- even count some of the maintenance and capital savings. They are actually taking a stab at following Amory Lovins' dictum to count all costs and benefits.

Nonetheless, I think there are some good reasons why the consensus is wrong about there being a net cost at all. I think the overwhelming evidence is that a climate-stable future will have a higher GDP, even before avoided climate disruption is counted.

The main extra benefits economists overlook are the helpful side effects other than mitigating the climate crisis -- "positive externalities," in economic jargon.

For example, about half of all economic activity takes place in climate-conditioned buildings. Greening these buildings could increase[PDF] productivity [PDF] by around 10 percent. Similarly, switching most long-haul freight trucking miles to long-haul freight rail would increase productivity in transportation. Many energy-saving practices in industry, such as reducing scrapping and reducing spills and other types of emitting stoppages, would increase productivity as well. A switch to wind and solar would reduce labor productivity in the electricity sector; the conventional wisdom is that a switch to organic agriculture would do the same in that sector, though I think this is much less certain that people think. At any rate, sectors where productivity would rise greatly outnumber the tiny sectors where it might fall -- resulting in a huge net increase, probably greater than 5 percent for the economy as a whole.

Another example would be huge benefits to health. Eliminating or greatly reducing the use of fossil fuels would reduce air pollution, water pollution, and exposure to toxics. A switch to organic and low input agriculture would decrease direct ingestion of toxics, and increase available vitamins and minerals in food. Whether such a switch alone would encourage a switch to healthy increase in the consumption of non-starchy vegetables and fresh fruits I don't know, but it certainly could be part of policy that accomplished this. Overall, I think it is almost impossible that switching from fossil fuels to renewables and efficiency, that switching from toxic soil-consuming agriculture to non-toxic soil building agriculture, from unsustainable to sustainable forestry, would not increase GDP.

Two last points.