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Fuel tax magic, part two

The following is part two of a guest essay from Charles Komanoff, an economist and environmental activist in New York City. For more on taxing carbon fuels, go to http://www.komanoff.net/fossil/.

For part one of this essay, go here.

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Now another question arises: so what? At the end of the day, what's the practical difference between the actual price-elasticity of 20% and the popular conception of zero elasticity if the effect of higher gas prices is only going to be offset by economic growth?

I offer two answers. Combined, they just might hold a solution to our era's twin overriding crises: the oil-dependence crisis and the climate crisis.

The first answer is that as we extend our time horizon, gasoline's price-elasticity, or price sensitivity to break free of the jargon, gets larger -- a lot larger. Going out several years or more, individuals have greater scope to take actions that economize on gasoline. They can junk the gas-guzzler, or at least not replace it with another one when the old one gives out. They might calculate the dollar tradeoffs between density (high rents but less need to drive) and sprawl (the reverse) and pick up stakes for a less car-dependent area. They may gravitate toward job opportunities closer to home. And they can make more durable commitments to behavioral changes that reduce the need to drive, like forming a carpool or buying a roadworthy bicycle or selling the far-away vacation home.

The consensus of economists who have studied gasoline use is that the "long-term" price elasticity -- the effect on demand eight or ten years hence -- is between 50% and 70%, or roughly triple the 20% "short-term" elasticity I'm seeing in my spreadsheet. That is, over the long haul, rises in the price of gas are likely to dampen demand several times as much as the modest changes we've seen in the past year or two.

Too graphic for TV

From peta2.com, PETA's youth-oriented site, we learn of a new music video by Rise Against intended to "[show] everyone what goes on in the world and what people are doing to this planet and to animals."

According to band member Tim McIlrath:

Speak it

"A sustainable energy future is possible, but only if we act urgently and decisively to promote, develop and deploy a full mix of energy technologies... We have the means, now we need the will," said Claude Mandil, executive director of the International Energy Agency (IEA).

(via EB)

Au revoir, Greenland

Meanwhile, over at the L.A. Times, we find that the Greenland ice sheet is melting faster than climate models predicted.

Hey, I figure, more freshwater for us! Our grandkids? Eff them.

Today’s NYT

Michael Pollan says some smart things in this piece about ethics and animals.

I wonder whose arm got twisted to get this mash note to Robert Kennedy Jr.

Gosh it's hard bein' green -- so many options!

We can expect to see many more stories about strange biotic migrations and infestations.

I'm telling you, read Goodell's book. Too bad the reviewer saw fit to scoff at the notion that we change our thinking about energy -- instead, fusion gets a shout out. WTF?

This "prototype hybrid system using hydraulic fluid and a high-pressure pump instead of electrical current and a generator" sounds extremely cool, but the piece sounds like somebody's press release (barely) filtered through a reporter.

Still, not bad for one day, Gray Lady!

(And from yesterday: Coal is ravaging China too:

Fuel tax magic, part one

The following is part one of a guest essay from Charles Komanoff, an economist and environmental activist in New York City. For more on taxing carbon fuels, go to http://www.komanoff.net/fossil/.

For part two of this essay, go here.

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"Pam and Matt Keith spent Memorial Day weekend on a houseboat on Lake Oroville in Northern California. But because of high gasoline prices, the Keiths never even untied the boat from its mooring slightly offshore. When they ventured away from the shore, they supplied their own power -- in kayaks."

So began The New York Times take on the start of the summer driving season in an age of $3 gas: "Holiday Travelers Hit the Road, but Scrimped a Bit."

The Times' page-one piece was guaranteed to bring smiles to both economists and despisers of motorized recreation. As a member of both camps, I ate it up. I loved that the Keiths were kayaking instead of houseboating around the lake, and that another California couple, Celia and Michael Shane, had shelved their annual jet-skiing trip in Lake Mead National Recreation Area in Nevada. "To save the $70 per tank it now costs to fill up their minivan," the Times reported, "the Shanes were barbecuing instead." For guys like me who can let a single roaring jet ski ruin an entire beach day, fewer decibels mean more happiness. And after a year's drumbeat of articles insisting that higher gas prices hadn't dented Americans' "love affair with their cars," it was heartening to see the paper of record start acknowledging the No. 1 tenet of economics -- higher prices mean lower demand.

The world's thirst for petroleum breeds war, props up dictators, and imperils the climate. Known oil deposits are shrinking by the day. So no question in economics is more pressing than whether, and by how much, changes in the price of gas reduce the demand for it. I've been examining this question since May 2004, when the price first edged past two bucks. Every month I faithfully enter the latest price and consumption data into a spreadsheet. This has to be done just right. For one thing, because gas use follows seasonal patterns, monthly data must be compared over intervals of 12 months (or 24, etc.). For another, changes in price must be adjusted for general inflation. Most important is netting out the upswing in gasoline use that ordinarily accompanies expanding economic activity when the price of gas is stable. Only after taking these steps can one isolate the effect of higher pump prices on gasoline demand.

Spinning NAS

ThinkProgress has a little more on rightwing attempts to spin yesterday's NAS report, as well as Gore's reaction to said efforts:

Gore explained that science, by nature, thrives on uncertainty and tries to eliminate it; politics, on the other hand, is vulnerable to being paralyzed by uncertainty. When science and politics converge, Gore argued, the chance for "cowardice is high."

You could say that.

Goodell on coal gasification

My officemates are furiously packing, washing, dusting, and hauling in preparation for the Big Grist Move (you could help out by sending a few dollars our way!). I fled the scene to come home, using the excuse that somebody has to keep the blog going. So I guess I better blog about something ...

On Wednesday, I had a long, fascinating conversation with Jeff Goodell, author of Big Coal. I hope we can get it up in a week or so. In the meantime, check out the great op-ed Goodell just wrote for the NYT, which echoes many of the things we discussed. It's mainly about the big push behind coal-to-liquid plants.

About sequestration:

The possibility of failure

A fascinating essay by Bryan Appleyard in The Sunday Times Magazine argues two things:

• Human civilization is facing unprecedented crises;
• the pace of innovation has long been slowing, and we may not be able to think our way out of this one.

But that woefully oversimplifies the piece. I encourage you to read the whole thing.

It reminded me of something that's been on my mind lately. To wit:

Something Fishy: Fossil fish catches could be bad news

Yo-ho-ho, me hearties. 'Tis ye favorite pirate here with a quick news bit to satisfy yer cravin'. Me plundering sked is keepin' me busy these days, and I gotta tell ye, wifi ain't so great out here on the high seas.

That said, I've got a tale for ye about the African Coelacanth, an archaic (we're talking tens of millions of years old) species long thought to be extinct until one was caught in South African waters in 1938. I'm pretty sure it was the "Lord God" of fish at the time.