Articles by Peter B. Meyer

TVA could have planned for a normal accident such as the coal ash spill in Kingston, Tenn.

Those coal ash spills should have been expected.

Normal Accidents is a 25-year-old book by Charles Perrow, subtitled "Living with High-Risk Technologies." Perrow, reflecting on the Three Mile Island nuclear incident and other accidents, argued that modern advanced technologies are so complex, and require such careful monitoring and management, that accidents, including potentially massive system failures, have to be considered "normal," not exceptional, events.

The technologies he wrote about included many we consider commonplace today, but climate change and other global environmental impact risks were not among the "accidents" he anticipated.

Economists seem to have learned precious little from the book, highly acclaimed as it was. Economic calculations still get made on the basis of "expected values" -- the statistically most likely outcomes -- despite the fact that these values do not accommodate the virtual certainty of unexpected events.

Analyses like Environmental Impact Statements -- required for major federal investments under the National Environmental Policy Act -- are still based on what economists call "expected utility theory" (EUT). Based on past experience and recorded data, we project the probability of different events and use those odds in combination with the "utility" or value associated with each alternative event to arrive at an expected value for a course of action.

That doesn't make sense ... or does it?

Required reading for novice climate economists

Whether it's Pacific Northwest flooding or the other "strange" weather phenomena we've been seeing in the U.S. and across the globe, the present-day risks of a changing climate are real and threatening -- to say nothing about the future risks.

But the current economic downturn often drowns out calls for major spending to lower emissions or otherwise address climate change. Still, the reality is that the two -- economic and environmental revitalization -- can and should go hand in hand.

A great introduction to why is available from Frank Ackerman in Dollars & Sense magazine. "Climate Economics in Four Easy Pieces" doesn't even need five full pages of English to make a strong case for action that stands up to climate change deniers.

Who do we repay for the pollution from which we have benefitted?

If I buy bread from you, when you want to sell it to me, and we agree on a price, that's a deal between the two of us. Now imagine that you getting up early to bake bread wakes two people who would rather sleep in. They are not a factor in our deal -- they are "external" to our market exchange and any effect on them is an "externality" we have ignored in agreeing on our price. The same logic holds for the greenhouse gases your ovens generated when you baked the bread. That contribution to climate change is an "environmental externality."

How many of those did you create today?

Institutions, motivations, and assumptions in economic analysis

A belated Merry Christmas, everyone! Yes, it’s possible that most of Grist’s readers are not Christian (I’m not, for one). But December 25 is the day celebrated as Christmas by much of the world; it’s a declared holiday in many countries and cultures, whether or not we buy into its religious significance. It is, therefore, […]