Thursday, December 20, 2012

Holiday Cheer AKA Rant Against Consumerism

I should tread carefully here lest I come across as a socialist, or worse, communist.  I do think that government has a role in the economy, but clearly it should not be the primary driving source.  I consider myself neither socialist nor communist, but I believe that our materialism is harmful, both for humanity and for the environment.  I may be too anecdotal in this post, but I think the general idea is applicable for most people.  I realize that this comes across as quite the party-spoiler, but that tends to be a hobby of mine, for good or for bad.

Black Friday is a travesty.  I couldn't care less about its timing, the day after Thanksgiving.  I will not put much critique into the abhorrently long lines and primitive behavior.  No, the fundamental problem is that our economy lives or dies based on how much junk we buy.  Let's face it: girls, you hardly wear most of the fancy clothes that you spend so much money on multiple times a year.  All those t-shirts you got for this club or that sports team or your freshman dorm?  Might as well send them to the Goodwill with a note apologizing for destroying Africa's textile industry.  Of course, that's just the small stuff (mostly, depending on how much money you'll blow on prom dresses or new suits).  There's that iPhone 5S that you've just got to have.  There's a new PlayStation   If you're older, you might be looking into getting a new car.  One of the worst cases is when someone says that they're buying a new Prius to save the environment after trading in their "old" 3-year-old Prius because a new model came out.  Or maybe the richer folk decide that they need a Tesla to help the planet.  Unfortunately, even if you're getting the most ethically sourced, fair-trade, hemp skirt, it is not going to help the planet one bit.

In order to thrive with a growing population, we need to buy less.  I am guilty of temptations, but I try harder now to think of whether what I want is something that I'll actually use and something that will last.  I am not suggesting that you don't buy anything.  If you actually do need a new phone and you get a lot of benefit from having a smartphone, go ahead and get that new iPhone.  If your clothes are worn and unwearable for their purpose, get new clothes, or better, check out a used clothing store first.  But you don't need ten pairs of shoes and eight different dresses to go with them.  And yes, I think most of the blame for clothing deservedly goes to women.  From what I've seen, men are actually slightly less materialistic, although we might end up wasting just as much money (and therefore energy) on useless gadgets and fancy televisions.  Part of the blame goes to the manufacturers as well.  Instead of providing us with quality, upgrade-able, and durable products, we get laptops that don't last five years and are almost impossible to modify; instead, we dispose of them, not necessarily in the safest manner.  Then there is a fancier, faster laptop available for the same price that also won't last.  Don't even get me started on how bad Walmart is in this regard.

Unfortunately, there is a cost to reduced consumption, at least in simple terms.  If we decide to buy less stuff, then unemployment will go up even more.  I don't think that unemployment should be the face of the economy though.  High unemployment is a result of efficient production, lack of demand, poor education, and more.  It is easy to say that if consumers were more confident and just shopped more, the economy would be better off.  It's true that GDP would rise, but does that really improve our quality of life?  I don't believe that we need more jobs necessarily.  We need more people working, but they don't have to be manufacturing junk or building new cars or marketing a brand of sex-on-the-beach perfume.  There is certainly a need for more people cleaning up the streets, helping the poor, working at a rehabilitation center, or engineering solar panels that will compete with coal.  In some ways, we are moving towards a less-materialistic society.  The Internet has all but killed solid music and may yet lead to the demise of the printed book.  Newspapers are on their way out, as are non-Wikipedia encyclopedias.  There are companies that deal largely with re-selling used items to eager buyers, making it easy to buy and sell obscure products.  Unfortunately, at its core, the economy is still rooted in the exchange of new goods and services and every one of you reading this is part of the problem.

Now my simple list of advice::

  • Don't buy a new t-shirt.  I made the mistake of wasting $$ on fancy t-shirts.  They're nice, but not spectacular.
  • Don't buy new clothes unless you're going to wear them often (at least once per cycle of clothes for non-formal, weather-permitting).  And you don't need 10 different dress outfits for different job interviews and different dances and different "formal Fridays" and different concerts and junior prom and senior prom and graduation and college graduation and whatever other event you can think of.
  • Don't buy something new unless it's really not worth it to get used.  This goes mostly for books, especially textbooks.
  • Sell/give away your unused junk.  If I gave something that was not liked, I would want it to find a suitable home.
  • Don't get too much decorations.  It's fine to decorate the house, but expensive pottery does not look different for the tenth $50 vase without any plants (saying this from experience as I write this from my living room).
  • Do write cards.  They can say a lot and everyone appreciates them.  I need to focus on this...
  • Ask your friend what they actually want!  If it's something fancy, then team up with their friends to get it for them rather than taking a stab at what small thing they will most appreciate.
  • Volunteer, donate to charity, etc.  You'll make yourself happy, and you'll make others happier than your friend would be with the book that he'll never read.  If you want to buy a present for me, spend the time/money on finding a worthy cause, and more importantly, a reputable charity to invest in.  I seriously do not want any presents ever again.
  • Go out, enjoy yourself.  Experiences matter!  Party it up, go bowling, go on an adventure.  It should be the people you're with that matter, not the stuff you're with/wearing.
Shameless plug: For any textbooks that you still need and can't get from colleagues, go here:  Although it's still a for-profit company, Better World Books does a lot to help literacy (donate one book for every book you buy, gives millions of dollars to literacy charities, and more).  It is a Benefit Corporation, so it is not exclusively bound to maximize profits.

I would like to emphasize again that I am not suggesting you abstain from buying anything new.  Just spend more time thinking about what you are getting.  Is this something that you will use now, next week, five years from now?  Are you still going to get as pleasure out of it then?  Is it worth the energy, pollution, and waste that went into its manufacturing?  Then buy what you want.  Remember these words of wisdom from one Steve van Matre: "The key to a good life is not having what you want, but wanting what you have."

Saturday, December 8, 2012

What is Happening to Moderate Republicans?

I am not studying for finals now and am angry about stuff as usual, but I am not going to touch on too heavy of a topic now.  The sheer magnitude of craziness of the Republican party has come to light again in the failure to pass a completely non-controversial UN Disability Treaty.  Only eight Republicans voted for a bill that would do nothing to change US law and was actually based on American policies.  Let's briefly examine what is happening (or has happened) to moderate Republicans.

Charlie Crist, former governor of Florida, switched to an independent and is now a Democrat
The late Arlen Specter did the same before he lost the Democratic primary

Dick Lugar (former Indiana senator) lost his primary by 20 points after serving in the Senate for 35 years.

Lisa Murkowski (Alaska senator) lost in the primary before successfully running a write-in campaign to claim her seat (perhaps the only success story of a relatively moderate Republican recently)

Arnold Schwarzenegger would have a much better chance to win a national primary as a Democrat.

Jon Huntsman, a solid conservative former Utah governor, was ridiculed for preposterous positions like believing in science and supporting raising the debt ceiling over letting the economy crash.

Bob Inglis began his tenure as a reliable conservative, but his views began to moderate in more recent years. He voted for the stimulus and the DREAM Act.  More importantly (to me), he eventually came to accept the consensus on climate change and has been a strong advocate for a carbon tax (more on this later).  He lost his primary in 2010 by 41 points.

The whole of the moderate Republican presence Kansas state legislature, including the (now former) Senate president, got bombarded.  More on that here  (and just because it's Fox doesn't necessarily mean it's biased).

Chuck Hagel, a former Republican Senator before he decided not to pursue reelection, has endorsed Democratic Senate candidates in Pennsylvania and Nebraska.

Colin Powell, Bush's former Secretary of State, has endorsed Obama twice now.

Mike Castle decided to run for the Senate after a long tenure (18 years) in the House.  He lost to Christine "I am not a witch" O'Donnell, who got easily defeated in the liberal state of Delaware.

Lincoln Chafee actually lost in the general election in 2006 after barely winning the primary.  His response was not what you'd expect: "When asked whether he felt that his loss may have helped the country by switching control of power in Congress, he replied: 'To be honest, yes.'" Now he's an independent governor, probably more of a Democrat.

Chris Cristie was heckled for giving praise to Obama's handling of the immediate aftermath of Hurricane Sandy.  We'll see if the Republicans will embrace him in 2012 if he keeps his (somewhat) independent streak.  Or he could take the coward's way out like...

John McCain shifted to the right, now voting almost as an establishment Republican.  In fact, he was rated tied for the most conservative senator in 2011 following a long period of moderation before his 2008 campaign.

Mitt Romney.  Need I say more?

Okay, he wasn't really a moderate, but at one point, Tim Pawlenty supported cap-and-trade and believed in climate change.

Basically, the Republicans suck.  To be fair, the Democrats have consumed some of their own too, like Joe Lieberman (who has still for the most part supported the party's agenda since he became an independent) and Arlen Specter (the ex-Republican).  It is clear though that the purge is much greater on the Republican side.  Think of where the Democrats would be if not for senators in these states:

Monday, November 5, 2012

Guide to Naor's Opinion on Election Stuff

I probably should have written this before I voted, but here are my thoughts on some issues:

Before I say anything about the election itself, I want to express my disgust at two archaic voting processes that you should scorn no matter your party affiliation.  Let me start with the day of the election itself.  Is there any good reason that the biggest national event every four (if not two) years is held the second Tuesday of November?  Well, there was, back in 1845.  It has a lot to do with the Sabbath, farmers, and buggies.  Come on, is there anything that makes it good policy now?  Early voting and absentee ballots help, but they aren't available in all states and most people still vote in person.  There is the argument that the alternatives (making voting a holiday or have it on Saturday) would be economically harmful or cut into people's leisure time.  However, I doubt that modifying one day out of two years is going to stall vacation or destroy business.  If it does, then perhaps we should reevaluate our commitment to democracy  Voting should not be unnecessarily burdensome more than it already is in the form of long lines and and vicious campaigns.  Here is a petition in support of weekend voting (unfortunately it doesn't look like its going anywhere):  

The other dumb artifact of a different century is the electoral college.  The founding fathers didn't want a true democracy and wanted smaller states to have some influence.  Originally, the "electors" in each state were chosen by the legislature, but eventually their affiliation was chosen by the popular vote in each state.  As it stands, smaller states are over-represented in influence on the result, but the bigger issue lies with the process itself.  2000 aside, it is a rarity that the elected president actually loses the popular vote.  The bigger concern is really with the fact that so few states end up deciding the election.  Voting for president in large states like California and Texas, or small states like Hawaii and Alaska, is not very important considering that there is little chance of a close result.  As a result, the campaigns put no effort into some of the most important regions of the country.  I do not know how the vote would change if we moved away from the electoral college, but it would certainly be more representative.  Even among swing-state voters, there is a strong majority support for getting rid of the electoral college.  The best avenue now is a campaign to get state legislatures to pass an agreement to appoint all their electors to the winner of the popular vote.  It has passed for 132 out of 538 electoral votes; if just 271 votes are represented, then we can change the system.  This is because states are still not actually mandated to choose electors based on the state totals.  Hopefully this will eventually get the support it needs!

Now to some issues that I voted on:

I'll offer my lukewarm support to Obama.  Although Michael Bloomberg may be a little more conservative than me, I'd like to see him as president.  See his endorsement of the president for more.

Other People
I voted for Democrats in all the partisan elections and voted for Jerry Hill over Sally Lieber (apparently he is more devoted to education).  I would support a Republican under the right circumstances, but I didn't see one I could support in this election.


Prop 30
BIG YES.  As much as it sucks to raise taxes in a still-down economy, we can't afford to cut back on schools.  Of course I'm biased as this could have a direct impact on my college tuition.  Yes, I'm sure that there are some things that we should cut, but gutting our schools and colleges isn't going to cut waste.  The tax increase is modest, temporary, and goes to a good cause.  I am not the biggest fan of teacher's unions, but it is not worth it to under-fund schools just to spite a few overpaid teachers, especially when most good teachers are probably severely underpaid.  

On that note, NO on 38.  Just a rich idiot who might not even support education since all she did was spend tens of millions of dollars proposing a slightly different bill than Prop 30 that ignores colleges and universities. If Prop 30 fails, Charles Munger (anti-Prop 30)and his daughter Molly (pro-Prop 38) are to blame.

Prop 31
No.  It has some good things like a two year budget cycle.  Unfortunately, it ended up being too complicated and gives too much power to local governments.  I don't really support balanced budget amendments either, something that is basically a part of this.  Any increase in spending of over $25 million would have to be immediately offset.  The biggest problem is this: "Allows local governments to alter how laws governing state-funded programs apply to them, unless Legislature or state agency vetoes change within 60 days."  That is just a recipe for more fighting and bureaucracy.  I hope that the group that brought up Prop 31, which is actually legitimately nonpartisan, simplifies their proposals and comes out with a better bill.

Prop 32
NO.  By itself, it's not bad.  I support reducing campaign spending, but unfortunately it is nearly an impossible task in the wake of Citizen's United.  Proposition 32 unfairly targets unions while leaving Super-PACs and does nearly nothing to stop corporate spending.  

Prop 33
NO.  Stupid bill designed by the Mercury Insurance chairman.  Punishes people who have not yet had insurance or who decide to get rid of car insurance temporarily if they are disabled or decide not to drive.  

Prop 34
Yes.  I support ending the death penalty.  Just a moral thing.  I think we should avoid killing other people no matter the situation.

Prop 35
I voted yes, but I'm not so sure it's a great bill.  It will pass easily, but it seems to be dubious with regard to punishing prostitutes and their families as if they're sex offenders.  And I'm not sure how much effect the increased fines and jail time will really have on reducing sex offenders.  

Prop 36
Yes. It would modify the three strikes law to end mandatory life sentences when the last felony is non-violent.  My support is tepid due to concern that there may be a flood of cases in the court system.  Hopefully though, it will remove non-violent felons from unnecessary jail space.  

Prop 37
No.  I was initially in favor of this, largely because Monsanto is against it.  I am very skeptical of the positive impact of a chemical company that makes GMO crops just so people will buy Roundup.  Even for people who support labeling, the fact that meat and dairy products are exempt is very concerning.  The biggest GMO crops by far are soy and dairy.  98% of soy is used for livestock feed.  Most corn not used for ethanol (gosh don't get me started on how stupid ethanol is) gets fed to farm animals too.  A significant portion of the remainder is used for alcohol, which is also exempt from labeling.  

Well, since I am vegetarian and I don't drink alcohol, nearly everything that I purchase at a supermarket would be required to be labelled if it contained GMOs.  However, there is no credible evidence that GMOs are themselves harmful.  If they are, this is not the way to go about regulating them.  I believe that there needs to be more research into the safety of foods and pesticides, but there is nothing inherently different about GMOs than conventional crops.  I have my concerns about environmental sustainability and the actual effectiveness of genetically modified crops at increasing yields and reducing pesticide use.  However, simply slapping a label onto a box of crackers doesn't address these concerns.  

Another influence on my decision to vote against Prop 37 is that one of its biggest supporters is a anti-vaccination, alternative medicine by the name of Joseph Mercola.  He also believes that AIDS is caused by stress and that microwave ovens are dangerous.  His anti-vaccination stance is quite a bit more concerning to me than Monsanto's policies.

Prop 38
NO.  See Prop 30.

Prop 39
Yes.  It makes business pay taxes based on in-state sales.  Now, companies can choose to either do this or pay taxes based on property owned and labor employed in California.  This means lower taxes for companies that are from out-of-state.  Unfortunately, the first five years devotes $550 million to cleantech investments, basically filling the pocketbook of the bill's main sponsor and proponent.  I don't think that clean energy investing should have a place in this bill, but it seems to be generally good tax policy.

Prop 40
YES.  Not much to say here considering all opposition has been dropped.

Some local things:
I don't vote in Palo Alto, but I think Ken Dauber is nuts.  Unfortunately it looks like he will join the school board.  His views on closing the achievement gap are overly simplistic.  Basically, making Algebra 1 easier will do nothing to better prepare students for life.

Measure A
Yes.  A small increase in the local sales tax.  I am generally supportive of tax increases and relatively trusting of my county to not waste too much money.

Measure B
NO. It is fairly complicated and I admittedly did not read through all of it.  That is not a good sign, especially for a local measure.  It would basically replace a parcel tax that is expected to expire in 2016 and renew it for 15 years.  The money would go to water supply and flood control programs.  It will also supposedly provide habitat restoration  and ensure clean water goes to creeks and bays.  Unfortunately, from what I've heard, the Santa Clara Valley Water District is not the best organization and the bill has a lack of accountability.  Also, one of the main selling points is that it does not raise water rates.  I'd rather see a rise in water prices to pay for water improvements and hopefully lower costs due to reduced demand.  The measure has drawn mixed reviews from environmental groups and a neutral position from our local Sierra Club chapter.

Tuesday, August 28, 2012


Mitt Romney is not an idiot.  His idea of US energy independence by 2020 is not much different from what any other candidate (including Obama) has said.  But since he's the one putting it out now, he deserves all the flack that everyone throws at him.  I don't even need to get into the disaster of an energy plan that involves no carbon pricing and continued fossil fuel subsidies.  Greg Mankiw, are you going to respond to this at all?  It would be nice if we could get some reputable Republican economists who have been fairly environmentally conscious to shoot down Romney's plan for more drilling at all costs.  I don't expect that to happen, but any economist who endorses it as a credible policy loses their reputability.

This sentence is enough to make me snort tofu out of my fingers, whatever that may entail.  Apparently "Republican presidential candidate Mitt Romney will lay out policies on Thursday aimed at achieving North American energy independence by 2020 by pursuing a sharp increase in production of oil and natural gas on federal lands and off the U.S. coast."  I don't know if this is the dumbest statement I've read this week, but it's certainly the most memorable piece of idiocy.  The title of this post is all you need to know.  We will not have energy independence by 2020, by 2050, or probably ever, no matter the president(s).  Romney definitely knows this considering he was the CEO of an investment company that helped bring jobs to China.  Unless we become like North Korea and shutter ourselves completely from the outside world, any mention of "energy independence" is pure fallacy.  I'm not going to get into the specific policies, but I want to take a look at the goals of these policies, especially the notion of "energy independence."

It does not matter how much oil or natural gas we have.  Unless the US had all the natural resources in the world, there is no hope of "independence." The fact remains, oil is a global commodity.  We can drill for all the oil we have, but we are never going to be the sole supplier.  I'm sure that Romney, the former CEO of a company that helped promote outsourcing, appreciates the globalized economy we have today.  The increased supply in natural gas may help reduce electricity costs in the short term, but it is not going to power our cars in the immediate future.  As it stands now, the US gets very little electricity from imported sources.  As long as we are dependent on petroleum, we will be dependent on the Middle East.  And even the most optimistic forecasts caution that the era of cheap oil is over.  There is still plenty out there, but we have already reached a point of diminishing marginal returns; new oil from shale and tar sands costs a hefty sum of $70 per barrel to extract, plus a lot greater environmental damage than conventional drilling.  Contrast this with a price of fewer than $10 for oil from Saudi Arabia, and you can see that drilling is not a long-term (or even medium-term) solution to our energy problems.

Now, let us delve a bit further into Romney's "plan."  You can see it in full for yourself here. It is rather lackluster in details on how much Romney will change anything.  He says that we should reduce regulation and promote more drilling, basically only speeding up the current trend towards increased production.  Romney's plan opens with this statement:
While every President since Nixon has tried and failed to achieve this goal, analysts across the spectrum– energy experts, investment firms, even academics at Harvard University– now recognize that surging U.S. energy production, combined with the resources of America’s neighbors, can meet all of the continent’s energy needs within a decade. The key is to embrace these resources and open access to them.
Unfortunately, not all of the subsequent links present the same rosy outlook.  To be sure, there are some very optimistic claims of us becoming a net oil exporter by 2020, but there is no claim that the US would be able to set prices.  Here is an image of expected "hydrocarbon exports;" we can see that the Middle East is still expected to be a major player.  

Another paper cautions against the notion of us becoming self-sufficient:
However, quasi oil self-sufficiency will neither insulate the United States from the rest of
the global oil market (and world oil prices), nor diminish the critical importance of the
Middle East to its foreign policy. At the same time, countries such as Canada, Venezuela
and Brazil may decide to export their oil and gas production to markets other than the
U.S. for purely commercial reasons, making the notion of Western Hemisphere self sufficiency irrelevant.
Oh, so we're not the only country in the world that matters?

I am really surprised that Romney's paper includes a link to this USA today article considering the claims it makes:

At the same time, the 19 million barrels that Americans burn daily may fall by 2 million, by Citi's numbers. One reason: The EIA says the U.S. will be 42% more energy-efficient by 2035, continuing an enduring trend. 
One reason for all that new efficiency is regulation.

Oh snap, they just used the "r" word!  Let's read more:
The most important number may be $70 — the estimated cost to produce a barrel of oil from shale or tar sands, the heart of the new U.S. supplies. While natural-gas prices have sunk, oil prices might not, since they typically follow the cost of producing the most expensive barrel on the market.
$70 looks like the best case scenario.  Lastly, the real reason that energy independence is a farce:
Yet many hopes — and fears — about the U.S. energy boom will likely prove exaggerated. 
Citi's thesis that gas and oil will stay cheaper in the U.S. than abroad, for example, assumes most exports of U.S. crude remain illegal and natural-gas exports stay rare, says Mark Zandi, chief economist at Moody's Analytics. Instead, U.S. crude is likely to be refined into exportable products such as gasoline, while infrastructure to export liquefied natural gas improves. Both will pull U.S. prices toward higher world levels, he says. 
"Markets have a wonderful way of finding their way around restrictions when there's money to be made," Zandi says.
Oh right, those gosh-darn hippies and their free markets...

A common thread in many of the articles is the importance of reduced demand. If Republicans have their way, then the trend towards lower gasoline consumption will be reversed, and Romney has not exactly embraced conservation. Lower fuel taxes, less regulation, and a larger economy will all work to reduce our influence as an energy supplier. Romney's plan does not even pay lip service to the demand side of the equation, literally abstaining from all references to reduced demand. Of course, he surely realizes that energy prices are only set to go higher no matter the increase in supply if we do not conserve. There is simply no such thing as a free lunch.

My biggest concern with his energy plan, as with almost any plan that promotes pollution, is its complete disregard for externalities. Here is his blatant disregard for the benefits of regulation: "Laws should promote a rational approach to regulation that takes cost into account. Regulations should be carefully crafted to support rather than impede development."  This is not exactly a bad approach, but we must equally take into account the great benefits that regulation can bring for safety, public health, and the environment.  The EPA has been rated the best government agency as far as the net benefit to cost ratio despite the difficulty it has in forming a market-based regulatory policy without the power to levy taxes.  This is not to say that every EPA policy has benefits that exceed costs, but it is still generally a positive influence.  Romney completely ignores the long term harm of climate change, but of course that is to be expected given his new-found conservative fanaticism.  I am saddened that the second most reasonable Republican candidate has come up with such an atrocious plan, especially considering his economic advisers.  He could have helped bring about a market-based environmental reform that Obama has failed to deliver, but instead has just chosen to blithely follow the smoggy, dead-end path of the fossil fuel machine.

Tuesday, July 31, 2012

Guess Which Country Leads the World in Carbon Emission Reduction?

Could it really be us?  Oh yes.  America has actually led all nations in reducing carbon dioxide emissions.  Coal consumption is at an all-time low and sinking fast.  We don't need no stinking carbon tax, right?  Or maybe our lack of emissions is due to a sluggish economy.  No matter the case, environmental groups are put in a bit of a rut.  Obama and the Democrats have glossed over it.  The above link is a good primer on the logistics of the situation.  The criticisms are right to an extent.  If fossil fuels are priced out of competitiveness without a carbon tax, then there is no real need for one.  However, while natural gas is much, much better than coal, it still pollutes and will still cause devastating global warming.  Further controversy today arises from the prevalence of fracking, which has still-unclear effects on nearby water supply.  And the other unfortunate truth is that a lagging economy (at least in the traditional GDP sense) is a great recipe for less pollution.  But that's another topic..

Saturday, July 7, 2012

Patriotism and Such

Ah, another post that is not about environmental economics.  Don't worry: it will be back.  In the spirit of Independence Day, I would like to offer some thoughts on the "American Dream" and the like.  Don't get me wrong; I love many things about this country.  "Amurica" is amazingly successful and prosperous, especially for such a large area.  And although I despise American politics, I will readily admit that they are not the worst among developed nations.  Italy elected Silvio Berlusconi three times as prime minister, basically the equivalent of voting for Donald Trump and Charlie Sheen for president.  Greece has just elected a bunch of loony socialists to the majority, while giving neo-Nazi fascists a quarter of the seats.  I could go further in describing the sorry travails of South Korean Parliament or Japanese ministers, but I want to focus on America.  I just want people to be realistic about what they say, and this goes for Democrats as well as Republicans.

Since I don't expect many conservatives to read this blog, I will focus more on the things that everyone says that irk me.  I will pay some lip service  to conservative dogma though.  No, we are not the greatest country in the world in every way.  We are neither the most free country nor the most wealthy country (per capita).  We do not have the best healthcare or the best education.  In fact, we are well behind most developed countries in these two crucial areas despite spending far more.  Enough of that though; most people living in the real world (which may not include a majority of Americans) know that we have vast room for improvement.  And I'm not sure exactly how any statistics back America's status as the hands-down greatest country in the world.  Of course, if any American politician asserted that Norway or Sweden were run better, then he or she would be chastised for a lack of patriotism.  In fact, the US ranks 23rd in inequality-adjusted HDI (Human Development Index).  Even disregarding inequality, we are measurably behind Norway and Australia.  I have no problem saying that the US is one of the greatest countries, but we are certainly not the best.

Okay, so over-the-top nationalistic fervor is disingenuous, but for the most part harmless.  As long as we still realize that there is room for improvement, it doesn't hurt to feel a little overly smug of our country.  I have no problem with having a day to celebrate (July 4th), although I doubt most people remember the history behind it.  Unfortunately, our self-infatuation goes beyond nationalism.  There is of course the obvious case of immigration, where liberals are quick to point out the racism and xenophobia of many Republicans. Arizona has gone crazy recently with its crackdown on immigration, and perhaps worse, banning ethnic studies.  There is also the wildly irrational fear of world governments (the UN for example).  God forbid that we have to interact with other countries.  Unfortunately, the sad reality is that many Americans are not willing to help the rest of the world, evidenced by the widespread lack of support for foreign aid.  We hear many liberals saying that we should focus on our own problems before helping out others.  I don't think one precludes the other; in modern society, improving the standard of living in any country will make America better off.  I think that trade globalization have been important steps towards a better world.

I am the first to acknowledge that there are some horrible tragedies in free trade.  Poor working conditions, corporate-supported terrorism (for example, Banana Republics), and vast environmental degradation have resulted from unfettered trading.  Of course there is cause for concern.  Unfortunately, the most commonly proposed "solutions" do nothing to remedy most of this.  Shuttering trade does nothing to improve working conditions; they will still have to make a living somehow.  There is no reason that the Chinese would be better off if they were working for local companies instead of American ones.  International trade has done far more to improve living standards despite the perceived awful conditions.  We must work to further the improvement, pressuring China and other countries to develop better regulations.  Limiting trade is only going to increase the likelihood of terrorism and conflict by further isolation countries.  Environmental exploitation is the biggest long-term consequence of trade, but this is an unfortunate result of rapid development.  We are sacrificing short-term improvement for the potential of vast long-term harm.  The practice of dumping all of our garbage in third-world countries is despicable; that is something that I believe needs to be cracked down on.  We need to handle our own toxic waste rather than shipping it off to China.  Unfortunately, the same people who say this will not support facilities here due to the health consequences.  Again though, there is no reason that we cannot have international trade without causing so much environmental destruction.

While we must be cognizant of the damages, we should not get carried away into blindly supporting everything American.  There is no reason that manufacturing should be done in America and not China.  There is zero reason that as compassionate, bigotry-free liberals, we should not embrace foreign workers as much as we care about Americans.  I cringe whenever I hear Obama (or anyone else) talking about the travesty of shipping jobs overseas.  The end goal for us, as people, should be to make the world a better place for everyone, not just America.  Other countries are not "stealing" our jobs; they are simply doing a better job competing.  I do not think that it is a bad thing if there is one more programmer in India, or a million more.  A loss of jobs is a result of overpopulation, not of outsourcing.  We should not impede the development of other countries by protecting American jobs or American manufacturing.  I don't think that there should be special tax breaks for American production or American companies.  We need to make things better, not necessarily make things American.  I see nothing wrong with outsourcing, nothing wrong with China beating us technologically.  The great thing about globalization is that every country benefits.  So yes, we need to do better, but not for the sake of being better than China.  We should applaud China's development and help it become more efficient and (especially) more sustainable.  As far as improving the situation for America, the only thing that is really going to make a long-term difference is better education.

Next time you're thinking about the greatness of America, whether it's tomorrow, this election season, or next July 4th, take a moment to remember our shortfalls.  And please don't chastise foreign workers just because they don't live in America.  After all, you would protest the anti-foreigner fervor inside the border as bigoted and racist.  You don't get a free pass outside the border.

Sunday, July 1, 2012


Well I don't think anyone (me included) has read this in a while, but I feel like making this rant.  I'm not super passionate about this issue, but I do feel that is important.  I'm still not going to go into any personal stories if any of you (well I guess just me) were wondering, but let us just say that the end of my first year of college is an appropriate time to bring it up.

It may come as a surprise, but I am not totally opposed to lowering the drinking age to 18.  As an aside, I have flip-flopped to believe that legalizing marijuana is a net benefit, almost entirely due to the likely reduction in gang violence.  I bring this up to show that my morals, which are severely anti-marijuana, are not the primary concern in my feelings expressed in this post.  I don't think that the benefits of legalizing marijuana or lowering the drinking age are as great as proponents suggest.  If you think that the prison population would magically vanish and gangs would simply go away if weed were legal, then you must be in a fantasy land.  Look at California, where it fairly easy to get hold of semi-legal marijuana.  I really do not know what steps we can take to really eliminate gang-related crime, so I will say that legalizing marijuana can be a start, but is definitely not a solution.  Fortunately, the hazards of alcohol are mostly direct than drug wars fueled by illicit substances.  Unfortunately, alcohol is one of the leading causes of premature deaths, especially among teenagers and young adults.

As much of an anti-partier as I may be in person, I do not realistically think that it is either wise or necessary to prevent parties from having alcohol.  However, this should not be seen as an endorsement of simply letting college students go wild and shrugging it off by saying, "Everyone does stupid things in college."  Now, having spent a year in the dorms, I can say that this is not even close to true.  There is a sizable minority that drinks as little as I do (that is, not at all).  Of the people who do drink, I'm sure there are plenty who are responsible and do not get overly wasted.  Unfortunately, our culture seems to endorse the extremes.  It is not overly concerning that 73% of college students drink (meaning that more than a quarter are completely sober).  However, the fact that more than half of underage young college students who do drink binge drink is alarming.  It saddens me that people (some of whom I know) feel the need to get drunk out of their minds ever, much less on a regular basis.  I will say that there is a place for alcohol, which likely has measurable health benefits, but we must remember that it is a drug.  Getting drunk is drug abuse just like having too much cough syrup is.  Once you lose a rational state of mind, there is no benefit to alcohol other than the possible near-term consequence of you not knowing what you are doing.  Is it really worth it to go crazy to forget your life problems only to wake up the next morning with a headache, the same problems you had before, and perhaps more issues with what you unknowingly did or said the previous night?

Okay, maybe you don't agree with me that losing your conscience is morally wrong or dumb.  The real danger is not the harm alcohol can do to you.  Maybe it's alright if people get themselves sick, hurt, maybe even die due to alcohol abuse or due to stupid decisions relating to it.  For example, apparently two young men died on Houseboats this year because they were so drunk that they decided to jump off the boat and subsequently drowned.  No, the real danger of alcohol is what it does to others.  Assault, rape, and unprotected sex are largely a result of drunkenness.  Less extreme but still disgusting is the vandalism and trash that inevitably follows a wild party.  If you want an example of that, look at Davis the day after Picnic Day.  Then there is of course drunk driving.  I may be a bit exaggerated in my panic over drug usage sometimes, but I feel that I am perfectly reasonable in having zero tolerance for driving under the influence.  I feel that once you get caught drinking and driving (or under the influence of any other impairing drugs for that matter), you forfeit your privilege to be on the road.  If you were truly being safe, you wouldn't have gotten pulled over in the first place.  There is no greater risk on the road than someone under the influence and there is little that us sober people can do if a crazy drunk screams past.  If you're driving under the influence, you deserve to lose your license permanently.  I have no sympathy for anyone who is driving drunk under any circumstances.    Of course, this must not be the only solution (insofar as it can even be seen as one) to our drinking problems.

I believe that our alcohol problems begin largely in high school, for some even dating back to middle school. Lowering the drinking age to 18 would have little effect on the legality of high school drinking.  A fundamental misunderstanding that people have is that kids (or semi-adults if you will) are actually often charged with underage drinking.  In fact, drinking is rampantly tolerated in college.  At UC Davis, parties often get shut down early, but I am not so sure if that is so much due to underage drinking as general disorder and noise violations.  Also keep in mind that being over 21 does not give you the right to go out and get drunk; there are still laws against public intoxication.  I am not so sure that having a drinking age is really a concern at all.  As long as alcohol is a legal non-prescription drug, I don't think that there is good reason to make it illegal for minors to consume, especially given that it is permitted for religious purposes.  Alcohol is neither as harmful physically nor nearly as addictive as tobacco, and to arbitrarily say that it is safe for consumption immediately after one turns 21 does not sound like sound science.  Rather than futilely attempting to eliminate alcohol from 15-21 year olds, we should focus on how to safely and responsibly handle alcohol for everyone.

I think that the key to safer alcohol is taking it off the spotlight.  Alcohol consumption should not be encouraged as it is in commercials today.  Alcohol must not be the centerpiece of parties, either in high school, college, or beyond.  If I have read correctly, alcohol has less of an effect when consumed with a stomach already full of food and water.  People should have the right to enjoy alcohol, but there is a limit to the behavior that is permissible in society.  We must adopt to a culture that does not encourage binge drinking, and curtailing advertisements that glamorize such behavior might be a start.  I also believe that it is a responsibility of bars to ensure a safe environment; they have every right to refuse to serve someone alcohol who is on the brink of violence.  There is a place for police to get involved with drunk people (men especially) considering the large role alcohol has in violent crimes from minor assault to rape to murder.  I don't think that alcohol should be banned or even severely restricted in sales, but our attitude towards it has to change.

There is of course an opportunity to tax alcohol at a higher rate, which I certainly supports.  However, let us not get carried away into thinking that taxing alcohol is going to solve many problems.  The issue is not even the total alcohol consumption; we're not really a country of severe alcoholics.  For the most part, alcohol-related incidents are due to the short term effects.  It does carry chronic health concerns, but those are mostly the deal of the imbiber.  Taxing alcohol more will lead to a decrease in consumption to an extent, but I doubt that it would lead to a significant decrease in assaults or drunk driving accidents.  A tax that is too high would encourage a black market on alcohol, something that has already happened in Russia.  Nevertheless, taxation is a great signal and an important component to the fight against alcohol abuse.  To sum it all up, I believe that we need better education, better law enforcement of intoxication laws and a zero tolerance driving policy, and an increase alcohol taxes.  These will serve to lower demand for alcohol and hopefully encourage people to moderate their single-session intake.  Hopefully we can make alcohol safer, healthier, and more enjoyable for everyone.

Feel free to contest anything I say.  I won't guarantee that I'm likely to change my views, but I have switched to support legalizing marijuana and I am no longer an enthusiastic supporter of the drinking age (or any for that matter).  Also if you happen to read this (you won't), give me suggestions on something else you want to see me write about, preferably something that I would at least be mildly interested in.

Sunday, March 11, 2012

Tornado Relief? Bad Policy

I would be castigated as a heartless idiot by the liberal media, but I think that the disaster aid system is screwed up.  Case in point: Obama offers disaster aid to Indiana counties hit by tornadoes.  "Assistance can include grants for temporary housing and homerepairs, low-cost loans to cover uninsured property losses and other programs, according to Daniels' office."  This is a very shortsighted policy that is only going to cause long-term harm.  It is exactly the kind of government intervention that was opposed Climatopolis.  While I certainly think that people affected by the tornado should get some help, they should not simply be left to go back to business as usual.  They are living in high-risk areas that have a significant possibility of being hit with future storms.  People should be encouraged to move to a safer location.  They should not assume that the government can pick them up whenever a predictable storm happens.  I am not completely familiar with the area, but a quick Google search indicates that Jefferson County is a common home of tornadoes.  And if homes are going to be repaired, they must be repaired to withstand a tornado, not merely to survive until next year.  I also don't think that rural areas should be subsidized at all, but that's another story.

Monday, March 5, 2012

A Carbon Tax isn't Politically Feasible? BS

Although Republican politicians now seem vehemently opposed to any and all climate change policy, there is a smattering of conservative support for carbon taxes. This includes some previous support from politicans, some support from ex-politicians, and a multitude of businessmen and conservative economists who enthusiastically embrace energy taxes.

As far as economists in general are concerned, 60% of economists in Australia support the carbon tax bill passed (25% are opposed).

Republican House candidate BJ Lawson: "We should also explore a carbon tax on nonrenewable energy as a complete replacement for our federal income tax. We want more jobs, productivity, and income – so it doesn't make sense to tax jobs, productivity, and income."

Greg Mankiw (see more on him here) has a Pigou Club manifesto  outlining a very coherent analysis of the benefits of a carbon tax.  

Conservative University of Chicago Economist Gary Becker
Former Federal Reserve Chairman Alan Greenspan
Bill Gates
Freakonomics author Steve Levitt
Former Republican Senator Bob Ingliss
Alan Mullaly (current president of Ford and former Boeing CEO)

Current Republican Senator Lindsey Graham's 2010 proposal: "He proposes “putting a price on carbon,” starting with a very focused carbon tax, as opposed to an economywide cap-and-trade system, so as to spur both consumers and industries to invest in and buy new clean energy products."

Conservative columnist Charles Kraughthammer
Conservative columnist George Will

The conservative think tank American Enterprise included a carbon tax in its deficit-reduction bill:
"In fact, the irony is that there is a broad consensus in favor of a carbon tax everywhere except on Capitol Hill, where the 'T word' is anathema."

Former Bush economic adviser Lawrence Lindsey

Former Bush economic adviser Glenn Hubbard: “But businesspeople don’t innovate because it feels good; they innovate because there’s a return to that innovation. If you want a return to that innovation, you will have to price it – you will need to put a price on carbon, which means having, either through a cap-and-trade system or an explicit tax, some incentive to innovate carbon-saving technology.” 

Supply-side economist Art Laffer 

Former Reagan Secretary of State George Shultz

Exxon-Mobil CEO Rex Tillerson: “He said he favors a carbon tax to curb greenhouse gas emissions — rather than a cap and trade system using pollution credits — because the tax is more effective, less costly and easier to administer.”

Exxon-Mobil International Chairman Robert Olsen: "Achieving a uniform and predictable cost for carbon across the economy would enable market mechanisms to work effectively to this end. Uniformity ensures economic efficiency, whilst predictability facilitates good decisions affecting energy consumption today, and investment in the technologies needed to reduce emissions over time."

Sempra Energy (natural gas operator) CEO Donald Felsinger: "I think the most effective way to deal with carbon pollution is to have a carbon tax."

Conservative NY Times columnist David Brooks: A crusade for economic self-restraint would have to rearrange the current alliances andembrace policies like energy taxes and spending cuts that are now deemed politically impossible. But this sort of moral revival is what the country actually needs.”

Climate change-denier Wall Street Journal writer Holman Jenkins Jr: "A carbon tax would be the efficient way of encouraging businesses and consumers to make less carbon-intensive energy choices. Government would not have to exercise an improbable clairvoyance about which technologies will pay off in the future."

Former George W Bush speechwriter David Frum: "You don’t have to believe that global warming is a problem to recognize that a carbon tax is the solution. Under the umbrella of a permanent disadvantage for fossil fuels, markets could figure out freely which substitutes made most sense."
Paul Anderson, former CEO of Duke Energy

Former American Petroleum Institute Chief Economist Michael Canes

Former Reagan Chief Economic Adviser Martin Feldstein

GM CEO Dan Akerson: “You know what I’d rather have them do – this will make my Republican friends puke – as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.”

FedEx CEO James Hansen
Caterpillar CEO James Owens

There you have it.  That is an assortment of 25 businessmen, conservative economists, conservative politicians, and conservative pundits who have publicly supported a carbon tax.  Vocal supporters of energy taxes include two of the three American car company CEOs, the upper echelon of one of the biggest sources of emissions in the world (Exxon), two other energy industry executives, and a smattering of prominent Republican economists.  Is it really so politically suicidal for Democrats to show the widespread support of a carbon tax among some of the most prominent conservative businessmen and economists?  

Why We Should Replace All Federal Taxes with a Carbon Tax

I am actually writing my research paper for writing class on this topic, so please message me any comments/concerns.

Global warming may be the arching problem of the next few generations.  No, it will not bring about the end of human civilization.  However, there will be devastating tragedies, some of which we are already experiencing.  There is a legitimate choice that we need to make.  Humanity is going to pay for climate change whether we like it or not.  I am not going to harp on about the consequences, but if we want to minimize the effects, we need to drastically reduce pollution.  Now, even if the United States eliminates all of its pollution, there is still going to be a major problem if developing nations like China, India, Indonesia, and South Africa industrialize through coal and oil. 

Although some hope (and even believe) that we can simply innovate our way out of the problem with technology, the prospect of this is dangerously unfeasible.  It is going to require a complete transformation of the world economy.  It is going to take a whole lot more than buying compact fluorescent light bulbs, buying a hybrid car, going to the farmer's market, and getting energy efficient appliances.  Energy efficiency is great, but only if it actually leads to a decrease in energy consumption.  I am going to be blunt: it will cost us a lot of luxury to reduce our carbon dioxide emissions to tolerable levels.  It may not even be possible.  So why should we even try?

The basis of economics is the study of scarce resources.  And like it or not, the primary energy sources (coal, oil, natural gas) for today's society are limited.  Perhaps they will last a few hundred more years, but the cost is ever-rising.  We have already reached a peak of cheap oil, turning to tar sands and high sulfur crude.  Once again, we will have to pay eventually.  The only question is how to limit the damage, how to seamlessly transition for a high-pollution, fossil fuel-based economy.  It will not be as simple as replacing the grid with the elusive "too cheap to charge for" nuclear fission or pie-in-the-sky fusion.  And you are living in a fantasy land if you think that we can even come close to maintaining our current levels of consumption.  No, we are going to have to employ the scorned upon notion of conservation.  We have to cut back.  We have to drive less, bike more, travel less, eat more sustainable foods, move to cities, and use less electricity.  It does not have to destroy our quality of life.  But the path to such a society matters.  

The idea behind a pollution tax is simple: pollution is bad, so we should discourage it.  Arthur Pigou was one of the first economists to popularize the concept of taxing negative externalities.  In an ideal situation, the damage to society of a good is equal to its price.  In a free market, there is no value on the “external” costs of a product, such as the negative health effects of pollution.  Therefore, the price of “bad” products should be raised to the true societal cost.  Unfortunately, it is difficult to measure the true cost of global warming.  The necessary price of carbon dioxide to provide a sufficient revenue stream might well be higher than the harm that global warming will cause.  However, the increased chance of a completely devastating natural disaster may render action necessary at all costs.  Either way, taxing carbon dioxide will lead to lower overall emissions, which benefits society even at low levels of output.

The basic premise of a consumption tax is actually quite conservative.  One argument is the simplicity of a tax on the purchase of goods as opposed to taxing wages.  Income is difficult to measure and to keep track of, and the tax code is rife with loopholes and deductions.  Simplifying the code to a basic tax on the sale of products is going to reduce noncompliance.  Another criticism of the income tax is that it penalizes labor: taxing wages causes people to work less.  A consumption tax rewards investment and saving by raising the price of immediate consumption.  The combination of these effects leads to greater economic efficiency.  A carbon tax is basically a targeted tax on consumption. 

The magnitude of a carbon tax to replace federal revenues is hard to comprehend.   Imagine gas prices at $15 per gallon, electricity prices at $1 per kilowatt-hour, airplane tickets costing three times as much.  A carbon tax would effectively act as a national sales tax.  But therein lays the beauty of it.  Conservatives have already proposed replacing the income tax with a national sales tax.  If global warming were not such a politically contentious issue, then Republicans would enthusiastically embrace such a proposal.  Alas, this is not the case.  Al Gore's suggestion that payroll taxes get replaced by a revenue-neutral carbon tax was wrongly tossed aside.  I embrace his proposal and would like to take it significantly further.

A large carbon tax is not without its own set of complications.  Let us start by examining the liberal objection: any sort of a consumption tax is going to severely target the poor.  Yes, lower income people consume a far higher percentage of their earnings.  In addition, a carbon tax would even target people who have zero income.  This is concerning, but it would be far too complicated and simply unnecessary to leave the poor out of it.  After all, the planet does not discriminate as far as emissions are concerned.  However, there are still ways to make sure that the tax structure remains progressive.  One way is a lump-sum rebate: give everyone a bundle of money back.  This would necessitate a higher rate, but because the poor consume carbon disproportionately to their income, they would benefit more.  Another proposal is to only give money back to people making below a certain percentage of income.  The rebate system could be set up so that the overall tax progressivity is similar to today's structure.  A low-pollution, climate change-free world offers additional benefits for the less fortunate.  Climate change is likely to have a significantly greater effect on the poor, since they are less mobile and less able to adapt.  They cannot afford to move out of high-risk areas (like New Orleans) when the time comes.  A carbon tax is certainly not socialism, but it is not going to exacerbate income inequality more than simply allowing climate change to happen.

So what about regulations?  Why can't we simply mandate a reduction in emissions?  Why don't we require alternative fuels or renewable energy?  Why can't we provide rebates for "green technology" instead of raising taxes?  Well, we are already employing all of these tools.  The EPA has the authority to regulate greenhouse gases, but it is not easy to do.  And many states have adopted renewable fuel standards.  However, without economic incentives, these are impossible to meet.  The cost of renewables (and nuclear power for that matter) is simply too high for a large-scale transformation.  Mandatory emissions-reduction programs are not usually successful.  Even the enviable European countries are having trouble meeting their Kyoto targets.  Canada has pulled out of Kyoto in lieu of paying fines for failing to sufficiently reduce pollution.  CAFE standards require new cars to get 50 mpg by 2020.  This will help some, but it does nothing about the millions of cars that will remain on the road.  An increase in the usage of solar energy is not going to do anything to reduce pollution, only a decrease in fossil fuel use will.  Tax credits are simply not an efficient way to subsidize green technology.  They are too targeted and are highly regressive.  You aren't going to see families making under $50,000 a year buy a Tesla, solar panels, or even a new washing machine.  Tax breaks are also often wrongly targeted.  For example, corn ethanol is subsidized nearly $2.00 a gallon (including tariffs) when it provides little to no pollution benefits.  Simply raising the cost of pollution is a far simpler, far more effective method of encouraging new technologies.  Unlike with direct subsidies, technology is subsidized by its actual effectiveness in reducing pollution rather than the political clout of interest groups.  A carbon tax is also an extremely helpful motivator for conservation.  Sometimes, the best technology to use is no technology at all.  Drive less, use fewer lights, and hang up your clothes.  An extremely high price of energy would force middle class Americans to think twice before moving to the suburbs.  It would be a boon for urbanization and for public transportation.  These are all results that a simple sales tax, without regard to the harmfulness or benefits of the goods that are sold, cannot achieve.

The other market-based proposal that has garnered some more political support has been cap-and-trade.  This would also set a price on carbon, one that would specifically target a certain level of emission-reduction.  Carbon credits would be exchanged between companies.  A company that reduces its carbon footprint can sell its credits to a higher polluter. Such a system worked in the 1990s to dramatically reduced sulfur emissions.  It would certainly be at least as effective in achieving its pollution goals as a carbon tax if executed properly.  However, cap-and-trade is difficult to regulate.  It is easier to levy the final tax on the consumer than to worry about how many credits manufacturers get and the specifics of selling pollution permits.  Cap-and-trade is going to raise prices just as a tax would, but none of the money would go to the government.  With a direct tax, the government gets more revenue, which can be used to offset the complicated and inefficient tax code.  A carbon tax is the simplest and most effective method of combatting global warming.

So can a carbon tax actually work at significantly reducing pollution?  On the technology side, the impact seems obvious.  Increasing the price of fossil fuels is implicitly a huge subsidy for renewable energy.  Tripling the cost of coal would make solar energy close to cost-competitive with current technology.  The idea that it would change people's behavior is less certain.  We learned in introductory economics that the price elasticity of gasoline is less than 0.01.  This means that raising gas prices by 100% even will result in only a 1% decrease in demand.  However, the long-term price elasticity is estimated to be closer to -0.5, although it is going to be lower in the face of large price increases.  Still, the response is significant.  Of course, a large decrease in emissions creates its own problems.

How are we going to collect enough taxes to fund the government if a carbon tax actually works?  Of course, if the pollution is reduced enough, the government may no longer have significant funds to run.  It does not make sense to further raise the tax rate beyond this point, as there will be little, if any, increase in revenue.  If pollution is low enough, it is not even causing significant harm.  In this scenario, I would favor a progressive consumption tax. It can be gradually phased in as revenues would otherwise decline.  It would maintain the current progressive nature of the tax code while providing conservatives with their ideal, simplified tax system.  A consumption tax still discourages the excess purchase of disposable goods, so there is still some environmental benefit.  We can only hope that this situation arises.

The real question that is going to decide the merit of a carbon tax is the value of time.  If this generation is all that matters, it is probably not worth it to reduce fossil fuel usage or significantly cut pollution.  If we are serious in our efforts, it is not going to be easy.  The idea of actually using less energy is not easy to tolerate for most Americans, especially the middle class.  The likely mass urbanization might forever end the suburbs, and will all but eliminate rural towns.  Hundreds of thousands of Americans might be permanently out of a job as coal and oil companies scale back on mining and refining.  New, disposable goods are going to be too expensive for most people to consider buying.  Given the limited supply of natural resources, the transformation to a more sustainable, less disposable economy is inevitable.  I do not think that we should immediately destroy the economy by implementing a full-blown tax now.  However, within the next ten to twenty years, the tax can be gradually phased in.  This will give time for technology to improve and for people to adapt.  Colleges are going to have to shift their major programs, and some people may have to go back to school in order to find a job.  Sure, there will be an influx in “green jobs,” but the job market is going to change forever.  The economic benefits of a shift towards a sustainable, low-pollution society are easy to see: better health, better efficiency, and more diverse and creative energy sources.  However, it is ultimately not the economics, but the social reality that will determine the ultimate policy.  If all you want is to feel good driving your Tesla, eating your veggie burger, and admiring your solar roof, then sit back and relax while the planet does not notice.  A large-scale carbon tax is the least costly, most efficient method of actually combatting global warming.  It will take more than just the United States to solve the problem, but we have to start somewhere.  In the end, the sacrifice will be well worth it.

Tuesday, February 7, 2012


I think that it's time to revive my blog from the dead for my own sanity's sake.  I don't intend to make this blog personal, but my academic interests and my non-Internet life had a brief marriage today.  Of course, it had to involve environmental economics.  Thanks to Mathew Kahn, a UCLA Economics professor for the lectur.

Basically, the premise of most climate change economics is that we need a mechanism to reduce emissions to a sustainable level that will minimize the effects of global warming.  However, there is a lack of worldwide initiative for such a problem.  Emissions are ever-increasing with a growing population and the rise of China, India, and other developing nations.  Although it is still extremely important to limit the damage of climate change, we must adapt to the consequences.

Kahn's lecture focused on how humans can adapt to climate change.  Most of his proposed solutions come from a capitalist free market.  This doesn't necessarily mean unregulated pollution and a complete ignorance of environmental issues.  I think that there are takeaways that liberals should come to terms with.  For one, we cannot continue to have such low water and electricity rates in a world of ever-scarce resources.  Allowing water rates to increase from their outrageously low prices of less than 1 cent per gallon would go a long way towards encouraging conservation.  The government also needs to stop subsidizing growth in vulnerable areas, like New Orleans (a whole post could be dedicated to this issue).  Instead, it should allow insurance rates to go up and property prices to go down in disaster-prone regions.  This will encourage migration to safer, better quality cities.  An especially interesting concept was the idea of charter cities.  Basically, these would be brand-new cities built on empty space.  All of these are important methods of limiting the potentially devastating consequences of global warming.

In the end, the prospect of humanity depends on whether or not we are willing to adapt.  Kahn used the Rome heat wave as an example.  Thousands of people died from the Moscow heat wave in 2010.  If Kahn is right, then humanity will adapt and be better prepared for the next one.  He put it another way: if humans are 100% Homer Simpson, then we're screwed; if there is a little Spock in humanity, then we can deal with it.  Hopefully there are enough smart people who care and can work to keep civilization thriving throughout what will certainly be a more tumultuous climate.

The lecture slides for the presentation are available here