tag:blogger.com,1999:blog-59740732095927871552024-03-13T03:35:10.215-07:00Market FailureMusings on the state of the worldUnknownnoreply@blogger.comBlogger37125tag:blogger.com,1999:blog-5974073209592787155.post-46401655004531314242008-07-27T12:07:00.000-07:002008-07-27T18:03:19.923-07:00A lunch I wish I had attended...Matt Kahn blogs about a lunch he had with Matt Kotchen. This led to Kahn's Top 5 <a href="http://greeneconomics.blogspot.com/2008/07/big-questions-in-environmental.html">Big Questions in Environmental Economics</a>. (Not in order and hat tip to <a href="http://www.env-econ.net/2008/07/some-light-week.html">Environmental Economics</a>)<blockquote><br />1. How large are learning by doing effects for renewable energy technologies such as wind and solar?<br /><br />2. How much damage will we suffer from climate change if average world temperature increases by T degrees? Where T takes on the values 1, 2, 5, 10, 30 c? Marty Weitzman's point is that each of these states of the world have non-zero probability of taking place. So, how much damage and who suffers the damage from each of extreme weather events?<br /><br />3. When carbon pricing is introduced, which industries, nations and households will bear the incidence of this taxation?<br /><br />4. Are consumers indifferent between "natural capital" and man-made engineered products? So for example, think of gentically modified foods versus organic foods -- are you indifferent? Is there any price differential such that you would be indifferent or do you view the GMO as "frankenfoods" that you wouldn't touch?<br /><br />5. What are the causes of environmentalism? When people are environmentalists how does this affect their answer to #4 above?<br /><br />6. Building on #5, we need structural consumer demand estimates of the willingness to pay for "green" products (think of the Prius) or tofu and how these estimates vary by population demographics and ideology.</blockquote><br /><br />I think these are great questions and topics for discussion and research. It is interesting to note how many of Matt's questions are empirical. "How large" in #1, "How much" in #2, "how does this affect" in #5, "how [do] these estimates vary..." in #6.<br /><br />Others I can think of...<br />How will the incidence of increasing energy/carbon prices differ in the short-run vs. long-run?Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-5530500451567947212007-07-22T10:33:00.000-07:002007-07-22T10:35:27.562-07:00New Computing ResourceI just discovered <a href="http://www.mayin.org/ajayshah/misc.html">Ajay Shah's homepage</a> full of information about R and economic computing in general. Good example code for Maximum Likelihood Estimation as well as integrating R output into TeX files.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-59358703255153869822007-07-11T22:33:00.000-07:002007-07-11T22:36:41.404-07:00Env Econ Recommended ReadingEnv-Econ has some links to a few good <a href="http://www.env-econ.net/the_environmental_economi.html">recommended readings</a> for those interested in environmental economics, mostly Robert Stavins' columns from The Environmental Forum. Many would be good to read for an introductory environmental economics course.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-23024836534176152472007-07-11T07:38:00.000-07:002007-07-11T07:43:18.652-07:00Congressional Budget Office on Cap-n-TradeThe Congressional Budget Office has <a href="http://www.cbo.gov/publications/collections/climatechange.cfm#pt3">several policy briefs</a> on the impacts of tradable emissions permits.<br /><br />Including...<br />Supplemental Information About Trade-Offs in Allocating Allowances for CO2 Emissions<br />July 9, 2007 <br /><br />Trade-Offs in Allocating Allowances for CO2 Emissions<br />April 25, 2007 <br /><br />Limiting Carbon Dioxide Emissions: Prices Versus Caps<br />March 15, 2005 <br /><br />CBO's Comments on the White Paper "Design Elements of a Mandatory Market-Based Greenhouse Gas Regulatory System" <br />March 13, 2006<br /><br />Issues in the Design of a Cap-and-Trade Program for Carbon Emissions<br />November 25, 2003 <br /><br />Shifting the Cost Burden of a Carbon Cap-and-Trade Program<br />July 2003 <br /><br />An Evaluation of Cap-and-Trade Programs for Reducing U.S. Carbon Emissions<br />June 2001 <br /><br />Who Gains and Who Pays Under Carbon-Allowance Trading?<br />June 2000Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-86973071577042004322007-07-10T18:06:00.000-07:002007-07-10T18:09:15.567-07:00“Zero-Energy” home plans, in the city or in the sticks<a href="http://metropulse.com/articles/2007/17_27/commentary.html">This commentary by Matt Edens at Metro Pulse</a> makes some good points about zero/low energy housing. Building a new house in the suburbs that requires little electricity but still requires the residents to drive everywhere may not be a step in the right direction. Just more evidence that retrofitting existing houses is a real part of the energy solution.<br /><br /><blockquote>Those estimates aren't just an academic exercise, either. Starting in 2002, ORNL's Building Technology Center teamed up with Habitat for Humanity to build four demonstration homes outside Lenoir City. Built for less than $100,000 each, those homes' daily energy costs averaged out to a mere 82 cents a day compared to the $4-$5 of an average Lenoir City home. They weren't entirely “off the grid,” but at times, their meters more or less ran backwards. Credit for excess electricity contributed back to the power grid trimmed an average of almost $300 off each home's annual utility bill.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-37972110890277050522007-07-10T12:10:00.000-07:002007-07-10T12:13:38.707-07:00Larry Summers on Climate Change Policy<a href="http://www.ft.com/cms/s/781e620e-0d4a-11dc-937a-000b5df10621.html">From the Financial Times</a> <br /><br /><blockquote>What then should be done either instead of or as a complement to the Kyoto approach? The place to start is with the recognition that it is much easier for governments to make and keep commitments to policies they can control than to outcomes they cannot assure. Whatever targets are negotiated or set, emphasis should also be placed on concrete measures that will have meaningful impact.<br /><br />First, the US must engage in an energy efficiency programme that takes effect without delay and has meaningful bite. As long as developing countries can point to the US as a free rider there will not be serious dialogue about what they are willing to do. I prefer carbon and/or gasoline tax measures to permit systems or heavy regulatory approaches because the latter are more likely to be economically inefficient and to be regressive. The key point is that after Kyoto, where there was US vision in setting goals but no on-the-ground action, there must be real policy commitments.<br /><br />Second, the major industrial countries should commit to a very large increase in funding for research in technologies that offer the prospect of reducing the concentration of greenhouse gases, such as renewable energy, carbon sequestration and energy efficient engines. They should also learn a lesson from the pharmaceutical experience and commit to making intellectual property relating to clean energy available to developing countries on preferential terms. It may be that ambitious emissions- reduction targets can be achieved with existing technology, yet new technologies could help.<br /><br />Third, the World Bank, and probably the regional development banks, should be reconstituted by their shareholders as “Banks for Development and the Global Environment” and take on as a major mission the provision of subsidised capital for projects that have environmental benefits that go beyond national borders. There is much that can be done to encourage energy efficiency in almost every sector within developing countries, yet national governments have inadequate incentives to take account of global impacts. Moreover, the institutions need a new role with respect to countries other than the poorest ones at a time when the leading developing countries are actually exporting rather than importing capital.<br /><br />Fourth, a goal should be set of eliminating by 2025 the more than $200bn the world spends each year on energy subsidies, and enforced through strategies such as those used for inappropriate subsidies in trade. This is a clear case where environmental and economic imperatives coincide and it is one where external political commitment is likely to be desirable in many countries, just as in the trade area. This will require considerable work on the definition of and measurement of total energy subsidies. Such work will lay a foundation for the more ambitious efforts that may be needed in harmonising world energy prices above market levels in the future.<br /><br />There is a final critical process element in the policy response. Given that viable solutions depend on significant changes in developing country policies and that these countries are unlikely to make them unless they see their own interests as at stake, it is essential that they be full participants in setting the global direction. They are surely likely to do more if they can help shape policy than if it is simply the Group of Seven leading industrialised nations seeking to bring them along.<br /><br />Is all of this a sufficiently ambitious agenda? Perhaps not; and perhaps political efforts to generate commitments to ambitious if remote targets can be worthwhile as powerful forces for change, as with human rights in eastern Europe. But they must be married to more immediate if less dramatic steps that have real and practical effect.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-19323235630655669502007-07-10T11:02:00.001-07:002007-07-10T16:46:36.511-07:00Another Vote for a Revenue-Neutral Carbon Tax<a href="http://pdf.wri.org/Brookings-WRI_GreenTaxSwap.pdf">A Green Tax Swap</a> by Gilbert Metcalf with the Brookings Institution<br /><br /><blockquote>As the new Congress convenes, both Democratic and Republican lawmakers are proposing limits on greenhouse gas emissions. Most of these proposals are for carbon cap and trade systems similar to the European Union Emissions Trading System.<br /><br />A carbon tax is another way to limit emissions. This policy brief describes how a carbon tax could be implemented and presents an analysis of a Green Employment Tax Swap (GETS). Under this proposal, a national tax on carbon emissions is paired with a reduction in the payroll tax. In particular, the brief assesses the impact of a tax of $15 per metric ton of carbon dioxide (CO2), which is used to rebate the federal payroll tax on the first $3,660 of earnings per worker. This reform is both revenue-neutral and distributionally neutral.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-75248317413034673982007-07-10T10:57:00.000-07:002007-07-10T11:00:32.589-07:00The Tax Free Lunch<a href="http://www.realclearpolitics.com/articles/2007/06/the_taxfree_lunch.html">The Tax Free Lunch</a> From Charles Krauthammer at Real Clear Politics...<blockquote>...<br />I have no objection to paying more to reduce our dependency on foreign energy. But it is hard to conceive of a more politically dishonest and economically inefficient way to do it than with mandates that make private industry do Congress's dirty work, hide the true cost of energy efficiency and perpetuate the fantasy of the tax-free lunch.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-40139754434824255752007-06-25T12:05:00.000-07:002007-07-10T12:08:25.590-07:00Calling For Higher Gas TaxesReal Clear Politics writer Mort Kondracke <a href="http://www.realclearpolitics.com/articles/2007/06/wholl_have_courage_to_call_for.html">calls for higher gas taxes...</a><br /><blockquote></blockquote><blockquote>...<br />Admittedly, higher energy taxes would be a hard sell for any Democratic leader. Republicans likely would make their lives miserable. The idea would need bipartisan backing. But it is the right idea and it could be sold as a path to what everybody wants -- energy independence and a clean environment.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-81779992065043424302007-05-27T06:33:00.000-07:002007-05-27T09:05:40.666-07:00Sierra Club Fails Economics ClassThat would be the headline if the Sierra Club turned in <a href="http://www.sierraclub.org/mpg/">this</a> analysis of increased CAFE standards for any of my economics classes. <br /><br />The Sierra Club has a Miles Per Gallon website that calculates the savings from an increase in the CAFE (Corporate Average Fuel Economy) standards for different cars. Here are the increased fuel economy improvements they assume, from their "Under-the-Hood Look" at the numbers...<br /><blockquote><br /> * 57% for small cars and small wagons<br /> * 61% for compact and full-size pickup trucks<br /> * 75% for midsize cars, midsize wagons, and large cars<br /> * 78% for small SUVs<br /> * 85% for minivans and large vans<br /> * 98% for midsize and large SUVs<br /><br />Based on information in the ACEEE report, "Technical Options for Improving the Fuel Economy of U.S. Cars and Light Trucks by 2010-2015," and further consultation with authors of the report.</blockquote><br />Hey, great! I mean, why wouldn't we want to improve gas mileage for midsize and large SUVs by 98%? Well, what about the COST of doing this? Do they really think the cost of cars will stay the same as we force the automakers to implement this? I don't.<br /><br />Second, they assume people will drive the same amount before and after the improved fuel efficiency. As the wesbite states, improved fuel efficiency means a "reduced cost of driving." If your fuel efficiency goes up by 98% (your mileage has almost doubled), your fuel costs have been cut in half! With the cost of driving cut in half, who thinks people will still drive the same amount? I don't.<br /><br />Third, they tell me that over my car's lifetime (average of 12 years) I'll save 12 times as much as I save this year! Woah. That assumes that, 1) I drive the same amount each year, 2) the cost of gasoline stays the same each year, 3) my gas mileage stays the same for all 12 years, and 4) a dollar saved today is worth exactly the same as a dollar saved 12 years from now. If the Sierra Club really believes these things, especially #4, they are loonier than I thought. <br /><br />I'm not saying that an increase in fuel efficiency standards would be a bad thing. It would be great. But it is just plain wrong and misleading to say that we can costlessly increase fuel efficiency standards by 98% for SUVs and to imply that the total savings for me are 12 times the potential savings this year. <br /><br />The Sierra Club is trying to gain support for a fundamentally flawed policy (I would much prefer a carbon tax or a simple and substantial increase in the price of gasoline). And they are doing so in a misleading way. That makes me mad. If the Sierra Club were to turn this in for my environmental economics course I'd give them an A for effort, but they'd still fail.<br /><br />The Bottom Line in all of this? If you want someone to do less of something (like emit greenhouse gasses into the atmosphere), make it expensive for them to do it! Do not make is cheaper and easier to pollute, by reducing the cost of driving. When are people going to suck it up and realize we simply cannot afford to continue our policy of cheap gasoline?<br /><br />Thanks to <a href="http://www.env-econ.net/2007/05/an_mpg_calculat.html#more">Environmental Economics</a> for first pointing out the Sierra Club website.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-66888850181255230542007-05-25T19:25:00.000-07:002007-05-25T19:32:18.403-07:00Why Carbon Taxes are SuperiorI recently had a discussion with David Kroodsma (who recently finished <a href="http://www.rideforclimate.com/americas/">biking from Palo Alto, CA to Tierra del Fuego, Argentina</a> to raise awareness of the impacts of climate change on the poor, and is now <a href="http://www.rideforclimate.com/usa/">biking across the USA</a> to promote energy efficiency and other solutions to climate change, check out his <a href="http://www.rideforclimate.com/usa/blog/">blog</a>) about the difference between mandated energy efficiency standards vs. a carbon tax. Here is my opinion on the topic. <br /><br />The fundamental problem of climate change is that we release too much carbon into the atmosphere from burning too many fossil fuels. I believe a carbon tax is the most direct solution to this problem. Why? Because the fundamental law of economics is that prices matter; as the cost of doing something goes up, people will respond and do less of it or find substitutes. Mandating increased efficiency is another way to reduce consumption, but I believe a carbon tax has several advantages.<br /><br />A carbon tax will affect all sources of carbon emissions, whereas efficiency standards only affect the regulated uses. For example, a carbon tax will raise the price of gasoline which will affect the driving habits of all car owners. This will have immediate results as all of us try to find ways to reduce our consumption and save on gasoline costs. On the other hand, a fuel efficiency standard only applies to new cars, which means that the results of the increased efficiency will not be felt until the new cars become a large proportion of the car fleet. <br /><br />Second, part of any gains from increased efficiency standards will be lost to the “rebound effect.” If we increase the fuel efficiency of your car but keep the price of gasoline the same, the cost to you of driving one more mile has actually gone down. If the price of driving has decreased, I predict you will drive more. Driving more will begin to burn up some of the gasoline savings from the increased fuel efficiency, which we call the rebound effect. <br /><br />Third, carbon taxes will encourage more technological innovation, increases in efficiency, and research into alternative fuels. Under efficiency standards the only incentive a firm has is to comply with the law and no more. A firm has little incentive to develop technologies and products that go beyond the efficiency standards. It is little wonder that the fleet average fuel efficiency for U.S. automakers has closely tracked the Corporate Average Fuel Efficiency standards. They stop as soon as they satisfy the law. They have no incentive to produce more fuel efficient cars because consumers do not demand them. And why should they when fuel is cheap! Under a carbon tax, firms and consumers are rewarded for any and all methods of reducing consumption. Further increases in efficiency always create real savings since fuel is expensive. A carbon tax also encourages more research into alternative fuels, another way to reduce consumption of fossil fuels.<br /><br />Fourth, the costs of an efficiency standard are hidden and lumped into the purchase price of the car. This affects everyone who purchases a car equally. On the contrary, the heaviest burden of a carbon tax is born by those who consume the most fossil fuels. Those who respond to the tax most, by driving less and purchasing more fuel efficient vehicles, will bear less of a burden. Those who change their behavior (the goal of our policy) are rewarded by paying less total carbon tax. It is more equitable to financially punish those who use their cars not simply those who purchase a car.<br /><br />If those effects weren’t enough to convince you that a carbon tax is a superior policy, there is also the revenue generated by a carbon tax. Taxing all those carbon emissions will result in a lot of revenue. The government could use this money to shore up Social Security and Medicare or spend it on alternative energy research and development. Or, we could use this revenue to offset other taxes. My preferred use of carbon tax revenue would be to reduce other taxes and make the taxes revenue neutral. In this sense a carbon tax is not a new tax but simply replaces other taxes. <br /><br />The government has to generate money to perform many valuable services for the country. Let’s raise that revenue by taxing activities we want people to do less of, like burning fossil fuels, and reduce the taxes on things we want people to do, like working. We shouldn’t discourage people from working, but that is exactly what we do when we tax income. I would use the revenue created from a carbon tax to reduce income taxes such that net taxes do not increase. In fact, citizens who reduce their consumption of fossil fuels most are likely to even receive a tax break! <br /><br />One of the biggest complaints about a carbon tax is that it might be regressive (poorer people might spend a larger percentage of their income on the tax than richer people). This is a valid concern but is easily remedied by reducing other taxes on the poor to offset their extra carbon tax expenditures. <br /><br />A revenue neutral carbon tax, with the greatest income tax reductions for the poorest and those least able to change their behavior, is the best strategy for reducing our consumption of fossil fuels and combating climate change. If we want people to do less of something we should increase the cost of doing it. This is exactly what a carbon tax will do and exactly why I support it.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-5974073209592787155.post-15983219325370299272007-05-08T09:55:00.000-07:002007-05-08T09:58:26.407-07:00More on Gas Taxes vs. CAFE StandardsThe Congressional Budget Office has a good <a href="http://www.cbo.gov/ftpdocs/51xx/doc5159/03-09-CAFEbrief.pdf">policy brief</a> on gasoline taxes as compared to increased fuel efficiency standards. The bottom line? Surprise, surprise, gasoline taxes make more economic sense. Raise the cost of doing the thing we don't want people to do. Want people to consume less gasoline? Make it more expensive, not cheaper, as increased efficiency would do.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-54861404178231228862007-05-01T12:03:00.000-07:002007-05-01T12:12:05.955-07:00Ethanol: The Government's ChoiceWe've heard a lot about ethanol. It was the only real "solution" to climate change and the energy crisis President Bush mentioned in his State of the Union address this past January. Why? Well, it is a political "slam dunk." It is a fuel that we can more-or-less easily substitute for gasoline in current automobiles, and the red states produce it. The problem is that we aren't really serious about letting the market determine if it is economically feasible. An article at <a href="http://www.businessandmedia.org/articles/2007/20070430180342.aspx">Business and Media Institute</a> points out that we have subsidized corn production to the tune of $51 Billion since 1995 and there is still that pesky tariff of $.54 per gallon on imported ethanol.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-17368246939500399542007-04-26T08:13:00.000-07:002007-04-26T08:18:08.710-07:00More on Gas TaxesThe San Francisco Chronicle has <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/25/BUGF3PEIUQ1.DTL">an article</a> today about the high price of gas and how it needs to be higher. I couldn't agree more. <br /><br />Here is a quote that I found particularly irksome...<br /><br /><blockquote>Jonathan Williams, an economist at the nonpartisan Tax Foundation in Washington, observed that consumption has remained fairly steady in the United States despite rising pump prices.<br /><br />"It's highly doubtful that raising gasoline prices by $1 per gallon would have any significant impact on demand," he said. </blockquote><br /><br />Who cares? Yes, it would be great to reduce consumption (and I think in the long run it will), but a gas tax is still smart public policy as long as we make the tax revenue neutral and decrease payroll taxes.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-33375239838001030422007-04-25T07:03:00.000-07:002007-04-25T07:04:59.811-07:00Hybrid Cars at Popular MechanicsPopular Mechanics has a special section on <a href="http://www.popularmechanics.com/plugincars">hybrid cars</a>. Their take on the hybrid phenomenon? Get ready for Plug-in Hybrid Electric Vehicles (PHEV).Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-91864704946632497142007-04-20T19:45:00.000-07:002007-04-20T19:49:42.451-07:00More Peak OilRobert Hirsch (of the "<a href="http://www.projectcensored.org/newsflash/the_hirsch_report.pdf">Hirsh Report</a>" fame) has a new article on Peak Oil, "<a href="http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3163&MONTH_YEAR=Apr-2007">Peaking of world production: recent forecasts</a>". Doesn't really look like anything new, but provides a pretty good summary of the Peak Oil perspective. <br /><br /><blockquote>Because of the large uncertainties, it is difficult to define an overriding geological basis for accepting or rejecting any of the forecasts. However, the International Energy Agency (IEA) recently warned that worldwide investment in expanded oil production has been considerably less than needed to continue world oil production that is adequate to meet expected world demand. Thus, geological limits may be yielding to inadequate investment.</blockquote>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-52752248141327924362007-04-18T08:40:00.000-07:002007-04-18T08:43:07.408-07:00More Envrionmental Press CoverageAn <a href="http://www.nytimes.com/2007/04/17/business/17ethanol.html?ex=1334548800&en=b8ab120026c49bf8&ei=5124&partner=permalink&exprod=permalink">NYT article</a> discusses the ethanol movement...<br /><br />“Producing cellulosic ethanol is clearly more difficult than we thought in the 1990s,” said Dan W. Reicher, who was assistant secretary of energy efficiency and renewable energy at the time of the first ceremony and who spoke here then.<br /><br />To be sure, swarms of innovators, venture capitalists and government officials are optimistic. Over the last year, money has begun to pour in from all corners — government, private foundations, venture capitalists and Wall Street — to sort out the myriad production problems preventing cellulosic ethanol from becoming a reality. And recent advances in gene sequencing have raised hopes for a breakthrough in mass producing the enzymes needed to do the work.<br /><br />If making the technology work to produce ethanol from cellulose was important in the 1990s, it is even more critical now. Because of growing concerns about oil imports and climate change, Mr. Reicher said, “it is essential that we figure this out, and fast.”<br /><br />Mounting concerns over excessive demands for corn as both food and fuel only add to the urgency. In January, President Bush set a goal of producing 35 billion gallons of alternative fuels, probably mostly ethanol, by 2017.<br /><br />But the more than six billion gallons of ethanol that will be produced this year have already helped push corn to its highest price in years, raising the cost of everything from tortillas to chicken feed. Poor people in Mexico have protested against the higher prices, and now China and India are starting to suffer from food inflation.<br /><br />So why has no one figured out a way to make ethanol from materials like the sugar cane wastes engineers are working with here?Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-70774850522019760092007-04-17T15:07:00.000-07:002007-04-17T15:22:46.579-07:00Estimating the Price of a Used Car"<a href="http://www.econ.washington.edu/user/startz/482_F2002/482_F02_papers/Shing.pdf">What is your Car Really Worth?</a>" by Jonathan Shing.<br /><br />Model 2 estimates that used private party prices dropped $.15 for each mile driven and $348 for each year of age of the car. Hmmmmm.... that seems really high per mile and low per year...Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-7421037338671600462007-04-17T15:00:00.000-07:002007-04-17T15:06:11.911-07:00Saving Pennies while Wasting Dollars?<a href="http://www.omninerd.com/2006/09/15/articles/59">Gas Prices in Perspective </a>, an article I found while looking for information on the automobile depreciation from vehicle miles traveled. It addresses the issue of working hard to save pennies on gas but paying for convenience at a Walgreens/CVS/etc. The <a href="http://www.omninerd.com/">OmniNerd</a> website deserves a look.<br /><br />How much does mileage contribute to automobile depreciation? It is an important item in the discussion of fixed vs. variable costs of owning a car.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-40345507213940455162007-04-17T13:32:00.001-07:002007-04-17T14:45:59.331-07:00(Better) Markets in Everything: ParkingThe problem of cars is that they entail high fixed costs and low marginal costs. Insurance costs are essentially fixed. Depreciation depends more on time than mileage (Does it?). Parking is likely under-priced at the margin. The private marginal costs of pollution are zero. So one small step to a solution to the car problem is moving as many of the fixed costs to marginal costs as we can. The result will be consumers choosing to drive less. <br /><br />One of the interesting ways to "free two birds with one stone" would be to unbundle parking spaces to housing/apartments. Some evidence suggests the provision of parking space is a significant contribution to the cost of housing. Unbundling the parking spaces have the potential to significantly reward families/individuals who choose not to own a car. More affordable housing and fewer cars, sounds like a win-win situation to me.<br /><br /><a href="http://www.nytimes.com/2006/11/12/realestate/12nati.html?ei=5088&en=529325c13b573922&ex=1320987600&partner=rssnyt&emc=rss&pagewanted=all">NYT article</a> about removing parking from downtown apartments in cities across the US.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-77840456673275889042007-04-03T08:09:00.000-07:002007-04-03T08:35:48.474-07:00The Environment and the Supreme CourtThe Supreme Court decided two important cases recently that have environmentalists exaltant. The <a href="http://www.nytimes.com/2007/04/03/washington/03scotus.html?ex=1333339200&en=e0d0a1497263d879&ei=5124&partner=permalink&exprod=permalink">article in the NYT...</a><br /><br />In Massachusetts vs Environmental Protection Agency, (read <a href="http://www.supremecourtus.gov/opinions/06pdf/05-1120.pdf">the text of the ruling</a>) the Supreme Court ruled that the Environmental Protection Agency has the right and obligation to regulate greenhouse gasses (GHG). A coalition of states sued to force the EPA to regulate emissions of carbon dioxide and other GHG. The dissenting opinion (John Roberts, Antonin Scalia, Clarence Thomas, and Samuel Alito) largely centered around the states' right to sue. Scalia and now Roberts have led the charge to make it harder and harder to sue the government. <br /><br />The Supreme Court also ruled with environmentalists concerning application of the New Source Review provision of the Clean Air Act. The New Source Review applies new and more stringent pollution control rules only to new sources of pollution. Existing sources were grandfathered under the rule and only had to comply with the newer pollution control rules if significant modifications were made. Duke Energy modified some of their coal-fired power plants allowing them to operate at the same level as before but for longer throughout the year. Duke held that since output per hour of operation was the same the modifications were not enough to trigger compliance. The Supreme Court sided with environmentalists stating that annual output is a better measure of whether a modification is significant or not.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-27015379937031360852007-04-02T07:28:00.000-07:002007-04-02T07:31:23.840-07:00Do incentives matter? How about $10 Million worth?The X Prize, the same group who brought us the prize for space travel, has offered a $10 Million prize for the team producing a production ready automobile with a fuel efficiency over 100 miles per gallon. Read more at the <a href="http://auto.xprize.org/xprize/">Automotive X Prize website</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-22118915048056607352007-04-02T07:25:00.000-07:002007-04-02T07:27:52.122-07:00Surprise, Surprise, the Poor Lose Again...There is a <a href="http://www.nytimes.com/2007/04/01/science/earth/01climate.html?ex="1333166400&en="6c447dacadd1a4ba&ei="5124&partner="permalink&exprod="permalink">a pretty good piece</a> in the April 1 New York Times about the dangers facing the poor in a changing climate. The bottom line? Guess...Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-79228584702791178882007-03-23T08:09:00.000-07:002007-03-23T08:14:11.446-07:00Why can't we convince people that scarce resources require higher prices?Will congestion pricing ease traffic on Northern Virginia's interstates? <a href="http://www.richmondfed.org/publications/economic_research/region_focus/weekly_update/index.cfm"><br />Markets vs. Gridlock </a><br /><br /><p><a href="http://www.calccit.org/itsdecision/serv_and_tech/Congestion_pricing/congestion_pricing_report.htm"> Congestion Pricing, Intelligent Transportation Systems Decision Report</a> , 2002<br /><br /><p> And posts by <a href="http://www.becker-posner-blog.com/archives/2006/02/the_solution_to.html"> Gary Becker </a> and <a href="http://www.becker-posner-blog.com/archives/2006/02/traffic_congest.htm"> Richard Posner </a>on Congestion Pricing <a href="http://www.becker-posner-blog.com/archives/2006/02/response_on_tra.html"> (and Becker again)</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5974073209592787155.post-42063683155071691262007-03-21T07:52:00.000-07:002007-03-21T08:09:03.231-07:00Carbon OffsetsThere is beginning to be quite a huff over carbon offsets. Most recently there is <a href="http://www.ecotality.com/blog/2007/in-the-future-every-presidential-candidate-will-buy-carbon-offsets/">this post</a> at Ecotality claiming that carbon offsets purchased by Al Gore and John Edwards are nothing more than hypocrisy. The post states that Gore and Edwards should change their behavior rather than "offset" their consumption.<br /><br />I think there is a legitimate debate about whether carbon offsets actually reduce emissions. See for instance, <a href="http://www.marginalrevolution.com/marginalrevolution/2007/02/do_carbon_offse.html">this post at Marginal Revolution</a>. However, I think it is one of environmental economics' largest contributions to the pollution debate to note that not all of us have to reduce our pollution equally. If Al Gore wants to have a big house and pay the requisite fees to reduce emissions somewhere else, that is all right with me. Me? I'd prefer to take the bus, fly commericial rather than on my private jet and live in a smaller house.<br /><br />Let me repeat that. I do NOT think we should all live the same lifestyle. I think that as long as people are paying the full cost of their lifestyle, people should be allowed to choose how they would like to live their life. The problem now is that we are not paying the full cost of our actions.Unknownnoreply@blogger.com0