When it comes to reducing carbon emissions, or addressing any environmental challenge, there is often a fight between efforts to force lifestyle changes and promote technology. Invariably, technology proves far better at reducing environmental impact and improving the use of scarce resources than forced lifestyle modification.
The fight between these two approaches is exemplified by two recent events.
McGinn's most triumphant moment of the night may have come with a question about transit. The moderator asked candidates to talk about streetcars and buses, and also to say when each last rode a Metro bus. Mallahan recalled riding a bus over the summer from a Ballard bar to his home in Wallingford, but "I drive my Prius to work in Factoria," he said. Now that he's on leave, he admitted: 'I drive my Prius six blocks from my house over to Eastlake Avenue," where his campaign office located. McGinn has made a big deal throughout the campaign about being a bike commuter. He took the bus yesterday.
The Democrats decided not to endorse either candidate. It is hard to say what role this moment played in the decision, but when driving a Prius is considered disqualifying, it is emblematic of the commitment to lifestyle modification that drives the left's approach to reducing carbon emissions. That approach is also the centerpiece of the state's approach to climate change, driving spending on transit, light rail and imposing numerous new regulations.
On the other hand is a recent speech from Robert Shapiro, an economic adviser to President Clinton, Al Gore and John Kerry. Speaking to the National Economists Club in Washington D.C., (you can listen to the speech here), Shapiro makes the argument for putting technology at the center of our approach to reducing carbon emissions.
In his speech, he notes:
There is one clear and clean intersection between climate, energy independence and economic growth, and the innovation process lies the heart of it. ... If a critical issue for climate is innovation – as it is more generally for long-term growth and productivity gains – then the conditions which affect the pace of innovation become much more important.
He goes on to argue that protection of intellectual property rights is critical to this trend.
Shapiro also offers a strong defense of globalization and the critical role it plays in developing new technologies that are a critical part of improving energy efficiency.
We can figure out things that before we never had the techniques or the person-power to tackle. And part of it is globalization, which gives almost any organization access to the entire global pool of human capital. Globalization also has helped drive very rapid economic development across a number of large developing nations. As the number of middle-class people in the world has rapidly expanded, the market for many innovations has expanded with it – something perhaps most obvious in health care. And as that potential market has expanded, so has the R&D to develop new products, processes, materials, and ways of financing and marketing, and new ways of organizing and running a firm, to meet that demand. With those increases in R&D – which also probably have been accelerated by the global trend towards deregulation, which the current crisis may well reverse – we should expect to see increases in innovations based on R&D.
The choice between an approach that emphasizes regulation designed to force lifestyle modification and one that emphasizes creativity and innovation is the key decision governing our efforts to reduce carbon emissions and use scarce resources wisely.
The choice should be simple: technology not only honors personal freedom and choice that are central to a free society, but improves overall well being and has been consistently more effective at reducing environmental impact.
There is a growing consensus that "green" building standards, like those Washington adopted in 2005, don't live up to their promise. Many of the reasons cited echo the data and flaws we've highlighted in the past.
One problem, they note, is that "the certification relies on energy models to predict how much energy a planned building will use, but council officials and many experts agree that such models are inexact." This has been a particular problem in Washington state where the Seattle City Hall and numerous schools were projected to save energy, but ended up increasing energy use. Our research has shown that in virtually every school district, green schools use more energy per square foot than recently-built schools that don't meet the arbitrary standard.
One reason, as we've noted, is that these buildings use large windows in an effort to increase natural lighting. Those windows, however, see large energy losses in the Winter and large energy gains in the Summer, making it difficult to keep a room at a consistent temperature. One person in the NY Times article noted:
But Mr. Siegal, 59, a customs service broker, said his three-bedroom apartment has floor-to-ceiling glass windows that offer great views but also strong drafts. “If there’s a lot of glass, is that going to be efficient?” he asked.
The same problems were found by the San Francisco Chronicle.
In an article titled "Green buildings standard seen as flawed," the Chronicle notes that "many buildings certified as green under a broadly accepted national standard for energy savings are not performing as well as predicted." As a result, San Francisco is looking to change the rules.
Worse, it is widely acknowledged that these regulations increase the cost of buildings -- funding that could go to helping teach school children or on projects that actually help the environment.
The best solution is to let districts find the best way to design buildings that save energy. The fact that districts were building schools that are more efficient than the schools built following the new regulation shows that local districts have the incentives and knowledge to build good schools. That knowledge consistently outperforms the cookie-cutter approach now mandated by law.
Politicians and activists who support these standards often argue that they are necessary to reduce carbon emissions. The question is, if they continue to support policies that don't actually reduce carbon, do they really care about the environment?
It is the mantra of the environmental left that they "follow the science." Frequently, however, repeating that claim substitutes for actually adhering to scientific rigor.
The latest example comes today in the Seattle Times, where State Senator Phil Rockefeller claims that "Quite literally, greenhouse-gas emissions threaten to render our planet unlivable." This is simply not true by any reasonable standard.
The body most often cited as the basis for the "scientific consensus," the UN's Intergovernmental Panel on Climate Change (IPCC) says that such a threat is virtually nonexistent. The most likely scenario under a "business as usual" approach to carbon emissions is an increase of 1 to 3 degrees C (1.8 to 5.4 degrees F). It should be noted that if we apply current temperature trends, the projections are at the lowest end of that range. Saying that such increases would render the planet "unlivable" is hyperbole to the extreme.
The public should be dubious of policies that rely on unscientific hyperbole for justification.
Washington has designated I-5 its "hydrogen highway" in an effort to highlight that emerging technology. A new online tool will help you find filling stations along the highway.
The National Hydrogen Association (motto: "Hydrogen is #1...on the periodic table") has launched a web page that allows you to enter your state and shows you all the filling stations available. So I decided to test it. I entered a search for currently operating hydrogen filling stations in Washington and it said:
Today's Seattle Times has a graphic outlining the environmental impacts of plastic bags. It says "Here’s a look at the environmental costs of bags," noting water use and CO2 emissions would be reduced. It indicates that water use for bag production will be reduced by 39 million gallons each year and it will reduce CO2 emissions by 6,000 tons each year. The estimated annual cost to achieve these goals is $10 million.
It is useful to put those numbers in context and relate the costs to the benefits.
One key question for any environmental policy is whether we could achieve the same environmental benefits for a lower cost. This is not only a concern about keeping taxes low (which in a tough economy should be reason enough), but it also asks whether we could do more for the environment with the same amount of money.
With regard to water and CO2 and even trash, the answer is "yes." Even if the bag tax performs as supporters promise, it wastes resources and misses opportunities to make real environmental improvements.
While 6,000 tons of CO2 sounds like quite a bit, it is actually a very small amount. In Europe it currently costs $20.52 to reduce one metric ton (2,204 lbs) of CO2. Reducing 6,000 short tons of CO2 would cost $111,731.40, or 1 percent of the cost of the bag tax.
When it comes to water, the Seattle Times' graphic notes that the tax would reduce the water used to make bags but doesn't put the number in context. Each day, Seattle uses about 130 million gallons of water. Reducing water use by 39 million gallons a year is less than one one-hundredth of one percent of water used in Seattle. Even that number is probably too high. Many of those 39 million gallons are used outside the city limits of Seattle, so reducing water use for bags doesn't reduce Seattle's direct water use. So, the amount of water saved by this tax is infinitesimal.
How much is that amount of water worth? Using residential rates, which have the highest marginal rates, the cost for 39 million gallons (5,213,904 cubic feet) is between $169,452 and $553,716 depending on the amount used, assuming use during peak times.
In other words, the bag tax will cost $10 million to create environmental benefits that could be acquired for $281,183.40.
Finally, the focus of most of the argument is on the reduction in trash in landfills. The Times estimates that plastic bags cost about $3.85 million annually to manage, about 2.5 percent of the total trash budget. Assuming that the bag tax reduces bag use by 50 percent, it could save $1.9 million each year. There are two things to understand about this number.
First, this number is high because it is unlikely that the City will reduce staffing or overhead costs because they still have to deal with all the other trash. Thus, a reduction of one percent in load does not equate to a one percent reduction in cost.
Second, it should be remembered that we already pay to collect that trash. While the bag tax increases costs for bags, it does not reduce the garbage taxes already being paid. So, Seattle taxpayers are unlikely to see any savings despite a reduction in trash volume. The Times does estimate that the City would use 47 fewer railcars of trash. Based on a rough estimate of cost per railcar, that amounts to less than $200,000 per year.
Adding the reductions in trash, water and CO2, the bag tax creates about $500,000 of benefit for $10 million in taxes.
Some will respond by saying that it is worthwhile to reduce our environmental footprint and that while the cost may be high, the need is great. But this argument is simply incorrect. Proponents of the bag tax claim to be concerned about waste of resources. Waste of money is waste of resources and the City could receive more environmental benefit by spending $1 million to reduce CO2, water and trash. The ironic conclusion is that the bag tax creates more waste by missing opportunities to reduce environmental impact.
Until environmental activists do a more rigorous analysis of the policies they propose, they will continue to support efforts that not only have little impact but are actually counterproductive.
Two years ago, the Office of the Superintendent of Public Instruction put out a video claiming all manner of benefits from green schools, including that one school in Spokane reduced its energy costs by about $40,000.
We noted at the time that this claim about the benefits of green schools was silly. We noted then:
A quick fact check shows that the number is not only wrong, but isn't even reasonable. The three elementary schools using the green building standards in Spokane have average annual energy costs of about $44,000 a year each. Schools would have to be reducing their energy costs by 90% a year.
Now the OSPI has admitted that the data is incorrect. There is a disclaimer on the web page with the video that reads:
Please note: This video was produced in 2007 and may not represent current conditions and knowledge of high-performance schools.
What they don't say, of course, is that current knowledge indicates that energy savings are far below (or non-existent) what is claimed in the video. Indeed, the Spokane school highlighted in the video actually uses more energy per square foot than a recently-built, non-green school in the same district.
We'll see if the OSPI and Ecology make use of this new knowledge when reporting to the legislature.
Two weeks ago we held our annual Environmental Conference, featuring keynote speaker, climatologist Dr. Pat Michaels. More than 300 people joined us and if you weren't one of them (or even if you were) you can watch the conference on the TVW web page.
In my presentation, I address the free-market alternative to the ineffective government-based environmental policies Washington has been trying for the past several years. You can watch it below.
Those who believe in personal freedom and responsibility have a strong case to make that technology, prosperity and an honest assessment of priorities are far superior to our current approach.
My presentation begins 30 minutes in. Rep. Shelly Short provides an update on environmental legislation and issues during the first part of the video.
Was spending $1 billion a particularly cost-effective way to achieve those CO2 reductions? Probably not. Assuming the above calculations are correct and that each consumer keeps his or her car for 10 years, then the total savings should be a little less than 5.7 million tons of carbon dioxide. That means each ton of carbon dioxide would be worth about $175.53 to the U.S. government. As the Washington Policy Center pointed out on its blog in June, a ton of CO2 currently goes for about $17.50 on the European Climate Exchange.
AP environmental writer Seth Borenstein echoed that sentiment, quoting an MIT expert who comes up with numbers similar to ours.
Paying up to $4,500 per clunker means the government is spending more than $160 for every ton of carbon dioxide removed over 10 years, said MIT's Jacoby, co-author of the book "Transportation in a Climate-Constrained World." That's five to 10 times more than the estimated per-ton cost of carbon dioxide for power plants in the cap-and-trade system passed earlier this year by the House.
We are frequently bombarded with claims that one policy or another will make significant reductions in CO2 emissions. Too often, however, the estimates of cost and effectiveness are done only after the policy is being implemented. It shouldn't be surprising that we are often disappointed about the results of those policies.
One month ago there was a great deal of fanfare surrounding a plan for the "world's largest" solar plant planned for Cle Elum. At the time we argued that there were still many questions about the Cle Elum solar plant that needed to be answered before judgment could be passed.
For instance, we wrote:
The cost is estimated to be "north of $100 million." At $100 million the installed cost would be $1,333 per installed kilowatt, which is much lower cost than other projects, so I'm guessing that it will be well north of $100 million. By way of comparison, the solar panels the city of Seattle wanted to put on Qwest Exhibition Hall cost about $12,500 per installed KW.
On July 9, Howard Trott, head of the Teanaway Solar Reserve, gave a $100 million estimate to build a 75-megawatt solar power plant near Cle Elum. But Northwest Power and Conservation Council formulas put the cost at $525 million to $750 million.
Those new numbers are certainly "north" of $100 million. The new estimate is more in line with traditional costs of $7,000 to $10,000 per installed kilowatt. This is up to five times as expensive as other renewables like wind power.
Further, it is estimated that the project will create "hundreds" of jobs. Assuming that hundreds means 500 (it could mean more or less), it would cost $1 million per job. Even if it creates 999 jobs (which would still be hundreds and not thousands), it would cost $500,000 per job. Such costs will be passed on to ratepayers. Despite those very high costs, it is likely that the project will be approved by the state because Washington's renewable portfolio standard, created by I-937, requires utilities to meet targets for renewable energy. That requirement virtually assures that even at this extremely high price, the power will be purchased and paid for by ratepayers.
When looking at these numbers it is important to remember that waste of money is waste of resources. Spending millions on projects that have a small environmental impact wastes money that could be used to support projects that truly make a difference. Government regulation and political subsidies, however, distort these calculations, moving environmental policy farther away from good science.
Syndicated columnist Froma Harrop has an opinion piece in the Seattle Times today called "The Logic of a Locavore" in which she explains why we should eat local food. Many environmentalists embrace the buy local mantra in the mistaken belief it is better for the environment.
Harrop is, accidentally I think, very honest about the pedigree of this concept. Responding to the critique that eating local is passe, she writes:
Local is so 2008? Yes, and it is also so 1908, 1608 and 508 B.C. Until the last 100 years or so, the "alternative food crowd" encompassed nearly all of humanity.
I'm not sure why this is an argument in favor of eating local. Lots of things are 1608, including lifespans of 30 years, cholera, poverty, spoiled food and the like. Environmental icon Jared Diamond wishes we could go back even further.
Seattle Times science reporter Sandi Doughton wrote an excellent piece on the potential solar plant in Cle Elum, highlighting some of the opportunity but asking the right questions about potential problems. More information will come out, but there are some elements to watch as this project progresses.
The debate about reducing carbon emissions has centered around two policy directions: technology or lifestyle modification. The focus of most of Washington's climate policy has been on forcing people to change their lifestyle. We've noted repeatedly that these approaches have high cost and low success.
Technology is the approach that is most successful but is also consistent with prosperity. The problem is when politicians try to pick and choose the technologies of the future. They don't pick correctly very often (witness hydrogen or electric cars and biofuels, just to name two recent examples).
There is great initial excitement about the solar project in Cle Elum, but there are some important considerations to ensure that this is truly a successful project and not another taxpayer-subsidized eco-fad.
Don't be seduced by the "world's biggest."A few years back, Washington also became home to the nation's largest biodiesel plant (disclaimer: I was hired to organize media coverage announcing that deal to build the plant). That announcement highlighted the jobs that would be created, the environmental friendliness of the project and even featured a US Senator promoting the role of government support in creating the project. Today, that plant is not running at capacity and biofuels are a suspect technology when it comes to reducing CO2 emissions. Seattle just stopped buying soy-based biodiesel due to environmental concerns. What seemed sexy just a few years back is a disappointment today.
Taxpayers pay, profits are privatized. This project makes sense primarily due to government subsidies and regulation. The story notes that "Generous tax breaks and a citizen initiative that requires utilities to get some of their power from renewable sources also add to Washington's appeal." Put simply, Washington's laws give tax benefits for construction and require utilities to buy the energy they produce. Profiting in such a scenario is virtually guaranteed. It is hard to criticize entrepreneurs who take advantage of such an offer, but it should be clear that we are paying to build a solar plant for the right to buy high-priced energy.
This will likely increase energy costs. As the Times story notes, solar hasn't developed like other technologies "largely because of high costs." The cost of solar photovoltaics is much higher than other forms of energy. For instance, the Kittitas wind project cost $1,920 per installed kilowatt. Solar PV, by way of comparison, costs about $7,000. It will be hard to know what the cost of this project will be until the full financials are released. The project will involve 400,000 solar cells, producing 75MW. The cost is estimated to be "north of $100 million." At $100 million the installed cost would be $1,333 per installed kilowatt, which is much lower cost than other projects, so I'm guessing that it will be well north of $100 million. By way of comparison, the solar panels the city of Seattle wanted to put on Qwest Exhibition Hall cost about $12,500 per installed KW.
Creating or losing jobs? While job creation will be the highlighted talking point for this project, there is question about whether it will create good jobs. When looking at other solar PV installations, the article notes that "the biggest is a 60-megawatt plant in Spain." A study earlier this year examining Spain's effort to create a "green" economy found that the effort destroyed 2.2 jobs for every one it created. That's part of the reason Spain enjoys an 18 percent unemployment rate.
Logging for a green economy. Ironically, the site of the solar array is a 400-acre area that has been clear cut in the Teanaway. That is the size of about four large clear cuts. While timber harvests re-grow, however, this guarantees the forest will likely never re-grow. Timber harvesting in the Teanaway has been the target of environmental lawsuits trying to stop the very clearings that are now the location of the biggest "green" energy project in the world.
Our creative, free-market economy is the most powerful force ever conceived to promote the technological innovation that has dramatically increased well-being while reducing environmental impact. Political efforts to pick and choose technologies, however, undermine that creativity, substituting eco-fads for true innovation. As this project moves forward, we'll have a better sense in which category it belongs.
This week the New Economics Foundation published its Happy Planet Index of countries worldwide. They note that "the index combines environmental impact with human well-being to measure the environmental efficiency with which, country by country, people live long and happy lives." Like many such analyses from the environmental left, it glorifies poverty and repression.
The Index combines "Life Satisfaction," life expectancy and "Ecological Footprint."
The Index rates Costa Rica as the #1 country in its list. The US comes in at 114. Additionally, the following countries rank ahead of the US (I've also added the country's political rights as rated by Freedom House - 1 - full rights, 7 - no rights)
The results mirror other studies showing that some believe that greenness requires poverty. Sadly, such poverty is seen too often as "quaint" by wealthy Western environmentalists. As filmmaker Phelim McAleer says "quaint may be the most evil word in the English language."
These results are not surprising since they are based on the work of Herman Daly of the University of Maryland. In his 1996 book Beyond Growth he outlines his approach to the problems of growth and development, which he describes in one chapter as "Marxian-Malthusian." In describing the economic and environmental challenges in Northeast Brazil, he writes:
A Marxian-Malthusian definition of social class, in terms of control versus non-control of both production and reproduction, fits the Northeast, and offers a possibility for integrating the valid insights of both traditions. This is important because with the current rebirth of Marxist economics in Brazilian universities, Malthusian insights are in danger of being lost or discarded... The democratization of control over reproduction is no less (and no more) important than the democratization of land ownership in the Northeast.
They praise the program because it not only applies to cars but to bikes and buses:
The Scrap It program is focused on energy efficiency and reducing CO2. The best way to do that is to incentivize better miles per gallon along with alternatives. Most people won’t trade a clunker that is the sole mode of transit for a bike, but many people would get rid of a second car in the driveway for a bike.
The question is, does it make sense as a way to reduce CO2? The answer is that it is better than the Cash for Clunkers program, but is still a poor way to reduce CO2.
The program has a calculator that measures the reduction in CO2 and then determines if you qualify to receive an incentive payment of $1,250 or $2,250. For example, I found that had I traded in the car I bought when I graduated from college, a 1993 Saturn SC, for a Prius today, I would qualify for the $2,250 and reduce CO2 emissions by 2.25 metric tons (tonnes) a year. Assuming I would have kept my Saturn for another ten years, I would reduce my total emissions by 22.5 tonnes. Under those (extremely favorable) circumstances, the program pays $99.56 per tonne of CO2, more than five times the going rate for CO2 on the European market. If the car lasts only five years, the calculation gets much worse, costing nearly 11 times the going rate for CO2 emissions reductions.
Just to test the limits of this idea, let's say I traded in my Saturn for a bike and didn't drive a car for the next 10 years. The BC government will give me $1,200 to trade a car for a bike. Even in those wholly unrealistic circumstances, the program spends $31.58 per ton of CO2, or about 66 percent more than the going rate for CO2 on the European market.
Those who truly care about the environment need to remember that waste of money is waste of resources. By ignoring the cost of projects, we spend money poorly that could be used to promote other environmental projects.
This is a problem with so many politically-picked solutions. The judgment about whether the program is worth supporting is not based on effectiveness or bang-for-the-buck but on a political calculus about whether it sounds good and rewards constituents with taxpayer money.
There has been much made of the fact that Congress voted yesterday on a bill of greater than 1,000 pages without reading it. One historian, however, notes that the same was true of the Declaration of Independence.
Author and "historian" Dave Barry notes in Dave Barry Slept Here, which may one day become a history textbook, that Thomas Jefferson didn't expect people to actually read all that he wrote. To prove his point, Barry cites the text of the Declaration:
When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth the separate and equal station to which the laws of nature and nature's God entitle them, a decent respect to the opinions of mankind require that they should get some sleep. Because I have been up for two nights now, declaring independence, and I may be a lanky Virginian but I am not a machine, for heaven's sake, and it just doesn't make sense to sit here scrawling away these compound-complex sentences when I just know nobody's going to read them, because nobody ever does read all the way through these legal documents. Take leases. You take the average tenants, and you could put a lease in front of them with a clause about halfway t!
hrough stating that they have to eat toasted moose doots for breakfast, and I guarantee you they'll never read it. Not that it would make any difference if they did, because tenants ignore most of the rules anyway, such as the rules about not flushing inappropriate objects down the toilet. Ask any landlord what he spends most of his time doing, and the odds are he'll answer "Pulling inappropriate objects out of tenant's toilets." I know one landlord who found a gerbil in there. Who the hell would do a thing like that? A cat, yes. I could see that. I could see giving a modest rebate for that. But not a gerbil. I gotta lie down.
As Congress heads into its 4th of July recess, we would do well to remember these words.
A recent report from a Spanish economist noting that their effort to create green jobs has backfired, killing 2.2 jobs for every one created, elicited an interesting response from Presidential Spokesman Robert Gibbs. He called the analysis into question, telling the White House press corps:
It seems weird that we're importing wind turbine parts from Spain in order to build -- to meet renewable energy demand here if that were even remotely the case.
It may be weird, but Washington State has another name for it: "green." The 2008 Washington State Green Energy Jobs report counts "Tank Car, Truck, and Ship Loaders" as green jobs, saying that we have 30 people working in that category doing "green" work. In Washington some of these ship loading jobs are related to unloading wind turbines from overseas.