Tag: "environmental footprint"

Private-Public Partnerships Move to Improve Texas Energy and Environment

Apart from obvious biological costs of the Deepwater Horizon oil spill in 2010, there were heavy indirect costs associated with the spill which most economists will likely never be able to calculate accurately. These intangible costs include the heavy blow dealt on the Gulf’s tourism sector that year.

The mere cleanup costs of similar spills have been monumental:

Cleanup of Oil Spills

Note: These figures are projections based on the estimated average cost of cleaning up a single barrel of oil in today’s dollars. They do NOT include the cost to other industries, countries, outstanding damages to private property or the value of lost oil. In the case of Mexico in its 1979 Ixtoc I spill, these three external estimated costs totaled an astonishing $872 million. 

Unsurprisingly, British Petroleum estimates that over 30 percent of medium-term oil production will be offshore oil, hence risk management strategies are not only a foremost ethical parameter but a rational metric for increasing a company’s profitability. Bearing this end in mind, the University of Houston and Texas A&M at Corpus Christi are forming the Subsea Systems Institute and Texas OneGulf, and will enjoy close collaboration with NASA, Rice University, ExxonMobil, Halliburton and Sclumberger among others. The two research organizations — aided by the private sector — will pioneer deep-sea drilling technologies designed to protect the environment and private enterprises through safer and more cost-effective deep-sea drilling practices.

Our vision is to create an institute that is recognized around the world as the undisputed leader in transformative deepwater technology… We will create, test, and provide the technologies that industry will need in the next five to 10 years.

– Ramanan Krishnomoorti, Chief Energy Officer and Interim Vice President for Research and Technology Transfer at the University of Houston

 

Jul 01, 2015 | 5 comments | by

Environmentalists for School Choice

Last year I met Dr. Bart Danielsen, the Founder of Environmentalists for Education Reform. What a brilliant concept! As a long-time environmental economist, and urban economist, I should have recognized the vital importance of the connection between at least the “school choice” part of the urgently needed transformational education reform and environmental impact, not to mention the very fiscal and economic sustainability of central cities. Family flight to the suburbs has been a disaster; tax base loss, loss of business/jobs, and environmentally. The latter disaster arises from the blight of property abandonment and infrastructure decay, loss of open space to suburban sprawl, and increased driving which means more pollution.

Once the connection fully sank in, I recalled that my The School Choice Wars discusses a 1990’s Denis Doyle paper that describes survey results that said “school choice” would have kept a lot of middle/upper income families from moving to the Baltimore suburbs. Nathan Gray and I discovered a similar phenomenon in Edgewood, west of downtown San Antonio, TX. School choice attracted families and business, and drove public school improvement.

Well, thankfully, Dr. Danielsen recognized the vital importance of the connection.  He’s working hard to give it prominence through publication, networking, and the documentation of additional examples. Hopefully, this will significantly broaden the pro-transformation, pro-choice coalition.

Jun 10, 2015 | Leave a Comment | by

The Expensive Solar Power Death Trap

The $2.2 billion Ivanpah Solar Electric Generating System is a concentrated solar thermal plant in the California Mojave Desert. The Ivanpah solar facility generates 377-392 megawatts (enough to power 140,000 homes) and spreads across 3,600 acres killed over 3,500 birds in its first year, according to a new report.

From 29 October 2013 to 20 October 2014 at the Ivanpah Solar Electric Generating System facility:

  • Avian detections at the site included 83 different bird species with 64 having fewer than 10 detections.
  • Of the remaining 19 species, all have populations that are great enough locally (either as breeders, wintering birds, or migrants), regionally, and nationally that the magnitude of mortality detected and/or estimated at Ivanpah during the first four seasons of monitoring would have a minimal impact on populations at any of these geographic scales.
  • The cause of death for 42.2 percent of the detections of species with 10 or more detections was unknown and thus cannot be determined with certainty to have been “facility-caused”, the standard cited in Section 5.3 of the Plan.

The report‘s recommendations concerning monitoring and/or adaptive management at Ivanpah include:

  • Continuation of Plan implementation as it was performed during year 1 monitoring.
  • Continue with and increase the number of searcher efficiency and carcass persistence trials to enable more refined estimates by season and/or within project elements.
  • Continuation of the adaptive management process to investigate means of reducing avian mortality.
  • Full implementation of bat deterrence at all three solar units.

In comparison, a new coal-fired power plant that generates enough electricity to power as many homes as Ivanpah, costs $1.1 billion. At double the cost, solar power is still too expensive.

Apr 27, 2015 | 4 comments | by

NASA and EPA Causing More Political Trouble

NASA released a new study that warns about severe weather, such as “megadroughts” that will plague the Southwest and Central Plains of the United States from 2050 to 2099. The study says that greenhouse gas emissions can increase the likelihood of this severe weather.

If greenhouse gas emissions continue to increase along current trajectories throughout the 21st century, there is an 80 percent likelihood of a decades-long megadrought in the Southwest and Central Plains between the years 2050 and 2099.

At the same time, the Environment Protection Agency’s (EPA) rules for mercury emissions from power plants (specifically targeting coal power plants) is going to be reviewed by the U.S. Supreme Court. The mercury emissions rules would help close down every coal power plant that provides close to 40 percent of the electricity in the United States. As the Supreme Court reviews these rules, the court should consider that:

  • There is more mercury in the air from natural sources ― such as volcanoes ― than from all human activity.
  • Mercury emitted from both volcanoes and coal-fired smokestacks resides for months in the air, usually until it is precipitated out by some rainstorm. In addition, a large amount of the mercury that falls in North America originated in highly polluted China.
  • All U.S. emissions are 2 percent of the global total.
  • U.S. power plants emit only half of that ― about 0.5 percent of the total ― and by 2016 will emit even less than that.

The climate is changing, always has and will continue to do so. However, the human impact to that change, especially in the United States, is minimal. Making this issue so politically incendiary distracts our leaders from doing their job, hurts our economy and weakens the U.S. position in the world.

Feb 16, 2015 | 2 comments | by

Does it Matter if Alleged Climate Change is Alleged to be Human-Caused?

Three things happened recently to prompt this plea for clearer thinking on the issue of alleged climate change.

  1. A fund-raising letter from the Environmental Defense Fund, a once fine environmental policy think tank that has lost its way on “Global Warming”, which was the subject of the letter.
  2. Paul Jacobs Common Sense column, which focused on disagreement on natural vs. human basis for alleged climate change.
  3. Several of the comments on Bjorn Lomborg’s Wall Street Journal Op-Ed on Climate Change Alarmism focused on human vs. natural causation.

By the way, as an economist, I don’t have a noteworthy opinion on the physical science of climate change. As an environmental economist (before I jumped into school system reform studies), I can see that there is a lot less agreement among climate scientists on this issue than the mainstream media outlets argue. For example, climatologist Dr. Roy Spencer laments: “Two scientists can examine the same data and come to exactly opposite conclusions about causation.” And the unscientific basis for widely-assumed human causation depresses Dr. Spencer.

What depresses me is the continued failure to focus on the central issue, which is the ability to cost effectively address the issue. Instead, there is a lot of focus on the nearly irrelevant causation issue. Suppose scientists detect a huge meteor on a collision course with earth. Can you imagine someone saying ignore it because it is not human-caused? Suppose another ice age is imminent? We wouldn’t worry about cause. We’d be doing benefit-cost analysis on ways to warm things up. If/when catastrophic warming becomes imminent, we’d better stop the finger-pointing and focus on cooling strategies, or lacking cost-effective cooling strategies, we’d better invest in go-it-alone, no-regrets strategies and adaptation to a warmer planet. In this period of uncertainty and controversy about the scope of the threat and cost-effectiveness of feasible strategies, serious people will give special attention to the many available policies that reduce methane and fossil fuel emissions as a side benefit to already attractive policies from other perspectives (= no regrets). One of those is the challenge to eliminate costly shortages of highway space. The popular term for such “shortages” is traffic jam, which are very costly just for the delay they cause, not to mention vehicle wear and tear, increased air pollution, and over-building of roads to meet the demand at a direct price of zero. The ECO 101 cause of all shortages is setting price too low. At rush hour, “free”-way is too cheap.  Economic illiteracy is often very costly.

Feb 09, 2015 | 2 comments | by

Super Bowl is Good for the Environment?

The Super Bowl is the most watched television broadcast in the United States with an estimated 111 million people watching each year. The amount of electricity consumed during the broadcast exceeds 11 million kilowatt-hours or equivalent to the amount of electricity generated by a medium-sized power plant.

However, right before and during game time, electricity consumption drops 5 to 7 percent on an average Sunday afternoon in winter. Research conducted by Opower suggests that there are several reasons for this drop in electricity consumption:

  • People gather at public places to watch the event and leave their homes with most everything turned off.
  • Most appliances around the house are turned off during the Super Bowl.

Hardly anyone would have guessed that the Super Bowl is good for the environment and conserves electricity.

Feb 02, 2015 | 2 comments | by

Dallas Imposes Plastic Bag Tax

After over two dozen cities around the nation have banned plastic bags, Dallas officially joined this year at 5 cents per bag. This new imposed fee encourages the use of reusable bags. However, the Dallas plastic bag ban will end up having a negative effect on the city.

Contrary to the myth propagated by environmental lobbyists, plastic bags are not a significant source of waste. Indeed, the national 2009 Keep America Beautiful study does not even include plastic bags in its top 10 sources of litter. A recent study found that plastic grocery bags make up less than 0.6 percent of the overall waste stream.

Negative effects of a plastic bag tax:

  • Stores affected by bag bans reported an increase in missing shopping carts and hand baskets.
  • Stores inside the Los Angeles ban area reduced their employment by more than 10 percent. Stores outside the ban area increased their employment by 2.4 percent. This occurred despite the fact that the overall unemployment rate in Los Angeles County fell dramatically.
  • The cost to taxpayers also will rise as lawsuits are filed challenging these bans.

Reusable bag dangers:

  • On the economic front, China is the leading manufacturer of reusable bags, while plastic bags are made in the U.S. with the industry employing thousands of workers.
  • When the bags are used to carry meats, poultry or fish, blood and other fluids can soak into them. If not cleaned regularly and stored properly, bacteria — including E. coli — can take up residence and mold can form.

Free plastic bags benefits:

  • Plastic bags reused to line bathroom trash bins, collect dog waste and used cat litter, to securely seal soiled diapers and more.
  • A number of major retailers have set up recycling boxes at the entrance of their stores to encourage recycling, and plastic bag recovery has increased by 31 percent since 2005 and according to EPA data, this growth is more than nine times the 3.4 percent increase in recovery of all municipal solid waste from 2005 to 2009.

Consumers like choice, and most choose plastic bags for their convenience, flexibility and strength. Evidence indicates that cities with bag bans lose, where people cannot choose.

Jan 05, 2015 | 2 comments | by

Fighting Global Warming Will Cost $4 Trillion +

A new report from the Global Commission on the Economy and Climate reports that fighting global warming will cost $4 trillion over 15 years. However, the report also says:

  • Countries will spend an extra $90 trillion on infrastructure.
  • Countries will enact policies to reduce their carbon footprints.

Expanding each participating country’s infrastructure, halt deforestation, regulate carbon dioxide emissions, land use reforms and reducing fossil fuel subsides is just the start of a much larger economic cost than just $4 trillion that the report claims would be the cost to fight global warming.

Sep 17, 2014 | 1 comment | by

Bag Bans are Bad Business

This past year the NCPA published numerous studies on how both bag bans, and bag regulations were harming consumers. The details of the studies revealed that not only were the local governments cashing in on taxpayers, but that the environment would still be suffering as a result. How can this be? Wouldn’t a decrease in the plastic bags being sold help the environment? After all, ecosystems suffer from trash and pollution daily, this could be the next steps towards cleaning up the country. However, this is a free market, and unintended consequences from government interaction has been an issue since people started submitting themselves to others.

Paper Bags: Plastic bags were at one time our nation’s solution to paper. Deforestation was running rampant in the world, and environmentalists were demanding paper bag removal from stores. Plastic bags, which were more efficient, cheaper and did no harm to any forests or the ecosystems within. It is also extremely important to note that paper bags create a far bigger environmental footprint than plastic, and are not able to decompose in landfills. As we approach an alternative to plastic it seems that reusable bags are in. Despite numerous reports of E.coli collecting on them, and the fact that stores are able to sell them for a bigger profit than free plastic bags, our economy is not ready to suddenly change overnight.

Increasing Taxes: Many local governments decided that instead of a ban they would propose a tax on every plastic bag used. DC for example, utilized a 5 cent fee on every plastic bag sold to consumers. The more groceries you bought, the more you would be charged. While it seemed like a good idea at the time, other countries who did the same thing ended up having to raise the tax repeatedly over time. Their tax began at 15 cents in 2001 and jumped to 22 cents in 2007. The government was forced to raise the tax after they noticed that bag use was increasing as consumers began absorbing the cost of the bags. This exact identical situation also happened to Ireland.

Sep 08, 2014 | Leave a Comment | by

The Challenge of Becoming a Green Nation (Part 2)

In my previous blog post, I critically examined our nation’s predisposition to view public policy, if formulated by a democratic process, as being sufficient for promoting the public interest in managing our nation’s energy economy. Abandoning decentralized, voluntary market transactions and embracing centralized, regulated energy resource allocations does not ensure a superior pathway for satisfying our nation’s long-run energy needs. Specifically, I noted that:

  • Competition over scarce energy resources exists, whether they are allocated in the private or public sectors.
  • Self-interest guides citizen choices in both the private and public sectors.
  • Power and influence were unequally distributed in both the public and private sectors.

These realities imply that there is plenty of room for inefficient development of energy resources to arise from poor public policy design. Further, we also need to understand the many challenges of implementing regulatory policy over our nation’s energy resources.

Observation #4: Critical knowledge for efficient and sustainable energy resource allocation is scarce and it tends to be concentrated in the same markets that the federal agencies are tasked with regulating.

This means that government agencies need to hire industry experts from the very markets that they try to regulate. Also, regulators from these agencies tend to be heavily recruited by special interest groups operating in the markets that are being regulated. With such cross-pollination of talent, there exist many opportunities for unequal influence to occur in the design and implementation of public policy which may not necessarily reflect the public interest.

An illustrative case is the recent announcement that the second highest EPA administrator resigned from his federal appointment to head a non-profit group that seeks to influence the EPA’s federal energy policy design and implementation. Whether we agree or disagree with this organization’s goals and objectives, it still illustrates how public policy is not insulated from the same concentration of influences that supposedly contaminate private sector resource decisions.

Observation #5: All of the costs surrounding any resource allocation decision must be fully paid, whether in the private or public sector. In the public sector, however, the benefits of public policy often do not accrue to those who bear these costs.

Most people understand how oil spills or auto exhaust emissions can impose negative spill-over costs on third parties. This often drives the call for greater regulatory intervention. Yet, few people recognize that similar cost externalities are often created when the government control over resource allocation decisions replaces the private, voluntary transactions in the marketplace.

For example, it is well-documented that food prices have risen ever since federal policy forced oil refineries to add ethanol (mostly made from corn) into our nation’s gasoline supply, in part to reduce fossil fuel consumption rates. When U.S. agricultural markets shifted 14% of its corn production away from food products, this moved the United Nations to ask the U.S. to lower its ethanol requirements to ease the impact of rising food prices on developing nations.

Observation #6: All the potential impacts from a resource allocation decision cannot be anticipated, even by the experts in a regulated market. The private sector has much more flexibility to adapt to these unforeseen impacts than the public sector and to send accurate signals of relative value in competing proposals for developing a resource.

By definition, private sector decisions are always voluntary and public sector decisions are always compulsory. Pursuing public policy to allocate energy resources replaces the potential of markets to find innovative solutions and forces the government to pick winners and losers in competing energy policy proposals. It also creates distorted price signals about competing plans for developing our nation’s energy resources.

Consider what transpires when the government imposes eminent domain upon a private landowner to facilitate a given energy policy. While the land owner is constitutionally assured a fair market price for the lost benefits for using the appropriated resource, we must remember that this same owner always had the opportunity to sell the resource at its market price, but preferred to not sell it. This means a voluntary sale would require a much higher price.

This reality implies that if the government were to acquire the needed resources to facilitate a given public policy through a voluntary market process, it would be far more expensive than simply imposing eminent domain. This makes it much more likely that the public policy in question would have been found inefficient, had it been forced to compensate the owners of all the needed resources for the full value of their lost benefits.

Andrew Morris (J.D., Ph.D.) is a law and economics specialist who serves as Senior Fellow at the Property & Environment Research Center. In a recent study he notes that,

Eminent domain laws are inadequate for coping with this growth in infrastructure, for protecting landowners’ rights in the face of expanding utility easements, and for giving utilities inappropriate price signals.

The bottom line is this: for all the concern that developing energy resources in the private sector would fail to reflect the public interest, there is no guarantee that public policy — even when designed and implemented in a democracy — would better reflect the public interest. We must dispassionately and carefully examine both public and private sector approaches to make an informed decision.

Aug 13, 2014 | Leave a Comment | by
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