Tag: "environmental benefit"

Economic Gain Increases Environmental Quality

The relationship between environmental quality and economic development has been described as an environmental Kuznets curve: Initially, economic development exacerbates environmental problems; however, as an economy grows and develops, average incomes reach a certain point beyond which environmental indicators start to improve.  Indeed, as gross domestic product per capita increases, emissions of pollutants per $1 of gross domestic product falls. This is true also of industrial emissions of carbon dioxide, which was not traditionally viewed as an air pollutant, but is now regulated by the Environmental Protection Agency.  [See the table.] This suggests that economic progress is a prerequisite for improving environmental quality generally, and specifically for meeting carbon dioxide emissions reductions goals.

Carbon Dioxide Emissions

(kilograms of CO2 per $1 gross domestic product)

 

  1990 2000 2010
China 1.9695 1.0110 0.9084
India 0.6533 0.6538 0.5338
Japan 0.3341 0.3328 0.2966
Singapore 0.6105 0.3196 0.0510
South Africa 1.1881 1.0964 0.9692
United Kingdom 0.4272 0.3169 0.2416
United States 0.5988 0.5121 0.4174

 

Note: Dollars of GDP adjusted for purchasing power parity.

Source: Millennium Development Goals Database, United Nations Statistics Division.

Special contribution by NCPA research associate Jiawen Chen. 

Electric Vehicles: More Harm than Good?

A recent study by Stephen P. Holland from the University of North Carolina- Greensboro and other economics and business professors has found the environmental benefits and harms of electric cars vary state by state. The federal government currently awards a subsidy of $7500 for each electric vehicle bought, with some states adding their own subsidies to such purchases. Such subsidies reflect current movements towards green policies.

Electric vehicles, however, are clearly not “zero emission vehicles.” First of all, the components of those vehicles are made in factories most likely powered by fossil fuels. Second, the electricity used for the vehicles themselves comes from power plants across the United States, where around 70 percent of power plants operate on natural gas or coal. In most areas around the country, driving an electric vehicle means choosing to burn coal and natural gas rather than burning oil.

Due to differences in energy production by states, using electric vehicles may be better in some states while continuing to drive gas-powered cars in others may be best. In California, for example, the electric grid is relatively clean while gasoline vehicles produce more environmental damages. In North Dakota, the opposite is true as the electric grid uses more coal.

The report found that on average electric cars are about half-a-cent worse per mile for the environment than gas-powered cars. However, gas-powered cars are worse in congested urban areas while electric cars are worse outside of metropolitan areas. A one-size-fits-all policy regarding electric cars therefore does not make sense. The federal subsidy should be eliminated, leaving only state subsidies for electric vehicles where they already exist.

 

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.

Apple Ventures into Solar Power

Apple’s CEO Tim Cook threw his weight behind solar energy with an $850 million deal to buy power from First Solar, the biggest developer of solar farms in the U.S. This new pledge puts Apple on the same page as other big businesses, including Google, Microsoft and Amazon, who have also bought into solar power in a big way.

With this new purchase, Apple will get 130 megawatts of solar power, enough to power “60,000 California homes.” This new purchase isn’t Apple’s first foray into solar energy; Apple already has two 20 Mw plants in North Carolina, two more in development, and currently powers all of its data centers on renewable energy.

Though Cook stresses his belief in climate change, he emphasizes that Apple’s investment in solar is a good business deal.

Apple isn’t investing in solar as a gift to humanity. It’s doing it because it’s a good business deal, “We expect to have very significant savings,” Cook stressed at the Goldman Sachs conference. The $850 million agreement is expect to supply enough electricity to power “all of Apple’s California stores, offices, headquarters and a data center.”

With the price of solar dropping quicker than that of wind, Apple’s big deal could be “a milestone on the road to cheap, unsubsidized power from the sun.”

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.

Still Too Early for Solar Energy

Many are claiming that solar energy is both great for the environment and a good investment. The focus has been on solar panels that are mounted on top of homes. Several nations and some states in the U.S., have been utilizing this renewable energy resource. However, solar energy is too new of an energy source to invest in at this time.

How can we tell? If the government is still giving any kind of financial incentive, then that means that the market has not caught up and it is still overpriced. Currently, the U.S. federal government gives a 30 percent tax credit for installing a solar energy system at home. On top of that, cash is also given directly to new solar systems ― Utah gives out $2,000 in cash incentives.

The day that tax credits and direct money incentives disappear, is the day that renewable energies, such as solar power, are priced closer to a solid and efficient energy market. That is the day you should invest in solar energy for your home ― if it is at a good price.

 

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.

New Fracking Process Benefits Environment

A new step that removes salt from the water that is used for the fracking process makes the water reusable. Researchers at MIT and in Saudi Arabia can now add a new step to fracking called electro dialysis.

Produced water from fossil-fuel wells can have salinity three to six times greater than that of seawater; the new research indicates that this salt can be effectively removed through a succession of stages of electro dialysis.

The idea would not be to purify the water sufficiently to make it potable, the researchers say. Rather, it could be cleaned up enough to enable its reuse as part of the hydraulic fracturing fluid injected in subsequent wells, significantly reducing the water needed from other sources.

Lienhard explains that if you’re trying to make pure water, electro dialysis becomes less and less efficient as the water gets less saline, because it requires that electric current flow through the water itself: Salty water conducts electricity well, but pure water does not.

While the electro dialysis technology is available, new fracking equipment is needed that will utilize the new step. This new step will help recycle water that can be used again for fracking and will draw less resources from water starved states like Texas.

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.

A Reevaluation: Does Environmentalism Necessarily Mean Radicalism?

What does the average citizen think of when they hear the term environmentalist?

Answer: a tree-hugging, bulldozer-sabotaging, disobedient hippie, who hates modernization and technological innovation. However, while these connotations may apply to some (very few) environmentalists, I assure you that this is a completely skewed and absurd definition.

Nevertheless, environmentalists have understandably earned this bad reputation over years as a result of their ever-increasing radical approaches. In cahoots with the Environmental Protection Agency (EPA), they have repeatedly blocked legislation that would have created jobs and improved the economy. Although I consider myself environmentally-friendly, I shy away from terming myself an “environmentalist” due to all of the negative connotations that come along with the label.

However, a point of clarification needs to be made with regards to the term. Here is Britannica Encyclopedia’s definition ofenvironmentalism:

Environmentalism is a political and ethical movement that seeks to improve and protect the quality of the natural environment through changes to environmentally harmful human activities; through the adoption of forms of political, economic, and social organization that are thought to be necessary for, or at least conducive to, the benign treatment of the environment by humans; and through a reassessment of humanity’s relationship with nature. In various ways, environmentalism claims that living things other than humans, and the natural environment as a whole, are deserving of consideration in reasoning about the morality of political, economic, and social policies.

Often times, environmentalists tend to focus on one issue at a time, such as climate change or conservation or pollution. As a result of this myopic perspective and a manipulation of the above definition, environmentalists solely intend to limit human interaction with the environment. Thus, they have earned their title as unreasonable and radical. However, if environmentalists want to actually take effective action, they need to reevaluate their objectives and start working with human interaction in the environment, “[reassessing] humanity’s relationship with nature.” Additionally, they need to have an agenda broader than simply one target issue.

Thus, if environmentalists choose to operate within the bright green framework, which encourages technological innovation and economic growth, they will be more effective in their wider range of feats. Furthermore, by aligning themselves more closely to the definition of environmentalism and avoiding radical, perverted interpretations, they will also garner a more favorable reputation.

Tanner Davis is a research associate at the National Center for Policy Analysis.