22 April 2008

Earth Day

The spirit of Earth Day is about rolling up your sleeves and getting down to the business of making a difference. There is no shortage of work to be done.

About Fish

Our fisheries are depleted. The will probably be no salmon fishing in the Pacific Northwest this year, a necessity that the commercial fishermen grudgingly acknowledge is necessary. But this is no fluke or temporary problem. Almost every major fishery is dramatically reduced. Our international institutions have not been strong enough to prevent a tragedy of the commons. It doesn't work to have have a fishing industry organized as hunting expeditions, in a world with agriculture sized populations.

Reinvigorating our fisheries requires less wild caught fishing, more fish farming, and less water pollution. The usual vanguard of environmental innovation who provide the bridge between industries at the start up, niche stage and the mass consumption lower price stage, the affluent consumer, has shunned fish farming. It is simply a matter of self-preservation. Farmed fish have more dangerous toxins, like mercury, than wild caught fish. All three solutions are intertwined. We need a grip on water pollution to boost wild fisheries and to make farm fishing viable so it can replace wild caught fish.

Global Warming

We don't have a real plan to slow down the global warming that we are causing. We know that it is caused by certain types of air pollution we emit. But we are uncomfortable about making the kinds of dramatic choices necessary to reduce them.

The United States is one of the worst global warming offenders. There are essentially three forums where we must change. We need to reduce emissions in the electrical energy sector, we need to reduce emissions in the transportation sector, and we need to reduce emissions in the industrial sector.

In the world of electrical energy, this means both more conservation and different ways of producing electricity.

On the conservation front we need to do a better job of communicating the value of conservation to consumers. Some of this is simply a matter of getting information on energy savings opportunities like energy efficient light bulbs and appliances to consumers when purchasig decisions are made on everything from light bulbs to appliances and computers to homes which can be designed to use less eletricity in building in mechanical systems and that have lower demands for energy with features like abundant natural light.

The other part of getting information to consumers is making sure that consumers share in the benefit not only of reduced consumption charges, but also of avoided costs like the power plants that don't have to be built, and the pollution that is reduced by their choices.

We also need on the electricity conservation front to develop energy efficient technologies -- like appliances that don't sip electricity when turned off and LED lighting systems.

I don't think that we should ban anything. There are niche places for inefficient technologies that override conservation needs. If a prize painting in a gallery, or an intangibly significant altar, or historic building looks better under an inefficient incandescent bulb or a polluting braizer, so be it. We should let people make those choices. But, a tax based, for example, on the number of watts a bulb requires over a state of the art number of watts to produce a given number of lumens, might be appropriate -- a sort of gas guzzlers tax for electricity hogs. If a bulb with the lumen output of a 100 watt incandescent bulb could be replaced by a 25 watt compact flourescent, maybe a 75 cent tax on the incandescent is in order. Small incentives can make a big difference in a shopping center environment.

On the production side we need to move away from fossil fuels, particularly coal, and towards nuclear power and renewables like wind, solar, and hydroelectric power, balanced against the costs of each. This means improved permitting for nuclear power (something already implemented to some extent), solving the high level nuclear waste problem (probably by biting the bullet and opening Yucca Mountain), imposing some kind of emissions taxes on coal production that contributes to global warming (ideally committed to a global warming reduction project fund) in which an emissions basis rather than a fuel basis in order to encourage clean coal technologies, and taking a comprehensive look at our hydropower infrastructure to identify how the system could be designed to increase production with management environmental costs (e.g. some old and inefficient or non-power producing dams might be removed or replaced).


We want fewer emissions from transporation. It is hard to decouple production from consumptions in this area.

One good place to impose environmental taxes designed to increase fuel efficiency and reduce emissions may be in the new vehicle sales market, rather than as a gas tax.

Once someone has purchased a new vehicle, they typically have not a lot of flexibility to alter the number of mile that they drive, and even if they sell the car in favor of another more fuel efficient one, someone is going to end up driving that car for its natural life. If gas taxes rise, used car buyers may be willing to pay less for the old car -- shifting some of the economic cost of the car's fuel inefficiency from the buyer to the seller of the fuel inefficient car, but someone is going to buy and drive that car at some price, unless the price of fuel is truly crushing.

CAFE standards are a blunt instrument for achieving this goal. While the fuel efficiency of the aggregate market of vehicles sold is what we want to change, it forecloes, for not terribly good reason, the possibility that some firms will focus their sale on big vehicles, or on less fuel efficient vehicles whose sales we want to discourage rather than ban, while providing firms that focus their sales on smaller and more fuel efficient vehicles to improve.

One option would a cap and trade emissions market. The average of the last few years fuel economy per vehicle would be determined and imposed as a cap (and then decreased year by year). Every vehicle sale of a more fuel efficient vehicle would give a company a credit. Every vehicle sale of a less fuel efficient vehicle would be permitted only if the company purchased enough credits to permit it from someone else. Selling Priuses or SmartCars would give companies are marketable commodity. Non-participants in the car market could also buy fuel efficiency credits on an equal footing with car companies and retire them, thus paying to improve air quality.

The only hard question is whether there ought to be some recognition of the fact that larger cars carrying more passengers are more fuel efficient than more fuel efficient cars in many cases. A single occupancy Prius (62 mpg) is less fuel efficient per passenger than fuel inefficient Dodge Durango (12 mpg) which routinely carries six passengers. One rough justice solution might be to have several different fuel efficiency standards for different classes of vehicles, based upon average occupancy in a class (determined empirically). Thus, one might have a small car, full sized car, small SUV, medium SUV, large SUV, regular cab pickup, full cab pickup, minivan, large passenger van, and full sized bus category. Regulations based upon EPA studies would establish an average occupancy for each type of vehicle in practice (something that already exists for passenger-mile estimates produced by the Department of Transportation). The target fuel efficiency rating for the entire fleet would set miles per gallon per average passnger per vehicle goal, which would then be translated into target fuel efficiencies in each class of vehicle.

Since we really want to do more than control fuel efficiency, vehicles that emit fewer greenhouse gases might get treated as if they were more fuel efficient than they actually are, and alternative fuel vehicles (ethanol or biodiesel or hydrogen or natural gas or plug in electricity) might receive similar adjustments.

This seems complex, and in some ways, it is complex. But, it would be entirely invisible to customers. The details would be relevant only to representatives of a dozen or so car companies and perhaps a similar number of environmental groups, and the fuel efficiency rights would be traded (on a government disclosed registry with disclosed prices) at the manufacturer level (the government might commit to buying unused credits at some price, essentially setting a floor to the market).

A trade and cap system would be invisible to car dealers and consumers who would simply observe that some vehicles like regular cab pickups were getting more expensive, while fuel efficient vehicles were getting cheaper. It also would not impact government revenues significantly. It would simply make more fuel efficient vehicles more profitable than less fuel efficient vehicles within the market.

The definition of vehicle, by the way, should be broad enough to include all passenger vehicles. Why? Because one of the most fuel efficient vehicles in existence is the full sized bus with any decent passenger load. This would provide a natural and proportionate way for the private car and truck market to subsidize the public transportation market.

The Third World

The shoe yet to drop for global warming and other environmental issues on a global scale is the environmental impact expected as third world and developing countries like China, India and Brazil develop and consumer more.

These nations inevitably will and should develop more advanced technology based economies. But since they are making decisions on more of a blank slate, it may be possible to steer those countries, at a relatively low cost, towards leapfrogging from their current less developed state immediately to more environmentally friendly sustainable economic arrangements without going through the grossly environmentally destructive intermedate steps that the Western world did.

Indeed, the advent of Peak Oil and its imapct on oil prices in the next few decades may make this an unavoidable choice.

Modest subsidies through R&D and other incentives now, may be a cost effective way of allowing everyone in the world to be developed in a cleaner way later.

No comments: