Archive for the ‘environment’ Category

A Tangled Solar Web

So, our government just placed a tariff on low cost Chinese solar panels, making them not so low cost. I thought our energy policy was, in part, to encourage the use of alternative energy sources, particularly wind and solar. Government has certainly spent enough money funding alt.energy projects that experienced technology developers found too impractical. Adding tariffs/taxes to raise the cost of solar, making it less cost effective, seems at odds with our policy goals. Right wing partisans might think that there is some deeper sinister plot at work. Perhaps there is, but our government seems to be so big and complex that the right hand destroys what the left hand creates. Ineptitude and inefficiency may be baked into the cake. Would we be farther down the solar path if government had just done nothing?

English: Solar panel installation at an inform...

English: Solar panel installation at an information center adjacent to Ögii Lake (Photo credit: Wikipedia)

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Gouged by the Wind

Fenton Wind Farm near Chandler, Minnesota

Fenton Wind Farm near Chandler, Minnesota (Photo credit: Wikipedia)

It’s not every day that Minnesota makes the editorial page of the Wall Street Journal, but today is such a day.

The editorial questions the wisdom of Minnesota’s renewable energy mandate. The author notes (correctly) that the mandate increases the cost of electricity and that the burden of the cost increase falls mainly on the poor and middle class. They also claim that the environmental benefits are almost zero. Whatever the benefits, they certainly have direct costs to households.

The Journal fails to mention the indirect costs. The high cost of electricity in Minnesota makes it less appealing to businesses, especially those that are heavy users of electricity. This used to mean big manufacturing operations or aluminum smelters, but it increasingly includes outfits with big server farms such as Google, Microsoft, and Amazon. Discouraging both traditional and high tech industries from locating here seems like a dubious economic development strategy.

This strikes me as another attempt to make things better that actually make things worse.

You might think it would be a “no brainer” to reverse course, but I doubt it. There is such a thing as institutional inertia and every bad idea has a core of supporters. For some, environmental concerns trump everything else and they won’t retreat from victories, no matter how small the benefit or how great the cost.

Minnesotans will continue to be gouged by the wind.

Humility and Overconfidence

Its fun to go back and see how really smart people understood things at the time. Maybe it should give us some humility — so much policy debate seems based on the idea that we know everything so well. … If you were transported back to to 1790 and got sick, would you want to be treated by the best doctors of the day?

via The Grumpy Economist: Negative stimulus, 1946.

We should keep this in mind whenever sweeping changes advocated by our “best minds” are proposed. I’m thinking about the “green economy” in particular and a lot of other things in general. The advantage of small incremental change is that you don’t usually look like such an idiot later.

Innovation vs Regulation

Alex T has some interesting things to say about innovation and regulation:

There are good regulations and bad regulations and lots of debate over which is which. From an innovation perspective, however, this debate misses a key point. Let’s assume that all regulations are good. The problem is that even if each regulation is good, the net effect of all the regulations combined may be bad. A single pebble in a big stream doesn’t do much, but throw enough pebbles and the stream of innovation is dammed.

Building in the United States today, for example, requires navigating a thicket of environmental, zoning and aesthetic regulations that vary not only state by state but county by county. If building a house is difficult, try building an airport. Passenger travel has more than tripled since deregulation in 1978, but in that time only one major new airport has been built: Denver’s. That airport is now the fourth busiest in the world. Indeed the top seven busiest airports are all in the United States, not so much because we are big but because without new construction we are forced to overcrowd our existing infrastructure. The result is delays and inefficiency. Meanwhile, China is building 50 to 100 new airports over the next 10 years.

It would appear that regulations intended to keep life from getting worse might also keep life from getting better. I wonder if someone has suggested a way of prudently judging the regulation/innovation trade offs.

No Regulations - Do as you please!

Image by Flying Cloud via Flickr

There must be some idea more nuanced than “all regulation is good” or “all regulation is bad”. Today, it looks like we’re flying by the seat of our pants.

Taken To The Cleaners

washing machine

Image by w00kie via Flickr

I have no idea what our foreign policy toward Libya should be, nor do I know enough about nuclear power plants to know whether the Japanese or Americans are right about safety precautions. But I do know about laundry, and How Washington Ruined Your Washing Machine resonates with me. Due to bonehead regulation, inexpensive washing machines no longer get clothes clean. This is just another Washington assault on the poor and middle classes, as well as their laundry. A person ought to think twice about advocates for the “common good” – this seems to be the code phrase for taking you to the cleaners. Maybe the Republicans can clean up the mess the Democrats have made, but I doubt it. All I know is this: if you screw up the little things, you’ll probably screw up the big things.

Green Godzilla

The Earth flag is not an official flag, since ...

Image via Wikipedia

When it comes to climate change, the environmental movement has gotten itself on the wrong side of doubt. It has become the voice of the establishment, of the tenured, of the technocrats.  It proposes big economic and social interventions and denies that unintended consequences and new information could vitiate the power of its recommendations.  It knows what is good for us, and its knowledge is backed up by the awesome power and majesty of the peer-review process. The political, cultural, business and scientific establishments stand firmly behind global warming today — just as they once stood firmly behind Robert Moses, urban renewal, and big dams.

via The Greening of Godzilla – Walter Russell Mead’s Blog – The American Interest.

Oh yeah. Mead argues that the environmental movement has lost its soul.

Oiling The Regulatory Machine

As if the Gulf oil spill wasn’t bad enough, we now learn that the EPA is thwarting the cleanup activity. I’m sure political pundits have already started questioning the motives and competence of the Obama administration, or at least the EPA. I have no special insight into that. But I do know that large complex bureaucracies tend to be rigid and inflexible, often do stupid things, and often work against their own goals. That’s the nature of the beast, a variation of Hayek’s “distributed knowledge” problem. That’s why we see such wasteful activity as one unit of government taking another another unit of government to court, all paid for with taxpayer dollars.

I understand the desire for a regulatory technocracy to address common problems such as pollution. But there are limits on what such an approach can accomplish. When we try to push past these limits, we make matters worse rather than better. We can’t achieve Woodrow Wilson’s dream.

I’m no organizational theorist, but it seems to me that the regulatory activity we need should be pushed down and distributed. The federal role should be decreased and the state (or even county) role increased. Centralized planning, command, and control simply doesn’t work very well (except for the military – but that’s another story).