From the department of shameless self promotion, if you’re in the Albuquerque area you should block out some time this evening around 7 p.m.-ish to watch In Focus on KNME, public telly channel 5, where I will be trying to explain brackish groundwater issues.
Then watch this space tomorrow, as I try to walk back all the things I said that came out sounding really dumb.
Frequently, when I’m driving to work, I see what I think is one of the clearest examples of an economic externality: big gravel trucks with lousy covers and a shower of greater or lesser extent of little bits of gravel flying off, threatening the windshields of all who would come near.
truck
On the mud flaps, a sign: “Warning: Stay back 200 feet. Not responsible for cracked or broken windshields.” There’s a half-assed cloth cover on these trucks that appears comically intended to reduce the windshield-threatening shower, to little effect.
This is a case where the damage caused by an economic activity is borne by party “A” (me in my little Honda Civic), while the cost of preventing that damage is borne b party “B” (the guy who owns the big gravel truck). What economic incentive might Big Gravel Truck Guy have to spend the money for a decent cover that doesn’t comically flap in the wind and let all the gravel shower down on other drivers? Maybe a little, if I go to the trouble to sue him for the $150 it costs to get the windshield replaced. But how many people do that? It’ll cost me far more than $150 in trouble to chase down the truck, get the license number, go to small claims court. So most people don’t. The result is that Big Gravel Truck Guy’s costs in this case are shifted to others.
This example also illustrates a couple of issues involved with policies that might be adopted to address this market failure.
One approach involves transaction costs. If we could make it easy for me to make Big Gravel Truck Guy pay for my windshield, he would have an economically efficient choice. He could either get a better cover, or simply pay for the windshields, whichever is cheaper. But transaction costs can be really high in this sort of case, where the burden is placed on a whole lot of individuals who are harmed. The other approach in a case like this is regulation. We could have government rules mandating really good gravel truck covers to prevent the gravel shower. But economics suggests why this also is not likely to happen. The benefit here, to all the people in cars, is diffuse. Few individuals have the economic incentive to be politically active on an issue like this, lobbying for legislative reform. The Big Gravel Truck Industry, meanwhile, has a focused economic incentive to hire Big Gravel Truck Industry Lobbyists to fight such rules.
Bottom line: We’re likely to have to just suck it up and live with externalities like this.
* updated with new title to reflect amusing blogoreference I thought of in the car on the way to work
Call newspapers dinosaurs if you like, but remember that dinosaurs roamed the Earth for millions of years.
An analysis last year by Gilbert Metcalf, of Tufts University, concluded that feed-tariffs – essentially a mandated price for utilities’ purchase of renewable energy – is the most effective tool encouraging investment:
The review of the European and US experience provides a number of lessons to guide future renewables policy in the United States. First, the European experiment with feed-in tariffs and renewable portfolio standards suggests that feed-in tariffs may dominate RPS systems as effective policy tools to encourage investment. Second, the US preference for tax incentives has clearly not had the same simulative investment impact as have feed-in tariffs. Third, a modest feed-in tariff for wind and biomass would make these technologies cost competitive with natural gas. Fourth, it is clear that considerable research and technological development will be required before solar electricity can compete in the market place regardless of the pricing support policy in place.
One might ask, then, why we don’t have more feed-in tariffs in this country?
That may be changing, according to Green Inc.:
Last week, the city of Gainesville, Fla., approved what the local paper called the “nation’s first solar feed-in tariff ordinance.”
Gainesville residents with photovoltaic panels on their roofs will get 32 cents a kilowatt-hour when they produce energy. (By contrast, homeowners in Florida last October paid on average 12 cents a kilowatt hour for their electricity, according to Department of Energy statistics.
Stehfest et al. in Climatic Change:
A global transition to a low meat-diet as recommended for health reasons would reduce the mitigation costs to achieve a 450 ppm CO2-eq. stabilisation target by about 50% in 2050 compared to the reference case. Dietary changes could therefore not only create substantial benefits for human health and global land use, but can also play an important role in future climate change mitigation policies.
James Annan argues that Roger and I are both wrong in our discussion of how to properly think about James Hansens 2006 draft paper discussing the possibility of “super El Nino”:
(See here for history, thought if you don’t already know it, you’re likely to be uninterested, so I recommend against clicking.)
In this morning’s Albuquerque Journal (sub/ad req.):
When I began my search for Leopold, I asked Witt and his colleagues at UNM’s Museum of Southwestern Biology whether they had any specimens in their vast research collection of plants and animals that might have been collected by Leopold himself.
Witt, who is the curator of birds, took me into the collections area and began rummaging through the drawers looking for a Sharp-shinned Hawk that, according to the museum’s computer database, had been collected by Leopold.
He pulled out drawer after drawer until he finally zeroed in on the bird he was interested in — dry, stuffed with cotton, it still had the sleek look of the lethal predator it had once been.
There was no name on the tag attached to the bird’s ankle, only this explanation of where and when it was collected: Tomé Hill, Nov. 23, 1919.
Outside, as we stood by the UNM duck pond looking up at the Bushtits, Witt spotted a Sharp-shinned Hawk out of the corner of his eye as it tucked in its wings and dove earthward, apparently having spied some unlucky prey.
It was easy to imagine Leopold enjoying the sight.
Alan Mutter argued yesterday that newspapers’ print products are central to driving traffic to their web sites – that a significant fraction of the web audience overlaps print, and that the loss of print “stripped of the advantages that formerly differentiated it from all other rivals, would become just one of thousands of URLs competing for attention on the busy, noisy web.”
In the comments, Howard Owens offered a counterfactual:
The Kansas City Kansan doubled online traffic as soon as the print edition went away.
The Kansan stopped printing in mid-January, going to an all-Web delivery of its product. How has that worked out?