Elasticities in the Short and Long Term

Posted by on

Via Dessler and Revkin, an interesting interview with economist Gary Yohe that gets to the heart of the puzzle about gasoline consumption this year. Gas prices soared over the summer, but consumption dropped only a bit (on the order of 3-5 percent year-over-year). The question posed by critics of a carbon tax as a greenhouse gas reduction measure – what does this suggest about the size of the tax required to get serious reductions? If doubling the price of gas doesn’t get us very far (and most advocates think we’ve got to go farther than 5 percent), does that mean a price increase in the form of a gas tax won’t work? If you look at this year’s data, you might be tempted to come to the conclusion that the gas tax would have to be enormous.

The answer, as Yohe explains, lies in the difference between short and longer term elasticities. In the short run, there’s not much you can do. In the longer term, a consistent signal that prices will be higher (which government can send in the form of a tax in a way the market on its own will not) makes me more likely not to buy that Hummer I’ve been so badly wanting. Here’s Yohe:

The price bounces around and that adds a little bit of uncertainty, potentially a lot of uncertainty… A tax, on the other hand, sends a very strong price signal that’s unambiguous and not clouded with a lot of noise, so that people can actually understand what carbon will cost them and how the price of carbon will increase persistently and predictably over time.

Net Green Jobs Watch

Posted by on

John Whitehead’s jihad against the green jobs argument continues:

The implication of this type of study is that environmental policy creates net positive green jobs. The jobs lost as a result of environmental policy are never mentioned.

You’ve really got to follow the comment threads on these. And to be clear – John is not arguing that green policies are not of value. See externalities. He’s arguing that the green job creation argument is bogus.

Elephant Diaries: Information in Meatspace

Posted by on

Bruce Barcott on the loss of newspapers:

It matters because papers exist in the physical world, the meatspace with the rest of us, and the fact of their existence, in print on paper, sitting on every corner of downtown Seattle, reminds us that there’s a larger conversation going on around us. She’s worried that the physical existence of newspapers binds us together as a society. Without it, we float off into our private little nodes of self-interest.

Water in the Desert: CocoBait Edition

Posted by on

C.J. Brooks, a Tucson water geek and author of the “Watering the Desert Blog”, talks about the linkage between land use planning and water in Nevada. Washoe County has done the sort of thing advocates around here have been talking about ever since I started thinking seriously about water issues (and likely for a lot longer than that). Brooks quotes an article from Water Strategist discussing the initiative:

The measure requires the amendment of the Truckee Meadows Regional Plan (“TMRP”) to require future land use and water requirements in the county are in balance.
The practical impact is to have regional planners plan for 200,000 more people in the county for a total of 600,000 persons based on current water use and available water.

Brooks has concerns about the “what happens next” part, suggesting that this may do a better job of creating work for lawyers than it will in aiding water and land use planning efforts:

The Washoe County initiative makes no reference to supply augmentation, merely referring to “identified and sustainable water resources” available in the county. That could be interpreted to place a pretty firm cap on future growth under one possible interpretation. Look for lots of litigation to spring from this measure in the future.

Bottom line (to borrow Zetland’s trick): It is a good idea to link land use planning to water availability, but you’ve got to do it right.

Elephant Diaries: Report from Colorado

Posted by on

Tom Yulsman, from the Center for Environmental Journalism in Boulder, bemoans a life without Rocky Mountain News and, potentialy, the Denver Post?

If Scripps cannot find a buyer for the Rocky Mountain News — and no one thinks it will — then the paper will go belly up,  leaving the Denver Post as the only daily in town. But there’s no guarantee that the Post will survive either, as Moody’s Investors Services reports MediaNews, owner of the Post, could default on its loans. Moreover, Dean Singleton, the Post’s publisher, said today that he must slash expenses by $20 million.  Maybe he’ll get the unions to cooperate. But will that be enough? I wouldn’t bet on it.

So we are faced with the rather alarming prospect of a major American city of some 2.1 million people lacking a daily newspaper to cover cops, crime, city council, education, zoning, politics, corruption, sports, entertainment, etc. — and the environment.

Tom suggests a non-profit model, but grasps the audience problem that would result:

But will a small group of hungry reporters aided perhaps by academics and student interns have the reach and influence currently enjoyed by the dailies? I doubt it.

Elephant Diaries: The Great Paradox

Posted by on

Surowiecki in the New Yorker:

The peculiar fact about the current crisis is that even as big papers have become less profitable they’ve arguably become more popular. The blogosphere, much of which piggybacks on traditional journalism’s content, has magnified the reach of newspapers, and although papers now face far more scrutiny, this is a kind of backhanded compliment to their continued relevance. Usually, when an industry runs into the kind of trouble that Levitt was talking about, it’s because people are abandoning its products. But people don’t use the Times less than they did a decade ago. They use it more. The difference is that today they don’t have to pay for it. The real problem for newspapers, in other words, isn’t the Internet; it’s us. We want access to everything, we want it now, and we want it for free. That’s a consumer’s dream, but eventually it’s going to collide with reality: if newspapers’ profits vanish, so will their product.

Worth noting: I didn’t pay for Surowiecki’s piece, and don’t regularly read the New Yorker. A blogger pal emailed it to me. Thanks, Ken!