Monday, August 30, 2010

The science of choice, bovine flatulance edition

© 2010 Joshua Stark

...and I don't mean it like, "The Breakfast of Champions."

Economics is often called the science of choice (which is also why it's called the "dismal science"), because an economist spends her time thinking about everything you could have done with that $1.25 you spent on the King Sized Snickers you bought at the corner liquor store (the Standup Economist has a simply genius take on this when translating Mankiw's Ten Principles of Economics).

It's interesting, because economics looks at the choices we make with an eye toward improving efficiencies, but efficiencies come in many shapes and sizes, and increasing one efficiency may, in fact, create a less efficient outcome for something else.  Take California cow farts, for example.

That's right.  KQED posted a snippet about methane digesters at two huge dairies in the Central Valley, and the problems they are having getting them up and running.  In it, they talk about the farmers' troubles with lowering their pollution.  You see, methane is a greenhouse gas, but burning it causes a local pollutant known as NOx.  It just so happens that the air quality district in which these dairies operate is almost constantly far beyond the legal limit for its local, human-health-destroying pollutants.  For some perspective, note that one in five children in the Central Valley has asthma.

Unfortunately, KQED decided to place this in its "ClimateWatch" series, and not its, "OhMyLordOurIndustriesAreKillingOurChildren" series, where the "efficiencies" argument might be considered in a different light.  However, they did, and they talked about how these farmers, in trying to do a good, unselfish deed, were coming up against the heartless and cold steel wall of bureaucracy.  Why, one poor farmer has had to spend $200k for one pollution control device!

But, what the report does not do is compare the costs of containment to a number of other factors.  For example, how much was saved in medical costs for asthma attacks?  I'm no doctor, but I'm guessing that a couple hundred grand is chump change.  Also, how much of these farmers' energy costs were offset by generating their own power, even after the added pollution-control measures?  How much ag. production from neighboring farms was saved, since pollution is responsible for probably a 15% reduction in plant productivity from dimming the Sun in the Valley? 

And, if they'd saved that money, how many additional cows could they have bought, thus increasing their pollution contribution?

Economics uses money because it is a convenient way to measure relative efficiencies, but it isn't the only way, nor is efficiency the only thing to worry about.  For example, how many children were spared a painful, frightening and life-threatening asthma attack?  How many parents were spared the horror of rushing a child, who simply cannot breathe, to the hospital?  We can put these savings into dollar amounts, but that would cheapen it in a bad way, now wouldn't it?

I will tell you right now that these farmers did not fund methane digesters simply because they believe that global warming is partly their fault, just like we consumers don't all put solar panels up on our houses or run out and buy an electric car just to save the planet.  They ran the numbers, and the energy saving they'll get from doing it in-house pays off.  Plus they may get carbon offsets in the near future.  Plus they help do their part to save the planet.  Plus they have the ability to cover the up-front costs of conversion, and the risk of doing something fairly new.

I commend these farmers for taking a step out unfamiliar territory, and I'm especially glad that John Fiscalini at Fiscalini Farms put in that pollution control device.  That's great work.  I'm also very happy with the work of regulators telling folks that they have to control their NOx pollution in a place with the worst air quality in the entire country.  I'm not so happy with KQED losing the heart of this story by contriving an angle to shoehorn it into their ClimateWatch series.

Economics, in getting us to consider our choices, is a great boon to society.  But remember that these choices go beyond the over-simplified monetary quantities.  Our choices have real impacts.

And, when you click over to the KQED piece, please note the convolutions the editor had to go through to get to use, "cut it", in the title of a piece on cow farts.

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