© 2011 Joshua Stark
My title should have been the title to this article out today at California Watch. Unfortunately, they picked a title with a tad less specificity, and in doing so have picked a side in the debate between the two ideas. Their title: Free cap-and-trade system beats carbon tax, study finds.
That study, Inducing Clean Technology in the Electricity Sector: Tradable Permits or Carbon Tax Policies?, by UC Merced & the University of New South Wales, compares the possible impacts of a carbon tax vs. a cap-&-trade system using a model of a single, small firm that owns a coal-fired power plant. In the abstract, the authors claim to find that, due to the inherent uncertainty of a tradable permit system, a small firm will more likely hedge its bets by investing in some hybrid form of clean tech. + coal than it would under a system with a more stable carbon price.
Now, I don't have $20 to put down on a copy of this study (chalk it up to microeconomics, both literally and figuratively), but I do have some questions - especially to California Watch:
-The study's abstract says nothing of a "free cap-and-trade system", and in fact, I don't have a clue as to what a "free" cap-&-trade system would look like. People pay when carbon is priced, period. So, California Watch, where did "free" come in?
-The study's abstract also explains that other ideas associated with C&T (e.g., offsets) are also more expensive than just a tradable permits system without them. California Watch, why did you not include this little gem of news?
-And for the researchers: Why study a particular scenario that is unlikely to have much of an impact on carbon? If energy companies were as the authors envision - small firms owning one coal plant - then uncertainty may lead to hedging. However, we are talking about creating a contrived, government-mandated market with a number of very, very large firms. These firms move markets, they tend to suppress volatility (which is why companies want to be big), and they unduly influence political economy in their favor (hence, offsets & free permits to them). This last point cannot be understated, especially because any carbon price is going to be the result of a government regulation and it will be much easier to "game" the system if it has elements of contrived uncertainty in it.
Also, consider this: A clear government regulation pointing to a relatively quick increase in carbon prices will also lead a small firm to switch to clean tech. In fact, if the price looks high enough, that firm will leave coal completely, thus saving lives. This regulation will also lead big firms to switch.
Never forget that, no matter how we price carbon, it will be through a government regulation.
Uncertainty in carbon prices may, indeed, lead many companies to hedge their bets, although current history (carbon prices are surely uncertain right now) does not completely bear this out. And if carbon prices were a commodity, rather than a priced-in externality, I'd be more inclined to allow some uncertainty. But the fact is that any carbon price will be contrived, because it doesn't have to have a market price. Since the price for carbon will come out of regulations (even a C&T price) and an artificial scarcity, since large companies can thrive on creating their own certainty and influence shifting and uncertain regulations to a greater extent, and since a clear sign that carbon prices will go up will also induce a strong shift toward clean tech., it is imperative that we have a clear and certain regulatory framework.
Monday, July 11, 2011
Thursday, July 7, 2011
Bad Science on levees makes it into the paper
© 2011 Joshua Stark
Alas, having an advanced degree in a field doesn't always mean you are always right all the time.
Take this op-ed piece in yesterday's Sacramento Bee. In it, a Dr. Lund from UC Davis, a man who is probably nearly a genius in his field, makes some very dubious claims about Central California's levees. Sadly, here he refers to no studies nor historical evidence to prove his position.
The professor's claim is that we should remove trees from all "urban" levees, per a requirement by the US Army Corps of Engineers, even though doing so may have bad impacts to riparian habitat and recreational values. He is concerned because trees may weaken levees, and hide burrows from workers checking them.
What does the professor use to support his claim? The fact that other parts of the world - namely, China, Japan, & the Netherlands - remove trees from their levees.
That's it.
He offers no studies in this article that have shown these levees to be superior to California's. He offers no examples of California levee failures (or any levee failures) due to trees. He offers no support whatsoever for such an environmentally devastating act, for an act that will forever change habitats and recreation on our levees.
After some research, I found Dr. Lund's article as a blog post where he actually does cite references. However, the references are largely skewed (most being from the Corps), or almost never support his position. For example, this Power Point presentation lists trees and vegetation that are more or less problematic according to their research on European levees. The list describes a host of bramble bushes - blackberries and such - as less problematic for levees. However, I daresay that a burrow would be harder to find in a blackberry bramble than under a valley oak.
Another example, from the Ca. Dept. of Water Resources link he cites: "... California asserts that the Corps’ strict enforcement of the ETL and PGL will adversely impact public safety."
An earlier report by the Sacramento Bee, about the lawsuit by environmental groups against the Corps for this horrid idea, did mention the science on levee failures:
"But it (the Corps) offers little scientific evidence for those conclusions (to remove trees). A 2007 symposium hosted by the Sacramento Area Flood Control Agency (SAFCA) offered evidence for the opposing view: Tree roots may, in fact, strengthen levees by binding soils together."
I am no levee engineer. However, a quick google search of images from the last major levee failure on the California Delta, at Jones Tract in 2004, are telling; do you see any trees? Also, think back to times when you've noticed tree roots, perhaps sticking out of the side of a cut-bank on a road or a creek. Think about the dirt and rocks sticking to it, and how it and the land touching it stick way out from the eroded places around it, places that only had short grasses growing on it.
Last, I want to make a point about Dr. Lund's tone (and nearly everybody else talking publicly) when talking about levees: It is super-easy to make dire predictions, because nobody wants to have been the Pollyanna the day one fails, and because the old saw about there being two types of levees (those that have failed, and those that are about to) is true. But I would like to point out that this year we have experienced well over double our average runoff, and have had no major levee breech.
It may be time to reconsider a push for drastic actions to redesign a system that has been working pretty well for quite a while. Eventually, a levee will fail. Far less likely will multiple levees fail, and the event that would cause multiple failures will also likely go beyond what we actually accomplish to protect them now, regardless of the current wild-eyed rhetoric. Perhaps we should look at smaller-scale solutions to a recurring issue, rather than panicking about a potential catastrophe.
And for the record, I was born and raised on the Delta, and I live on the Delta now, as do my parents, a sister, and a nephew.
Alas, having an advanced degree in a field doesn't always mean you are always right all the time.
Take this op-ed piece in yesterday's Sacramento Bee. In it, a Dr. Lund from UC Davis, a man who is probably nearly a genius in his field, makes some very dubious claims about Central California's levees. Sadly, here he refers to no studies nor historical evidence to prove his position.
The professor's claim is that we should remove trees from all "urban" levees, per a requirement by the US Army Corps of Engineers, even though doing so may have bad impacts to riparian habitat and recreational values. He is concerned because trees may weaken levees, and hide burrows from workers checking them.
What does the professor use to support his claim? The fact that other parts of the world - namely, China, Japan, & the Netherlands - remove trees from their levees.
That's it.
He offers no studies in this article that have shown these levees to be superior to California's. He offers no examples of California levee failures (or any levee failures) due to trees. He offers no support whatsoever for such an environmentally devastating act, for an act that will forever change habitats and recreation on our levees.
After some research, I found Dr. Lund's article as a blog post where he actually does cite references. However, the references are largely skewed (most being from the Corps), or almost never support his position. For example, this Power Point presentation lists trees and vegetation that are more or less problematic according to their research on European levees. The list describes a host of bramble bushes - blackberries and such - as less problematic for levees. However, I daresay that a burrow would be harder to find in a blackberry bramble than under a valley oak.
Another example, from the Ca. Dept. of Water Resources link he cites: "... California asserts that the Corps’ strict enforcement of the ETL and PGL will adversely impact public safety."
An earlier report by the Sacramento Bee, about the lawsuit by environmental groups against the Corps for this horrid idea, did mention the science on levee failures:
"But it (the Corps) offers little scientific evidence for those conclusions (to remove trees). A 2007 symposium hosted by the Sacramento Area Flood Control Agency (SAFCA) offered evidence for the opposing view: Tree roots may, in fact, strengthen levees by binding soils together."
I am no levee engineer. However, a quick google search of images from the last major levee failure on the California Delta, at Jones Tract in 2004, are telling; do you see any trees? Also, think back to times when you've noticed tree roots, perhaps sticking out of the side of a cut-bank on a road or a creek. Think about the dirt and rocks sticking to it, and how it and the land touching it stick way out from the eroded places around it, places that only had short grasses growing on it.
Last, I want to make a point about Dr. Lund's tone (and nearly everybody else talking publicly) when talking about levees: It is super-easy to make dire predictions, because nobody wants to have been the Pollyanna the day one fails, and because the old saw about there being two types of levees (those that have failed, and those that are about to) is true. But I would like to point out that this year we have experienced well over double our average runoff, and have had no major levee breech.
It may be time to reconsider a push for drastic actions to redesign a system that has been working pretty well for quite a while. Eventually, a levee will fail. Far less likely will multiple levees fail, and the event that would cause multiple failures will also likely go beyond what we actually accomplish to protect them now, regardless of the current wild-eyed rhetoric. Perhaps we should look at smaller-scale solutions to a recurring issue, rather than panicking about a potential catastrophe.
And for the record, I was born and raised on the Delta, and I live on the Delta now, as do my parents, a sister, and a nephew.
Thursday, June 16, 2011
Non-environmental economics post
© 2011 Joshua Stark
But, it's a quick one.
I just wanted to re-post this quotation from Professor Brad DeLong's blog:
"A depressed economy with a slack labor market, low wages, and very low interest rates can be consistent with high asset values and ample corporate profits. But policies that produce such an outcome aren't policies for economic recovery. They are policies for class war. They are not in the public interest..."
But, it's a quick one.
I just wanted to re-post this quotation from Professor Brad DeLong's blog:
"A depressed economy with a slack labor market, low wages, and very low interest rates can be consistent with high asset values and ample corporate profits. But policies that produce such an outcome aren't policies for economic recovery. They are policies for class war. They are not in the public interest..."
Tuesday, June 14, 2011
California Republicans Have a Strange Way of Shrinking Government
© 2011 Joshua Stark
The Sacramento Bee blog Capitol Alert has a post on a letter from four Republicans in talks with California's Governor over a budget deal.
The Republicans explain the types of reform that must happen in order for them to vote to allow Californians the chance to vote to keep taxes at their current levels.
I found page 3 of the letter - on regulatory reform - fascinating. In particular, I am blown away that the way Republicans hope to shrink government and reign in spending is by creating a brand-new Office of Economic and Regulatory Analysis.
I don't get it.
The Sacramento Bee blog Capitol Alert has a post on a letter from four Republicans in talks with California's Governor over a budget deal.
The Republicans explain the types of reform that must happen in order for them to vote to allow Californians the chance to vote to keep taxes at their current levels.
I found page 3 of the letter - on regulatory reform - fascinating. In particular, I am blown away that the way Republicans hope to shrink government and reign in spending is by creating a brand-new Office of Economic and Regulatory Analysis.
I don't get it.
Monday, June 13, 2011
The Sound of One Shoe Dropping
© 2011 Joshua Stark
Sadly, as the New York Times reports, the catastrophe hitting California's State Park System is more of a nationwide phenomenon.
To sum it up, parks around the country have had few funds, and in the past few years, even these have dried up. In California, we are looking at closing 70 parks, and probably radically altering fees. Closing 70 parks. This is unprecedented, and sad.
Think about this: What do we have to remember about the 20th Century's massive economic meltdown? Many things, of course, but just about the only physical representations are the "C's" park units - parks whose infrastructure was designed and built by the CCC, a Depression-era attempt to put young men to work. These park buildings are often jewels of rough-hewn timber and stone trail steps, with a unique aesthetic, beautifully integrated into the rugged park scenery. In their day, they were beacons of hope to aspiring American visitors, and good, honest work for young men.
What will our legacy be for this economic downturn? According to the NY Times, "Customers... is the new buzzword", the notion that parks are selling goods and services, competing with the likes of Six Flags, WalMart, Sierra Pacific Lumber and Chevron. Gone is the notion that visiting our most treasured natural and historical spots is an American rite and right. Gone is the notion of "visitors". "Customers" is the new buzzword.
A few years back, I stood up during a National Park Service-sponsored conference on visitor use and defended the idea of visitors using parks. Amid concerns from park staff about a sizeable reduction in visitation to parks, a well-meaning professor had made the comment that fewer boots on the ground meant fewer impacts to the resource.
My response: If visitors aren't using it, if Americans and other tourists aren't there to enjoy what we are trying to protect, then they will no longer care, and others will use them - they will log them, dam them, mine them, and drill them. They will get used, just not in the same way. We have to encourage appropriate use, to build appreciation for and a desire to protect these amazing places, by encouraging appropriate access.
Today (from the Times): "One of the most inventive efforts is in Ohio, where the Legislature is set to approve a bill that would allow drilling for oil and gas in the shale beneath some state parks. Lawmakers say parks would directly benefit from revenues."
As a Western American, I know our Right to Freely Move through Our Lands. California is half-owned by the federal government, in the form of US Forest Service and BLM lands. These lands have always been free (notwithstanding the Los Padres Nat'l. Forest fiasco), and it is as American as apple pie that they stay free to appropriate uses. However, parks have usually had minimal fees - they require higher standards of protection and more intense management because they guard our most cherised natural and historical places. But without funding from government, these places are pressured to increase fees to draconian levels, where they can, and pressured to close - or be opened up to extractive uses - where they cannot. "Customers" is the new buzzword, as unAmerican as that is - limiting access to the history of how we became the freest society on Earth.
I am sure I've opined in previous posts about the sad affairs of California's State Park interpretive (educational) system - how I had to quit my best job as a park interpreter because we couldn't afford to live on a 3/4-time salary, how my park units saw one million people per year (1/3rd the visitation of Yosemite), but only had one 3/4 time interpretive position.
For a quick reminder, here is the Mission of the California State Park System:
"To provide for the health, inspiration and education of the people of California by helping to preserve the state's extraordinary biological diversity, protecting its most valued natural and cultural resources, and creating opportunities for high-quality outdoor recreation."
Sadly, we are way past just underfunding the very mission of the park system. We are actually closing parks.
We have met our recent economic downturn in a much different way than did our forebears some eighty years ago.
I, for one, am ashamed.
Sadly, as the New York Times reports, the catastrophe hitting California's State Park System is more of a nationwide phenomenon.
To sum it up, parks around the country have had few funds, and in the past few years, even these have dried up. In California, we are looking at closing 70 parks, and probably radically altering fees. Closing 70 parks. This is unprecedented, and sad.
Think about this: What do we have to remember about the 20th Century's massive economic meltdown? Many things, of course, but just about the only physical representations are the "C's" park units - parks whose infrastructure was designed and built by the CCC, a Depression-era attempt to put young men to work. These park buildings are often jewels of rough-hewn timber and stone trail steps, with a unique aesthetic, beautifully integrated into the rugged park scenery. In their day, they were beacons of hope to aspiring American visitors, and good, honest work for young men.
What will our legacy be for this economic downturn? According to the NY Times, "Customers... is the new buzzword", the notion that parks are selling goods and services, competing with the likes of Six Flags, WalMart, Sierra Pacific Lumber and Chevron. Gone is the notion that visiting our most treasured natural and historical spots is an American rite and right. Gone is the notion of "visitors". "Customers" is the new buzzword.
A few years back, I stood up during a National Park Service-sponsored conference on visitor use and defended the idea of visitors using parks. Amid concerns from park staff about a sizeable reduction in visitation to parks, a well-meaning professor had made the comment that fewer boots on the ground meant fewer impacts to the resource.
My response: If visitors aren't using it, if Americans and other tourists aren't there to enjoy what we are trying to protect, then they will no longer care, and others will use them - they will log them, dam them, mine them, and drill them. They will get used, just not in the same way. We have to encourage appropriate use, to build appreciation for and a desire to protect these amazing places, by encouraging appropriate access.
Today (from the Times): "One of the most inventive efforts is in Ohio, where the Legislature is set to approve a bill that would allow drilling for oil and gas in the shale beneath some state parks. Lawmakers say parks would directly benefit from revenues."
----------
I am sure I've opined in previous posts about the sad affairs of California's State Park interpretive (educational) system - how I had to quit my best job as a park interpreter because we couldn't afford to live on a 3/4-time salary, how my park units saw one million people per year (1/3rd the visitation of Yosemite), but only had one 3/4 time interpretive position.
For a quick reminder, here is the Mission of the California State Park System:
"To provide for the health, inspiration and education of the people of California by helping to preserve the state's extraordinary biological diversity, protecting its most valued natural and cultural resources, and creating opportunities for high-quality outdoor recreation."
Sadly, we are way past just underfunding the very mission of the park system. We are actually closing parks.
We have met our recent economic downturn in a much different way than did our forebears some eighty years ago.
I, for one, am ashamed.
Sunday, June 5, 2011
A classy piece from a good man
© 2011 Joshua Stark
If you have not yet read it, please read this piece by Bill Magavern on the California Environmental Quality Act (CEQA), which he describes as, "the centerpiece of California's economic democracy." If you think that is a reach, then definitely read it to understand his position.
If you have not yet read it, please read this piece by Bill Magavern on the California Environmental Quality Act (CEQA), which he describes as, "the centerpiece of California's economic democracy." If you think that is a reach, then definitely read it to understand his position.
Thursday, May 26, 2011
Not buying the premises
© 2011 Joshua Stark
California State Senate President pro tem Darrell Steinberg says that a budget deal with Republicans is close, which most likely means that:
A) A tiny cadre of probably termed-out Republicans will support a tax increase, most likely in the form of regressive taxes (sales, vehicle license fees, etc.); and
B) Democratic leadership will probably support environmental regulatory shortcutting in the name of "job growth".
I don't buy either premises.
First of all, the notion that we can re-establish a robust state government relying even more heavily on the backs of the poor and lower-middle class are ridiculous. I've talked about the problem with regressive taxes before, but I'll be clear and concise right here: A tax that disproportionately impacts poorer people is unethical and bad economics, because it devalues dollars by moving more valuable dollars (one dollar is worth more to a poorer person than to a richer one) into a pool of less valuable dollars, it exacerbates the problems of poverty (which require more government expenditures to fix), and it makes government revenues rely upon a more volatile base (poor people's purchasing power fluctuates a lot more than rich people's, which is why everybody wants to be rich).
The second premise is a bit more hidden: If Democrats agree to curtail environmental regulations in order to grow California's economy (jobs), then they are agreeing to the premise that environmental regulations are dragging California's economy.
I've yet to see a study showing this to be true. Further, I've seen studies showing that, if anything, the opposite is true.
To be honest with you, the majority of places where California's economy is in dire straits are those places where:
A) California's environmental regulations have been lax or inconsistently applied;
B) Places where California's economy has always suffered.
Think places like the Central Valley and other poor communities. For goodness' sake, we refer to them as environmental justice communities!
Just consider this another unintended consequence of term limits.
California State Senate President pro tem Darrell Steinberg says that a budget deal with Republicans is close, which most likely means that:
A) A tiny cadre of probably termed-out Republicans will support a tax increase, most likely in the form of regressive taxes (sales, vehicle license fees, etc.); and
B) Democratic leadership will probably support environmental regulatory shortcutting in the name of "job growth".
I don't buy either premises.
First of all, the notion that we can re-establish a robust state government relying even more heavily on the backs of the poor and lower-middle class are ridiculous. I've talked about the problem with regressive taxes before, but I'll be clear and concise right here: A tax that disproportionately impacts poorer people is unethical and bad economics, because it devalues dollars by moving more valuable dollars (one dollar is worth more to a poorer person than to a richer one) into a pool of less valuable dollars, it exacerbates the problems of poverty (which require more government expenditures to fix), and it makes government revenues rely upon a more volatile base (poor people's purchasing power fluctuates a lot more than rich people's, which is why everybody wants to be rich).
The second premise is a bit more hidden: If Democrats agree to curtail environmental regulations in order to grow California's economy (jobs), then they are agreeing to the premise that environmental regulations are dragging California's economy.
I've yet to see a study showing this to be true. Further, I've seen studies showing that, if anything, the opposite is true.
To be honest with you, the majority of places where California's economy is in dire straits are those places where:
A) California's environmental regulations have been lax or inconsistently applied;
B) Places where California's economy has always suffered.
Think places like the Central Valley and other poor communities. For goodness' sake, we refer to them as environmental justice communities!
Just consider this another unintended consequence of term limits.
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