Wednesday, June 15, 2011

More on energy externalities

Great article here at Politico describing the external costs of our energy.
Everyone should read this.

The most important question of our age?

I think this is it: What is the backstop energy source?

The only options right now are nuclear, solar, hydro, geo, and of course fossil fuels like oil, natural gas and coal. Every one has pros and cons, which means this is great stuff for economic analysis. Will nuclear ever be safe? Will coal ever be clean? Will solar ever be cost effective? Is there something else on the horizon?

We know that we have to start addressing these questions, but we can't agree on how to do it.

Here's a link to an article discussing the results of a survey of consumer attitudes. Here's another poll on the same set of issues. Note the serious split between those that say "more" and those that say "less" for just about everything currently on the table. No wonder our politicians can't put together an energy policy... no matter what they advocate, around half the country will be opposed.

Pigouvian tax on gasoline

Interesting article here at 3P.

Note the importance of incentives in affecting behavioral change and the discussion of standards vs. market-based policies. I also like the discussion of the vulnerability to price shocks. Curtailing our use of gasoline is a kind of insurance against economic instability. As much as I like these arguments for raising the price of gas, we also have to recognize reasons for keeping the price of gas low (at least for some users). The U.S. is really big geographically speaking, so within country commerce may depend more critically on cheap transport than in smaller nations. Check out the linked Economist article. It's short and good.

Tuesday, June 7, 2011

Hog farms and water quality

Here's a story from Reuters about command-and-control regs on hog farms that are intended to improve water quality (in Manitoba). This is clearly an interesting application of cost-benefit analysis.

What are the benefits of tighter restrictions? Are these values market or non-market? For the non-market components, what valuation procedures might be used to estimate the monetary value of better water quality?

What are the costs of the restrictions? How might they be estimated?

The Coase Theorem in action

Here's a story at the WSJ about some really rich people arguing over views from their mansions.

Here's the part where the Coase Theorem comes in.

Hat tip: Tim Haab

Wednesday, June 1, 2011

This week

For the rest of the week I'll be in Port of Spain, Trinidad, attending a conference on sustainable development in coastal communities. Read about it here, and here. I'm giving a talk on Friday.