Here's an interesting story (from the LA times, oddly enough) about waste-to-energy in NC hog farms.
Same story with more detail here from the Charlotte Observer.
More here from the Raleigh News and Observer.
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19 comments:
I find it impressive that North Carolina is helping lead the way for developing new ways to create energy especially when we use waste as a power source. I recently also read this article (http://onforb.es/JSQOSW) about Apple's plan to develop a 100% clean energy data center in Maiden, NC. It involves using a combination of fuel cell, solar power, and burning methane gas from the Catawba County Landfill to produce the large amounts of energy the facility will demand.
The Yadkin River Valley is one of the areas of the state most impacted by agricutural pollution.
Anything that can be done to reduce pollution and at the same time increase a farmer's profitability is a great thing.
I am not a fan of the "renewable energy law" signed by the governor.
I also do not believe that pollution credits should be bought and sold from one company to the next.
James,
Why are you not in favor of pollution credit trading? It has proven to be the most effective means of pollution reduction ever employed. Tradable permits significantly accelerated the phase-out of lead from gasoline and lead to major reductions in acid rain from SO2. Pollution trading saves money, increases profits and reduces pollution all at once.
A similar concept (tradable quota) appears to be the best available solution to fisheries depletion.
This is great technology that I hope all the NC hog plants convert to in the coming years. Would this help to reduce energy costs for more than just the hog plants?
I do not dispute the outcomes acheived from pollution credit trading.
My objection os simply philosophical.
I believe that each polluter should be responsible for the pollution they actually produce.
The trading of pollution credits encourages the use of production facilities that no longer operate efficiently.
The discouragement of new technological innovation and adaptation is another consequence of pollution credit trading.
My main objection with pollution credit trading is that it encourages production facilities to operate at levels that do not maximize their production possibilities.
James,
Pollution credit trading creates an incentive for innovation in abatement tech. It does not discourage it. Pollution trading discourages inefficient polluters.
If you think that polluters should be responsible for their pollution then you should be in favor of permit trading.
I understand, and cede, your point.
My point is:
If you are not able to maximize your production(whatever the reason) you are not operating efficiently.
A facility that is not able to achieve maximum production b/c of circumstances it can control (abatement technoloy) is not an efficient operation.
The closing of the inefficient facility, would lead to a drop in supply. This shortage would cause prices to rise and encourage new entrants into the market, or increased production from efficient(pollution compliant) facilities.
These new entrants, or increases in production, would reestablish market equlibrium and allow for the removal of the non-compliant polluter from the market.
I will go so far as to argue that the new entrant(s), and/or increased production from pollution compliant facilities, and the closure of the non-compliant pollution producer would actually cause a rightward shift in supply(since all production is now maximized) and lead to greater efficieny across the entire market for all participants and for any affected third parties.
Why is my logic incorrect?
I'm not sure I'm following you, but I think your argument fits nicely within the permit system.
There will always be some firms with less developed technology than other firms. If having older tech leads to lower profits, then over time we'd expect that some of those firms will leave the market on their own or adopt the newer tech. If the less efficient firms have the option of polluting (and paying a fine) or purchasing permits, then we'll get the same result that you suggest: costs will increase, profitability will fall, and some of these firms will exit the market, potentially being replaced by new entrants.
Let's take farms as an example. Some farms have new technology (efficient combines that don't pollute much), some have older technology (less efficient tractors that pollute more). You seem to be suggesting that we force the less efficient farms to cease production. But if those farms have to pay for a permit to produce/pollute or pay a fine for pollution, won't that serve as an incentive to adopt the better technology or leave the market?
I was assuming that the less efficient farm would continue to remain that way since it had apparently achieved an equilibrium where MR=MC even when adding in the cost of the permit, or fine.
If MR does not = MC for the less efficient farm including the cost of the permit, or fine, then the farm would cease to produce, and not purchase the permit, or pay the fine.
Is it not true that the cleaner producer gives up some production capacity in order to sell a permit to the dirtier producer?
Does this unused production capacity not create inefficieny?
How does the market reconcile this inefficiency caused by the loss of production when determining the "efficient" level of pollution and establishing permit prices and fines?
The less efficient firm may well have been at their own profit-max equilibrium before the system is implemented, but with the permit system they will have to pay more to pollute or they will be forced to adopt the new abatement technology.
The cleaner firm will only free up capacity to sell permits if it is in their best interest to do so, so by definition any trades are efficiency-enhancing.
Here is more on the topic:
http://www.edf.org/climate/how-cap-and-trade-works
http://www.adamsmith.org/80ideas/idea/38.htm
Dr. Peter Schuhmann said...
The cleaner firm will only free up capacity to sell permits if it is in their best interest to do so, so by definition any trades are efficiency-enhancing.
Because it is a free market.
I was assuming that there was a government mandate in place that forced the buying and selling of permits among firms.
Thanks for your time and the links.
Trades are voluntary.
This really excites me because many of my friends and family own hog or poultry farms and they could benefit economically from such opportunities, particularly if the electric company is purchasing the power are a profitable rate for the farmers. I have also heard about the research begin done this summer with NC hog lagoons and growing algae to be made into a biofuel. Here is an article that I found, though it doesn’t talk about the research that is specifically being done in hog lagoons, it is relevant.
http://www.starnewsonline.com/article/20091129/articles/911299972?p=1&tc=pg
I think it is so great that so much can come out of this one waste processing center and that so many people are able to benefit from it. The farmer can benefit because it powers his farm and also providing fertilizer from the toxic ammonia which benefits the people around the farm as well. Even the pigs benefit from a cleaner farm. It is also interesting that this is in North Carolina, with so many hog farms around I feel sure this new technology will spread quickly, especially if we can come up with incentives for the farmers to use this new technology or we create cheaper ways to use it.
It seems neat that hog waste can be turned into energy. If technology can do that, it makes me wonder what else technology could do potentially. Could cars run on hog waste? It would be helpful if they could. Energy produced from hog waste has the potential to solve many environmental issues and boost the economy for the better.
I think this is amazing that Duke University funded this for Bryant's system. What I also really like is that this system not only manages the toxic waste, but converts it into nitrogen to use as fertilizer. Like Terri, I am also interest to see if these reduced energy costs would help other areas? I remember in my microeconomics class talking about the Duplin county hog slaughter house and the pollution it caused to residents. I think systems like Bryant's would benefits society all over the U.S.
I believe the fact trading is voluntary makes this a postive act. I believe a creative economy is the fuel of magnificence!
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I think it is wonderful we are making this sort of progress and really going outside the box. Everyone can benefit from this and hopefully it will catch on and more will follow suit. If cars can run on used cooking oil then why not also on hog waste!?!
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