Topic: Energy and Environment

Global Warming Gas Bags

In an op-ed I recently cowrote with Peter Van Doren for the San Diego Union Tribune, I argued that California’s much ballyhooed legislation to cut greenhouse gas emissions by 25 percent by 2020 should probably be taken no more seriously than a New Years’ Eve Resolution.  The legislation has no teeth, it has offers no program to translate wish into reality, and has all the earmarks of any number of empty environmental pledges that have turned to dust with the passage of time.

There are now strong indications that the story line we predicted for California is being played out in Europe as well.  A report just out finds that without additional measures, the EU will only be able to reduce its greenhouse gas emissions by 1.6 percent below 1990 levels. Compare that with the 8 percent reduction promise undertaken by those same countries under the Kyoto Protocol.

One reason why environmental laws often cost less than advertised by the business community is that the goals written into those laws are subsequently ignored.  But as long as politicans gain full credit for promises made and can escape blame for promises broken, this is the sort of thing that is the rule rather than the exception.

Shoot ‘Em Before They Poop Again

If I were to ask you what the number one cause of bacterial pollution in the Potomac, Anacostia, and more than two dozen other rivers on the federal “impaired waters” list, what would you guess?  Sewage discharges?  Stormwater run-off?  Agricultural waste?  How about increased mountains of dung from our supposedly threatened wildlife populations?  You guessed it - because we have done such a good job making the human environment safe for all of God’s creatures, we are destroying the planet.

If you’re rushing off to make a bag of popcorn to watch the upcoming brawl between the National Wildlife Foundation (a polluter-defense league if there ever was one) and Greenpeace, walk, don’t run.  Animal pollution good.  People pollution bad.  But regardless, shouldn’t we at least require Bambi to secure a poop permit - or regulate the time and place at which these river-killing vermin can dispose of their waste product in an environmentally friendly manner? 

All Wet

For wetlands and Commerce Clause groupies, I have a short piece published in the Environmental Law Institute’s National Wetlands Newsletter analyzing the impact of last term’s wetlands-meets-federalism decision, Rapanos v. United States, here. While every critic of the case singles out Justice Kennedy for criticism, I aim equal ire at the failings of Chief Justice Roberts’ short, and equally problematic, concurrence.

Eat, Drink, and Be Merry, for Tomorrow We Die

James Lovelock, the author of the “theory known as Gaia, which holds that Earth acts like a living organism, a self-regulating system balanced to allow life to flourish,” has a new message for us: Never mind, it’s too late, Gaia can’t handle industrialization. Earth will be at least 10 degrees hotter in a decade or two. It’s irreversible. “We are poached,” the Washington Post reports.

So we might as well enjoy ourselves. Burn those fossil fuels. Build those McMansions. Eat those cheeseburgers. We’re doomed anyway.

Or you could recall an earlier doomsayer, Professor Paul Ehrlich of Stanford University, who wrote in 1968, “The battle to feed humanity is over. In the 1970s, the world will undergo famines. Hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now.” He was slightly off. But he kept his job at the prestigious university, he made a bundle on his bestseller, and he still writes for publications like Scientific American. He’s even quoted praising Lovelock in the Post article.

As for Lovelock, he’s the subject of a huge, lavish, sales-boosting two-page profile in the Washington Post. Not to mention respectful reviews in major papers on both sides of the Atlantic. He’s speaking Friday at the respected Carnegie Institution of Washington. Why are people like Lovelock and Ehrlich treated seriously?

Crossposted from Comment is free.

The Myth, and Insight, of Owens Valley

Yesterday’s Washington Post included an article on the political battle between Las Vegas and northern Nevada over access to northern Nevada’s groundwater.

Unhelpfully, the article repeated the myth of Owens Valley, the southeastern California valley that, a century ago, became part of the nation’s first major water rights agreement. Under the deal, valley residents sold their property and water rights to Los Angeles, and much of the valley’s water was carried away by aqueduct to fuel the city’s growth into a major metropolitan area.

The Post repeats the myth faithfully:

The specter of California’s Owens Valley looms over the area, as people recall the aqueducts that almost 100 years ago turned a lush agricultural community into an environmental disaster so that water could be delivered to Los Angeles.

[…]

William Mulholland, as head of the Los Angeles water department in 1904, conceived the idea of an aqueduct from the Owens Valley. “He had no interest in draining the valley, he had no interest in creating that wasteland,” [Bob Fulkerson, state director of the Progressive Leadership Alliance of Nevada] said. “He did not want that to happen, but that’s what did happen because once the siphon was started it was impossible to turn it off.”

University of Arizona professor Gary Libecap, in research he summarized in a Summer 2005 Regulation article, has effectively exploded this myth.

Far from being a “lush agricultural community,” historical data show Owens Valley contained small, relatively low-production farms with a total of only about 50,000 acres in cultivation. Much of the valley’s income came from livestock, not planting. The area featured a fairly short growing season, high elevation, alkaline soils, and poor access to markets. In short, Libecap concludes, “Those data suggest that Owens Valley farmers may have been quite anxious to sell their land to an interested buyer.”

The Los Angeles–Owens Valley deal provided that buyer. Libecap’s research shows valley landowners were offered considerably more money for their property and water rights than what their farms were worth. The payments became even more enticing after the California legislature and courts forced the city to sweeten the deals.

That may ultimately prove the solution to the Nevada problem. As Ronald Coase famously argues, original distribution of property rights will not prove an impediment to ultimate efficiency so long as transactions costs are minimal. Put more simply, Las Vegas likely needs to up its offers to northern Nevada counties in order to get the water it needs. And, given Vegas’s growth rate, that bid is likely forthcoming.

Rent-Seeking Weasels

We’ve all heard about how actor-director Rob Reiner sponsored an initiative in California in 1998 to raise cigarette taxes to fund preschool programs. Reiner then became chairman of the state agency created by the initiative. And then he funneled $230 million of state spending through the ad and PR agencies that had worked on the initiative. And then he spent another $23 million of state money to support Proposition 82 this spring, to create universal preschool programs. He had to resign from his position, and voters turned down Prop 82.

But he’s not the only person sponsoring an initative that would benefit himself, his family, or his friends. A wealthy real estate developer who thought stem cell research would benefit his diabetic son spent $3 million of his own money to get Californians to create a $3 billion taxpayer-funded stem cell research organization, which he then became chairman of.

And now comes Vinod Khosla, a founder of Sun Microsystems and former partner in the fabulously successful Silicon Valley venture capital firm Kleiner, Perkins, Caufield and Byers, and recently number 1 on Forbes magazine’s Midas list of “the people who most successfully use venture capital to create wealth for their investors.” He’s been the subject of two admiring profiles in the Washington Post (one reprinted from Slate) in the past two days for his latest venture: ethanol. If Vinod Khosla says ethanol is a good investment, don’t bet against him. Or against fellow Silicon Valley megamillionaire Bill Gross, who says that “reinventing energy … dwarfs any business opportunity in history.”

But if it’s such a good investment, why is Khosla ”supporting an initiative on this fall’s ballot in California that would tax oil companies to generate $4 billion to help encourage the use of alternative energy,” as Slate writer Daniel Gross notes? Khosla told Post columnist Sebastian Mallaby that he wants just a little help from the federal government, too: “Khosla wants government to require auto companies to make more flex-fuel cars that run on gasoline or ethanol… .  Khosla wants government to require big gasoline distributors to install ethanol pumps at a tenth of their gas stations.” Oh, and a better subsidy.

Taxing your competitors to subsidize your industry is a rent-seeker’s dream. Usually you have to be more subtle about it. But if you have a “green” business idea, you can get liberal journalists to write gushing stories about you without even stopping to ask, “Hey, aren’t you going to benefit from these initiatives and laws you’re pushing? Isn’t that sort of like, you know, corporate welfare? Like we’re always accusing the oil industry of?”

We shouldn’t bet against Khosla. But if his latest investment is really such a great business opportunity, we should feel free to vote against subsidizing it.

No Consensus

The Wall Street Journal reports that “as gas prices again approach $3 a gallon, consumers are buying new vehicles that are faster and heavier than ever,” much to the annoyance of the EPA. Sometimes, no matter how much we hector and even tax and regulate them, the masses just persist in doing what they want to do in defiance of elite opinion. The story reminded me of several other stories that I wrote up recently at the Guardian blog:

A weekend article in the FT comes with this teaser: “A generation ago, Shin Dong-jin was trying to stop South Korean women from having babies. Now his planned parenthood foundation has the opposite problem–there aren’t enough babies being born. He must persuade the country to go forth and multiply.”

Apparently Shin Dong-jin is just the only person in South Korea who knows, at any given time, how many children people should have. But people make their own decisions.

The FT piece reminded me of some other recent articles about how stubborn people just won’t do what the planners want. A front-page headline in the Washington Post read: “Despite planners’ visions, outer suburbs lead in new hiring.” I was particularly struck by the lead:

As a consensus builds that the Washington region needs to concentrate job growth, there are signs that the exact opposite is happening.

Over the past five years, the number of new jobs in the region’s outer suburbs exceeded those created in the District and inner suburbs such as Fairfax and Montgomery counties … contradicting planners’ “smart growth” visions of communities where people live, work and play without having to drive long distances.

Maybe if tens - hundreds - of thousands of people aren’t abiding by the “consensus,” there is no consensus: there is just a bunch of government-funded planners attending conferences and deciding where people ought to live. It’s like, “Our community doesn’t want Wal-Mart.” Hey, if the community really doesn’t Wal-Mart, then a Wal-Mart store will fail. What that sentence means is: “Some organised interests in our community don’t want Wal-Mart here because we know our neighbours will shop there (and so will we).”

Similarly, another Post story reported that the Ford motor company has dropped a pledge to build 250,000 gas-electric hybrid cars per year by the end of the decade. Environmentalists accused the company of backpedalling: it seems not many people want to buy hybrid cars - even though the planners want them to.

Again and again, individuals insist on making their own decisions rather than conforming to planners’ visions and purported consensuses.