Topic: Energy and Environment

Obama Knows the Drill

President Obama should be credited—albeit cautiously—for his announcement yesterday that he will open some U.S. coastal waters to offshore oil drilling.  The fact that this is an interesting political reversal on Obama’s part has been treated extensively elsewhere.  But what of the substance of the president’s drilling proposal?

I and other free-market advocates have spoken for years of the potential energy benefits of allowing this drilling, so I won’t devote too much space to repeating myself.  The best encapsulation of my own thinking on the subject is this piece I wrote for the LA Times in 2008.

A few points worth adding:

Obama’s press conference at Andrews Air Force Base yesterday did indicate a welcome new direction for U.S. energy policy.  But in an absolutely perfect world, the government would not be in the business of allocating scarce resources—in this case, the offshore oil fields—to competing user groups. The market would play that role.

Hence, the best policy would be to divest this land via auction and allow environmentalists, recreationalists and preservationists to compete with oil and gas companies for the rights to those resources.

It is not at all inconceivable to me that those opposed to drilling, whatever their reasons, might well out-bid extraction industries for rights to some of these fields. Unfortunately, there seems to be limited political support for privatization, so President Obama’s initiative is probably better than the status quo.

We need to remember, however, that if governments could intelligently allocate scarce resources across the economy without recourse to market information or institutions, then the North Korean economy would work swimmingly.

Celebrate Human Achievement Tonight

Environmentalist groups and celebrities are celebrating “Earth Hour” tonight. They ask that you turn your lights out for an hour, to call attention to global warming.  Folks at the Competitive Enterprise Institute suggest that “this sends the wrong message – to plunge us all into darkness as a rejection of technology and human achievement.” In fact, they point out that it’s Earth Hour every night in North Korea, where people lack basic freedoms, as well as affordable, reliable access to many human achievements, such as electricity. Check out this famous photo of environmentally conscious North Koreans observing Earth Hour all night, every night.

CEI rejects the rejection of technology. They have declared the hour between 8:30 and 9:30 tonight to be “Human Achievement Hour.” To join the celebration, just turn your lights on tonight and enjoy the human achievement of light when we want it. And watch CEI’s short video history of human achievement here.

Yglesias Is Baffled

Progressive blogger Matthew Yglesias says he is baffled by my previous post here about whether urban sprawl is the result of individual choice or government regulation. Ben Adler, a Newsweek blogger, weighs in as well.

You can read my detailed response to Yglesias on the Antiplanner blog. In a nutshell, Yglesias claims that my argument is a “complicated counterfactual hypothetical about whether or not most people would still prefer to live in large single-family homes even in the absence of regulatory restrictions.” In fact, my argument is that the government regulation that he claims forces people to live in urban sprawl does not even exist.

As near as I can tell, Yglesias has lived his entire life in New York City, Massachusetts, and the DC area, all of which have had highly prescriptive land-use regulation during most of Yglesias’ life. So he might be excused for thinking everywhere else is just like that. In fact, most of the country has never had such regulation. Instead, what regulation exists, in the form of zoning, has been entirely responsive to the market.

As a libertarian, I have repeatedly challenged progressives like Yglesias to join me in supporting the abolition of all zoning codes and other forms of government land-use regulation. Instead of accepting my invitation, Yglesias and Adler would rather pretend I am a hypocrite for supporting such regulation.

A Libertarian View of Urban Sprawl

On Thursday, March 18, John Stossel’s show on the Fox Business News network will feature a discussion of how taxes and regulation have prevented urban areas like Cleveland from recovering from the decline of the industries that once supported those regions.

While the “stars” of the show were Drew Carey and Reason Magazine’s Nick Gillespie, Stossel spent a few minutes on zoning and land-use regulation. When searching for someone to advocate such land-use regulation, they happened to ask James Kunstler, author of The Geography of Nowhere, a critique of suburbia.

Kunstler’s response was emphatic. First, he called one of Stossel’s other guests (okay, it was me) “a shill for the sprawl-builders.” Then he added, “Please tell Stoessel [sic] he can kiss my ass.” He was so proud of this response that he posted it on his blog (look for it in the archive if it has disappeared from his home page).

Kunstler is biased against mobility and low-density housing, but he must be a good writer because he has lots of fans. As soon as he posted his rude reply, the blogosphere lit up with arguments from progressive, conservative, and even libertarian writers claiming that sprawl is the result of central planning and zoning and therefore libertarians such as Stossel and Cato should support smart-growth policies aimed at containing sprawl.

Sprawl is “mandated by a vast and seemingly intractable network of government regulations, from zoning laws and building codes to street design regulations,” claims conservative Austin Bramwell. As a result, “government planning makes sprawl ubiquitous.”

Anarcho-libertarian Kevin Carson quotes The Geography of Nowhere as the authority for how planners like Robert Moses forced people to live in sprawl. “Local governments have been almost universally dominated by an unholy alliance of real estate developers and other commercial interests” that insisted on urban sprawl, says Carson.

Progressive Matthew Yglesias describes sprawl as “centrally planned suburbia” and accuses libertarians of being hypocrites because they don’t oppose zoning codes that mandate sprawl. He adds that “People sometimes cite Houston as an example of a libertarian-style ‘no zoning’ city, but this is mostly a myth” (citing a paper that finds that Houston “regulates land use almost as intricately as cities with zoning”).

This is all balderdash and poppycock. People who believe it should get their noses out of Kunstler’s biased diatribes and look at some real data and see how zoning actually worked before it was hijacked by authoritarian urban planners. It doesn’t take much to show that areas without any zoning or regulation will – if developed today – end up as what planners call “sprawl.” Until recently, all that zoning has done has been to affirm the kind of development that people want.

Contrary to Carson’s claim, zoning was not invented by developers trying to impose their lifestyle preferences on unsuspecting Americans. The idea that realtors and developers could somehow force people to buy houses they didn’t want is refuted by hundreds or thousands of real-estate developments that failed financially because they did not offer what people wanted. Unlike planners who write prescriptive zoning codes, developers who risk their own money are going to make every effort to build things that people want because if they don’t, the developers themselves will be the losers.

Instead, zoning was invented by homeowners in existing developments who wanted to insure that their neighborhoods would maintain some degree of stability. When zoning was first applied, it was used almost exclusively in areas that were already developed. Those original zones merely reaffirmed the development that was already there. Single-family neighborhoods were zoned for single-family homes; apartments for multi-family; industrial for industry; and so forth.

Single-family homes in Euclid, Ohio.

The Supreme Court’s 1926 Euclid decision was not over vacant land but an existing neighborhood of single-family homes. A realtor wanted the option of building an apartment building in this neighborhood. The court realized that an apartment building could attract higher rents if it were located in a stable neighborhood of single-family homes, but conversely it could reduce the value of the nearby homes. Rightly or wrongly, the court decided that the rights of homeowners to maintain their property values exceeded the right of one property owner seeking to boost the value of his property at everyone else’s expense.

After the Euclid decision, most American cities zoned their neighborhoods. Planners criticize “Euclidian zoning” because most zones separate housing from other uses. But such separation was the prevailing standard in developments after about 1900, and zoning merely affirmed that standard because most of the land that was zoned was already developed.

Most vacant land in a metropolitan area is outside of city limits under the jurisdiction of county governments, and until the 1960s and 1970s most states did not give counties the authority to zone (some still don’t). As Robert Nelson pointed out in his book, Zoning and Property Rights, when cities or counties did zone vacant land, they generally put it in a “holding zone,” meaning that it was zoned for a low density until some developer saw a market for something else. The developer would then ask the city or county to rezone for the market, and the city or county almost always complied.

People look at these low-density holding zones and charge that they force sprawl. It would be true if the zones were inflexible, but in fact the cities and counties were responsive to market demand: when a landowner or developer came forth with a proposal, the city or county generally reclassified the land into an appropriate zone. NIMBYs who expected that the low-density zones would remain forever were doomed to disappointment, and they often accused city/county commissioners of somehow being in the thrall of the developers. But the developers themselves were just reflecting market demand and city officials did not consider it their job to dictate what kind of homes or other buildings people should build and buy.

To his credit, Matthew Yglesias actually looks at some real data, namely the zoning code for Maricopa County, Arizona. But he misreads the code – or misleads his readers – when he implies that the densest zoning allowed is duplexes. In fact, chapter 7 of the code provides for multi-family housing with as many as 43 units per acre. An even bigger omission is the “planned area of development” (elsewhere called planned unit developments) zone in chapter 10, which allows for high-density, mixed-use developments. Every zoning code I have ever seen has included such a zoning option.

Whatever the code says, just reading it offers no idea of how flexible it is. If a significant chunk of vacant land is in one zone, but a developer thinks there is a market for another zone, most cities that haven’t yet fallen into the smart-growth fad will cheerfully change the zone or allow a variance. Obviously, this wouldn’t happen to a single vacant lot in the middle of an otherwise developed area, but would frequently happen to pieces of land that were, say, 100 acres or more. Maricopa’s PAD zone, for example, allows anyone with 160 acres to build a classic New Urban (mixed-use, high-density) development.

These homes were built in a suburb of Houston that has no zoning and no land-use regulation, so – according to sprawl critics – this must not be sprawl.

As noted, Yglesias also points to land-use regulation in Houston, which supposedly enforces sprawl. It is true that Houston regulates such things as setbacks and building heights. But it does not regulate uses: you can build a 7-Eleven in the middle of single-family homes or an apartment building in an industrial district. To the extent that Houston has a separation of uses, it is because that is what people want. Convenience stores want to locate on busy streets where they are visible to lots of potential customers, so they don’t often locate in the middle of neighborhoods of single-family homes. People don’t want to live in industrial districts, so you don’t see too many apartments in them.

If you don’t believe Houston is unregulated, just step across the city line into Harris County or any of the eight counties adjacent to Harris County. Texas counties aren’t allowed to zone, so there you will find virtually no regulation (other than building codes), yet you still find developments with the classic separation of uses and low-density development that planners derisively call sprawl.

This subdivision is in Germany. Does that mean that German laws are also forcing people to live in sprawl?

And if you don’t believe that, take a look at Wendell Cox’s rental car tours of European (and other) cities. Few would argue that Europe has forced people to sprawl, yet Cox shows that European cities are rapidly spreading out with low-density developments that (as Peter Hall says on page 873 of his massive tome, Cities in Civilization) are “almost indistinguishable from [their] counterparts in California and Texas.” (In a more recent article, Cox also refutes the completely undocumented claim that Americans are deserting the suburbs to move back to central cities.)

American cities sprawl because Americans, like people all over the world, prefer to live in single-family homes and like to have a little land they can call their own for gardening, entertainment, and play areas. The automobile made it possible for almost everyone to achieve this dream, where before the auto only the upper classes could do so. As John Stossel noted back in 2006 (when Kunstler had accepted his invitation to be on his show), restrictions on sprawl will destroy “the lives of poor people” because they basically tell “low-income people who want back yards that they can’t have one” (to which Kunstler supposedly replied, “you can’t have everything”).

So which is the appropriate libertarian view? To tell low-income people that they have to live in multi-family housing because social policy has made single-family homes artificially expensive? Or to simply eliminate zoning codes (which, contrary to Yglesias’ claims, every libertarian I know advocates) and let people do what they want (including, if they want, living in high-density developments or low-density developments with deed restrictions providing the stability that zoning once offered)?

Sprawl is not the result of central planning and libertarians need not hesitate in their opposition to smart growth. The real hypocrites are the so-called progressives like Yglesias who claim to care about low-income and disadvantaged people yet support policies that will prevent most such people from ever owning single-family homes.

Tufts Academic Gives Two Thumbs Down to Cheap Food

I suspect I may be falling into a publicity trap here, but nonetheless I am unable to resist blogging about an email I received this morning from the Global Development and Environment Institute at Tufts University.  The email contained this teaser:

How does cheap food contribute to global hunger?  GDAE’s Timothy A. Wise, in this recent article in Resurgence magazine, explains the contradictory nature of food and agriculture under globalization. He refers to globalization as “the cheapening of everything” and concludes:

“Some things just shouldn’t be cheapened. The market is very good at establishing the value of many things but it is not a good substitute for human values. Societies need to determine their own human values, not let the market do it for them. There are some essential things, such as our land and the life-sustaining foods it can produce, that should not be cheapened.”

This sort of stuff could only be written by someone on full academic tenure and who has never had to worry about feeding his family.

It would take many hours to rebut all of the idiocies contained in the full article, but for now I will just say: Yes, it is true that U.S. government subsidies for corn, for example, cause environmental damage in the Gulf of Mexico (Cato scholars have in fact covered this before as part of our ongoing campaign to eliminate farm subsidies). And yes, poor farmers abroad have suffered because of government intervention in food markets. But those are problems stemming from government intervention, not the free market.

Do You or Do You Not Hate America?

Sen. John Kerry (D, MA) made an, er, interesting rhetorical case yesterday (as reported on E2 Wire, The Hill’s Energy and Environment blog) that borrows heavily from the Bush playbook: your patriotism hinges on voting for his favored policy — in this case, a climate change bill. Not that the bill is really about climate change, of course. It’s about a list of goodies completely unrelated to the changing political winds:

What we are talking about is a jobs bill. It is not a climate bill. It is a jobs bill, and it is a clean air bill. It is a national security, energy independence bill,” he told reporters in the Capitol…

“And people are going to have to decide whether they are going to vote for America or against it,” he concluded.

India Explicitly Rejects Bringing Environmental Issues Into WTO

An article today in BRIDGES Weekly Trade News Digest (What? You don’t subscribe??) contains an explicit rejection by India’s trade minister of the idea that carbon border tax adjustments belong in the WTO’s agenda.  Border tax adjustments in this context refers to de facto tariffs that would “level the playing field” for domestic producers competing with foreign producers not subject to climate change policies of an equivalent rigour, also called “border carbon adjustments” or variations on that theme.

While Minister Khullar predicts that these sorts of measures will be in place in 2-3 years time, he rejects that the WTO is the forum to deal with environmental issues.

Furthermore, countries introducing such measures can expect litigation:

India and other developing countries will undoubtedly challenge the true impetus behind the [border carbon adjustment] measures.

“Such measures imposing restrictions on imports on the grounds of providing a ‘level playing field’, or maintaining the ‘competitiveness’ of the domestic industry, etc are likely to be viewed as mere protectionist measures by the developed world to block the exports of the poorer nations,” [a recent report from an Indian think-tank closely connected with the Indian government] reads. “This is because there is little empirical evidence that companies relocate to take advantage of lax pollution controls.”

The [report] argues that such unilateral trade measures will inevitably lead to tit-for-tat trade retaliation that could spiral into an all-out trade war. Such warnings have also been raised by China and several think tanks following the issue.

I’ve written before on the dangers of introducing climate change issues into the WTO (and Dan Griswold has written more broadly on why labor and environmental standards don’t mix well with the aim of freeing trade) but this is yet another firm, unequivocal warning to developed countries that their proposals (and they are still just proposals at this stage) will have consequences. Developed country politicians who insist on forcing rich-world standards on the poor world should listen carefully.