Topic: Regulatory Studies

Lighting for People, not Politics

Unfortunately, there are many good (and sad) examples of Uncle Sam’s insatiable desire to regulate the smallest aspects of our lives.  Legislators can’t even let us decide which light bulbs to buy.  Government believes that it knows best, and is banning the venerable incandescent bulb.

Lighting consultant Howard Brandston makes a plaintive plea for lighting that serves people rather than politics:

The Energy Independence and Security Act of 2007 will effectively phase out incandescent light bulbs by 2012-2014 in favor of compact fluorescent lamps, or CFLs. Other countries around the world have passed similar legislation to ban most incandescents.

Will some energy be saved? Probably. The problem is this benefit will be more than offset by rampant dissatisfaction with lighting. We are not talking about giving up a small luxury for the greater good. We are talking about compromising light. Light is fundamental. And light is obviously for people, not buildings. The primary objective in the design of any space is to make it comfortable and habitable. This is most critical in homes, where this law will impact our lives the most. And yet while energy conservation, a worthy cause, has strong advocacy in public policy, good lighting has very little.

He hopes for a congressional reversal of the ill-considered prohibition.  If that doesn’t work, people do have one more option:  stock-piling bulbs for future use.  Of course, that probably would lead to the creation of a federal light bulb police, tasked with wiping out the black market in incandescent bulbs.  “Use a bulb, go to jail” may become the newest law enforcement slogan!

FTC to Protect Us from Multi-Colored Beer Cans

bud lightRecently Anheuser-Busch  hit upon the marketing idea of selling Bud Light beer in cans decorated with the college-team colors.  As the Federal Trade Commission (FTC) doesn’t have much else to do - it’s not like there’s been say fraud going on in the mortgage market - it quickly turned its attention to the issue, expressing “grave concern” that these team-colored cans would encourage underage and binge drinking.

As quoted in the Wall Street Journal,  FTC attorney Janet Evans said “this does not appear to be responsible activity.”  What’s not responsible is the FTC wasting taxpayer resources wondering what color beer cans we are drinking out of.  When I was an underage drinker, the last thing on my mind was the color of the can.  The ultimate purpose of the marketing campaign is to shift demand away from boring, non-team color beer cans toward team color cans.  If beer drinkers (or can collectors) get some pleasure out of a certain colored can, where’s the fraud or deception in that?

The real purpose of FTC’s interest is revealed in the comments of the Licensing Resource Group, which represents the colleges in protecting their logos.  Almost all the colleges that have asked Anheuser-Busch to stop selling the cans have cited trademark concerns.  Yet none of the cans have any team logos.  While no one would dispute the right of a college to control the use of its team logo, is it really reasonable to conclude that the colleges also own the rights to the use of certain colors?

Virginia Bureaucrats Look to Extort Yoga Instructors

Last month I blogged about attempts by various state governments to regulate yoga instructors by forcing them to obtain a costly government license.  Today the Washington Post has a story on Virginia’s efforts to place the government boot on the necks of its yogis:

The State Council of Higher Education for Virginia recently declared that studios offering yoga teacher instruction must be certified. That involves a $2,500 fee, audits, annual charges of at least $500 and a pile of paperwork.

Let’s call this what it is: extortion.  And if you still harbor the illusion that bureaucrats don’t sit around thinking up ways to pilfer more money from productive members of society, think again:

In Virginia, yoga teacher training first hit the state’s radar late last year after a state employee conducting school audits happened upon an advertisement, said Linda Woodley, the higher education council’s director of private and out-of-state postsecondary education.  Before that, Woodley said, ‘I was not aware they existed, and they were not aware we existed.’

Well congratulations, Ms. Woodley – the yogi community now knows you exist.

Studios can teach lotus poses to as many clients as they like, state officials said. But teacher training programs, which the state views as similar to dog grooming, massage therapy or other classes intended to prepare someone for a job, must be certified under state law. (For instance, Simply Ballroom Dance Teachers Academy, Danny Ward Horseshoeing School and Jiggers Bartending School are certified.)

Virginia citizens should sleep sound at night knowing ballroom dance teachers, horseshoers, and bartenders are government certified.

Woodley said it’s also about ensuring that students who plunk down cash for training programs that can run a few thousand dollars are getting their money’s worth. Plus, she said, being listed on the government registry will give schools a marketing tool, like a Good Housekeeping seal of approval.

Good Housekeeping seal of approval?  Ladies and gentleman, this is the mentality of the state bureaucrats that the federal government has tasked with “stimulating” the economy with YOUR money.

Why Future Net Negative Impacts of Global Warming Are Overestimated: Response to Conor Clarke, Part IV

This post responds to the last of Conor Clarke’s comments on my study, “What to Do About Global Warming,” published by Cato. This series started with the imaginatively titled, Response to Conor Clarke Part I, and continued with Cherry Picking Climate Catastrophes and  Do Industrialized Countries Have a Responsibility for the Well-Being of Developing Nations?

CONOR said:

I think Goklany is a bit picky and choosey with the evidence. … I also like the Goklany paper a lot. [THANK YOU!! I’ll take whatever I get.] But in this case it’s hard to resist. [Emphasis in original.]

To take one example (of several), Goklany’s hunger estimates rely heavily on those published by Global Environmental Change (GEC), which he uses to make the argument that “the world will be better off in 2085 with respect to hunger than it was in 1990 despite any increase in population.” But the GEC produced two estimates of hunger and climate change – one that assumes the benefits of CO2 fertilization and one that does not. Goklany picks the former estimate (I have no idea why), despite the fact the GEC says the effects of climate change “will fall somewhere between” the two. … [I}f you embrace anything other than the most Pollyanish CO2 fertilization estimate – the one that Goklany uses in his Cato paper – we will be living in a world in which climate change puts tens of millions of additional people at risk of starvation by 2085.

My RESPONSE:

First, let me elaborate on my selection of the set of studies that I used in my paper.  Essentially, the selected set of studies (published in Global Environmental Change) was the only one that had estimated global impacts using detailed process models in conjunction with the IPCC’s latest scenarios, and were peer reviewed.  Moreover, they come with a provenance that people who may be unhappy with my results cannot impugn. [This is important only because many people arguing about global warming seem to be more concerned about who did the study and whether the results bolster their predilections, than how the study was done.]  Specifically, virtually all the authors were intimately connected with the IPCC. The senior author of the hunger study was also the co-chairman of the IPCC’s Work Group II, which was responsible for compiling the portion of the IPCC’s latest assessment that dealt with impacts, vulnerability and adaptation. The authors of the water resource and coastal flooding studies were the lead authors of corresponding chapters in that IPCC report. An earlier version of the same set of impact studies was the basis for the claim by Sir David King, erstwhile science advisor to Her Majesty’s Government, that global warming was a more serious threat than terrorism (see here). The Stern Review also drew quite heavily from these studies (see below).

Let’s now turn to Conor’s comments on the hunger study and why I assumed that the benefits of carbon fertilization would be realized in the future. Indeed, the hunger study (Parry et al.) produced two separate estimates — one assuming that carbon fertilization is a reality, and the other assuming zero carbon fertilization.  But the two estimates are not equally likely. There are literally hundreds, if not thousands of experimental studies that show carbon fertilization is a reality (see also here), that higher CO2 not only increases the rate of photosynthesis, but also increases the efficiency of water use by plants (i.e., it confers a degree of immunity to drought), among the many other benefits CO2 bestows on plants and other carbon based life, including all creatures – big and small – in the biosphere that depend directly or indirectly on photosynthesis.  The probability that direct CO2 effects on crop growth are zero or negative is virtually non-existent (IPCC, 2001b: 254–256). Second, the positive effect of carbon fertilization was based on the average of experimental studies; it’s not an upper bound estimate. On the other hand, the notion of “zero fertilization” is an assumption not supported by the vast majority of empirical data. So averaging results from the two estimates makes no sense and would understate the average benefits that would likely result from carbon fertilization.

Notably, the Stern Review, invoked a study by Long et al. (subscription required) to estimate future levels of hunger based on “zero fertilization” using precisely the same study (Parry et al.) that I  – and Conor, in his comments – used. But Long et al.’s results have been disputed by other scientists (also see here), including some contributors to the IPCC’s assessment.  More importantly, Long et al. only suggested that under field conditions, carbon fertilization may be a third to less than half of what is indicated by experiments using growth chambers, not that it would be zero. It also noted that fertilization may be stronger under drought conditions or if sufficient nitrogen is employed. But drought is one of the bogeymen of global warming, and increased use of nitrogen is precisely the kind of adaptation that would become more affordable in the future as countries become wealthier, as they should if the IPCC’s scenarios are to be given any credence.  Indeed, that is one of the adaptations allowed in Parry et al. Also, the fact that crop yields are higher in richer countries is partly because they can more easily afford nitrogen fertilizers (see here, p. 78). In fact, China’s nitrogen use per hectare is already among the world’s highest. For all these reasons, even if one accepts the Long et al. study as gospel, it is reasonable to assume that the effect of carbon fertilization will be closer to the “higher” estimate from the Parry et al. study than to the “zero fertilization” case.

But, more importantly, the uncertainties related to the magnitude of the CO2 fertilization effect is most likely swamped by a major source of overestimation of hunger in Parry et al.’s estimates.

Although Parry et al. allows for some secular (time-dependent) increases in agricultural productivity, increases in crop yield with economic growth due to greater application of fertilizer and irrigation in richer countries, decreases in hunger due to economic growth, and for some adaptive responses at the farm level to deal with global warming, Parry et al. itself acknowledged that these adaptive responses are based on the “current range” of available technologies, not on technologies that would be available in the future or any technologies developed to specifically cope with the negative impacts of global warming (Parry et al., p. 57).  The potential for future technologies to cope with global warming is large, especially if one considers bioengineered crops (see here, chapter 9), which Parry et al. admittedly didn’t consider. Moreover, an examination of the sources cited in Parry et al. indicates that the “current range” of technology is actually based on 1990s or earlier technology. That is, it is not quite current.

The approach used in Parry et al. to estimate the impacts of global warming decades from now is, in essence, tantamount to estimating today’s level of hunger (and agricultural production) based on the technology of 50 years ago. In fact, the major reason why Paul Ehrlich’s Population Bomb turned out to be a dud was that it underestimated or ignored future developments in agricultural technology.

As noted in Part I of this series of responses, ignoring technological change can, over decades, lead to overestimating adverse impacts by orders of magnitude. Notably, due to a combination of technological change and increasing affluence, U.S. death rates due to various water related diseases – dysentery, typhoid, paratyphoid, other gastrointestinal disease, and malaria – declined by 99%–100% from 1900 to 1970.  For the same reasons, during the twentieth century, global death rates from extreme weather events declined by over 95%.

This basic methodological shortcoming, however, is not unique to Parry et al. It is common to ALL global warming impact studies that I have read – and I have read plenty of them.

For all these reasons, the adverse impacts of global warming for hunger (as well as other aspects of human well-being, e.g., due to malaria and coastal flooding) that I used in my paper are, more likely than not, substantially overestimated. And by the same token, ignoring technological change (and not fully accounting for increases in wealth) also assures that the positive impacts of global warming are likely to be underestimated, further overestimating the net negative impacts of global warming.

Therefore, far from being Pollyanish, the estimates used in my paper most likely substantially exaggerate the net negative impacts of global warming. Despite that, those estimates cannot justify emissions cuts that go beyond no-regret actions at this time or through the foreseeable future.

American People to Government: Don’t Mess Up the Economy

The American people get it.  The government is likely to go too far in “fixing” the economy. 

Explains Rasmussen Reports:

Fifty-four percent (54%) of U.S. voters worry more that the federal government will try to do too much to fix the economy rather than not enough. That’s up three points from a month ago and the highest level of concern found on this question since Barack Obama was elected president.

A new Rasmussen Reports national telephone survey finds that just 37% are more worried that the federal government will not do enough in reacting to the nation’s current economic problems. That’s little changed from last month and down from a high of 44% in January.

Last October, as the meltdown of Wall Street dominated the front pages, 63% worried that the government would do too much. By the first week of November, that number had fallen to 46% and it stayed below the 50% level for several months.

Among the nation’s Political Class, (70%) worry that the government will not do enough. As for those who hold populist or Mainstream views, an identical percentage (70%) fear the government will do too much.

Notable is the contrary thinking of the political class.  The vast majority worries that the government won’t do enough.  Unfortunately, this group has far more influence over what government is likely to do than does the general public.

What Recovery?

Despite the ballyhooed cash-for-clunkers program, retail sales dipped in July. Initial claims for unemployment also rose. Housing continues to be plagued by foreclosures. And many banks are still operating under the burden of toxic assets, which inhibits their ability to provide credit. These are not the recipe for an economic recovery. Yet the Federal Reserve is signalling it thinks a recovery is on the way. And President Obama is making happy talk on the economy.

A recovery may very well technically begin in the 3rd quarter of 2009, as signalled by rising GDP. But it is shaping up to be a jobless and joyless recovery. Firms are finding ever new ways of producing and earning some profits without hiring workers. The prospect of higher taxes for health care and to fund all the bailouts understandably makes businessmen cautious about taking on the liability of new workers.

The administration’s economic policy has been behind the curve. The idea of initiating new federal mandates, like health care and cap-and-trade with the attendant higher taxes, is a sure way to derail an economic recovery. What is needed is less spending and broad-based tax cuts. The administration’s economic policy is the real clunker and it is time to trade it in.

Time for a Change in Sugar Policy

Washington’s dysfunctional agricultural policy is costing consumers again.  Limits on sugar imports, designed to protect a few large sugar producers, are driving up prices in a tight market.  Reports the Wall Street Journal:

Some of America’s biggest food companies say the U.S. could ‘virtually run out of sugar’ if the Obama administration doesn’t ease import restrictions amid soaring prices for the key commodity.

In a letter to Agriculture Secretary Thomas Vilsack, the big brands – including Kraft Foods Inc., General Mills Inc., Hershey Co. and Mars Inc. – bluntly raised the prospect of a severe shortage of sugar used in chocolate bars, breakfast cereal, cookies, chewing gum and thousands of other products.

The companies threatened to jack up consumer prices and lay off workers if the Agriculture Department doesn’t allow them to import more tariff-free sugar. Current import quotas limit the amount of tariff-free sugar the food companies can import in a given year, except from Mexico, suppressing supplies from major producers such as Brazil.

While agricultural economists scoff at the notion of an America bereft of sugar, the food companies warn in their letter to Mr. Vilsack that, without freer access to cheaper imported sugar, ‘consumers will pay higher prices, food manufacturing jobs will be at risk and trading patterns will be distorted.’

Officials of many food companies – several of which are enjoying rising profits this year despite the recession – declined to comment on how much they might raise prices if they don’t get their way in Washington.

The letter is the latest salvo fired in a long-simmering dispute between U.S. food companies and the sugar industry over federal policy that artificially inflates the domestic price of U.S.-produced sugar in order to support the incomes of politically savvy sugar-beet farmers on the Northern Plains and cane-sugar farmers in the South. Most years, the price food companies pay for U.S. sugar is twice the world level.

President Barack Obama ran on the platform of change.  How about changing agricultural policies which enrich the farm lobby at consumer and taxpayer expense?