Environmental Economics

Climate Change, Recreation and Inhofe

Yesterday Senator James Inhofe gave an opening address to the U.S. Senate Commitee on Environment and Public Works ' hearing on the Potential Impacts of Global Warming on Recreation and the Recreation Industry--a topic near and dear to John and me.  Enjoy.

Among the highlights...

Price Controls Must Be Popular These Days

If members of Congress represent the will of the people, then all of the people named Will must really like price controls. 

First a price gouging prevention act that, if enforced, amounts to price controls on gas, now an increase in the minimum wage which amount to price controls in the labor market. 

I'm not opposed to income transfer programs to help those in need, but I am opposed to distortionary price interventions that ultimately affect everyone by interfering with otherwise efficiently working markets. 

Teaching economics

Pulled from the RESECON listserv, Stephen Swallow discusses some problems with basic economics and finds that basic economics is basically OK and should be taught as such.

I'm scared...

...because I agree with the The White House.  From the Washington Times:

The House yesterday passed a bill that would make price gouging by gas stations and oil companies a federal crime as prices at the pump surpassed a 1981 record reached at the height of the Iranian oil crisis. The White House, which has threatened to veto the bill, warned the legislation amounts to price controls and would lead to gas shortages and lines like in the 1970s.

An MPG calculator

The Sierra Club wants you to know what you could save with tighter CAFE standards.  They call them 'modernized standards' but really they're just tighter.  Anyway, here's a link to the calculator.  Allow me to work through an example...

Evidence of what I am willing to pay for my sanity

I'm packing up my big honkin' SUV tomorrow with my oversized family of 5 and driving 280 miles (one-way) to Lake Cumberland, Kentucky to visit with friends from Atlanta--who will be driving their oversized family of 5, 330 miles (one-way) in their big honkin' SUV.  Based on the paltry gas mileage we will get--about 18 mpg--I'm figuring our family will consume about 31 gallons of gas. 

At $3.50 a gallon that's $109.  If we could somehow double our fuel efficiency to 36 mpg and still fit the family--say by buying a Toyota Camry Hybrid--we would save $54 in fuel cost round trip*.  For a 4.5 hour one way trip, we are paying an extra $6 per hour to drive the SUV. 

So I ask myself, am I willing to pay $6 per hour to have my 3 kids separated by 2 feet each--two in the middle row, one in the back--rather than be touching each other the whole trip.

Ummm...can I get a big 'Hell Yeah'? 

It's what's not for dinner

Demand and costs rise for best cuts:

Over the past two months or so the cost of producing beef and the demand for it have risen so much that prices are soaring and the supply of top quality beef has dropped. Customers at steakhouses and markets will see the effects in coming weeks if they haven’t already.

...

The demand for ethanol and a harsh winter have caused the price of corn to rise about 60 percent over the past few months. Farmers are planting more corn now, but Mr. Leibtag would not predict a price drop soon.

The price of feed and the higher cost of fuel for transport have led producers to bring their cattle to slaughter when they are younger and lighter so they can save money and get a faster return on their investment.

A heady speculator would stock up on frozen ribeyes today.

Should the EIA revise their forecast?

Odograph shared this surprising graphic about expectations of future gas prices from the Energy Information Administration in the comments section yesterday. Some of us were skeptical and today the oil industry says biofuel push may hurt prices at the pump:

Some executives warn that current fuel shortages could become a long-term problem, leading to higher gas prices.

The oil industry wonders why they should invest in more refinery capacity (i.e., supply) today if the US government will subsidize or mandate renewable substitutes in the future. One thing missing from the oil industry's assertion is that if renewable fuels fill the gap, supply of gas will increase and price will fall. The oil industry might be guilty of a bit of disingenuity on this one. Just a bit.

Note: this has nothing to do with today's high prices, as the article title and some in Congress might suggest.

Climate change section on BusinessAssurance.com

Check out the new climate change section on BusinessAssurance.com. Here is something from their climate change blog:

We are at the beginning of a new era, of a new exciting place to be. But we're also facing a huge level of challenge. A challenge not just for industry, or for assurance providers or for government, but also for us as consumers. We as individuals have to start making carbon choices that we're not prepared to make yet, but that we're beginning to think about.

Industry can help with these carbon choices by helping to guide us, by helping to make the right decisions for them in terms of their carbon history. And government can help us in terms of making the rules simple and easy to work with and transparent and manageable.

Clearly on top of all that, which is also part of the work we've done with "What assures consumers?", is an issue that says that verification is crucial. 70% of people said that for them it was very important that climate change claims were verified.

It's clearly important for us as an assurance provider to provide the right sort of service to deliver something that says "here is a tonne is a tonne", but we need to do that in the least bureaucratic fashion and the most flexible fashion without losing trust in the market.

Though none go with me, I still will follow

I'm back in Boone after my excellent academic adventure and I have decided not to travel this weekend (no turning back, no turning back):

Even as national prices hit a new high of $3.20 a gallon, Roger Boyd, a spokesman for AAA Kentucky, predicted few people would change their travel plans for the Memorial Day weekend because most trips were planned weeks in advance.

The auto club expects that overall traffic this weekend will rise 1.7 percent to 38 million people, with the vast majority -- 32.1 million -- heading somewhere by motor vehicle.

That doesn't mean some people won't alter their habits. Boyd, for example, said the recent price spike could affect optional trips and vacations planned for later in the summer.

Let's just say that I was planning a car trip to Ky this weekend but I've put it off until next month. It could be that I'm forecasting lower gas prices next month or it could be that I'm postponing a trip to see my kids grandmother for a month. Note: My x-mas visit happened sometime in February.