Environmental Economics

Give CAIR a chance

I'm back from some holiday travels and ready to blog! (if some pesky kids would leave me alone [bah, humbug! ... or in the words of the local version of The Christmas Carol: "horsefeathers!" ... I expect to be visited by "the Guest" tonight]):

A federal appeals court in Washington reversed itself on Tuesday and temporarily reinstated a Bush administration plan to reduce pollution from coal-fired power plants.

In July, the court struck down the rule, saying the Environmental Protection Agency had exceeded its authority in devising a new emissions-trading system to reduce that pollution, and must rewrite the rule to fix its “fundamental flaws.” Environmentalists criticized the decision as a major setback for clean air.

In Tuesday’s decision, the court said that having a flawed rule temporarily in place was better than having no rule at all. The agency must still revise the rule but has no deadline for doing so.

The regulation, known as the Clean Air Interstate Rule had been the centerpiece of the Bush administration’s re-engineering of the Clean Air Act. It set significant targets to reduce pollution around the power plants and in the downwind states whose air quality was affected by the emissions. [keep reading ...]

Here is what the EPA says about CAIR:

On March 10, 2005, EPA issued the Clean Air Interstate Rule (CAIR), a rule that will achieve the largest reduction in air pollution in more than a decade. CAIR will ensure that Americans continue to breathe cleaner air by dramatically reducing air pollution that moves across state boundaries. In 2015, CAIR will provide health and environmental benefits valued at more than 25 times the cost of compliance.

CAIR will permanently cap emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) in the eastern United States. CAIR achieves large reductions of SO2 and/or NOx emissions across 28 eastern states and the District of Columbia. When fully implemented, CAIR will reduce SO2 emissions in these states by over 70 percent and NOx emissions by over 60 percent from 2003 levels. This will result in $85 to $100 billion in health benefits and nearly $2 billion in visibility benefits per year by 2015 and will substantially reduce premature mortality in the eastern United States. The benefits will continue to grow each year with further implementation.

What's not to like about that?

Green x-mas shopping

I'm still away from the env-econ office park so here is another holiday idea from the inbox:

I recently launched Green Any Site, a new web tool which I think would be very interesting for Environmental Economics readers.

GAS is a unique tool that allows users to have a portion of any purchase they make online donated to green charities at no extra cost to them. They can use it wherever they shop online... and thus "Green Any Site".

Ethanol is stupid

From the inbox:

I wanted to pass along a quirky letter to the editor that I saw today on the Concord Monitor’s website.  It was written by a 13-year old, Madeleine Stewart, and is one of those incisive notes that only someone with all the knowledge of youth can write...

Well, here it is (Well done Madeleine, I only hope that I am honing my own kids' economic senses as sharply as Madeleine's parents and teachers obviously have) :

We have been polluting our world too much. Naturally, we have tried to do something about it. What we use to create energy is the big problem, so people have tried to come up with a new, renewable energy source that is easily obtained. We have already figured out several non-polluting techniques: wind, water and solar power. But another attempt is not working out so well: ethanol. The problems start at the very beginning.

Most ethanol is made from corn. However, that corn must be supplied in enormous quantities, and corn is used in much food for humans and animals. If we use corn for fuel, more will need to be grown, on huge farms receiving government subsidies. We are paying extra so that our food can be used for fuel.

The corn is grown using chemical fertilizer, which is awful for the environment. Most pesticides are made from petroleum, exactly what ethanol is supposed to be preventing the use of. Also, the machinery on big farms needs massive quantities of gas.

The next step is even worse. The corn, grown with petrochemicals, must be distilled in factories to become ethanol. These factories need to get their energy from somewhere, and that somewhere is fossil fuels. It takes about nine-tenths of a gallon of fossil fuel to make a gallon of ethanol. Ethanol pollutes the environment about the same amount as if we just used fossil fuel.

To add insult to injury, ethanol is not as efficient as fossil fuel. In short, ethanol is stupid. It just doesn't do what it's supposed to do - namely, reduce our carbon footprint. Our government needs to start focusing its attention elsewhere. Wind, water and solar energy could use some boosting.

MADELEINE STEWART, age 13

Save a tree this x-mas

In away this week, so I'll leave you with some holiday ideas from the inbox:

The site worldchristmastree.com, launched a week ago by two activists from Riga, Latvia is dedicated to save at least a portion of what is lost in this NOT VERY GREEN festivity.

During THIS WEEK most of us will cut or buy a tree just for purpose of strong traditions. We donate money to the World Land Trust to save 1 sq. foot of rainforest in exchange for ones decorated tree photo. So simple!

Over a barrel, FT takes it in stride

Tomorrow's FT has an analysis of the recent oil price drop that's spot-on. The first sentence already says it all:

The plunging oil price is like a dangerously addictive painkiller: short-term relief is being provided at a cost of serious long-term harm.

The rest is worth reading as well, and a few pictures, as always, say a thousand words. Here's one. The article has a few more.

Where I was yesterday

Watching Jodie Meeks score 46 against Appstate in Louisville's Freedom Hall (jeez, it is kindof a dump these days):

The 6-foot-4 junior made 9 of 14 three-point shots yesterday -- tying Tony Delk's UK record for three-pointers in a game -- and topped his scoring average of 21.9 points per game in each half.

Meeks was 14 of 21 from the floor and 9 of 10 from the free-throw line in the highest-scoring game ever by a UK player at Freedom Hall and the highest by any Cat since Dan Issel scored 47 at Alabama in 1970.

Friday Holiday Shopping Suggestion

Looking for that special gift for the overly sensitive vegetarian in your life*:

Burger King Corp. may have just the thing. The home of the Whopper has launched a new men's body spray called "Flame." The company describes the spray as "the scent of seduction with a hint of flame-broiled meat."

The fragrance is on sale at New York City retailer Ricky's NYC in stores and online for a limited time for $3.99.

Or you could just buy a Whopper Junior for $1 and use it as rubdown after your shower.  Assuming you shower of course.

*Things have been way too serious around here lately, so if you're offended by this...LIGHTEN UP!

Some green jobs are costs in benefit-cost analysis

From Forbes (For Job Market, Green Means Growth):

The greening of industry is creating a constellation of new careers, and they're not your everyday forestry professions. Many of them are environmental twists on old professions, like law, or in Makower's case, journalism. Others are engineering careers tied to research in renewable technologies like wind energy and ethanol production. For instance:

-- Emissions brokers: In a market economy, credits to emit greenhouse gases can be traded on an exchange, and brokers facilitate the deal. If the U.S. ever moves to a mandatory trading system, expect this field to boom.

-- Bio-mimicry engineers: This new branch of science uses Mother Nature as a model for solving engineering problems. For example, Atlanta's Sto Corp. created a self-cleaning paint that repels dirt whenever it gets wet, just like the lotus leaf does.

-- Sustainability coordinators: Corporations from AstraZeneca (nyse: AZN - news - people ) to Wal-Mart (nyse: WMT - news - people ) are now employing managers to oversee the economic and environmental components of company efforts.

-- Green architects: With an increasing focus on energy-efficient buildings, a growing number of architects and developers are getting certified to become specialists in green design.

In a standard benefit-cost analysis of an environmental policy that leads to the creation of jobs such as emissions brokers, bio-mimicry engineers, sustainability coordinators and green architects, the cost of these jobs (i.e., wages, salaries and benefits) would go in the cost column. Government policy raises the cost of doing business. Some of these costs are passed on to consumers in the form of higher prices.

These costs, (1) reductions in profit (i.e., producer surplus) and (2) higher prices (i.e., lost consumer surplus) would be compared against the environmental quality benefits (e.g., the value of improved health, better recreational opportunities) that the policy generates in order to determine if the policy is economically efficient (i.e., net benefits are positive).

Cap-and-trade legislation

From Common Tragedies:

There is a new feature up at the RFF website that sums up the activity on climate change legislation in the 110th Congress:

http://www.rff.org/climatechangelegislation

It provides an overview of some of the key issues under discussion.  It also includes a table and chart that sum up 15 or so of the major proposals for cap-and-trade (or carbon tax) programs.  The chart depicts the proposed emissions targets in the various bills; the table sums up the major provisions for key issues.

...

The cavalry is coming

Rich Sweeney at Common Tragedies:

For some reason, we’ve reached a point in this country where no policy is supportable unless it promises to kill at least two birds with one stone. Even if an individual goal, like say mitigating climate change or boosting employment, is worthwhile on its own, we need to tie it’s solution to some other end before we’ll support it, even it the marriage reduces the policy’s effectiveness along both dimensions. As someone who’s clearly pro “green” (whatever that is) this has been my main problem with the green jobs movement. If jobs become an acceptable metric of climate policy success, we’re all in big trouble.

Which brings me to batteries ...