Economics – Page 103 – a sibilant intake of breath

Liquid lenses for low-cost eyeglasses

Joshua Silver – a retired Oxford professor – has developed a kind of eyeglasses that can be easily ‘tuned’ for a particular individual in the field. This is possible because the glasses contain sacs of liquid silicone and have syringes attached, allowing fluid to be added or removed. Changing the quantity of fluid effectively adjusts the kind of correction provided by the lenses, allowing them to address any degree or short- or long-sightedness.

10,000 pairs have already been distributed in Ghana, and there are plans to distribute 1,000,000 in India in 2009. Silver ultimately aims to produce enough glasses for 100 million people a year.

Enhancing carbon sequestration in wood

Ordinarily, wood is a relatively temporary storehouse for carbon. While trees absorb it when growing, they re-release it when they burn or rot. A company called Titan Wood is seeking to enhance the sequestration potential of wood by chemically altering it. In so doing, they increase the span of time for which the carbon will be bound up in a solid form; by making the wood stronger (converting soft woods like pine into a form comparable to tropical hardwoods), they also allow wood to be used in a wider variety of applications, displacing more carbon-intensive building options like concrete, metal, and plastic:

Instead of deforesting tropical rainforests for the highest quality hardwoods, we can essentially make them from trees that grow in northern climates. Wood that is grown via sustainable forestry practices and modified with our acetylation process provides a far more sustainable model for producing high-performance lumber. If the wood is both grown and used locally, so much the better.

Unlike woods treated with existing processes (such as Chromated Copper Arsenate), the resulting material is non-toxic.

In the Netherlands, a heavy traffic road bridge is being constructed from this processed wood (the commercial name for it is Accoya). All the wood being used for the construction is from source-certified sustainable species.

This all strikes me as a neat idea, and a potentially good way to store some carbon in the medium term while transitioning towards more sustainable building materials.

The nature and future of wind power

This Economist article discusses the history, technology, and future of wind power. It includes a fair bit of useful information, particularly about integrating wind into the broader energy system:

In addition, the power grid must become more flexible, though some progress has already been made. “Although wind is variable, it is also very predictable,” explains Andrew Garrad, the boss of Garrad Hassan, a consultancy in Bristol, England. Wind availability can now be forecast over a 24-hour period with a reasonable degree of accuracy, making it possible to schedule wind power, much like conventional power sources.

Still, unlike electricity from traditional sources, wind power is not always available on demand. As a result, grid operators must ensure that reserve sources are available in case the wind refuses to blow. But because wind-power generation and electricity demand both vary, the extra power reserves needed for a 20% share of wind are actually fairly small—and would equal only a few percent of the installed wind capacity, says Edgar DeMeo, co-chair of the 20% wind advisory group for America’s Department of Energy. These reserves could come from existing power stations, and perhaps some extra gas-fired plants, which can quickly ramp up or down as needed, he says. A 20% share of wind power is expected to raise costs for America’s power industry by 2%, or 50 cents per household per month, from now until 2030.

In 2007, 34% of the new electricity generation capacity that came online in the United States was in the form of wind turbines; China has doubled its capacity every year since 2004. 20% of Danish electricity already comes from wind, along with 10% in Spain and 7% in Germany. Given aggressive construction plans in Asia, North America, and Europe, wind power definitely looks like a technology with a big future.

Vaclav Klaus on climate change

Recently, Czech President Vaclav Klaus demonstrated the degree to which he deeply misunderstands the issue of climate change:

“Environmental issues are a luxury good,” Klaus added. “Now we have to tighten our belt and to cut the luxury.”

Global climate issues “are a silly luxury good,” he repeated.

Not only is maintaining a stable climate a fundamental requirement for human life and civilization, but it will be future generations who bear the majority of the pain if we fail to reduce emissions quickly. Far from being some unnecessary luxury, cutting greenhouse gas emissions is a vital moral requirement.

In Poznan, Al Gore did a much better job of explaining the ethical situation appropriately:

Very simply put, it is wrong for this generation to destroy the habitability of our planet and ruin the prospects of every future generation. That realization — that realization must carry us forward. Our children have a right to hold us to a higher standard when the future of all human civilization is hanging in the balance. They deserve better, and politicians who sit on their hands and do nothing to confront the greatest challenge humankind has ever faced.

Hopefully, that is a position that will rapidly becomore more widely held among politicians and the population at large.

Energy usage and the US Department of Defence

This article on space solar power (collecting energy from sunlight using one or more satellites in geostationary orbit, then beaming it down to Earth using microwaves) contains some interesting information on American military logistics in Iraq:

The armed forces are America’s single greatest consumer of oil. The Department of Defence delivers 1.6m gallons (7.3m litres) of fuel a day—accounting for 70% by weight of all supplies delivered—to its forces in Iraq alone, at a delivered cost per gallon of $5-20. It also spends over $1 per kWh on electric power (ten times the domestic civilian price) in battle zones, because electricity must often be provided using generators that run on fossil fuels.

This helps explain why militaries have such a keen interest in new energy generation and efficiency technologies.

The information on space solar power is also quite interesting. It actually seems to be a bit less infeasible than I thought, though the launching costs remain a very significant barrier.

Carbon pricing and economic freedom

Post-Dion, it will take a bold politician to revive the idea of a carbon tax in Canada. One ironic consequence of that is that it is likely to produce more ‘command and control’ style environmental policies. Whereas an economy-wide carbon tax (or cap-and-trade scheme with auctioning) would encourage every individual decision-maker to examine the cost of reducing their greenhouse gas emissions, trying to achieve those reductions based on targetted government initiatives requires that political and bureaucratic decision-makers try to perform that analysis: trying to identify low-cost potential emissions reductions, as well as instruments through which they can be encouraged.

I have argued previously that just putting a price on greenhouse gas emissions is not sufficient to drive the change we need, because other market failures and economic structures need to be overcome. With that caveat expressed, it is more than a touch ironic that an anti-tax ‘free market’ ideology that rejects carbon pricing may lead to centrally planned solutions emerging, as opposed to market-directed ones.

A related irony concerns the timing of mitigation. As Joseph Romm has repeatedly pointed out, we have the opportunity today to begin the transition towards a low-carbon economy in a relatively voluntary way. Nobody needs to be banned from doing essential; rationing is not required. All we need are sensible economic instruments and accompanying policies, provided we get started right away. By contrast, if we squander the opportunity we have now, achieving the stabilization of the atmospheric concentration of greenhouse gasses will require that far more onerous burdens be placed on individuals. In short, today’s unhampered freedom to emit greenhouse gasses is inexorably linked to the necessity of sharply dimininished freedoms in the future.

Fatih Birol on peak oil

In an interview with British journalist George Monbiot, Fatih Birol, the chief economist of the International Energy Agency made the following predictions about when peak oil output for non-OPEC and OPEC states would be reached:

“In terms of non-OPEC [countries outside the big oil producers’ cartel]”, he replied, “we are expecting that in three, four years’ time the production of conventional oil will come to a plateau, and start to decline. … In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is of course not good news from a global oil supply point of view.”

Coming from a representative of this particular organization, that is quite a surprising statement. Traditionally, the IEA has downplayed any suggestion that global oil output could peak before 2030. A peak in 2020 suggests that we have a lot less time than most firms and governments have been expecting to transition to a post-oil, post-gasoline, post-jet fuel future.

An early peak in oil output could have an enormous effect on both the development of the global economy and climate change. What effect it will have depends on many factors: three crucial ones being the timing of the peak, the severity of the drop-off in output afterwards, and the investment decisions made by states and firms. If we want to continue to produce enough energy to run a global industrialized society, and we also want to avoid the worst effects of climate change, we need to ensure that renewables (and perhaps nuclear) are the energy sources of the future, and that efficient means of energy storage are developed for vehicles.

Unions and seniority

Given the very high level of interest people have had in this previous discussion of the OC Transpo strike and unions in general (78 comments so far), it seemed worth initiating a second discussion on the matter. Since the union is saying that the major purpose of this strike is to retain the right to have bus routes assigned on the basis of seniority, the general issue of seniority and unions seems to be worth considering.

There do seem to be some valid reasons for supporting higher pay and greater privileges for more senior individuals. Among those are the issue of experience, which those who are senior to an organization can be expected to have in greater amounts, and perhaps the facilitation of standard lifestyle transitions: from youth to adult life, and from that to retirement.

At the same time, there seem to be valid reasons to oppose perks based on seniority. In situations where something worth rewarding is often correlated with seniority, but can be measured easily, it seems to make sense to measure and reward it directly. That way, rather than assuming that ten years on the job makes you more capable, you can reward those who actually demonstrate capability in a day-to-day manner. Another argument is that basing a large share of pay and benefits on seniority rewards the mediocre at the expense of the excellent. Those who are very active and engaged get paid no better than those who perform the minimum obligations of the job. Aside from providing a disincentive for talented people to be part of the organization, that seems basically unfair.

I am not disputing the freedom of unions and employers to negotiate whatever terms seem best to them. I am simply seeking to open a discussion on the advantages and disadvantages of favouring seniority: from the perspective of union members, management, and those who consume the products of services the union members and management provide.

Obama and manned spaceflight

Apparently, Barack Obama is thinking of curtailing NASA’s future manned spaceflight activities. Specifically, there has been talk of canceling the Ares 1 rocket and scaling back the Orion Crew Exploration Vehicle. If true, the news is welcome. There is very little evidence that ongoing manned programs – including the Space Shuttle and International Space Station – are generating useful science or providing other benefits. There is even greater doubt about the usefulness of returning to the moon.

Space exploration is an activity best undertaken by robots. They are cheaper to send up than humans and more capable. Given the very limited value provided by sending live people into space, it is something the United States should discontinue. At the very least, it is something that should be sharply scaled back while the government works to address America’s severe debts and other problems.

Ranking energy technologies, from wind turbines to corn ethanol

Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford, headed up a study to quantitatively evaluate different electricity generation options, taking into consideration their impacts on climate, health, energy security, water supply, land use, wildlife, and more:

The raw energy sources that Jacobson found to be the most promising are, in order, wind, concentrated solar (the use of mirrors to heat a fluid), geothermal, tidal, solar photovoltaics (rooftop solar panels), wave and hydroelectric. He recommends against nuclear, coal with carbon capture and sequestration, corn ethanol and cellulosic ethanol, which is made of prairie grass. In fact, he found cellulosic ethanol was worse than corn ethanol because it results in more air pollution, requires more land to produce and causes more damage to wildlife.

It is naturally very difficult to assess the validity of any particular research methodology, given uncertainties about matters like the future development of technologies, the evolution of the global economy, the availability of fossil fuels, and so on. Nonetheless, it is good to see serious work being done on comparing the overall appropriateness of different energy technologies. Given the unwillingness of many states to impose serious carbon pricing solutions, and the tendency of governments to ‘pick winners’ when it comes to technologies being subsidized, the more high quality data available, the better.

While I haven’t looked over the study in detail, it does seem like the strongest objections raised against nuclear (which is ranked very badly) aren’t really about the environment or economics. The risk Jacobson highlights most is that of nuclear proliferation, and the dangers associated with making fissile material more widely available. Proponents of a nuclear renaissance probably won’t be keen to see discussion of “the emissions from the burning of cities resulting from nuclear weapons explosions potentially resulting from nuclear energy expansion.”

The entire study was published in Energy & Environmental Science, and can be accessed online.