Space-based solar power

Dark bird on a fence

The Pacific Gas and Electric Company is seeking regulatory approval for a space based solar power system. The plan is for a 200 megawatt (MW) facility that will generate electricity from sunlight in orbit and beam it to a ground receiving station using radio waves. Older gamers may recall this technology as the basis of the ‘microwave’ power plants in SimCity 2000. Unfortunately, while the SimCity plants cost just $30,000 and produced 14,000 MW of energy, the 200 MW PG&E facility is expected to cost several billion dollars – far more than ground-based facilities with comparable output. The one real perk of space-based systems in geosynchronous orbits is that they will be exposed to the sun at all times, eliminating the need for storage or load balancing. Some have even speculated that the technology might eventually be able to direct beams of energy directly to facilities (perhaps even vehicles) that require it, reducing the need for transmission and energy storage infrastructure.

I am not sure how to feel about such initiatives. On the one hand, it is possible that space-based solar power will eventually be a commercially and ecologically viable source of energy. On the other, it may be a distraction from the urgent changes that need to occur in the near-term. There are also issues with the emissions associated with space launches, as well as the limited number of slots for satellites in geosynchronous orbit and ‘optical aperture’ issues. For now, it really doesn’t seem like a viable technology. That being said, if a private group can convince regulators that it is safe and environmentally effective, and investors that it is viable, I don’t see any reason to interfere with the attempt.

New Democrats disappointing on climate change

In the past, I have expressed my disappointment with the poor environmental positions adopted by the New Democratic Party (NDP) – most significantly, their oppositon to effective carbon pricing. In the lead-up to the election in British Columbia, I have been joined by a number of respected environmental groups, including The David Suzuki Foundation, the Pembina Institute and Forest Ethics.

Simon Fraser University economist Marc Jaccard has also criticized the NDP climate plan, arguing that it would be ineffective and would cost 60,000 jobs.

The White Man’s Burden

Emily reading Oedipus Rex

William Easterly’s The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good seeks to refute utopian notions of what can be done with foreign aid and military interventions by citing evidence from past disasters. In his analysis, the planners who develop and implement foreign aid plans lack the capability, incentive, and ability to provide what is really needed by the poor. Rather than continuing to empower them in seeking grand solutions, mechanisms should be established through which ‘searchers’ can create meaningful initiatives to deal with specific, tractable issues. One paragraph sums up the basics of Easterly’s view of development:

Even when the West fails to “develop” the Rest, the Rest develops itself. The great bulk of development success in the Rest comes from self-reliant, exploratory efforts, and the borrowing of ideas, institutions, and technology from the West when it suits the Rest to do so.

He argues that Western states should abandon their pretences and most of the approaches they have deployed so far. Because of the fundamental linkages of accountability they create, Easterly holds that markets, rather than bureaucracies, are the ideal mechanism for serving human needs. He does not, however, have an excessive faith in the ability of effective markets to emerge: stressing that they can do so only when social, legal, and political conditions are appropriate. Given that the complexities of these things aren’t even understood in relation to long-standing markets in developed states, he argues that it is unrealistic to try to develop and deploy market creation plans in poor states.

One somewhat curious aspect of the book is a focus on countries which is sometimes too rigid, with less consideration of the economic breakdown within them. Almost always, the most authoritative measure of a country’s success is taken to be the level of GDP and the rate of GDP growth. Comparatively little consideration is given to the distribution of wealth or income. Claims made about different forms of poverty reduction could have been more comprehensively examined through a combination of aggregate data and considerations of distributions.

Easterly acknowledges that health is an area where aid has done unusually well – partly because health problems lend themselves to the kind of high-accountability, distributed solutions he favours. Efforts to eradicate certain diseases with vaccines and medication demonstrate that big, expensive efforts are sometimes justified. Recognizing that, the book is highly critical of health efforts that fail to take into account local conditions. It is also very critical of spending money on AIDS treatment. Easterly argues that such treatment costs about $1,500 a year, in total, with only a few hundred of those dollars for the generic first-line drugs themselves. Since both preventing the transmission of AIDS and treating other diseases can extend the total number of years of human life much more efficiently, he argues that funding AIDS treatment is a gross misallocation of resources. He also argues that it is important to counteract entities that are doing enormous amounts of harm: such as the Christian organizations that push governments and NGOs to back away from condoms, or those that promote useless abstinence education programs. Other education programs can be enormously more effective: such as teaching prostitutes about AIDS and how to prevent it with barriers.

The book completely ignores environmental issues, which I see as a major problem. Climate change is a huge threat to development, and carries many risks of poverty and conflict. Easterly rightly criticizes planners everywhere from failing to anticipate the eventual consequences of the AIDS epidemic, and taking preventative action beforehand. Inadequate global action on climate change threatens to produce a much worse problem. When the book praises Beijing for having eight beltways around its core, it highlights the difference I have seen in other places between pro-growth development economists and others who are more concerned about the environmental consequences of such unbridled activity. While environmentalists are often insufficiently concerned with poverty reduction (sometimes monstrously suggesting that keeping most people in poverty is a good way to lighten the environmental burden), economists are often guilty of ignoring the real impacts and enormous threats associated with being unconcerned with sustainability.

Easterly’s suggests that organizations that provide or distribute aid need to be much more focused on particular, comprehensible tasks and that mechanisms must be in place to evaluate their effectiveness at serving the interests of the people who are the targets of the aid. They should concentrate on providing basic needs in a direct way: things like medicine, seeds, roads, textbooks, and medical staff. Results should be evaluated using scientific approaches (both randomized trials and statistical analyses) conducted by truly independent organizations. The concept of ‘development vouchers’ which could be given to poor people and then used in exchange for development services, from an organization selected by the recipients, is an example of the same general kind of thinking.

The book’s style deserves some criticism. It is written in the form of dozens of little sections, each a few pages long. It can also be rather repetitive. Sometimes, Easterly’s points of rebuttal are glib or unconvincing, delivered in an offhand way without a great deal of logical or empirical justification. That being said, his overall conclusions are well supported by a great deal of statistical, historical, and anecdotal evidence.

In the end, the book is one that ought to be read by all those with a serious interest in international development, and the relations between the developed and developing world. While it is not universally convincing, it is a useful contribution to the overall dialogue and a sensible rebuttal to the excessive idealism (even utopianism) or some plans and political positions. The book is also interesting insofar as it considers what elements produce stable and prosperous societies, and which characteristics lead to misery and stagnation. Those are lessons that can be sensibly applied even within the states which already consider themselves to be fully developed.

Easterly and climate change

Mossy branches

I am continuing to work my way through Easterly’s book, as selected for the blog book club. What I have been finding most interesting about it is actually its description of the complex nature of power and economic structures within society, more than its specific criticisms about how Western aid has been packaged, delivered, and understood. Essentially, the book is a classically conservative critique of the Enlightenment notion that a centralized body with sufficient information and intelligence can transform society for the better. It stresses the intricacy of society’s interconnections, while also highlighting the dangers associated with trying to undertake radical change.

Actually, it is somewhat uncomfortable reading, when you start thinking about how the information applies to climate change. While there is a degree to which top-down climate change policies work by spurring innovation, the real challenge of dealing with climate change is that it requires people to do things that contradict their past experience, and sometimes their near-term self interest. Acting quickly enough to stop climate change requires some degree of the kind of Utopian project-building that Easterly derides, though it is likely that an awareness of some of the pitfalls he considers might help avoid future problems. For instance, it might make more sense to create climate policies that don’t discriminate between technologies or economic sectors – rather than guessing where success will come from and investing directly there.

Two views on carbon pricing

Brick arch and river

The basic idea of carbon pricing is to force people to take into account more of the consequences of their own actions. This is essentially a response to market failures; while there is an incentive to overfish from a commonly-accessible lake, it doesn’t make sense to overfish your own pond. That being said, there do seem to be two possible philosophies for setting the price. One approach is to approximate the total level of harm your actions cause, then set the price at that level. But turning the suffering of others into your suffering, you are given the incentive to minimize the harm, and avoid actions that have more harmful than beneficial consequences. In the context of climate change, however, the overriding task is not simply to emit less, but rather to build a society where people live carbon-neutral lives. Arguably, then, the level of the carbon price should be set so as to make that transition maximally easy, while making sure it happens fast enough to avoid abrupt or catastrophic change.

In the end, this distinction is largely academic, given the uncertainties involved. (There is also the matter of choosing a discount rate, which has enormous effects on your estimate of the net present value of harms that occur in the future.) Since the transition to a carbon neutral society will be a one-off change, we will probably never have the information required to know for certain whether it could have been done more quickly or efficiently. Once the risks associated with inaction are taken into account, it seems clear that we need to establish a carbon price that spurs rapid action and a sustained commitment to economic transformation.

A new stadium for Ottawa?

Tangle of small bikes

Ottawa is currently considering two options for a new stadium: one in the middle of town, the other farther out. Personally, I see no value whatsoever in sports facilities. If private companies want to build them, in keeping with zoning and planning laws, I have no real objection. I do disagree with the notion that they provide benefits to the community sufficient to justify government assistance: whether in the form of direct payments, low-interest loans, etc. The Ottawa Citizen estimates that demolishing the existing structure at Landsdowne and building a new one would cost $185 million, while it would cost about $31 million to retain the existing structure for thirty more years.

While there is a weak case that might be made for professional sports encouraging athleticism, it is an awfully roundabout way for a city government to try to do so. They would be much better off giving children and young people grants for participation in sports, building and maintaining bike paths, or running public sports leagues.

In short, I hope the stadium plan never comes to fruition, at least not with any taxpayer backing.

Dubious ‘Clean Energy Dialogue’ appointment

Squirrel in hail

If Canada’s government was serious about having a Clean Energy Dialogue with the United States, it probably would not have appointed a former oil sands executive to head one of the three working groups. According to DeSmogBlog, the appointee – Charlie Fischer – has 500,000 shares in Nexen, a firm that owns 7% of Syncrude, a major player in the Athabasca oil sands. That is about as clear a conflict of interest as a participant in a ‘Clean Energy Dialogue’ could have.

The logic of subjecting the oil sands to the same carbon price as the rest of the economy is very strong. Firstly, it means that low-cost emissions reduction opportunities in the sector will be realized. Secondly, with an appropriately set carbon price, it will help discourage economic activities that have negative value, once the effects of climate change are taken into account.

The logic gets even stronger when you consider a future integrated North American carbon market: the bigger the market, the more opportunity there is for a single clear price signal to induce the lowest-possible cost emissions reductions throughout the economy.

Are Canadian banks too big?

Mixed media on a Toronto wall

So far, Canada’s banks seem to have fared will in the financial crisis. Unlike in the United States, they are few and relatively forcefully regulated. The current Wikipedia article on Canada’s banks is generous with praise: “Banking in Canada is widely considered the most efficient and safest banking system in the world, ranking as the world’s soundest banking system according to a 2008 World Economic Forum report.” It’s possible that this is a fundamentally superior form of financial regulation. At the same time, it’s possible that this crisis just wasn’t the sort that would test the viability of the big Canadian banks, and that another crisis could.

Given the extreme difficulty of dealing with banks too big to fail, should Canada break up the big banks that exist presently? Would doing so increase the security of the financial system, or diminish it? Also, if Canadian banks should be broken up, when should it be done?

The future of newspapers

In a recent post, Taylor Owen argues that the death of newspapers (if it is happening) is not anti-democratic, because they will likely be replaced by less hierarchical structures. Personally, I think the value of newspapers derives precisely from the resources they have that most websites lack, such as access to powerful figures and the resources required for independent research. While some blogs do have very capable writers and sophisticated analysis, I do think the mainstream media is a very important current flowing into online discussions.

One way or another, I am sure newspapers will survive. They serve too many valuable purposes to be rendered pointless by the internet, and the best of them will eventually develop revenue streams that allow them to keep functioning despite it.

Waxman-Markey climate change bill

Democrats in the American House of Represenatives released a 648-page climate change and energy bill today. The bill is centred around a cap-and-trade system that is intended to reduce American greenhouse gas emissions to 20% below 2005 levels by 2020, and to 83% below 2005 levels by 2050. Other provisions include “a nationwide renewable electricity standard that reaches 25 percent by 2025, new energy efficiency programs and limits on the carbon content of motor fuels, and requires greenhouse gas standards for new heavy duty vehicles and engines.” Overall, the targets are a bit tougher than the ones in the Obama platform were, though this is much more of an opening offer than a final draft. One huge issue which the bill does not yet specify is whether emissions credits will be auctioned or simply given away. Obama’s platform included a very clear call for 100% auctioning, which would be ideal from an environmental perspective.

It will be a long road from introduction through negotiation in both houses towards eventual ratification, and this bill may not make it. Even getting the bill out of the committee Waxman chairs may be a challenge. That being said, it is urgently necessary for a price on carbon to be established and for reductions to begin. Hopefully, legislators will be far-thinking enough to speed that process along, while also establishing a regulatory framework that can be built upon during the coming years and decades.