I started working on this project maybe a year and a half ago. It turns out, recording an album on your own is a lot of work. Why do many of us take on challenging creative projects with dubious rewards? It’s something I continue asking myself, and I think I’ve explored it far enough to know that the answer is not, simply, “for fun”.

On the micro-scale, this is true in many ways. The individual decisions of millions of businesses, communicating through prices, add up to a system that satisfies most people’s wants with a dizzying array of constantly-improving products. We don’t need a giant bureaucracy to set the price of raisin bagels or determine how many electric lawnmowers should be built.

However, what I’m now discovering is that there is no “invisible hand” analogy on the macro-scale. The “natural” macroeconomic outcome of an entirely free market is abhorrent. Devastating cycles of boom, bubble, and recession; ever-more concentrated wealth; terrible working conditions for the poor; and, perhaps, resource depletion and collapse. It’s entirely up to the government (and, in some cases, labor unions), to guide the market with fiscal policy (government spending), monetary policy (mainly the interest rate), and human rights protections, and to clean up after the market with social welfare programs.

The hands are quite visible. So how much do you trust your government? They’ve been doing a bang-up job lately. Poor monetary policy (years of super-low interest rates, among other problems), contributed greatly to the housing bubble and our current Great Recession.

I just think it’s important to remember when certain pundits and Wall Street executives plead for small government and financial deregulation, that there is no reason to believe that would help in macroeconomic terms.

On the micro-level — when you are talking about things like price tariffs, subsidies, restrictions on trade, product standards — there is a justification, at least in theory, to call for “smaller government” or deregulation. Because here the market allocates resources more efficiently than the government would (again, at least in theory). But we already know what happens to the macroeconomy, left to its own devices, and that is everyone but the fabulously rich and very lucky gets smacked around by the invisible hand.

The point of the rule is to collect greenhouse gas emissions data from facilities in order to support future regulations and climate policy development. It is an exciting first step toward controlling emissions from the majority of sources across the economy. Many of the issues that have to be hammered out about who is in or out of the system and what kinds of emissions are included are the same for the reporting rule as for a cap-and-trade system. In this way, the reporting rule may very well set the groundwork and the boundaries of a cap-and-trade system or other regulation. Cap-and-trade, however, will not be enough to solve the climate problem.

Our major point in the paper is that the reporting rule can be easily augmented to collect more data to support a wider array of future policies and regulations. We also discuss the choice of reporting thresholds (the proposed rule did not use any objective criteria to set the threshold of 25,000 tons CO2e/yr across the board) and basically recommend a lower threshold than what was chosen.

I encourage interested members of the pubic to (read our paper and) submit a comment on the rule.

Of course you can find many people, even people in prominent or powerful positions, who believe carbon dioxide is not a pollutant (e.g. Senator James Inhofe), or who don’t characterize current economic conditions as a recession. But that does not justify presenting a widely-held and generally-accepted fact as a fringe belief. Waterboarding is widely and generally accepted to be torture, not “likened” to torture and not only by “critics”, just as carbon dioxide is not merely “likened” to pollution and not only by “critics”.

I wrote a letter to the editor of the Post about this; I’ll let you know what happens.

Well, prices changes behavior. That’s the point. There is some psychological value to giving people options, even ones they can’t afford, as opposed to mandating something (“You can only drive on odd-numbered days”), but it’s still about changing behavior. We know that raising the price of driving causes people to do it less (cf. recent increases in gas prices and subsequent fall off in car travel), but it’s not a terribly strong effect. If we want big reductions, like cutting miles driven in half, it’s hard to imagine that just pricing people out of their cars ($15 gas?) will be acceptable. I’m convinced the much more powerful (and palatable) tools will be land-use planning, making urban cores more attractive places to live (e.g. by improving urban schools), and cultural shifts toward valuing neighborhoods and urban features.

One of the interesting questions that came up was, “will policies to reduce miles driven also suppress economic growth?” This is something the right and center panelists were very concerned about. And actually, it’s hard to see how a pricing-based policy wouldn’t. There could be some rebound effects, like a more vibrant commercial economy if congestion-pricing makes the city more pleasant to shop and do business in. Or perhaps everyone would save fuel on balance because congestion-pricing eliminates gridlock. However, the main effect of charging more for driving is that people have less money to spend on other things. But let’s think about the other types of policies — the ones that get people replacing cars with transit and living closer to things. Offhand, I would say the economy becomes more service-oriented. People go out to eat more, spend more on cultural attractions, meet each other in bars and so on — the classic urban lifestyle model. They have smaller houses which they spend less to fill with things and, or course, less on cars. Bad for the economy? It’s not obvious, but I’d guess it’s better for communities to have more-local economies in the long run. Another direction it might go is that car travel gets expensive/unpleasant but the alternatives aren’t great either, so people just stay home. Probably yes, this would slow economic growth. Although that shouldn’t be the question. Are people less happy? Spending more time with the family and less time commuting to far-flung jobs is not bad. Staying home to watch tv and get isolated and depressed, on the other hand, probably is bad. So there is a right way and a wrong way to reduce driving. I expect that the strategies based on building vibrant communities support both economic growth and movement to a service-based economy that is better for the environment and connects people with each other.

On the one hand I find it a little disingenuous that the Japanese plan focuses on food product labeling when the climate impact of individual food items are pretty small for consumers to be constantly worried about, and the differences between comparable food items (say, one brand of soda versus another) are likely to be within the margin of error of the footprint values. It might make more sense to start with the big-ticket items, like consumer electronics or furniture, and not overwhelm already-complicated food purchasing decisions with more cryptic labeling. On the other hand, it might be good to get carbon labeling on to something that people see and worry about every day. Maybe the impact of people shifting their food purchases won’t be that big, but there could be a spillover effect from the raised awareness of carbon footprints. It could be one of those things where you add up carbon labels, recycling, reusable bags, and suddenly you get a conservation society — the much-sought-after cultural shift where people start to think about their impact on resources and not just the cost of things. After a while, it becomes natural, like wearing a seatbelt. Of course you choose the house with the lower carbon footprint. You wouldn’t throw a can in the trash, would you?!

Well, a fellow can dream.

The debate about whether plant-derived ethanol saves GHG’s over its life cycle compared to gasoline has been going on for years. The basic story is that bio-ethanol and gasoline emit similar amounts of CO2 at the tailpipe, but on the bio-ethanol side, when plants regrow they capture some of that carbon back from the atmosphere. However there are other energy inputs to make fertilizer, run farm equipment, process the plants, and transport the fuel. On balance, looking across many studies, it appears that ethanol from corn provides a modest GHG benefit over gasoline, and technology in development to make ethanol from a whole plant (“cellulosic ethanol”) would provide a big benefit (4).

The new contribution of the first three references is to look at the carbon lost from plants and soil when you convert land from some other use to grow biofuel crops like corn, soy, palm, or sugarcane. The stunning result is that you lose so much carbon converting a piece of land to cropland, that it takes decades or centuries of making biofuels from it to even break even on GHG emissions. What is really disturbing is that as prices for corn and ethanol have gone up, people are already chopping down tropical rainforest to grow more biofuel crops. Even if you make sure to buy ethanol produced from land that was already cropland, that is just pushing land for food crops to be converted somewhere else (since the total demand for food is relatively inelastic).

Even in the U.S., taking out-of-use cropland, of which we have millions of acres, and converting it to grow corn for ethanol, results in a carbon debt that takes about 50 years to pay back (1). That is essentially because when ag land is out of use for while, it turns back into grassland or forest. With future, more efficient means of producing biofuels, the payback times will be shorter, but still substantial.

Does this mean biofuels are a Bad Idea? My opinion is, on a grand scale, yes. There are some exceptions. Fuels from agricultural wastes are still a good idea. And cellulosic fuels from a careful mix of native grasses grown on marginal land is still a good idea with significant potential. But can we rely on biofuels to make deep cuts in transportation sector emissions? Probably not. And this is an important salvo in the climate policy debate.

And there is a larger story underpinning the findings of these papers, and that is that land-use change is a key element of climate policy, one which hasn’t got enough attention so far. There is a huge amount of carbon currently stored up in natural lands and we are rapidly setting it free, whether by converting it to cropland to feed a growing and increasingly meat-hungry population, converting it (perversely, it seems) to grow biofuels, or clearing it for urban development. Continuing to do so will undercut our efforts to reduce greenhouse gas emissions.

There is also an interesting connection here to my research on capturing CO2 from air. In principle, one could extract CO2 from the atmosphere using industrial methods (as opposed to using plants), add a lot of energy, and get liquid fuels. The industrial method uses at least 10,000 times less land than the corn-ethanol method, and so basically avoids the land-use change issues we are talking about. On the other hand, the biomass method runs largely on solar energy but the industrial method would require a huge amount of energy from somewhere to synthesize the fuel. Back in the ’70’s, Steinberg proposed doing it with nuclear (5). Now maybe we can find something better.

References:

1. Fargione, J.; Hill, J.; Tilman, D.; Polasky, S. and Hawthorne, P. “Land Clearing and the Biofuel Carbon Debt.” Science, 2008. DOI: 10.1126/science.1152747
2. Searchinger, T.; Heimlich, R.; Houghton, R. A.; Dong, F.; Elobeid, A.; Fabiosa, J.; Tokgoz, S.; Hayes, D. & Yu, T. “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land Use Change.” Science, 2008. DOI: 10.1126/science.1151861
3. Righelato, R. & Spracklen, D. V. “Carbon Mitigation by Biofuels or by Saving and Restoring Forests?” Science, 2007, 317, 902-.
4. Hammerschlag, Roel. “Ethanol’s Energy Return on Investment: A Survey of the Literature 1990-Present.” Environmental Science and Technology. 2006, 40, 1744-1750.
5. Steinberg, M.; Dang, V. D. “Production of synthetic methanol from air and water using controlled thermonuclear reactor power: Technology and energy requirement”. Energy Conversion. 1977, 17, 97-112.