Saturday, March 29, 2008

How conservation happens

Through the right incentives, namely profit:

"The pressure is immense" to cut weight, said John Heimlich, chief economist for the Air Transport Association of America, an industry trade group. "Every penny more per gallon adds $195 million to the industry's expenses per year. You simply cannot make all of that up with fare increases."

"Reducing consumption is a certainty," Heimlich said. "You're always going to win by consuming less energy."

To that end, carriers have pulled out unused ovens, magazine racks and trash compactors during the past few years. Some removed paper manuals in the cockpit and installed electronic maintenance logbooks.

Fort Worth, Texas-based American Airlines created a Fuel Smart Team in 2005 as fuel prices started to go up. Tom Opderbeck, American's manager of strategic programs, said the team tried to cut weight in places that customers wouldn't notice. The team capped electrical outlets in the lavatories and cut the power converters from the wall. It took out phones in seat backs and removed the heavy telephone wiring that was folded inside. "I always think we've come to the end of the list, but we keep on finding new items" to remove, Opderbeck said.

Read the rest here. Do you think any government agency or non-profit would go to these lengths to conserve energy? I'm afraid dimming the lights for an hour won't cut it. But if you like that idea maybe we can agree on flipping the lights off completely on about 95% of government operations.

Addendum: While we're on the subject, it looks like biofuel subsidies are proving to be a monstrous reminder of the law of unintended consequences.

Monday, March 24, 2008

India's environmental disaster

While I still don't have pictures from my trip to India, I can't help spilling the beans on the most striking and surprising aspect, especially after reading Tyler Cowen's poignant dissection of Jeff Sach's book Common Wealth: Economics for a Crowded Planet. Per Tyler:

I am much more pessimistic, partly for reasons Sachs already outlines. I won't recapitulate all of my previous writings on the topic (follow the links here), so let me give a kind of "splat" response: Chinese CO2 emissions are much worse than we had thought, China resists outside pressure, Chinese governance is often of very poor quality, China is currently subsidizing energy consumption, China thinks it is our problem to solve, China won't automatically keep on becoming prosperous, the super eco-conscious Europeans in fact haven't made much of a dent in the problem in terms of percentage change, the U.S. has done better on carbon emissions than most of the Kyoto signatories, the price of oil rose fivefold in a relatively short period of time without much helping, a gradual increase in carbon taxes (in a Hotelling model) can lead to more extraction today thus worsening the problem, and if the rich countries massively cut their carbon consumption the prices of coal and oil would plummet and the incentive for someone to buy and smoke the stuff will be all that much stronger.

Much of this resonates with my experience in India. It was not a romantic vacation, it probably took years off my life. The air quality was so bad that in three weeks of travelling I never once observed anything like a crystal blue sky, really it looked more like a nuclear winter (believe me, pictures will confirm this). There was a severe drought pushing its way eastward from the Thar desert, effecting the entire northeast region in which I travelled, Mumbai, Delhi, and Rajasthan primarily. For instance, the Bharatpur wetlands bird sanctuary, a World Heritage site, done dried up. Read some of these ridiculous Rajasthan tourism sites for Ranakpur and Udaipur, the "romantic city of lakes" and "Venice of the East," etc. More like a dust bowl.

North of Mumbai, in the state of Maharashtra, we observed streets lined with trees, their trunks painted red and white to indicate government protection. The rest of the countryside was barren. In Mumbai and Delhi the problem was more due to streets jammed with all manner of transport and refuse, ox drawn carts, cows, auto-rickshaws, and dump-trucks serving the booming economy. Eventually, I developed terrible asthma and a hacking cough which only subsided once I reentered the 1st world.

One optimistic view, propounded by the likes of Jeff Sachs, is that India's environmental problems can be corrected through some combination of regulation, carbon taxes, and subsidies for alternative energy technologies. Another optimistic view is that this is but a temporary phase that all industrializing economies go through. Compare London in the 1950s to today. That is, eventually India will get rich and then enjoy the luxury of harping about the environment.

Like Tyler, I now have a more pessimistic view. Jeff Sachs places too much faith in government, especially 3rd world governments. I spent a few days with Vivek Pandit, a politician of sorts, who has spent 20 years battling slavery in India. He lives like the Godfather on a compound outside of Mumbai, surrounded by body guards and adoring tribals and Dalits who he's helped free. The love they have for him is undeniable. And he has succeeded in many ways, particularly by holding politicians feet to the fire and making them accountable to the law. While I was there he took a group of tribals to the unemployment office to get their promised benefits. After waiting in line all day, in the end most were denied because they couldn't read the application.

The point is that government, especially in a place like India, serves those who can take advantage of it. As such, it becomes a tool for special interests, perpetuated my the misplaced hopes of the disadvantaged. I simply don't trust the Indian government to produce effective environmental policy.

Jeff Sachs is right about one thing, that the solution will likely come in the form of new technology from European countries, the U.S., and Japan. But how many years will this take? And as the situation worsens, how many years will it take the largely illiterate and disadvantaged lower castes of India to figure out a) what's causing pollution, b) what are the long term effects, and c) how to avoid it? I'm with Jared Diamond on this: environmental collapse is a distinct possibility.

Saturday, March 22, 2008

David Mamet on the tragic view

Is the military always right? No. Neither is government, nor are the corporations—they are just different signposts for the particular amalgamation of our country into separate working groups, if you will. Are these groups infallible, free from the possibility of mismanagement, corruption, or crime? No, and neither are you or I. So, taking the tragic view, the question was not "Is everything perfect?" but "How could it be better, at what cost, and according to whose definition?" Put into which form, things appeared to me to be unfolding pretty well.

Read the whole thing here. Or just read some Adam Smith:

It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.

Friday, March 21, 2008

Back in the 1st world

I've been travelling in India and Morocco for the last month, which I'll fully elaborate upon as soon as I get all the pictures. But first I need to get a handle on this subprime meltdown situation.