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Here is a good summary of the modern challenges facing philanthropists. Back when we had our student group this would have been a great topic for discussion.

Aside from the obvious Hayekian concerns about knowledge and planning, the philosophical question of whether unborn future people can and should have a claim on us is difficult. One reason I find it difficult is that it is widely believed that the world population is too large today and there is broad support for abortion. I don’t want to offer fundamental disagreements with those positions but find them in tension with the broader motivations of existentialism.

Finally, and please so answer honestly in the comments: come up with your 10 very best ideas for a philanthropic enterprise or go through the empirical list that the GiveWell folks use, and tell us honestly if you think any of that will change the world meaningfully? And compare those to 100 historical “things” that have really changed the world. I don’t think it’s close.

I think aside from these concerns that the entire approach ignores two obvious elephants in the room. First is that how do you empirically evaluate an idea that has not been tried? Perhaps I think that taking my 50 billion to buy a “country” and allow a radically different institutional approach to govern is a pretty cool way to help people? Second of course is the completely difficult to accept question begging of the entire enterprise – that philanthropy is anywhere on the list of things that could do the greatest good. If we were to be honest about it we’d have to call ourselves conditional utilitarian or even Kantian utilitarians. This is ironic given the abject dismissal in the article of such hazy notions as justice and liberty … what they are arguing is confused – replace “justice” in their quote with “doing philanthropy” and I don’t see how any of that changes.

Were Universities doing their jobs every student would be able to be fully conversant in the underlying ideas here and would be able to engage coolly without being outraged or even worse without jumping on an a priori bandwagon.

Via Alex Tabarrok:

Reason can say no to the Hostess Twinkie but it has no counter to the gun and concentration camp.

LETA

Now, I surely do think we as humans can do a much better job in treating the animals we eat (and whose products we eat) better. But treating your food badly is not exactly unusual in the animal kingdom.

Try this on:

Or this one:

What’s On My Mind?

1. My default view of economic policy, even very effective policy, is that at best policy changes move us only a little bit of the way toward our stated goals as compared to an array of far larger and more important forces. These forces are often beyond our control, including biological ones, and include cultural and social ones too. To get your mind around what I mean, ask yourself what, in a perfect world you would envision as a terrific educational intervention that would improve learning outcomes for grade schoolers. Smaller classes? More highly trained teachers? More time in class? Better books? And now, even ignoring the cost, compare those changes to the other factors that may impact learning outcomes. The implications deserve a separate post.

2. I think our thinking that “Pigovian Taxes” are “efficient” is wrong and not for the typical reasons it is thought to be wrong. The traditional thought is that taxes are not necessarily the least cost way of solving externalities problems if transactions costs of negotiation are large because they require that we “pick” the lowest cost avoider of the problem as the party to be taxed. That may be the case, but I think deeper reflection should be given to what, exactly, we are taxing. Take the case of particulate emissions from cars. You might think that a standard tax would be a tax on fuel, but I view that every much as I would an input regulatory standard. If we simply put a tax on fuel, we are saying that the way to reduce particulate emissions is to reduce fuel use. But that is like “picking a particular production process” rather than truly taking advantage of market incentives. The idea would be not even to tax particulate emissions, but if it were possible (it is not) we would want to penalize the actual external cost (the incidence of disease that may come from it, for example). If you are taxing the act of purchasing gas, that is not at all going to ensure that the lowest cost way of avoiding the particulate damage is going to be employed. What if, for example, it is really cheap to stick something on the tailpipe that removes all emissions? With a tax on gas and not on the damage itself, there will be little incentive for these technologies to be rolled out.

3.Our own Professor Jones’ daughter Laura was instrumental in the passage of Canada’s Red Tape Reduction Act. I’ll believe in unicorns if such a thing ever were passed here.

I suppose I should be less inclined to do so, but when I see the term “democratic” used, that is a pretty sure signal for me to go. My hypothesis is that when you see someone invoke the term democratic in an argument, it is just shorthand for saying something closer to “undemocractic.” It seems to me that the term is only invoked when a small minority of people wishes to impose their (unpopular) views and values onto a population that is either unfamiliar with it, or outright opposed to it. That does not of course make their arguments wrong.

Feel free to insert your favorite illustrations in the comment. I would, but I might be marched off to the intellectual abattoir if I do.

So, this hit my inbox:

Happy Earth Day! You are receiving this email as someone who has participated in the University of Rochester’s Go Green Pledge. As of April 1, 2015, you, along with 2,060 people have taken the pledge including students, faculty, staff, andRochester community friends.

On this Earth Day, we invite you to recommit to the pledge.  The pledge has been updated to include more everyday actions that can impact your environmental footprint; the food you eat, the waste you create, your contribution to the community and beyond. Make a personal pledge to pitch in, turn off, conserve and re-evaluate your daily habits. Improving the environment is easy when you commit to actions within your reach.

By re-entering the email address you used when you first took the pledge (in receipt of this message) on the main pledge webpage at http://www.rochester.edu/sustainability/pledge/, you can review the items that you once promised to do, as well as see if there are any new items you would like to add to your commitment.

We thank you for making the commitment to sustainability!

HAVE QUESTIONS?

If you have any questions about the Go Green Pledge, contact _____ (name redacted)

No comments about me “making the commitment” folks! But look at what we learned in this message. Basically no one cares about “Sustainability” even if they could ever venture a guess as to what it could possibly mean. How can I say this? Well, our school community is bombarded with the “Go Green” stuff. It’s on the bathroom stalls, on every trash can, in all of the buildings, on all of the bulletin boards, in the library, in the classrooms, and most definitely in our morning e-mail just about every time we open it up. There are eCycle days and tours and all kinds of articles and features promoting all of the “good” things we do on campus. Yet in a community of 20,000 employees, and another 9,300 students and lord knows how many community supporters, we manage to get only 2,000 people to basically click a link that doesn’t require them to actually DO anything, it only requires them to input an email address to “SAY” that they care. Yet, out of a minimum population of 30,000 who quite literally is fed the “Go Green” marketing materials every single day, we have about 7% of the people even bother to click through to show that they care.

Why is this something to learn from? Because if there is ever a place where you have a self-selected and “indoctrinated” community of people who at the very least can fake that they really care and will do something, a University community is it. Yet among this highly selected population, less than 7% partake in this symbolic act?

I find this little bit of data surprising, my priors would have had me guess it was closer to 20% or more, since we have full-time staff basically dedicated to growing that number. I think it’s far more fruitful to point that out than to blog about a hypothetical response to the email that I used to send when I cared, such as, “Can I demonstrate my commitment to sustainability by ensuring that I avoid organic foods and avoid recycling everyday household rubbish both which use more resources than they claim to “save?” You see, no one wants to deal with those kind of questions. But it seems that the infinite set of “no ones” that I used to have in mind is a lot smaller than I thought it was.

Have a lovely day.

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Happy Mirth Day

One of my favorite aspects of discussing environmental economics is the typical “bait and switch” or simply change of direction whenever environmental cost-benefit figures come up. For example, I’ve been called all kinds of names for things like this and have had it said that, “well, umm, ehhh, ekkk, well, there’s more to the world than economics.” On this Earth Day I share with you one of my favorite illustrations of the mirthiness that an uncritical and political assessment of environmental economic conditions has become. It’s from a few years ago but it ages well. Here the Mackinac Center finds, by simply adding up all of the subsidies that GM gets directly for producing the Volt and for he subsidies that its suppliers get, and so on. The numbers indicated that each Volt sold (I suppose with economies of scale this would fall) came equipped with a quarter million dollar of benefits from the taxpayers. Nice!

Now of course, the Volt is going to save the world, but leave that aside for a moment. When GM saw the article, did they correct the analysis? Did they point out that some of the subsidies no longer were being paid or were incorrectly calculated? Did they add some context about carbon emissions saved per dollar or something of the sort? Nope. Nada. Not a bit. Their response is sadly classic:

Greg Martin, director of Policy and Washington Communications for GM, wrote in an email, “While much less than the hundreds of billions of dollars that Japanese and Korean auto and battery manufacturers have received over the years, the investments provided by several different Administrations and Congresses to jump-start the country’s fledgling battery technology and domestic electric vehicle industries (not just specifically for the Volt as Ford’s offering will also use LG Chem batteries and Fisker will use the A123 system for example) matches the same foresight and innovation  leadership that other countries are exhibiting and which America has historically taken pride in.”

Martin added that the Mackinac Center’s math was “simple and selective.” However, he offered no data or specifics to support his assertion.

No need to go on a rant today. Here is what was just installed at our town community center:

Coal Power

 

Of course the electricity is free. That must be nice.

My snark in my town doesn’t work too too well because most of the power comes from the Municipal Power Company which purchases electricity, mostly hydro power, from the state. Nonetheless, it’s fun to commend Volt owners not just for being rich, not just for getting thousands in subsidies, but also for driving a coal powered car.

French Press

The French just passed legislation requiring all commercial buildings to install solar panels or install plants on their roofs.

I am sure that the following questions were asked and smartly debated before passage:

  • What externality is this solving that could not be done more cheaply with taxes or other output regulatory standards? For example, if you are concerned about water runoff, why mandate a particular way of controlling runoff rather than requiring buildings to have less runoff?
  • Suppose it was decided that we understood what externality this mandate was dealing with (for example, carbon emissions), at what cost per unit of externality reduction did these solutions create? For example, how many tons of CO2 emissions per year are averted by installing solar panels on building roofs, of course considering that the panels themselves had to be manufactured in a carbon intensive industrial process? And then, how many dollars were spent per ton of CO2 emissions averted? And then, how does this compare to the damage caused by a ton of CO2?
  • If we build a roof with plants on it, how much heavier will the roof be once it collects soil and rainwater? If the roofs are considerably heavier (remember that one gallon of water weighs 8 pounds, my current roof is about 1,000 square feet, so a 5-inch deep plant system on my current roof would be about 417 cubic feet of rooftop garden. Assuming that this soil is weightless (silly) but absorbs 50% of the water falling on it, it will add up to 1500 gallons equivalent of water to my roof, or about 12,000 pounds. I think this is a conservative estimate. Now, I am not a builder or an engineer, but I am pretty sure that designing a roof on even a small home like mine to withstand that weight is going to require more and stronger materials in the construction of the house, and almost surely will require a concrete supporting deck to install and support the new roof. Is it possible, given the requirement for the new materials, that installing green roofs is perhaps even harmful to the planet? It would be worthwhile to at least investigate a back of the envelope number, no?

I am also sure that when this law (and others like it) was passed, no one stood to benefit from its passage. There are no such things as corporations that build and install solar panels. There are no such things as corporations that build and install and design rooftop gardens. Those non-corporations probably have never contributed a dollar to a PAC, Super-PAC or have ever stepped foot to lobby the halls of Congress. Those sorts of “dirty” activities are reserved only for evil corporations that we don’t like.

Finally, I am sure that with the passage of this law the French government has established a system to review the effectiveness of those programs at delivering on the environmental goals of the program, we look forward to reading the annual reports on it.

Green Smoke

You will see in Wednesday’s post that the best argument GM can give for why they get so much in subsidies to produce a Volt is because, “the damn Koreans and Japanese do it more than we do.” Aside from the economics of that, pause for a moment to reflect on how we run our “Save the Planet” programs here in the United States. Take the case of biofuels. Ignore for the time being that they are not really a great way to get us reliable and large amounts of clean energy, we have as a policy in our country mandated purchase requirements for fuel companies to add biofuels into our traditional petroleum based fuels, and at the same time we impose high tariffs on imported Brazilian sugar cane. This sugar cane, from a chemistry standpoint, is a much better feedstock for biofuel than corn, and so its widespread use would both reduce the environmental footprint of our biuofuels program (ncluding putting much less stress on American Water resources) and make gasoline cheaper.

Similarly, we have all kinds of programs that subsidize R&D and installation of solar equipment and all kinds of programs that help large scale industrial solar get off the ground. Yet at the same time the United States imposes high tariffs on solar products that come in from China and other parts of East Asia. Again, allowing these products in would both reduce the environmental footprint of solar and make that kind of energy cheaper for Americans.

As we have said here for a long time, Environmental Policy is not about the Environment. And should you engage someone on this topic, the best answer you are likely to get for why we do such things will not be one that admits that the Environmental Movement is the mother of all rent seeking movements, rather you’ll get some song and dance about it being complicated, or different, or some such thing. In other words, the “science crowd” is going to respond in a very anti-scientific matter. We’ll know the environmental movement is serious when these sorts of hypocrisies are ended.

Here’s what my brother has been up to in Missoula, MT.

 

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