My alma mater is much in the news lately, and I will post on that if I can figure out the right way to articulate my view on the unfortunate events. But they still can’t help sending their alumni triumphal emails about how awesome they are. In the latest e-mail they are celebrating the Chevy Volt purchase that was made for their Amherst College Emergency Medical Service students. Now, ignore the fact that a Volt does not seem to be an idea car for EMT services (to be fair, they don’t need an ambulance), here is one of the triumphs of the purchase:
Hatch and Tepe calculate that, compared to the old Crown Victoria, the new Volt will reduce ACEMS’ carbon footprint by about 87 percent—nearly a ton of emissions per year. It’s also more reliable, capable of running on gasoline when the electric charge runs out. And if it ever does break down, Tepe points out, they can “literally push it down the hill” for repairs at the Classic Chevrolet dealership right next to campus.
Well for students, at the margin the Volt is free. But one-ton of CO2 emissions imposes roughly $30 of damage according to the Climate Experts (not the “deniers”) as reported in their IPCC 4th Assessment report. So let me ask, assume that the Volt requires no other expenditures whatsoever and that it can run for 20 years on the same battery without any expenditures, and that by the end of 20 years the car will have no value, would you still want to spend the $40,000 in order to prevent $30 per year of damages each year for 20 years? Let’s be more generous than the Stern Report and assume a discount rate of zero percent – which is to say that saving $30 of damages in the year 2032 is just as valuable as saving $30 in damages today. Or even use a negative discount rate if you wish. Cumulatively, would you pay $40,000 to save $600?
Spending $40,000 to save $600 in total would be a rate of return of 1.5% per year if the Volt were infinitely lived That is downright awful as far as investments go, unless of course we are living in an atmosphere where the returns to normal business activity are zero or negative – as some thing they are now. But if we treat this like any other way to spend money, I calculated the internal rate of return on a $40,000 investment that yields $30 per year for 20 years to be … -25.3%.
Now to be fair, there are other costs of emissions beyond CO2 that the Volt is presumably replacing. But to be fair, the calculation above is assuming that the Volt is not actually a coal powered car! The Volt here does seem to be powered by the CoGen plant at Amherst, so I’ll keep the assumption that powering it does not in itself cause emissions problems and I will make the assumption that the Volt battery is itself Eco-Friendly, even after its ultimate disposal. And we are keeping the assumption that emissions during the full life-cycle of production of the Volt are identical or less than the emissions from the production of a new Impala, for example.
So, leave it to Amherst, who in its fight song boasts, “To the Frenchmen and the Indians He Didn’t Do a Thing … ” to figure out a way to “do a thing” to the environment. And that thing sure does not mean “protecting” it. Of course, it’s all in the name of prestige and “doing what seems to be the right thing.” Because of course, no one knows Amherst College. Without parroting green triumphalism they would surely find themselves struggling to attract the best and the brightest.
And in a future post we’ll examine what this stupidity has to do with recent tragic events on my old campus. This kind of symbolism is not costless.