Archive for the 'economics' Category

High Energy Prices: Good

I’m sipping my coffee at 6 a.m. at Stumptown in Southeast Portland (joy). The Oregonian’s front page shows an ocean of the 72,000 faces that turned out to see Barack Obama yesterday (yes, I voted for him, too) and the lower right corner story is: “Who loves high energy prices? The environment.”

The gist is basic economics: when price goes up, demand goes down. And we have got to demand (use) less energy, because it costs the earth heavily. I’ve seen oil fields and coal mines described as war zones, and that makes sense, because we’re violently wresting fossil fuels from the earth that have been millions of years in the making (hence the term fossil). Moreover, burning them causes global warming, because the atmosphere cannot quickly absorb millions of years worth of carbon dioxide and methane. High prices help us slow all this down. In fact, slowing down is crucial all around.

The big problem with high energy prices is that they can make the poor suffer, which of itself is immoral and unethical. If you can’t afford to get to work or heat your house, then you deserve a price break or assistance. (But you also should carpool!) We need a more progressive tax system altogether, and those who have enough need to just voluntarily share more with those who don’t have enough. My household gives about 5% of our net income to philanthropy, but I think we can and should increase that.

If the earth loves high energy prices, let’s get it straight that we are part of the earth, too. Would we put a rock-bottom price on our own lives? No; our civilization is built on valuing human life. Because our fate rises and falls with the earth’s fate, we have to put a high price on energy and use it as the incredibly costly stuff that it actually is.


Food For Biofuel? Wrong.

 While President Bush and the biofuel industry are happy with the growth of biofuel, Columbia economics professor Jeffrey Sachs is not. Neither, it seems, are millions in the world currently starving who weren’t starving prior to the push for biofuel. The food riots in at least eight countries over skyrocketing food prices may have been our first clue.

A full third of U.S. corn is now being used not for food but for fuels like ethanol. This is not about classic capitalism, the free market and Adam Smith’s invisible hand. The U.S. government subsidizes the growth of that corn.

President Bush and the biofuel industry deny a cause-effect relationship between subsidizing vast amounts of food crops to make fuels like ethanol and sharply increasing worldwide food prices. Economist Jeffrey Sachs has determined there is a cause-effect relationship between food-based biofuel, rising food prices and starvation.

Who is more objective in their assessment: a highly profitable industry and the politician subsidizing it, or a world-renowned economist and expert on poverty — a person not being subsidized, elected or paid by special interests to say or do anything in particular?

Sustainability has a triple bottom line: environment, economy and equity, as in social equity. Growing food for biofuel violates social equity altogether (and isn’t good for the environment or economy, either). In my view, growing and using food for fuel is wasteful, greedy and plain wrong.

Note that I said both growing and using. The greed is just as much on the part of consumers as producers — and we can climb out of our greed and consume fuels with more integrity and more joy. More on that in my next post. In the meantime, remember that biodiesel made from recycled restaurant vegetable oil is a different animal from the biofuel discussed here. See Heating Our House With Biodiesel.

Also coming up soon: our final decision on which hybrid car we’re buying.

Death of Retail & Naked Ladies

Short post this morning on the deaths of many retail stores recently in the U.S. First, I really feel for the people who are losing their jobs, and in many cases, their retail businesses. This is painful and scary for them, and I wish stability for all the people affected.

In the bigger picture, the retail industry has simply got to get smaller. It (with help from all of us) consumes way too much of the earth’s limited resources. We in the U.S. are 4% of the earth’s population, consuming 25% of what the earth has to offer. And the research by Juliet Schor and many others is clear that added layers of consumption after our normal needs are met brings very little additional happiness.

That said, I’m keenly aware we have to consume things in order to live. And I admit I struggle with my own addiction to used — isn’t the euphemism ‘pre-worn’– clothes (see Unclothing the Horse and Juliet Schor). I played this out with more fun than usual yesterday when I bicycled to a Naked Lady Party. We all brought clothes we no longer needed, tried things on and brought new-to-us outfits home. I’m wearing one now, it’s beautiful. My point is that we need economic transformation, including an emphasis on community and sharing resources. We don’t need a return to how the retail industry used to be.

And to cover my biggest retail experience of this or any decade, I’ll write later this week about the new car Thor and I are actually buying and bringing home, after all our extended debate. (Want to purchase a pre-used 1993 Nissan Sentra)

Stampede To Small Cars?

The New York Times has a front-page article today about Americans making a stampede to small cars due to rising gas prices.

I read it avidly since our transportation choices form such a high percentage of our national carbon footprint (and carbon emissions are the primary cause of global warming). It turned out that one in five U.S. car purchases in April were of a compact or sub-compact car, compared to one in eight a decade ago.

This is called a stampede to fuel-efficient cars? I’m underwhelmed.

I see a misguided but very human thing playing itself out around gas prices, cars, carbon emissions and global warming. Science tells us we need to reduce greenhouse gas emissions by 70-85%.  Yet, media coverage and public behavior reveal a childlike desire for our lifestyles to change very little from what we’re used to — despite full evidence and knowledge that our lifestyles need to change a lot, based as they are on cheap, abundant fossil fuels.

My post on Our Next Car: Prius Or Honda Hybrid? has gotten almost as many hits as the next two most popular posts put together. Clearly, people are hot for green-tinged cars. But why aren’t we talking about cutting our driving in half, rather than having wet dreams about cars in different flavors and sizes? Where is the front-page NY Times story on how 82% of U.S. trips of five miles or less are currently made in cars, rather than on foot or bicycle? Using our bodies for transportation addresses national health and obesity problems as well as global warming. And exercise elevates mood and makes us feel happier, too.

The time when people reported the highest level of happiness in the U.S. was a time when they walked and bicycled more and drove less. Let’s not be impressed by the current so-called stampede to small cars. The transformation needed to effectively deal with global warming calls for changes in us more than in our cars.

Our Portland CRAG Launches!

Last night five friends of mine, new and old, got together at Colleen and Thad’s house in NE Portland. We had wine, a delicious potluck dinner and animated-to-hilarious planning of our Carbon Action Reduction Group.

Honestly, it would have been fun and funny even without the wine. The four sled dogs milling around our legs added a lot to the happy hubbub. Bottom line: We’re going to do it! We’re responding to global warming by measuring our households’ carbon footprints and working together to control and reduce them. This is the basic spreadsheet each household will use.

Probably because I was the initial instigator, I get to be the group’s ‘accountant’ in the first year. I accepted this role only because Ewan O’Leary, who is starting his own carbon-offset business, is going to help me. (I love teamwork.) We are naturally open to new members: please post a comment at top of this article if you’re interested.

If you are sitting there thinking you are definitely not ready for this CRAG thing yourself, don’t feel alone. Here is what some of my friends said at the prospect. And I am absolutely still friends with them; I’m even going hiking with Micki tonight. I do believe, though, that my frequent-commenter Mick down in Berkeley is thinking about starting a CRAG, himself. Hope he’ll keep us posted. 🙂

I, A Tax Non-Begrudger

If you’re stressing over your taxes being due today, I empathize. I have SO been there (though not any more. Here are my tips on breaking free of credit card and consumer debt.) Now I am a tax non-begrudger. I willingly pay taxes because I want to live in the civilized kind of society they make possible.

I see roads and highways as the most valuable collaboration of all us U.S. taxpayers. They are also the biggest chink in the armor of the Ayn-Rand-libertarian-tax-begrudging folks. Try living a life without roads. We couldn’t get to work, school or grocery stores without the roads our taxes are buying. They cost trillions of dollars. Libraries and fire and police services are other cool value-adds that taxes buy, and that make me a tax non-begrudger.

HOWEVER. I do object to bad stewardship of taxes. The biggest offender is the Iraq war, costing us over 341 million per day. My strongest objection here is to the obscene loss of life. More insidious is the unprecedented national debt it is incurring, which my attorney friend Jack actually terms treasonous on the part of the Bush administration because it sabotages our nation’s future. I’d have to agree with his assessment.

That said, I still am a tax non-begrudger because taxes allow civilized society to sustain itself, allow things for the greater good to be financed. I reject the terms ‘tax burden’ and ‘tax relief’ because they pander to the irresponsible child in each of us. If you imagine you don’t need any greater-good things like roads, or fire and police services and a national legal system, please tell me your plan for staying alive. Taxes are just another cost of living that adults pay, like rent and utilities.

It’s easy to think we’d be happier if we got to spend all our money on luxuries instead of taxes. Read The Peak of Happiness to learn why that’s not true. Happy April 15th to you, and please post a comment if you like (right under the title of this post). Tomorrow I’ll report on my first meeting that I’m having tonight with my CRAG group (in which my household will pay self-imposed fines, like taxes, for using carbon over a certain amount.)

Photo courtesy of blmurch.

Learning To Count Carbon

I posted my thoughts on Bear Stearns right after it collapsed. But a deeper problem even than the money-drunk nature of our culture is the way we count.

Our economic system hasn’t yet learned how to count in a way that reflects reality. Natural systems like air, soil and water (also known as the primary world) are holding up our whole civilization. Our economy is predicated on them and would collapse in their absence. Yet we assign them no value in our Gross Domestic Product, which unfortunately gives us every incentive to squander them in the course of making and consuming the things that are counted in GDP. Most of those things, in turn, contribute very little to our happiness.

The other thing we need to learn to count is carbon emissions. They’re the primary drivers of global warming and all of us are creating them every time we drive and fly and most of the time that we use electricity. If carbon emissions were counted and taxed we would create them more sparingly. They’re not taxed, partly because we haven’t figured out how to count them, and also because we lack the public and political will to do it.

All the market players, government, businesses and individuals alike, will be continuing to operate in economic unreality until we have a carbon tax and also accurate valuations of what natural resources actually contribute to the economy. The cost of these delusions, of our not knowing how to count, is exponentially escalating climate change with economic impacts that will make the Bear Stearns collapse look like a fond memory.

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