Archive for the ‘Scarcity / Abundance’ Category
Declan McCullagh of CBSNews reports that a Department of Treasury analysis released under the Freedom of Information Act estimates that a cap and trade program would raise $100B to $200B a year in taxes. Those taxes come from us one way or another. Recall that my estimate of the cost to cover the uninsured is about 2/3rds of that amount ($63B to $126B).
So we have a fortuitous illustration of the tradeoffs we have to make. There are two issues, priorities and effectiveness. It’s not that I don’t think there is some merit to reducing CO2 emissions. Rather, I think there are other problems that are higher priority with solutions that are more likely to be effective. Health care for the poor is one of those. I’m willing to pay an extra $1000/year to solve health care for the poor. I’m not willing to pay an extra $1500/year on top of that to address global warming.
If you do nothing else intellectual this Sunday, do these two things:
(1) Read Tyler Cowen’s NYTimes column on how the bestowing of political favors was at the heart of the financial crisis and how we’re about to make the same mistake with health care.
(2) Remember Norman Borlaug. He is the scientist who led the “Green Revolution“. In my opinion, he would be a strong candidate for the man who did the most good for the most people in the second half of the 20th Century. And the mainstream media will not make nearly a big enough deal of his death at 95 compared to that of Ted Kennedy.
Some of you may recall my post Organic Farming Harms the Environment. As I wrote, one of the things that bugs me about organic proponents is that they act as if there are no tradeoffs. I don’t understand much about farming, but I do understand something about how economic activity works. I presume that modern farming has responded to market pressure and evolved to optimize along many different dimensions. I’m pretty sure you can’t magically improve along one dimension without sacrificing along another dimension.
Thus, I was not surprised to read this article (hat tip to Tyler Cowen at Marginal Revolution) on modern farming by an honest to goodness family farmer. It is full of good examples of the tradeoffs I suspected were lurking. For instance, by using herbicides, farmers reduce the need to till, which is a major source of soil erosion. Hog crates and turkey cages may seem inhumane, but they prevent sows from killing piglets and turkeys dying from drowning. Crop rotations that decrease the need for synthetic fertilizer increase the amount of water needed to produce the desired crop.
Read the whole thing. It reinforced my confidence in the general rule of trying to avoid legislating solutions. Send pricing signals by allocating resource rights and taxing negative externalities. Then let the market do its optimization.
Last night, I was lucky enough to get a personal tour of the California Academy of Sciences from Dr. Brian Fisher, a taxonomist specializing in ants. He’s doing some amazing work trying to help Madagascar prioritize and save the 10% of native rainforest they have left. It’s reminiscent of Willie Smits‘ work in Borneo, though focused on preservation rather than revitalization. But it has the same feel of getting the local people committed to managing their own ecological resources.
You can donate here (I gave them $500), but make sure to write “For the Fisher Madagascar Project” in the “Comments” field. Otherwise, you’ll be paying for the building lights. Go ahead and leave the “Allocation” field at the default, “Campaign for a New Academy”. Update: Forgot to mention that if you donate $2,000 they’ll name a new species after you or whomever you designate.
It’s hard to do justice to what I saw last night in a blog post, but here goes…
One of things I object to about mainstream environmentalists is that they act as if there are no tradeoffs. For example, they simultaneously promote organic farming, argue for biodiversity , and lobby for more open space. Personally, I think the second and third are very important. In my value system, they are are very close to terminal goals. Which is why I avoid organic foods.
Reason has a short interview with Norman Borlaug that nicely sums up the tradeoffs required by organic farming. There is literally nobody who understands modern agriculture better. The bottom line is that if the US tried to produce today’s agriculture output with 1960s era technology, we would need on the order of 1 million square miles of additional farmland (assuming that the marginal productivity of the land decreases somewhat as you bring less productive ares into play). That’s a swath 1000 miles by 1000 miles. That’s about 1/3 the land area of the contiguous 48 states.
Replicate this calculation all over the world and you’d have massive deforestation and habitat destruction. Remember the unintended slashing and burning rainforests to plant oil palms for subsidized biodiesel? Now multiply that by 10. No thanks.