Saturday, August 30, 2008

The Economist Debate - Some More Comments.

Here are a few of the latest remarks on the above, which might be of interest:

Federal Farmer wrote:
August 28, 2008 08:52

Econoguy and Chris Rhodes I think have found common ground. Just looking around, I find numerous reasons for optimism about the ability of people to find creative ways to economize on transportation and home energy usages. What has been proven before, such as in the seventies, is that demand for petrol is not so inelastic as people once thought. Add to this some recent developments in how people are choosing to live and there is much to be hopeful about.

The history of the planning of cities offers tremendous lessons for all of us and I cannot recommend more highly the work of Jane Jacobs, especially her early book on city planning entitled, The Death and Life of Great American Cities. The radical reform of American cities in the early twentieth century brought about the unfortunate segregation of housing and employment through a misguided perception of what constituted a more natural environment. Rather than allowing for people to select their own living arrangements, zoning became the rage of urban government planners. High transportation subsidies for interstates added to this condition. This is not to say that some of this would not have occurred anyway, but it was certainly accentuated to a very high degree by local and national authorities. To the extent that there is lock-in or path dependence in the way we do things, you can usually find a political root to it somewhere.

To address this situation today might not be so daunting if we consider that private development is once more finding ways to reintegrate residential and work environments. Combine this with pricing out of our roadways in a fashion such as Harold Demsetz and Sir Alan Walters put forward, requiring users to bear the costs of their usage, and you can do much that is both constructive of human community AND self-reliance, encouraging both personal freedom, AND responsibility. That would be a constructive use of government as opposed to a command and control approach that would run up against human nature itself.

willstewart wrote:

August 28, 2008 06:26

I am trying hard to support Romm, who seems fundamentally right, but he does not make it easy by overstating his case. For example

'The future in vehicles is good old fuel efficiency, hybrids, and batteries--all of which is quite old technology.' - no it's not - whereas Hydrogen fuel, the comparison, pretty much is. Batteries have improved considerably over time and the controls and so has the system integration needed to make a hybrid (or a modern diesel) work well. Breakthroughs are not seen easily without looking at the detail!

Having said that improvements in car/auto efficiency are big, too (also needing breakthroughs in materials and design) but the really effective move is just a smaller car. It is almost funny to watch the increasingly desperate efforts of manufacturers in the UK to sell huge SUVs - one is advertising 'the most efficient 4*4 7-seater in its class' - well yes, quite.

chrisrhodes wrote:

August 28, 2008 03:00

There is indeed some confusion over the concept of Peak Oil. What is meant is the peak in production of cheap conventional light crude oil and that does seem to be with us if not already, within a few years. It does not auger-in the running-out of oil, per se. We will be producing hydrocarbons for decades, but it is going to cost far more than we are used to. Transportation is the vulnerable aspect of energy provision, and providing enough biofuels, hydrogen (even if the chain of technical problems attendant to the hydrogen economy can be solved) and even electric cars, if sufficient battery technology could be installed, on a basis comparable to the world's 600 million or so road vehicles, is a staggering endeavour. All "solutions" fail when the question of "scale" is examined closely, and the timescale at which realistically "new" technologies might be implemented is daunting, compared to the short window of plentiful (relatively cheap) oil we have access to. The CEO of Shell has said that he expects a gap in demand and supply for oil to come "by 2015", which gives us only 6 -7 years at best for conventional oil. Hence my contention that personalised transport will be diminished, leading to a complete relocalisation of our activities into fashions that simply need less extensive transport. I think this is the key issue to be absorbed and anticipated. There could even be benefits, such as a restoration of communities, if civilization doesn't descent into anarchy first. This is where the "planning" (meant in a soft sense) comes in, to make that transitional journey to a lower-transport economy smoother than simple market forces would dictate. The seeds will be sown by simple economics, fuel costs etc., but real means to find stable localised economies are necessary. There may be great personal and social opportunities to be had, but we need to look for them rather than doing nothing, and hoping all will be well through some supernatural miracle.

econoguy wrote:

August 28, 2008 00:42

Maybe my confusion on which way to vote comes from the word need. I need a Porsche or Lamborghini. And a modest yacht, maybe about 36 to 40 feet. Sail, of course. We need solutions. Saying we need something dodges the issue of what we are willing to give up to get it. Yes, I am an economist of the Chicago tradition.

I suspect we can solve our energy problems with less government involvement, less intervention in markets, rather than more distorting subsidies. The signals out there are strong and clear. Look at the number of 'For Sale' signs on SUV's and pick-up trucks. And the rising sales of alternative fuel vehicles. There has been a lot of clamoring for subsidies for this and that in the realm of energy possibilities for a long time, at least since the OPEC price spikes of the 1970's. Some things certainly did change. Gas mileage went up moderatley but was that due to CAFE standards or changing demand? Housing insulation increased and building codes required more as well but which came first? People set thermostats a little lower. But bigger changes awaited the more drastic price increases of recent years. The price of petroleum went up rapidly to $100 and $140 per barrel from numbers only 1/10 of those only 8 years ago. The Peak Oil argument even helped by adding emphasis to the idea we are 'running out' of petroleum. Transportation consumers are examinining alternatives because the expense to them has risen. They are changing away from gas powered single occupant vehicles. Spending the money is where the signals are strong and clear. When the discussion concerns needs, clarity fades.

A closing comment on the Peak Oil discussion is that its greatest value lies in making more people aware of changes coming sooner or later. Much, even most, of that debate wastes our time, sounding very like Malthus and others who forecast doom for humanity. Maybe this time, the sky really is falling. I doubt it. Humanity innovates, we solve problems. If we don't we will not survive. I simply do not believe governments making choices for us and for markets is the best way to get wherever it is we will go. I trust the power of incentives to get us where we want to go far more than I trust governments to get us somewhere near there.

so_its_said wrote:

August 27, 2008 23:56

1) it is apparent that the term 'breakthrough innovations' means different things to different people.
2) there is no definitive 'proof' that innovations bring about solutions to problems that we need to address.
3) its doubtful that any innovation in solar energy; the conversion of electromagnetic radiation to electricity can approach the energy conversion efficiency of converting mass into energy; Einstein and co-workers demonstrated this more than 60-70 years ago. You would be contesting the very laws of nature (physics) if this (solar) were the case.
4) finally, again we need to CONSERVE ENERGY!

No comments: