Final Blog

Learning about clean energy development paths was likely the most mind blowing thing to me because it seems like that would be one of the number one reasons to switch to clean energy since it has great long-term benefits. I feel that starting developing countries on a clean development path would be a more talked about topic since they are the biggest co2 emitters right now. However, there are some that believe clean technology would be more expensive than its long run benefits, but they are not taking into account the fact that ripple-effect benefits of switching to clean technology. 

After taking this class I am dumbfounded as to how nothing has been done about climate change. Even when it is evident that it is occurring and the solutions aren't as expensive as they once were. I am also unsure how some can just toss away scientific evidence and say there is not climate change at all. It seems to me that the people who are willing to turn a blind eye are the biggest obstructors of actually doing anything about climate change. 

It made me happy to see that there is some movement, policy wise, towards clean energy development. Before, I was not very optimistic that anything of substance would get done anytime soon, but now there is at least some hope.

The Case of Solyndra and Why the Government Should Continue to Invest in Clean Energy Companies

Solyndra was a major controversy in the United States because the government gave them a loan in hopes that it would help make a breakthrough towards more accessible clean energy. Anyways, Solyndra went under and it was displayed as the main reason why the government should not be involved in the market because it makes mistakes with their investment decisions. However, they also seem to forget that private companies also make bad investment decisions, which is why they normally diversify their investments so that one bad investment does not ruin the profitability of the group. The government did do this and the recent news that the program turned a profit proved the the government is able to make smart investment decisions. 

The government should be involved in investing in clean energy technology because it cannot wait for the free market to decide to move away from fossil fuels. The government needs to set the path towards clean energy and away from fossil fuels in order for the market to seamlessly switch over. Starting a path towards clean energy is what the government should do and it should be lauded by the people because it helps advance technology and will likely lead to a quicker reduction co2 emissions than what would have resulted under the free market. 

I have a problem with how the Solyndra incident down because it was very public that this company that received a government loan, which made a lot of people mad, but I doubt the success of the program overall will even come close to the amount of coverage the Solyndra scandal received. The government should do what it can in order to give the success as much publicity as possible in order to show people that the government can make smart investments and show clean energy is making its way into our lives. 

Money and Lobbying Ruin the Political Process

Corporate lobbying and corporate money in campaigning is the bane of our democratic process. Corporations can hire lobbyist in order to argue for or against bills on their behalf. This muddies up the democratic process because corporations hold a lot of wealth and can influence congresspeople to vote one way or the other. Congresspeople are responsible to their constituents, but because corporations have the ability to lobby and have their money spread across many congresspeople they are able to influence important votes. This is not how the democratic process should be done and it is probably one of the main reason for the amazing inability to get things done that has plagued our congress for the past six years. 

This problem is highlighted when you look at the issue of global warming. 97% of climate scientists agree that global warming is real and man made, but no solution has been able to pass through the legislative process because of the lobbying abilities of the fossil fuel industry, such as the Koch Brothers. It is not a good sign that a single industry can influence the legislative process to minimize the impact of potential regulation. Especially since science is not on their side and their influence in the regulation process is holding up in progress we might have made in improving our environment. 

Other lobbying should not be ignored either, environmental groups also has a big budget when it comes to lobbying. I am arguing against lobbying of congress and getting private money out of campaigning. There should be absolutely no campaign donations and campaigns should be financed with public money with strict oversight. Getting rid of lobbying all together is tricky, but I believe it should be replaced with a panel who are well versed in their particular fields and they would put together a report on how a particular piece of legislation will affect certain areas of our economy or how it would affect certain industries. They would provide congresspeople with the information and the congresspeople would use this to make informed decisions. This would be quite costly, but since the payoff would be a well functioning democracy, it seems like it would be worth it. 

Open Space in Fort Collins

Open space is an important issue now because their is a ballot measure to preserve open space in Fort Collins. Open space provides many benefits to the community, but the issue is that these benefits are hard to place a value on. There are ways that these benefits can be measured, but none of these options are perfect. Contingent valuation asks people what they would be willing to pay to keep open space. This can run into problems since people could overstate how much they would actually be willing to pay since they may not actually have to pay that amount. However, this is probably the best valuation method for this problem since contingent valuation is the only way to measure passive value, which is the value one may get even if they don't use the resource. It is very important to measure the passive value of open space since it comes with a lot of benefits for those who do not use the spaces. Hedonic regression is another way to measure the value, but it is flawed because it bases it off of property values in the surrounding area. Many things can change property value and the value that we would actually receive from open spaces is a lit more than what changes in property value would say that the value is. One could also use travel costs which measures how much people are willing to pay to travel to the open space, but again this comes with issues because it does not measure passive value. 

Fort Collins voters should vote for this measure because even if one does not think that open space benefits them, it most likely does. There are many passive use values that come with open space areas. Preserving open space is the easiest way to preserve the environment for that area. Development cant take place on these lands, which keeps those lands out of private entities that would likely not think of the environment first. If open spaces were taken away, property values around the former open space would deteriorate. That is only one part of the equation, open spaces benefit everyone who lives in the city because it would attract business since people like open space, which would mean business’s would like to move there since that is where the working population is located. It also prevents the high costs of unplanned development because business’s would not be able to develop in these spaces, which would lead to more sustainable growth.

So please, Fort Collins voters vote to preserve open spaces, even if you dont believe that it has a direct impact on you because it does. Open space will have an exponentially better impact on the city economically than allowing businesses to develop where they please. 

India's Pollution Problem

India is a developing country that has faced criticism for the great amounts of pollution that it has produced due to industrializing. The World Health Organization declared New Delhi the most polluted city in the world. The income per capita of India was $1,503 in 2012. As we learned in class, pollution control wont likely become a real issue until their income per capita is raised significantly. When income per capita increase, people are more likely to demand  pollution control because they are able to handle it better. India also deals with river degradation and mass deforestation. 

I believe India has every right to go through the industrialization faze of their development. Pollution control should be left to richer countries to handle because they can do more about and rich countries are not innocent. They went through the same process of industrialization, but since climate change was not a problem then there was no one to ask them to cut their emissions. Rich countries want these developing countries to deal with pollution control for the benefit of the rest of the world, but since developing nations ask why the west doesn't do anything about it since they are only going through the same process that those countries did, but only a couple of hundred years later. However, they need to limit river contamination and deforestation. Much like Norway did in Madagascar, other rich countries could pay India to not cut down their trees. The Ganges is very polluted and that needs to be dealt with by India. They need to realize the long term health of the river is in jeopardy. They should enact anti-pollution laws in the river and have firms deal with their waste in a more environmentally friendly way. 

India has a right to develop because developing will life a lot of people out of poverty, especially since they are the second most populated country on the planet. Hundreds of millions of people should not be subject to poverty because they cant develop as a country. Once they get more income per capita they will start worrying about environmental issues more, but that wont likely happen without industrialization. The rich countries have to recognize this and realize that they should help these countries along in their industrialization process in the cleanest way possible. Providing them with cheap clean energy such as solar and wind power, especially wind since Monsoon season would be great for wind power production. The rich countries need to take the lead on dealing with climate change issues because they are the only group that is capable of dealing with it effectively. 

http://www.japantimes.co.jp/life/2014/09/27/environment/india-incredible-pollution-problem/#.VD_8CL58u04

http://qz.com/281251/here-is-why-india-has-no-clue-how-bad-its-air-pollution-problem-is/

Government Investment Has Made Renewable Energy Competitive

The government should be involved in investing in research for the development of renewable energy resources because it is the only viable way to ensure that this sector is getting enough investment since we will need renewable energy to take over for nonrenewable energy at some point in the future. Let alone the fact that climate change means that we should move to clean energy in all areas possible. The government investing in clean renewable energy is important because private sector investment on its own is not enough to fulfill the needs of this growing sector.

Some believe the free market will fix the issue itself and if the private sector is not investing in clean energy it is because clean renewables are not competitive with fossil fuels. However, the free market has trouble with dealing with green house gas pollution. Investing in clean energy does not benefit them because there are better options for energy right not. I believe that it is absolutely necessary for the government to be involved in the investment for clean renewable energy because it is important for these energy sources to be available in order to curb climate change. The quicker clean renewables are developed the quicker the United States gains energy independence as well as a guarantee of a clean energy future much faster than the market would. 

Solar technology has made major advancements in the last six years and no doubt the investment from the government played a major role. Solar has grown exponentially because of decreasing prices and advancements in technology. Solar panel prices have dropped 75% since 2008 and that has helped the spread of solar technology to many people who weren't able to afford it before. As the prices of renewables continue to drop and advances are made in other renewable technology to make them more competitive with fossil fuels, investment from the private sector will make government invest unnecessary. However, it was necessary for government investment to get renewable energy to the competitive position it is in now. 

http://theenergycollective.com/danliggett/1530306/making-solar-powers-future-even-brighter

http://www.upi.com/Business_News/Energy-Resources/2014/10/02/US-funds-advanced-solar-energy-research/5701412241351/

http://www.worldwatch.org/node/5855

Present Value of Climate Change Effects

Many are not willing to pay to reduce the effects of climate change because the effects really only effect future generations and the present value of reducing the effects to the current generation is close to nothing. However, with the news of 35,000 Walruses swarming a beach in Alaska because of the lack of sea ice to rest on, the effects are most likely closer than we thought. If people and politicians realize that the effects are close and that they could effect current generations, they might be willing to foot some of the bill.

If we want to get anything done in regards to reducing the effects of climate change, there needs to be a wholesale effort to show how the effects of climate change are affecting us now. If people can see that they are being affected, they would likely be more willing to help out than they would be if the effects only affected future generations. Some might say they 35,000 Walruses washing up on a beach does not affect us. I would argue that it does because it shows that the effects of climate change are much closer than we thought they were. If we ignored everything before it directly effected us, there would be little chance to reduce the effects of climate change. The climate change movement is stronger than it ever has been before, but nothing will likely get done on a federal level if politicians don’t know the current effects. 

http://news.yahoo.com/35-000-walrus-come-ashore-northwest-alaska-221314416.html

Mexican Mine Acid Spill: Does Coase Theorem help?

A copper mine in Mexico is leaking acid into a river, which cause the maniple water supply to seven towns to be shut down because of the danger. The Coase Theorem says that the people affected should be able to bargain with the mining company for some type of settlement. However, because seven towns were affected any one of them could throw a wrench into the process by holding out. There is no sign of the governments of the towns, on behalf of the population, bargaining with the mining company for a settlement. However, the mine has set up a fund $147 million in order to pay for environmental damages, but it does not seem that they are helping the people whose water supply was affected. 

I think it is bullshit that they seem to be getting off pretty easily from any damage they have caused to the people in those towns. The company did not notify anyone about the spill until 24 hours after it occurred. The spill not only meant people couldn't get water, but education as well. Eighty eight schools closed because of the uncertainty of drinking water. The mine is only going to pay for the damage to the environment, but they caused much more damage than that. People went without water and education because of the spill. 

I believe this is why companies that use dangerous chemicals should be heavily regulated. The spill did not occur because of malicious intent, it happened on accident because of heavy rains. Had there been enough supervision, the accident might not have occurred. Maybe the regulation would have caused “undue” burden on the firm at the time, but if it had been in place at the time of the spill this could have been avoided, mitigating the undue costs of regulation. 

This is a situation where the coase theorem is useless. No one in this situation has property rights over the river. Each town affected most likely has rights over their municipal water supply, but the copper mine has been unwilling to bargain. Each town would have to work together to bargain with the mine since the pollution in the river affects each of their municipal water supplies. This is yet another example of why everything cannot be solved by the free market. The mine did not notify anyone until 24 hours afterward and has been resistant to investigation ever since. If regulation had been a main priority, the spill probably does not happen in the first place. The government now needs to step in and be more firm towards the mining company, in order to secure a proper settlement for their citizens.

http://www.news.net/article/1957300/mexican-authorities-say-mine-still-leaking-acid

http://thinkprogress.org/climate/2014/08/18/3472343/mexican-mining-spill-border-88-schools/

Should Water be Privatized?

The debate about how clean drinking water should be allocated is contentious. There are some who believe the free market could do the job better than the government. Clean drinking water is mostly managed by local governments in the United States, but there have been some cities that have tried water privatization. Subscribers to austrian and conservative economic theory would argue that the market will improve the efficiency of the water system. 

In my opinion, water privatization is an awful idea. Water is vital to human survival and it is asinine to think that prices wouldn't increase dramatically because of the switch to privatization. The increase in price would no doubt leave poor people out of the marketplace. If water is privatized, it will lead to drastic consequences such as the misallocation of water to people who can afford it, while others are left with less. The profit motive it obviously there for any private company that would invest in a water system. They need to make a return off of that investment.  The basic necessity to human life should not be at the whim of the market.

Water resides in a grey area when in comes to labeling the type of good it is. It could either be public or common pool. Water could be rival because consumption of that water means another cannot drink it, but they could once it goes through the water cycle. Either way, water should not be part of the free market. Leaving clean drinking water up to the free market could lead more problems than we had in the first place, including a shortage of water for poor people. 

Air Pollution Deaths Show That the Market Cannot Handle Pollution

Whenever I think of air pollution, the first thing that enters my mind are greenhouse gases and the dangers associated with them. However, I rarely think of air pollution as something that can have immediate health impacts on people, which is why I found it interesting that the International Agency for Research on Cancer (IARC) stated that there were 223,000 deaths from lung cancer that were caused by air pollution. These were only deaths from lung cancer, but there is also evidence that increased air pollution can lead to bladder cancer as well as respiratory and heart disease. It is obvious something needs to be done to limit the loss of life that is associated with pollution.

Pollution is a negative externality because it is overproduced in relation to its social costs. It is clear that polluters are getting a free ride because they don’t have to pay the costs of these deaths. The market for pollution is not in equilibrium. We have not arrived at the socially optimal level of pollution because the polluters are not bearing the costs associated with their pollution. 

This pollution is mostly happening in developing countries where industrializing is key for survival. However, we should not expect these developing countries to fix the problem on their own. Developing nations simply don't have the resources for pollution control, which is why developed countries have an obligation to assist these developing countries in their fight against pollution. The issue is not only limited to developing countries, the United States have done next to nothing to reduce their pollution levels, in comparison to other developed countries. The US is probably best equipped to handle their pollution issue, but negligence has taken over. If they wont take care of their own problems then it is far fetched to believe they will help out foreign countries. 

The governments of the countries affected will need to get involved in pollution control in order to bring the market for pollution back into equilibrium. If they could convince the international world to to cooperate on some sort of emissions trading system it would improve their prospects. Producers in developing countries would need to buy the emission permits, while producers in developed countries would be able to sell them. They have better access to technology that help reduce emissions. It would be much easier to get help to developing countries if we had a better equipped international government, but since we only have the UN, developing countries are, sadly, on their own for now. 

http://www.scientificamerican.com/article/air-pollution-a-leading-cause-of-ca/

The Case for Government Involvement in Pollution Issues

New research published in Climate Risk Management journal showed that increases in the global temperature over the past 60 years are 99.999% sure to be caused by human activity. This news shows that the government needs to take on a bigger role when it comes to tackling pollution. The United States decided to back out of the Kyoto Treaty and gravitated towards a free market approach, which did not even come close to meeting the standards set in Kyoto. It is clear that Conservative and Austrian perspectives will have a difficult time in reducing pollution because they believe there is no room for the government to get involved in private affairs. Without the government setting ceilings for the amount of pollution allowed, the free market would have difficulty in finding some sort of standard at which to stop polluting. If there is demand they will supply the good regardless of pollution because businesses are looking for profit and nothing else. The government can handle this using a cap and trade system. Cap and trade is a market friendly solution because it provides incentives for businesses to alter the way they produce or move to developing cleaner energy. Cap and trade caps how much pollution should be emitted then it issues permits to businesses to expel a certain amount of pollution. Businesses who do not need the permits because they have found other ways to produce their product or moved to cleaner energy can trade their permits to businesses who are a little behind the curve and need to pollute more than their permits allow. This will keep pollution under the socially optimal level. Now that we are almost 100% sure that recent global warming has been caused by humans, it is clear that the free market has not lead us to the socially desirable outcome when it comes it pollution. Firms and people are over polluting and it looks as if there is no end in sight. It is time the government had a fair chance to try its hand in curtailing pollution. 

Source:

Philip Kokic, Steven Crimp, Mark Howden, A probabilistic analysis of human influence on recent record global mean temperature changes, Climate Risk Management, Volume 3, 2014, Pages 1-12, ISSN 2212-0963, http://dx.doi.org/10.1016/j.crm.2014.03.002.