Articles by Peter B. Meyer

Efficiency in the Obama economic revitalization plan

The long green? That's money -- and you all know what "going green" is about ...

Everyone keeps asking the members of President Barack Obama's energy and environment team if the U.S. can "afford" their agenda in light of the economic condition of the nation. (Witness the Washington Post interview with Carol Browner as one example.)

Silly question ... and they get simplistic answers, such as "we will." It's a silly question because it assumes a conflict that isn't there, as do the typical mainstream surveys of public opinion. The New York Times reports on Jan. 18:

Given a choice between stimulating the economy and protecting the environment, 58 percent of Americans said it was more important to stimulate the economy, compared with 33 percent who chose protecting the environment. In April 2007, 36 percent said it was more important to stimulate the economy, compared with 52 percent who chose the environment.

That's a false, unnecessary choice; and simply posing the proposition may generate opposition to the most rational course of action, which is not making the choice.

The way out lies through applying a little concept in economics that many in the environmental community have tended to abhor, at least until attention became focused on energy consumption: efficiency.

Pursuit of efficiency came to be associated with exploitation of workers, despoliation of landscapes and environments, abandonment of community roots and commitments, and many abusive actions of companies large and small in the 20th century.

But most climate change agendas today start with the pursuit of what everyone seems to agree is the low-hanging fruit of efforts to lower emissions: energy efficiency. Many who challenged the necessity of efficiency in the past are now trying to increase it today and into the future.

What gives?

TVA could have planned for a normal accident such as the coal ash spill in Kingston, Tenn.

Those coal ash spills should have been expected.

Normal Accidents is a 25-year-old book by Charles Perrow, subtitled "Living with High-Risk Technologies." Perrow, reflecting on the Three Mile Island nuclear incident and other accidents, argued that modern advanced technologies are so complex, and require such careful monitoring and management, that accidents, including potentially massive system failures, have to be considered "normal," not exceptional, events.

The technologies he wrote about included many we consider commonplace today, but climate change and other global environmental impact risks were not among the "accidents" he anticipated.

Economists seem to have learned precious little from the book, highly acclaimed as it was. Economic calculations still get made on the basis of "expected values" -- the statistically most likely outcomes -- despite the fact that these values do not accommodate the virtual certainty of unexpected events.

Analyses like Environmental Impact Statements -- required for major federal investments under the National Environmental Policy Act -- are still based on what economists call "expected utility theory" (EUT). Based on past experience and recorded data, we project the probability of different events and use those odds in combination with the "utility" or value associated with each alternative event to arrive at an expected value for a course of action.

That doesn't make sense ... or does it?

Required reading for novice climate economists

Whether it's Pacific Northwest flooding or the other "strange" weather phenomena we've been seeing in the U.S. and across the globe, the present-day risks of a changing climate are real and threatening -- to say nothing about the future risks.

But the current economic downturn often drowns out calls for major spending to lower emissions or otherwise address climate change. Still, the reality is that the two -- economic and environmental revitalization -- can and should go hand in hand.

A great introduction to why is available from Frank Ackerman in Dollars & Sense magazine. "Climate Economics in Four Easy Pieces" doesn't even need five full pages of English to make a strong case for action that stands up to climate change deniers.

Who do we repay for the pollution from which we have benefitted?

If I buy bread from you, when you want to sell it to me, and we agree on a price, that's a deal between the two of us. Now imagine that you getting up early to bake bread wakes two people who would rather sleep in. They are not a factor in our deal -- they are "external" to our market exchange and any effect on them is an "externality" we have ignored in agreeing on our price. The same logic holds for the greenhouse gases your ovens generated when you baked the bread. That contribution to climate change is an "environmental externality."

How many of those did you create today?