Category Archives: Economics

For the Future

Arklow Bank Wind Turbines

Arklow Bank Wind Farm, offshore of Ireland. Copyright, C, GE Energy. Used with permission.

Conferences –

Academics – An MBA for Changing the Climate of Business (click here). Continue reading →

Everything you need to know about Global Warming in 5 Minutes

Unlike Warren Buffett, Jeremy Grantham, chairman of Grantham Mayo van Otterloo, GMO.com, is not a “celebrity investor.” And also unlike Buffett, Grantham is an environmentalist. Jeremy and his wife, Hannelore, established the Grantham Foundation for the protection of the environment, and The Grantham Research on Climate Change and the Environment at the London School of Economics. Like Buffett, Mr. Grantham talks to investors who hire him, and via his investments, charities, and other work, he talks to the world.  Mr. Grantham recently wrote “Everything you want to know about Global Warming in 5 minutes“,

Two ideas stand out:

Climate warming involves hard science. The two most prestigious bastions of hard science are the National Academy in the U.S. and the Royal Society in the U.K., to which Isaac Newton and the rest of that huge 18th century cohort of brilliant scientists belonged.  The presidents of both societies wrote a note recently, emphasizing the seriousness of the climate problem and that it was man-made. …  Both societies have also made full reports on behalf of their membership stating the same.  Do we believe the whole elite of science is in a conspiracy?  At some point in the development of a scientific truth, contrarians risk becoming flat earthers.

Conspiracy theorists claim to believe that global warming is a carefully constructed hoax driven by scientists desperate for … what?  Being needled by nonscientific newspaper reports, by blogs, and by right-wing politicians and think tanks?

The full text is below:

Continue reading →

Wall Street and Climate Change

At Deutsch Bank, one of the world’s largest banks, there are some very bright people who understand that climate change is problem. An Internet search on “Deutsche Bank Climate Change” brings up links to Deutsche Bank Climate Change Advisors, which features a carbon counter,  showing the tons of Carbon Dioxide in the atmosphere, 3.6659 trillion metric tons.  Before the start of the “Industrial Revolution” there were approximately 2.5 trillion metric tons.  The question for the scientists is “What are the effects of shifting all this carbon from under the ground into the atmosphere?” For the citizens and policy makers, “Is this good or bad, and if bad, what should we do?”

What should Obama do? What is Celebrity Investor and Adviser to Presidents Warren Buffett doing?

Continue reading →

The Magnitude of the Deepwater Horizon Spill

The oil slick in the gulf

The Surface of the Oil Slick

Third in a series (1, 2, 3) that began on “Earth Day” (0).

BP and the government say they can’t measure the spill on the ocean floor. However, 5,000 barrels per day is reaching the surface and most of the oil – 80%  to 90% – is below the surface. So I thnk it’s  is on the order of 25,000 to 50,000 barrels per day.

But that’s my back-of-the-envelope estimate.  NPR, on Friday, May 14, 2010 reported that Steven Wereley, who teaches mechanical engineering at Purdue University, Tim Crone, a research scientist at Lamont-Doherty, and Eugene Chiang, an astrophysicist at UC Berkeley, believe they can make a pretty reasonable estimate of the amount of oil gushing into the Gulf. Wereley based his estimate on particle image velocimetry analysis of the video BP released. He says says 70,000 barrels per day, give or take 14,000 barrels,  is gushing from the Deepwater Horizon spill. Crone agrees with Wereley but said he’d like better video from BP before drawing a firm conclusion. Chiang estimates the flow at 20,000 to 100,000 barrels per day. 880,000 to 2,200,000 gallons of petroleum products into the Gulf of Mexico Each

DAY! That’s 6,160,000 to 15,400,000 gallons per week.

After 20 days that’s 400,000 to 2.0 million barrels. Each barrel could have been refined into 44 gallons of gasoline, jet fuel, and other petrochemicals.  But even at 5,000 barrels per day – 100,000 barrels in the first 20 days – this is a catastrophic event.

President Ronald Reagan

President Reagan

One hundred years from now, when historians, in energy efficient homes and offices powered by wind, solar, and geothermal, write about the end of the era of fossil fuel, they will point to the April 5, 2010 disaster at the Upper Big Branch, W. Virginia coal mine and the April 20, 2010 catastrophe at the Deepwater Horizon oil rig in the middle of the Gulf of Mexico.

Historians may assign responsibility to the energy policies of President George W. Bush and Vice President Cheney. They will note that President Carter put solar water heating system on the roof of the White House (click here for pdf) and President Reagan took them down in 1986. Their assessment of President Obama will be predicated on his next actions. Does he continue to embrace “Drill Baby Oops,” Coal with Carbon Sequestration, and Nuclear Power? Or do a 180 degree turn to sustainability?

President George W. Bush

Pres. George W. Bush

I don’t know what the pressures are at a depth of 5000 feet below the surface of the ocean. But there’s methane ice down there. At atmospheric pressure, Liquid Methane freezes is at -182.5 °C and methane gas liquifies at -181 °C (here)

The most important questions are:

What will be the effect of all that oil on fishing, tourism, the weather and the climate? It could be good for the maple syrup, solar power, and wind power industries, and the locavore food movement.

President Obama

President Obama

Given the severity of the spill, and what it demonstrates about our ability to operate at 5,000 feet below the surface of the ocean, I think we should rethink the Purgen Coal with Carbon Sequestration Plant, which will pump carbon dioxide into a well a mile below the ocean.

In addition, NPR reported on May 12, (here) that a House investigative subcommittee said Wednesday that the blowout preventer, had multiple defects — everything from leaky hydraulics to a dead battery.

How did it happen? BP and Transocean say the rig was built to handle working pressures of 20,000 PSI, but the safety equipment was built for pressures of 60,000 PSI.  Clearly, the upward pressure released by drilling 18,000 feet below the ocean floor, itself at a depth of 5,000 feet below sea level, exceeded the 60,000 PSI – that’s 60,000 pounds per square inch. In terms of reference, atmospheric pressure at sea level is 14 PSI. For more information and an exploration of this,  Click Here to “Moore Think, Less Confusion.

Full text of both articles by NPR are reproduced below the fold Continue reading →

Fossil Fuels and a Walk on the Moon

Ships trying to Extinguish the Flames

Ships trying to Extinguish the Flames at the Deepwater Horizon Rig

The unfolding disaster at the Deepwater Horizon rig in the Gulf of Mexico, which promises to be an environmental catastrophe, (click here) the recent disasters at the Upper Big Branch coal mine in West Virginia, and the Kingston, Tennessee fly ash retention pond demonstrate that fossil fuels are dirty and dangerous.  Safety and environmental protection are expensive and cannot be guaranteed. The oil will adversely effect fisheries in the Gulf for years. If the oil gets into the Gulf Stream, it will curl around Florida and flow up the coast hitting Georgia, South Carolina, North Carolina, Virgina, Maryland, Delaware, Pennsylvania, New Jersey, New York, Rhode Island, Massachusetts, New Hampshire, and if it flows around the Long Island Sound, Connecticut – all the original 13 states, then Maine and the Atlantic Provinces of Canada.

Rather than harnessing the Gulf Stream to push pollution from the Gulf of Mexico up the Atlantic coast of the United States, we should harness the Gulf Stream for clean renewable energy. (Here’s how.)

Solar and wind, which harness natural processes rather than consume natural resources, provide power without fuels, and without waste: with no arsenic, carbon dioxide, lead, mercury, methane, and other toxins, greenhouse gases or radioactive waste. These systems enable us to meet our needs and allow future generations to meet their needs – and flourish.

Rather than clinging to the dirty and hazardous infrastructure of the past, we must build the clean, renewable, and sustainable infrastructure of the future.

Cape Wind and the Staten Island Ferry solar array and the thousands of other solar and wind projects here in the U. S. and elsewhere on the globe are, to paraphrase Buzz Aldrin and Neil Armstrong, “small steps … yet giant leaps for mankind.”

This post is the First Installment of a series that will follow the unfolding catastrophe in the Gulf of Mexico.

—

The index is below:

  1. Fossil Fuels and a Walk on the Moon, May 3, 2010.
  2. Drill Baby Drill or Drill Baby Oops, May 7, 2010.
  3. The Magnitude of the Spill, May 15, 2010.
  4. One Month After The Spill BP Siphoning 3,000 Barrels Per Day, May 20, 2010.
  5. Deep Water Horizon – The Chernobyl of Deepwater Drilling?, June 2, 2010.
  6. The Deepwater Horizon: 40,000 Barrels Per Day or 70,000, June 13, 2010.
  7. The Deepwater Horizon After the Macondo Well Explosion, June 19, 2010.
  8. Deepwater Horizon – Bombs and Hurricanes, July 1, 2010.
  9. Like a Bad High School Math Problem, July 14, 2010.
  10. Crisis Management and the Gulf Oil Spill, July 16, 2010.
  11. The Deepwater Horizon: The Good, The Bad, and The Ugly, October 7, 2010.

Vermont Yankee – Leaks Cesium

The latest news about Vermont Yankee – The leak of Cesium-137 is not a new leak.  From VermontBiz.com (click here) or the Burlington Free Press (here).

“In a statement issued yesterday, Vermont Yankee said that recent news reports have focused less on the tritium resolution and more on the other isotopes found in the soil at the plant. Despite the recent media coverage, Vermont Yankee said the presence of Cesium-137 and other radionuclides found in the soil at the plant is not new news. During the first week of March, the company shared soil sample results with the Vermont Department of Health indicating the existence of cesium in the soil.”

What’s worse than a nuclear power plant that leaks radioactive tritium?  A nuclear power plant that leaks radioactive cesium. The good news  that it’s not a new leak. Vermont Yankee ” has not had a fuel defect that could leak Cesium-137 since 2001.” Exactly how is this reassuring?

It’s “not dangerous” according to the NRC and the people who either lied or didn’t know about the tritium leaks.

In an unscientific web-based poll (here) WPTZ a Vermont television station affiliated with NBC, 5,487 or 53% of the responders said Vermont Yankee should be shut down now (3,387 / 33%) or when it scheduled to shut down in 2012 (2,100 / 20%). The question was “Do you think Vermont Yankee should continue operations beyond its scheduled shut down in 2012?

” The question was answered affirmatively by 4,506, or 44%.

The Vermont Dept. of Health provided a summary, here of tritium contamination, here.

While nuclear power provides a tremendous amount of power from a small amount of material, it is very expensive when done right. And when done wrong we have disasters like Three Mile Island, Chernobyl, and business as usual like Vermont Yankee, Indian Point, Oyster Creek – the list of accidents is long for each operating nuclear power plant.

The economic externalities of nuclear and coal are very expensive in terms of health effects to people and the environment. As I’ve addressed elsewhere in this blog, solar, wind, and other renewable sources are safe and inexpensive, and the economic externalities are beneficial.

The only good news is that Vermont, in the spirit of Ethan Allen, is pointing the U. S. in the direction we need to go, vis a vis nuclear power.

Barack Obama, a Systems Thinker in the White House

President Barack Obama.

President Barack Obama.

In his State of the Union Address <video, transcript Englsh, en español>, President Obama said “The best anti-poverty program is a world classeducation

.” He described a positive, or reinforcing, feedback loop. Education enables people to accomplish more, earn more, and better educate their children, who also accomplish more and earn more. It is one of the most important differences between the populations of New Jersey and West Virginia. This is described in detail in Thinking in Systems, by Donella Meadows<link>, (C) 2008, published by Chelsea Green<link>, ISBN 978-1-60358-055-7.

The President also asked for a better health care plan. I can answer that in five words: “Single Payer; Medicare For All” <link>  just approved by the California Senate. Medicare works for my octogenarian father. Health Insurance Care doesn’t work for a 20-something friend of mine. He just graduated from college. He has no job and therefore no medical insurance. If he was a full-time student he’d be covered on his parents’ insurance. A simple reform would cover recent graduates until they find a job that pays a living wage and provides health insurance benefits. Another would be by expanding Medicare to cover all citizens. This is much easier said than done. Our medical care system cannot adequately care for approximately 50 million people – one out of six. This can’t be changed overnight – we need to train more doctors and nurses, and build more hospitals, but it must be changed.

Image showing mountain strip mined for coal.

Mountain strip mined for coal. Chris Dorst, Charleston, WV Gazette.

Energy is another set of systems problems. No one who has seen a once pristine valley after strip mining or “mountain-top removal”  uses the term “Clean Coal.” Countries like Denmark, Ireland, Israel, Japan, and Sweden built their economies with education not extraction of natural resources. As the President alluded to, conservation and clean, renewable energy technologies – solar, wind, geothermal, hydro – can be implemented faster, at a lower cost, and with fewer negative economic externalities than traditional fuel intensive resource based technologies like fossil fuel and nuclear power. This suggests another of the differences between New Jersey and West Virginia – the “Blessings of Education” versus the “Resource Curse” <link> from which economies built on extraction of natural resources suffer.

Arklow at Sunset

Arklow Bank Wind Park, off Arklow Bay, Ireland. Image courtesy Oneworld.net, UK.

The President needs economic advisors who start think in terms of ecological economics <link1 / link2>, of metrics like the Genuine Progress Indicator, GPI <link>, rather than Gross Domestic Product, GDP <link>. Simply put, ecological economics is neoclassical economics with a better understanding of the long term and of costs. Spending one dollar – or one trillion dollars – to clean up a mess is not as good as allocating those resources to build factories, houses, libraries, museums – the infrastructure, culture, and community of a nation.

God, Keynes, and Clean Energy

Columbia University

Columbia University

NY. Jan. 25. Mark Fulton, “Climate Change Strategist” Deutsche BankAsset Management, spoke at Cary Krosinsky’s class in Sustainable Investing at the CERC, the Center for Environmental Research and Conservation, Earth Institute, Columbia University.

Krosinsky, Vice President of Trucost, recently co-edited and wrote the book Sustainable Investing: The Art of Long Term Performance with Nick Robins of HSBC. He is an Advisory Board member of the Association of Climate Change Officers (ACCO) and founder director of InvestorWatch. Trucost has built and maintains the world’s largest database of carbon emissions and other environmental impacts as generated by the world’s largest public and private companies. Their data and expertise is used by leading global fund managers and asset owners to manage carbon risk. Continue reading →

Nuclear Power Development Costs Skyrocket

This is not exactly “news.” Nuclear power plant  construction is synonymous with cost overruns.

(This is a “systems problem.” Anytime you have a 10 to 15 year project in the $Billion range you will find several reinforcing feedback mechanisms that increase the cost and few, if any, balancing feedback mechanisms that keep the costs at a steady state. A brief delay or a minor increase in inflation will cost $Millions.)

Radioactive SymbolCosts of the proposed nuclear plants in San Antonio, TX, have skyrocketed, even tho construction has not yet begun. Originally forecast at $2 Billion per gigawatt (gw) of capacity, roughly the cost of wind power, it is now clear that they will cost between $4.5 Billion and $6.5 Billion per gw of capacity – $12.1 billion to $17.5 billion for the reactors. Continue reading →

Copenhagen, India, China, the US, and GAIA

I’m beginning to think that Copenhagen was what it had to be, what it could only be. It fulfilled its Buddha-nature. Thus, I don’t consider it a failure. Nor do I consider it a success. It was what it was, what it could have been, what it had to be:

A gathering of emissaries from the 64 corners of the earth.

Courtesy of NASA

Earth From Space, Copyright NASA

Isaac Asimov observed in Foundation (ISBN: 978-0553293357) that “diplomacy, is the art of speaking for a long time without saying anything.” Most of the diplomats in Copenhagen had multiple agendas. Unfortunately for billions of the world’s poorest, the public agendas of sustainability and the abstract “Gaia Hypothesis” were distant fourth and fifth behind the private agendas of power, money, and influence.

The inconvenient truth is that much of Bangla Desh, California, Louisiana, Southern Florida will disappear, submerged, like the mythical Atlantis. China will continue to build 2 coal plants per week. And people will die.

But disregarding this notion, a Chinese diplomat Continue reading →

Copenhagen, Climate Change, China, and Dessert

Sea IceEarlier today one of my friends handed me a copy of some satire published in the New York Post, a tabloid in the tradition of the London rags, on the subject of “Climate-Gate.”  At about the same time, Roger Saillant, co-author of Vapor Trails, who heads the Fowler Center for Sustainable Value at Case Western Reserve University pointed me to Elizabeth May’s post on the hacked computers and stolen e-mails at East Anglia University. Ms. May leads Canada’s Green Party.

Patrick Michaels, of the Competitive Enterprise Institute, which is really a public relations arm of Exxon Mobil, was once a scientist at the University of Virginia.  He is famous for giving testimony attacking Dr. James Hansen to the U.S. Senate. However, when interviewed by Elizabeth May on Canada’s CBC Sunday Morning’s “Kyoto on Trial” in 2002, Michaels admitted to redrawing Hansen’s graph to make it wrong. Michaels, who has traded the scientific method for Stanislavsky’s acting method, admitted to perjury in his testimony before the United States Senate.

The graph shows the amount of sea ice from July thru November from 1979 to 2000, then in 2005, 7, 8, and July thru Sept., 2009. It is from the National Snow and Ice Data Center, Boulder Colorado (here) published Oct. 6, 2009. The dark gray line shows Arctic sea ice from 1979 to 2000. The gray band shows 2 standard deviations from the mean. The colorful lines show that Arctic sea ice is at or well below two standard deviations from the mean levels of 1979 to 2000.  Clearly there is less ice in the Arctic then there used to be. Continue reading →

Massachusetts to pay higher prices for consumer-produced solar, wind energy

Marketplace reported last night that “Massachusetts has launched a program that rows of panelslets home and business owners who generate their own power sell it back to the electric compan” at retail prices, increasing the incentives for the installation of solar and wind energy-producing equipment, and additional incentives for conservation (i.e. additional conservation, which brings net consumption towards zero brings a household closer not just to a zero bill, but payment from utility companies).

Program pays top dollar for extra power, reported by Mitchell Hartman. From the transcript:

[Massachusetts] State Energy Secretary Ian Bowles.

IAN BOWLES: Starting now, if you own solar panels on your home, or you have a small-scale wind turbine, and you want to sell extra power back to the grid, you’ll now be able to do that at a very advantageous rate.

California will do the same thing starting in January and lots of other states are working on similar programs. Massachusetts now leads the pack, because it’s making utilities pay retail rates for the electricity customers generate.

TERRY TAMMINEN: So it really encourages you to become a renewable energy entrepreneur.

California energy consultant Terry Tamminen says these policies encourage alternatives to fossil fuels. But can a bunch of windmills and rooftop solar panels really make a difference?

TAMMINEN: Boston may not be noted for its sunshine, but neither is Germany, and yet Germany is the second-largest user and producer of solar energy in the world.

For years, Germany has been paying customers a premium for the renewable power they generate. Tamminen says that’s largely why it’s jumped ahead.

Mitchell Hartman, Program pays top dollar for extra power.

Via Marketplace, a production of American Public Media.



Green Energy: Our Future Depends On It

Back in February, 2009, Business Week published my article, Green Energy: Our Future Depends on It. They even asked for a picture – which I was happy to provide.  I just learned that it was picked up by other web-sites:

The article is reproduced below. Continue reading →

King Coal: Wise Monarch or Cruel and Ruthless Despot?

Chris Dorst, Charleston, WV Gazette.

Chris Dorst, Charleston, WV Gazette.

According to Mortality Rates in Appalachian Coal Mining Counties: 24 Years Behind the Nation, by Michael Hendryx, of the Department of Community Medicine, West Virginia University, Morgantown, WV <pdf>, mortality is 10.21 % higher in Appalachia than elsewhere in the US, and 18.45 % higher in in coal mining counties where 4 million tons or more of coal are mined. (See also Coal Tattoo.)

Part of the problem is poverty, lack of education, smoking, and other factors, but these are all related to the coal economy.

Continue reading →

Economics: NeoClassical v Ecological

2009 Lamborghini Gallardo LP560 Spyder

2009 Lamborghini Gallardo LP560 Spyder

“All this matters because economists thought, wrote, and prescribed as if nature did not.”

J. R. McNeill, Something New Under the Sun.

“Global Warming is nonsense. Greenhouse gases mean growth, far as I can see. The Earth is one big resource, to exploit and consume, for the grand old party.”

L. J. Furman, Sunbathing In Siberia

Economics, according to Daly and Farley, in Ecological Economics, ISBN 1-55963-312-3, is “the science of allocation of scarce resources among alternative ends,” or  “what we want and what we have to give up to get it.”

Since the Great Depression economics has been about growth. Neo-Classical Economists measure the health of an economy by the growth of Gross Domestic Product, GDP, the sum of the goods an services produced in the market.

Ecological Economists think that the purpose of the economy is not simply to maximize and keep increasing the value of goods and services that are passed around. According to Robert Costanza, Director of the Gund Institute and Professor of Ecological Economics, University of Vermont, “The purpose of the economy should be to provide for the sustainable well-being of people.” Ecological Economics distinguishes growth from development. Growth, an increase in throughput, can waste resources. Development, a qualitative change for the better, results in realization of potential. Ecological Economists distinguish between costs and benefits, and subtract costs.  Rather than the Gross Domestic Product, GDP, Ecological Economists focus on the Genuine Progress Indicator, GPI,and distinguish economic goods from what Donella Meadows calls “economic bads.

Continue reading →