Gernot Wagner's Blog, page 15

Motivated by purpose

Money makes the world go 'round, except when it doesn't.

Sometimes it's fulfillment, purpose, mastery, and all these other often unquantifiable dimensions that make life worth living.

None of that, of course, means that money doesn't matter. In fact, without enough cash to have a decent life, fulfillment, purpose, and mastery go out the window. The global rich editing Wikipedia pages may not be in it for the money, but the billions who truly matter are still striving to be in a position to pursue their unpaid passions.

If you are reading this, chances are you can afford to feel good about recycling, and you'll nod along while watching this video. Let's hope we can bring everyone else there, too, without choking the planet.

Dear Princeton, we are hiring

You have a Ph.D. in Economics (or a closely related field)?

You have some kind of Princeton affiliation?

You'd like to make a difference in the world?

Let's talk.

NIMBYism, New York edition

Forty miles north of New York City is the Indian Point Nuclear Power Plant. I don't care what you think of nuclear power, having an aging plant within forty miles of 20 million people isn't the outcome of any rational policy decision.

Still, Indian Point's impact so far pales in comparison with another genius planning move.

Jersey City, across the river from Manhattan, is home to the PSEG Hudson Generating Station, a coal plant that produces over 1.8 million tons of carbon dioxide, 58,000 tons of sulfuric acid, 1,500 tons of sulfur dioxide, and 50 lbs of mercury a year.

A tablespoon of mercury would poison the Hudson for good, and even smaller amounts will knock a few points off your kid's IQ.

Indian Point started its operation in 1962. Hudson Generating Station followed in 1964. Is it too much to ask for policies that would prohibit either from celebrating its 50th anniversary?

Where's your bag, ma'am?

Where's your bag, ma'am?

Oh, sorry. I forgot.

You do know that that will be a 5 cent charge for the bag, do you?

My friend, when conveying her experience on that fateful day in a Washington, DC check-out aisle:

I felt so small when I was standing there. One public shaming was enough. I always bring my bag with me now.

Check and mate. Economic incentives at work.

Ethically speaking, tonight between 5:30 and 7

If you are in New York, come join me tonight at the Carnegie Council for Ethics in International Affairs.

If you aren't, there's a live webcast.

Koch-funded study confirms sad state of affairs

It's amazing that this is even news, but here goes: A new study commissioned in the wake of "Climategate" that wasn't confirmed that, yes, the globe is indeed warming, and that the vast majority of climate scientists have gotten it right all along.

Among the study's sponsors: the famously infantile Koch brothers, who would be a laughing stock, if it weren't for their millions funding climate deniers.

What are the chances any of them will change their mind now and finally acknowledge that a "free market" can't operate, while you socialize the costs of doing business?

On the road to sustainability?

I'm spending the weekend playing Hoppa-Hoppa-Reiter* with my 7-months-old in a Washington hotel. (* Ask my mom. She started it.) They are doing all the right things here.

The toilet is of the high-intensity, low-water kind. The bulbs are CFLs. Towels aren't washed unless you drop them on the floor. In short, they are doing all the right things that save the hotel money and make guests feel good about doing good without having to do anything about it.

That's where things stop, as they do in most hotels.

The TV is flat, wide, and always on stand-by because, well, guests like it that way. The AC is on full blast when you walk in. There's always a line of cabs outside, even though the next metro stop is a block away. The hotel figures, probably correctly, that business travelers don't do public transport. Why would you, if you can expense the cab?

Most importantly, the water and energy saved from reusing your towels pales compared with the energy it takes to get you to the hotel in the first place—whether it's a car from across the Potomac, a train from New York, or a flight from San Francisco.

That's the part no hotel would ever touch. Telling people not to show up to yet another conference isn't quite in their interest. And volunteering not to show up to the conference will do nothing for the planet. It'll just make you look stupid in front of your boss.

Schwarzenegger, go where Romney has gone before

Comprehensive health care reform eluded America for decades. It was a Republican Governor in liberal Massachusetts who took the first step. Four years later, Mitt Romney's health care plan turned into federal law.

Comprehensive climate policy continues to elude America. It was a Republican Governor in liberal California who took the first step. California's cap-and-trade system has now been officially adopted. Projecting out from the introduction of Arnold Schwarzenegger's ambitious climate plan would put us in 2016.

Better late than never.

A second-best world

We don't live in a perfect world. When gas taxes are out and all we have are fuel economy standards, that's a second-best solution to tackling emissions from driving. When carbon taxes are out and all we have is political hot air, that's far from first-best, too.

Sometimes, however, one imperfection may well cancel out another. Monopolists distort markets. They charge more and produce less than the free market would. That's bad news. But if the monopolist happens to own a particularly polluting mine, charging more and producing less is exactly what you want. Break up the monopoly and pollution increases.

Double whammies may not be that bad after all.

Picking losers

We know that we need several Nobel-worthy technology breakthroughs to get out of the current energy mess.

We can sit around and hope. That, of course, isn't a strategy. It's betting on wind (and perhaps solar) and a prayer.

We could also try to pick winners. That's still much closer to a crap shoot approach than we'd like, and it's mostly bad policy.

Instead, we ought to subscribe to what economists know as "induced innovation." Entrepreneurs will always tinker and experiment. The question is whether we can guide that tinkering in the right direction.

We don't want to pick winners. But we can certainly pinpoint some of the losers, and carbon pollution is a clear one at that. That's where limiting and pricing pollution comes in. Do that, and let the inducing begin.