Seeking Realistic Economic Scenarios

I find it enervating to listen to economists trying to explain our circumstances without reference to resource constraints, as if resources were a separate topic. Krugman’s backing of Waxman-Markey carries some weight with me, but not as much as it would if he didn’t totally neglect resource constraints.

Some of the things Tidal has said in comments here fit in with this point of view; essentially driving the collapse of the Ponzi scheme is the fact that our ability to borrow from the future is now facing substantive limits which it did not face before. The key resource constrain is usually taken to be peak oil; CO2 emissions constraints function similarly.

I am looking to collect articles which tie the current economic disruption to resource and especially energy constraints. Here, from the Oil Drum, is an interesting one which  manages to blame Richard Nixon for everything. 
I don’t share the article’s extreme pessimism (or revolutionism?) about the future of capitalism; I think the system will limp along and eventually learn to live within limits. But perhaps my own expectations aren’t worth very much. Anyway I am not ready to talk about them at length.
I do share the article’s sense that resource constraints and especially energy resource constraints are related to the current crisis for reasons other than a mere coincidence in time. To read even Krugman or DeLong is to believe that the problems of the economy and the problems of its key resource are completely decoupled. It’s hard to find professional economists who make more sense than these guys and yet they aren’t making much sense at all.
To be fair, Krugman does seem to understand that oil is finite. It’s just that he doesn’t seem to think that’s very important, or relevant.
James Kunstler’s May 18 blog entry is also worth reading. (And don’t miss his eyesore of the month series if you are feeling sardonic!) But is there somebody convincingly arguing for a middle between collapse and “recovery”? Or is growth so hardwired that near-zero growth simply doesn’t happen.
I’m looking for other articles wherein resource constraints are tied to the economic prognosis without going into revolutionary or Kunstlerian postapocalyptic scenarios. Any ideas, anyone?
Note: I am not looking for ecological economics, Daley, Ayres, etc., unless and to the extent that they specifically tie their analyses to the recent economic disruptions and the prognosis.

Motorcycle Maintenance and the Matter with Kansas

I. An Unlikely Distribution

Consider this astonishing map of the distribution of a particular pesticide.
There’s a book out called “What’s The Matter with Kansas” which investigates the strange prospect of the hardscrabble states of the interior voting reliably against their own economic interests. This is achieved by a certain sleight of hand with which Americans are sadly familiar, where a political philosophy really amounts to a stand-in for a certain subspectrum of religious beliefs.
There’s another matter with Kansas, though, which is that its landscape is in ruins. I had the experience of driving into western Kansas from the Oklahoma panhandle during the spring flower season two years ago. It had been a stunningly beautiful spring in Texas with profusions and varieties of bright flowers all the way from Austin to Amarillo and beyond. Crossing into Oklahoma didn’t change matters noticeably, but the transition to Kansas territory just a few miles further on was mortifying. It was like crossing a border into a land where color had been outlawed.

Every inch of the place was economically active, and every inch dedicated to the prosperity of people who obviously lived far, far away. Not a bluebonnet or an Indian paintbrush was anywhere to be seen, not even the sunflowers that the state chooses as its emblem. Nor much in the way of human creativity either. Since a drive diagonally across Kansas is a lengthy prospect, this was a bit discouraging, especially in the wake of the spectacular trip across Texas the previous two days.

I’ll come back to the map in a bit; it has more to tell us.
II Zen and the Art of Integrity

A wonderful article by Matthew Crawford appeared in the New York Times Magazine last weekend, called “The Case for Working With Your Hands“. In Crawford’s case, it is about a transition from being a University of Chicago philosopher to being a motorcycle mechanic. Of course, as any well-read baby boomer will know, the idea of mixing philosophy and motorcycle maintenance isn’t without precedent.

Crawford finds himself defending the idea that manual labor engages the intellect; a prospect that only people who don’t do any could maintain. What does this have to do with me and my blog? I’m a clumsy and nerdy sort: the idea that my escape from my quandaries could be achieved with wrenches and screwdrivers seems a bit overwrought after all.
Here is the key passage in his article, and probably in his forthcoming book:

Over the next six months I spent a lot of time at Fred’s shop, learning, and put in only occasional appearances at the university. This was something of a regression: I worked on cars throughout high school and college, and one of my early jobs was at a Porsche repair shop. Now I was rediscovering the intensely absorbing nature of the work, and it got me thinking about possible livelihoods.

As it happened, in the spring I landed a job as executive director of a policy organization in Washington. This felt like a coup. But certain perversities became apparent as I settled into the job. It sometimes required me to reason backward, from desired conclusion to suitable premise. The organization had taken certain positions, and there were some facts it was more fond of than others. As its figurehead, I was making arguments I didn’t fully buy myself. Further, my boss seemed intent on retraining me according to a certain cognitive style — that of the corporate world, from which he had recently come. This style demanded that I project an image of rationality but not indulge too much in actual reasoning.

As I sat in my K Street office, Fred’s life as an independent tradesman gave me an image that I kept coming back to: someone who really knows what he is doing, losing himself in work that is genuinely useful and has a certain integrity to it. He also seemed to be having a lot of fun.

A “certain integrity”. As opposed to “The organization had taken certain positions, and there were some facts it was more fond of than others.” Here in a nutshell is what is wrong with us.

In a Jeffersonian democracy, where a great range of practical skills is distributed among the voters, one suspects that the capacity to maintain a fondness for some facts in preference to others would not be among those skills. In a world of specialization, one can be an expert on football scores and used car prices, say, without knowing much else about anything else. Cultural affinities align you with one or another opinion package. Those packages come with supporting facts.

In American politics these days, you only have two packages to choose from. One, increasingly narrowly defined, is also aligned with a narrow and literalist religious philosophy, entraining a certain amount of ugly racism and paranoia, and it is fortunately a little shy of the critical mass required to make the country seriously dangerous in the horrible tradition of 20th century totalitarian regimes. The alternative, though, for which the rest of us have increasing sympathy, is hardly immune from paranoia, selectivity of evidence, and foolish romanticism. Ultimately the selectivity of evidence becomes so severe that the two main groups operate, effectively, in distinct worlds. Their job, then, is not to promote their ideas, but to promote their “facts”, facts whose implication is so overwhelming that no argumentation is necessary.

III. The “Good Guys” Do It Too

I was pretty much ousted from the progressive community in Madison, WI, some years back when I defended the locally based Kipp Corporation against accusations of the most wanton emission of pollutants into a residential neighborhood. The fact that the neighborhood had grown up around the factory and largely because of the factory was a matter of indifference to its contemporary left wing citizens. Their attitude was that the company “hadn’t successfully proven that it wasn’t emitting dioxins”. My BS detector was good and thoroughly pinned.

Now Kipp was proposing to build a larger smokestack, something that probably would have affected the value of my own property at the time. But the battle wasn’t being fought on those grounds at all. It was being fought over the proxy of imaginary dioxin and complaints of ilness that almost exclusively were being filed by a single citizen, who ostentatiously wears a gas mask to public meetings in the neighborhood. The neighborhood website, for which I was the first webmaster, currently features a skewed report about the company.

In 1999, an odor survey of neighborhood residents was conducted by the Wisconsin Department of Natural Resources (WDNR). Citizens reported sleeplessness, headaches, nausea, and other ailments as a result of exposure to odors they attribute to MKC.

Or so it says. I filled out the survey and reported no such problems. By the time of the survey, a great deal of noise was being made about Kipp; one supposes that neighbors had headaches and nausea in 1999! The “result of exposure” is, obviously, something of a judgment call. I don’t recall the exact wording of the survey but I am pretty sure DNR didn’t ask the question that way. I know some DNR folks. DNR has more competence than that.
Kipp, unsurprisingly, has packed its bags for the suburbs, and perhaps the last major manufacturer is gradually leaving Madison, which may be for the best for all concerned.
This experience, though, has made it clear to me where the hostility to environmentalism originates. Kipp has always been the model of a responsible corporate citizen, maintaining a clean and presentable facility, supporting community events and initiatives, providing decent employment for blue collar workers, resisting outsourcing, and in general being community minded. The ingratitude shown by the local community, its susceptibility to fear and innuendo, and its profound rudeness, tactics that might have more resonance with a truly corporate opposition, in this case were taken out against a closely held and responsibly run local business.
This is a disaster. If every accusation of environmental malfeasance must be taken on faith, there is little motivation for activists to actually determine whether their accusations are founded. Accusations are taken to be true on the principle of selected facts. Why spend effort on weighing evidence? One could argue that there’s so much more good work to be done; why bother fussing about evidence when you can go directly to good, satisfying action?
IV Bee Colony Disorder and Bayer
As a natural worrier, one problem that has been worrying me has been the decline of bee colonies. As of last week, I thought of it as mysterious, so when I saw Bee Colony Disorder being blamed on pesticides on Twitter last week, I thought to investigate.
The tweet in question came my way from @monkchips who seems a decent enough sort on the whole. For instance he likes Frank Lloyd Wright. Can’t be all bad. He said:

Bayer pesticides are killing our bees. Please protest against imidacloprid. [v:glynnmoody]

I asked him for evidence, and his reply was simply:

Bayer found imidacloprid in pollen of flowering trees at concentr’s high enough to kill a honeybee in mins

Which leads to a rather typical advocacy article on Salon; the connection to the Colony disorder is made by innuendo. Nobody is denying that this stuff may have damaged a bee or two; this puts the manufacturer in an awkward position, leaving a romantic/absolutist green position easy to take up. But there’s really no evidence presented that bee colony decline is connected with this substance. And normally it would have stopped there.

But as scientifically literate people participate in Twitter, new possibilities for connections emerge. One @jenncuisine (an inspiring chef and an environmental chemist) pointed me to the map up above. All that remained for me was to find a map of bee colony disorder in the US for comparison, which I did. And here it is:
Not as detailed a map, admittedly, but even so, enough to assert that the correlation is very weak. No reports in Kansas? Reports in Iowa and South Dakota?
Whether or not imidacloprid is killing some bees, it is not likely to be responsible for the alarming phenomenon of Bee Colony Disorder. Implications to the contrary need evidence, not innuendo, and it took little investigation to provide evidence to the contrary.
V The Matter with Kansas
Still, the very strange map of where this substance is applied, compared with my own experience of a very sharp decline in ecosystem health exactly coincident with the Kansas line, doesn’t leave me enthusiastic about this behavior. Do other pesticides show a similar pattern?Was my experience just coincidental in some way? What exactly is the matter with Kansas?
We have to have some way of investigating evidence scrupulously.
The problem with the press isn’t Craig’s List or bloggers. The problem is an incapacity to examine and weigh evidence. We are left on our own, guessing. This is turn is responsible for the collapse of reasoned discourse. How can we reason together when we are operating on different evidence?
The solution to the journalistic quandary may need to emerge from the scientific blogosphere. Scientists, at least honest ones, are like motorcycle mechanics. We do not get to pick and choose our evidence. Whether or not Bayer is killing bees, is there something odd about Kansas beyond its politics, after all?
Would it not be worthwhile to find out, from someone without any agenda other than truth?

Waxman-Markey Counterproductive?

Gar Lipow argues, and convincingly so, in a current article on Grist, that Waxman-Markey’s cap and trade provisions are counterproductive.

I am still deferring to Mr. Gore and to Mr. Krugman, not to mention to David Roberts who seems to be wavering. So I am relectuant to argue against this bill. 
Lipow doesn’t address the issue of appearing in Copenhagen with nothing much to show. This still seems to me to at least weigh in favor of some large bill. But he does address the issue of putting bad metrics into practice to start with. 
In closing Lipow quotes Peter Dorman, so I’ll quote the same paragraph as something to think about:
Mainstream environmental groups are … soooooo happy that climate deniers are not in command of politics any more. They are fighting yesterday’s battle, to get general agreement on the principle that climate change is caused by people, and people need to do something about it. They like the nice feeling that comes from all of us raising our hands and pledging, scout’s honor, to achieve sustainability by 2050. But they are losing today’s battle to put into place a viable means to get from here to there, and judging from their public statements they don’t even know it.
Stacy Morford, on the SolveClimate site, is also on the fence.
In terms of public awareness, I lunched with a bunch of intelligent and astute American adults yesterday. None of them had heard of Waxman-Markey, though one person had heard of Rep. Waxman. 
Maybe this sort of opacity is necessary as a matter of realpolitik these days, but I don’t have to like it, do I? Shouldn’t this have escaped the energy blogs and made a tiny impact on the mainstream?

Surviving Montreal Traffic

An art contest in defense of pedestrians and bicycles.

Nos 6 & 7 are creative:

“For us, the annual appearance of potholes is a sign that Nature is constantly retaking the roots of our city. So, before we get around to gving her a good slap in the face, we installed some turf grass in several potholes around the Plateau Mont Royal.”


“Nous estimons que nous ne pouvons nous contenter du statu quo proposé par la Ville de Montréal, si nous voulons voir non pas un maintien, mais une amélioration de notre situation.”



We believe that we can’t be satisfied with the status quo proposed by the city if we want to improve our situation rather than just maintaining it. The solution includes public transport, but also a reduction in the traffic capacity of the streets.

I’m trying to imagine Texans arguing for less parking in their neighborhood to encourage more bicycles, trains and busses. Take that, Ben Wear!

Waxy Markup

Adam Siegel is trying to plow through the details of Waxman-Markey so there is one more reason for me not to. 

I am trying to get a grip on the whole business and hope to have something to say after  the dust settles. For the present, I am in favor of anything other than going to Copenhagen empty-handed and am somewhat reassured by Krugman’s acquiescence
I’ve never really followed legislation through the negotiation phase before. I’ve heard it isn’t pretty. That assessment turns out to be correct. 
I’ll point to useful articles as I come across them. 

Yeah, right

American passenger train service:

Train service to Toronto for the severely irrational. But though Air Canada services the route, people who travel between those two places may be uncommon.

What about just zipping across the southern tier?

Holy three days and five hours, Batman! (Three days and seven hours with the time zones, actually.)

For comparison (both one-way), the bus takes 25 hours and costs $71.50 with advanced purchase. Google says it is a 16 hour drive.

Oops. It appears that the Gulf Coast route, though marked on the map, isn’t in service at all.

waxing poetic

In the end, I reluctantly conclude that David Roberts is right that we (and I in particular) should STFU about the Waxman Markey legislation and let the politicians take it as far as they can.

This is what is ironically called a “real world” compromise, in which we understand perfectly what techniques would be needed to make a world of vastly greater human dignity, beauty, mutual support and happiness (though, perhaps, a wee bit less ludicrously funny), but the “real world” of politics interferes to make a thorough bureaucratic muddle of it all.

The NYTimes explains this flavor of realism here.

How did cap and trade, hatched as an academic theory in obscure economic journals half a century ago, become the policy of choice in the debate over how to slow the heating of the planet? And how did it come to eclipse the idea of simply slapping a tax on energy consumption that befouls the public square or leaves the nation hostage to foreign oil producers?

The answer is not to be found in the study of economics or environmental science, but in the realm where most policy debates are ultimately settled: politics.

Cap and trade, … is almost perfectly designed for the buying and selling of political support through the granting of valuable emissions permits to favor specific industries and even specific Congressional districts. That is precisely what is taking place now in the House Energy and Commerce Committee, which has used such concessions to patch together a Democratic majority to pass a far-reaching bill to regulate carbon emissions through a cap-and-trade plan.

The upshot is a lot of short term gain spread around to specific people, and a balancing amount of unnecessary extra long term pain spread around to nobody in particular. This is the activation energy of politics.

When I discovered the distinction between popular and less popular blogs about global change, I noted that the dominant players, at least so far, are the more politically oriented ones. I inadvertently offended Joe Romm, but whatever his educational background, his thinking is pretty inside-the-beltway. David Roberts, though happily ensconced in the other Washington and pretty critical on the whole about DC, is also in the class of unabashedly liberal/progressive blogs. These are the guys who, at least at present, are getting the traffic, relatively speaking. Maybe that is as it should be. Maybe the group of people I want to reach is intrinsically smaller. Anyway, while we may agree on many things, what they try to do on their blogs and what I try to do on mine are not alike.

I discovered that while there is no doubt that I describe myself as liberal/progressive in contrast to other political postures, that is only a crude generalization in my case, since my politics takes a back seat to evidence-based reasoning, and sometimes I say things that progressives hate, for instance, “CCS sure had better work” and “coal is not the enemy of the human race” and so on.

Consequently, my writing and my thinking is not about how to advance liberalism or progressivism or my preferred political parties, but about what the most effective response to circumstances would be. Almost invariably, these ideas are considered “unrealistic”.

While carbon emission contraints are long overdue and there is a very dramatic mismatch between policy and evidence, it is an unusual sort of slow motion crisis. The effect of delaying a response to the second year of the present congress would be relatively inconsequential, compared to the distorting influences of a bad bill.

And in so saying, I fall into the fourth way: neither partisan nor afraid to draw a conclusion, feeling grimly disappointed that political realism creates such a muddle out of what ought to be a straightforward application of the part of economics that obviously works.

Commercial activity responds effectively to monetary incentives. Seriously. It does.

But I’m not an absolutist. The dominant factor in the present circumstances is the upcoming Copenhagen negotiation. It makes a great deal of difference to all the other countries whether the US shows up having made real substantive cuts, by which the participants will mean, exactly, large symbolic actions that might eventually lead to real substantive cuts.

How much better off will this leave grand gesture us than did the grand gestures of the past, most notably Kyoto?

Oddly, much better, since Damocles’ sword has slipped much lower, and since America would not find itself explicitly rejecting international cooperation. Maybe some of these theoretical cuts will eventually exit the “real world” of politics and enter the other (unreal?) world where the actual radiative properties of the atmosphere are changing at an unusually high and climbing rate.

So it’s perhaps best to leave the politicians to their craftiness or craziness. Because like it or not the radiative properties of the atmosphere for the next 100,000 years may depend sensitively on an all-too-casually chosen word here and there, and on the ensuing future sturm und drang among lawyers and judges and corprate interests about what the word actually means.

After a half century of our warnings and a quarter century of our drum banging, at least they are taking note in their peculiar way. Will it be enough?

The answer seems to be that, enough or not, it is the best we can do this year, and that this year matters.

In short

@david_h_roberts is right: we shouldn’t quibble too much re Waxman Markey. Timing is politically important so let’s cope.

PS – That’s right, the Canadians are smarter.

PPS – Or maybe not. Krugman, taking me completely by surprise, prefers a cap to a tax.

The Cruel Hoax: Growth and Equity Cannot be Sustained

Via a perceptive summary at Bristling Badger, Jared Diamond addresses the Tobis tautology:

China’s catching up alone would roughly double world consumption rates. Oil consumption would increase by 106 percent, for instance, and world metal consumption by 94 percent. If India as well as China were to catch up, world consumption rates would triple. If the whole developing world were suddenly to catch up, world rates would increase elevenfold. It would be as if the world population ballooned to 72 billion people (retaining present consumption rates).

Some optimists claim that we could support a world with nine billion people. But I haven’t met anyone crazy enough to claim that we could support 72 billion. Yet we often promise developing countries that if they will only adopt good policies — for example, institute honest government and a free-market economy — they, too, will be able to enjoy a first-world lifestyle. This promise is impossible, a cruel hoax: we are having difficulty supporting a first-world lifestyle even now for only one billion people.

Yes, this is the problem. We can’t equitably sustain the impact we already have. Which means that there are only two possible ways out of an absolute decline:

1) Abandoning the pretense that we have any interest in being fair
2) Reducing the impact per unit of wealth elevenfold

And that is just to break even!

Consider what an economist would consider business as usual.

Consider 2.5% annual growth, wherein the rest of the world can eventually catch up entirely to our final level. Let’s give it fifty years of more growth. Then we hold still and wait for the rest of the world to catch up to us; this will provide a lower bound. (Things are worse if we keep growing after that, but this is a good place to start.)

Plus we suppose a 40% increase in population that the demographers are telling us is what to expect.

And now consider what the world what have to do to break even on impacts.

OK, the 2.5 % growth for 50 years amounts to a 3.4 fold increase in wealth for us. If the population does not increase, that means the 11-fold increase in the prior calculation (for others to catch up only to 2008 levels in the west) has to be multiplied by 3.4 to catch up to the west, plus another factor of 1.4 to account for the increased population.

As a consequence, the impact per unit of wealth has to decline by a factor of 11 * 3.4 * 1.4 = 52.9 .

In order to support business as usual without increasing net impact or abandoning any claim to international equity, impact per unit wealth has to decrease by more than a factor of fifty. Even that may not be sustainable: that is what is needed to fulfill the implicit promise of a growth economy to the rest of the world for another fifty years without increasing the RATE at which the earth is damaged. And even so, the growth idea implies continuing reduction in impact per unit of wealth thereafter.

This entirely leaves aside arguments from energy availability. It’s completely sink-driven. For the most part, supply-side energy depletion arguments (peak all) are “served concurrently”. They don’t make matters easier, but at least they don’t add new multipliers.

What really has me dismayed is the scenario that the west will indeed abandon the pretense of international equity and try to become explicitly cynical and apartheid. This would leave the numbers much more plausible, but the world in sorry shape, mutually hostile, sectarian and violent by choice.

The recent rise of China in particular, and to a significant but lesser extent of India, will probably preclude success of this strategy. I hope so. In that scenario, the “growth” would all be channeled to the military in any case, essentially leaving individuals no additional wealth.

As Diamond points out, our existing patterns, especially in North America, are very wasteful; little actual well-being results from much of the high-impact activity. Oddly, in this wastefulness there is some hope, hope that our inevitable “decline” will not be too severe or disruptive, hope that what we can trim is mostly useless anyway.

Maybe there is some way to impose some sort of “growth” on this just to humor the economists, the bankers and the pension funds, but in actual fact our North American rate of impact on the world is so unsustainable that we will either see a long period of decline or something vastly worse.

A bit more on cap and trade

People who have put more effort than I have into reading the Waxman-Markey bill are coming up with widely differing interpretations, not just of what its impacts will be, but of what it actually means.

One interesting case against is this analysis by Payal Parekh, who thinks the cap and trade components of the Waxman-Markey bill will do very little for American carbon emissions. Others do interpret the provisions differently; the real question is which interpretation will be advanced by the affected economic interests and how it will stand up in court.

I do gather from the comments to that article that a key flaw in trading emissions rights is double counting: a behavior that would likely have been done anyway can now be sold for credits that greatly exceed the expense of the action. This causes the cost of remediation to increase, not decrease.

On the other hand, I begin to see the urgency arguments as well; they do not stem from any physical process that can’t delay a year for an effort to design an elegant bill and . They stem from the need for the US not to show up in Copenhagen empty-handed. The whole world is desperate for a semblance of major action from the US. Even if the cap-and-trade provision of Waxman is completely toothless, it sounds big. In other words, it’s the semblance that seems to matter.

Of course, the atmosphere pays no attention to symbolic actions. So one question, especially presuming Parekh has it right, is whether a bad bill immediately makes a good bill in the next few years harder to achieve. I suspect so.

Architects May Come, Architects May Go

This morning’s talk of car free cities put me in mind of Frank Lloyd Wright, a man whose genius is widely but not universally appreciated. His greatest works, I think, happened early in his career (the Dana House in Springfield justifies a day trip from Chicago, assuming you have already seen the Robie House). Irene and I were married in Wright’s First Unitarian Meetinghouse in Madison, which has its delights but is not remotely comparable.

But Wright remained a very interesting man, and one not much constrained by conventional wisdom. One of his obsessions was a pattern of settlement neither urban nor suburban. Oddly, it’s in some ways reminiscent of the large scale patterns of the deep south, with settlement strung endlessly along four lane highways without ever managing to be rural or urban. Of course, it would look better if Mr. Wright were on the zoning commission, or, well, if there were a zoning commission at all.
The idea goes further than the linear sprawl, though. In fact, people would have long narrow lots strung out behind their dwellings on these linear structures. At the places where the lines crossed, immense skyscrapers would rise, containing most industrial and commercial activity. Great swaths of wilderness would be preserved between these linear structures. The benefits of city, suburb, farm and wilderness all interact in a unified whole. To be sure, Wright envisioned automobiles and even personal helicopters, but the design is very suitable for almost total conversion to externally powered train traffic (and without meeting any area-density requirement at all). 
I have always regretted the loss of optimism about the future. Even the people who think they are being optimistic these are promoting something far shabbier and sadder than what is well within, at least, our technical capabilities. 
I can’t resist another picture: this one has been reproduced as a poster and a copy of it is over my desk at the U of T:

This poster has been following me around for decades now. I’ve had my ups and downs with DOE in general and Rick Stevens in particular, but the moment I liked Rick the most was when he saw the drawing, took it in within a second or two, and said “why can’t the real world be like that?”

Yes, Rick, that is exactly the question. As far as I’m concerned, you can have all my tax dollars for your superdupercomputers if you can answer that one.

Images via the Hochschulle Darmstadt