Efficient Outcomes

We live in a world that is flawed by you, and everyone you do and don't know.  Those everyone's are humans; homo sapiens that reside at the top of the food chain but way below the chain of common sense.

Not to beat up on humans, I love being one, but let's take a look at some primary accusations the rest of living organisms might make if they could, well...only find a way to communicate with us.  One perfect example can be found in a book titled Ishmael.  While I don't purport this novel to answer humanities failures, but it does probe into the culture of our behavior. 

We lack the ability to respond to a fundamental reality of finite resources because in an economic system the value of these resources are externalities that hold little meaning in comparison to wealth building in financial terms.  We fail miserably in efficient outcomes.

Why?  A culture of belief that never ending consumption, is the key to our remaining at the top of the evolutionary chain.  This includes development, a term that has evolved from the establishment of civilization. Humans have a tendency to conquer rather than coexist.  As Darwin might say, survival is based on one's ability to thrive over another organism.  Evidence of this can be seen not only in grand edifice as a symbol of human greatness, but in our crowing achievement of eliminating disease.

To be certain, there is no turning back the magnitude of our achievement, though cataclysmic they may be in

scale.  Sure we will see glimpses of a change in the tides but culture is a difficult thing to change.  Not only are we slow to respond, in many cases we are just to late.  It is human culture that  is the greatest contributor to the accelerating background extinction rate, dominating the landscape with estimates from 1000 to 10,000 times normal extinction rates of other living organisms-- that is the impact of a civilized society.  Wikipedia has a very interesting way of stating it, as long as species have been evolving, species have been going extinct; no species is evolving faster than humans.

Opposition to Myths About Energy

Opposition to Conservative Reasoning
and Economic Theory

by Scotland Willis

A recent article in a the Atlanta Journal- Constitution(Feb 11, 2012), highlighted "myths about saving energy."  Unfortunately this line of thinking only reinforces the ignorance that much of the world perceives regarding its interpretation of the of the United States and its sense of arrogance.  

While this may seem like a extreme position to take, look at the numbers before I go into explaining why poor reasoning regarding whether or not behaving more consciously about individual usage, is the greatest harm.

The United States uses collectively, 3.7 billion Megawatt Hours/ year (mWh/ year) as per 2009 numbers*. In 2010, the average annual electricity consumption for a U.S. residential utility customer was 11,496 kWh, an average of 958 kilowatt hours (kWh) per month. Tennessee had the highest annual consumption at 16,716 kWh and Maine the lowest at 6,252 kWh.

An example of energy usage available via pdf produced by National Grid: Ten 100-watt lamps, when on for one hour, consume 1 kilo-watt-hour (kWh).  A 60 watt bulb running for 4 hours equals about a pound of coal.

Returning to the dispute; one should not be opposed to people understanding the individual economic impact of wasting energy; it is critical however, to be acutely cognizant of the greater collective impact.  One could easily argue that if I lived alone on this earth and randomly threw my waste everywhere and anywhere in my wake, it would have marginal impact in comparison to what the environment could in its decomposition process, but multiply that times 260 million people and we have a real problem.  Economic theory suggest that we hold constant explanatory variables other than the one under consideration, i.e., accept that considering the micro economics of individuals having too small an impact to matter, is irrelevant; this paradigm can no longer hold true.  The value of externalities and the increased rate at which we are decimating the environment is too significant a factor to be dismissed.  Such elements are too intertwined to not consider extrapolating the observations to create a more meaningful understanding of our individual responsibility- even if it seems as minute as $3.00.  If we could get 260 million people to donate $3.00 each day (which could serve as an example of how much energy we waste, thought the number is much higher), what affect would that have on poverty (2.847e+11); you'll want to add some zeros on for that "11"?

We need to be constantly conscious of our individual actions as we risk losing the opportunity to shift the behavior of everyone around us.  This discussion was prompted not only by the article, but by a heated discussion between my father and myself.  For him he argued that I could not quantify the significance of leaving a refrigerator door open for 10 seconds versus 3 seconds- which completely misses the point.  The point is if we collectively close our refrigerator door sooner, we (260,000,000 people) will have the kind of meaningful impact that would not only protect the environment a bit more, but also shift the perception that gluttony is a way of life in the United States.  A simple look at our rate of obesity and the trend therein, should reflect another serious indicator that our behavior needs to shift.    




*Energy Information Administration (EIA)

Pipelines and Priorities

On November 10 Reuters reported on the US government's decision to postpone Keystone XL's (Canada to Texas) oil pipeline which many environmentalists argue that one of the most damaging effects would be in the Nebraska tar sands ecosystem area, as a direct result from the project.


While there are arguments on both sides, the concern for the government and investors is the approximate $7 billion cost to the project and how any delay would disrupt the progress and possibly force parties to scrap the project. Countering this argument is not difficult to do. 


We were spending approximately $720 million a day according to 2007 research done by Nobel Prize winning economist Joseph E Stiglitz. The National Priorities Project research, states that *budget spending in Iraq and Afghanistan amounted to $797.3 billion and 459.8 billion respectively in the 2011 FY. Thus it is a difficult sell, that a mere $7 billion would force governments or corporations to scrap the Keystone XL project; given there appetite for the black gold.


Why should this project be delayed? Based on US consumption of oil that is a tough one to answer.  How many US residents are prepared to make significant reductions in their consumption of oil and oil/petroleum based products– in this economy, not many is the likely answer.


Reason for Pause
The Department of Energy in May 2011 conference stated that they recorded the highest levels of CO2 emissions ever; yet another indicator to be concerned about is the fact that seven the 7 billionth human was born on October 31st.  Each of these indicators tells us indifferent ways, that exploitation of nonrenewable energy sources (petroleum, coal, and nuclear) will be in greater demand if we extrapolate these records.


Further slowing the pace of the Keystone XL project will allow more time to review the riffs of the project from an economic standpoint.  Externality costs are the unmentioned cost to things like the environment; they look less from the revenue-generating perspective and more at the human and eco-welfare perspective.  


Perhaps a truly progressive idea would be to initiate a campaign similar to a campaign against smoking.  It  would pre-use the projected cost of the environmental impact (after a reliable assessment); allocate those funds for the campaign, and educate people about the cost these externalities (i.e., the environment as well as human health).


If we look back at the advent of fossil fuels as a source of energy for human consumption, it seemed like a really good idea; at the time developing societies required faster moving parts to grow.  Lack of such growth meant in some cases (and still does) either you grow or are conquered.  The difference in knowledge today however is that we can anticipate certain factors; we have a better understanding of the impacts.  The infrastructure and mindsets in the past, did not have the capacity to think forward in these terms.  Thomas Edison (quote below), was an exception.  Today is quite different; we know more about the limited resources and about what certain numbers mean.  Being proactive through conservation and preservation would serve well, the quality of life to all living things.


It is easier to not to say who is right and who is wrong, but what is the best decision to make from were we are going forward.  The best minds in the world always seem to have sound reasoning on their side.




*Chris Helman: Senior War Analyst at National Priorities Project; over a decade of war analysis and research.
* We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy — sun, wind and tide. ... I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that.

• In conversation with Henry Ford and w:Harvey Firestone (1931); as quoted in Uncommon Friends : Life with Thomas Edison, Henry Ford, Harvey Firestone, Alexis Carrel & Charles Lindbergh (1987) by James Newton, p. 31