Category Archives: Economic Forces

Coming Soon—Your World, Disrupted

Google's self-driving car...

Google’s self-driving car, a possible forerunner to “Transportation as a Service”, or “TaaS”.

Imagine this—fully autonomous cars, legal in all fifty states by 2021. And shortly after that—no more car dealerships. Cars that last for half a million miles, but that very few people own. Radical disruption of the oil industry. No more gas stations. An extra trillion dollars a year in US consumers’ pockets. People paying to have their used gas cars towed away and disposed of. Unused pipelines.

These and more are the stunning predictions in a new report from a noted technology research group, whose authors see an approaching “perfect storm” of economic disruption, driven by self-reinforcing feedback loops that revolve around the combination of dropping prices and increased capabilities of electric vehicles, renewable power, and self-driving control systems.

Basically, they envision an entire transportation system that is akin to today’s Uber, but one that is coupled with electric vehicles and autonomous driving in ways that result in plummeting costs, and they predict that this unbalancing of costs will have ramifications that will upend much of life as we know it. Perhaps more importantly, they also conclude that this shift will happen much, much sooner than nearly anyone thinks it will. In fact, they predict that sales of new gas-powered vehicles to consumers will cease as soon as seven years from now. Continue reading

All the Really Big Questions

city at night

Toronto at night.

Have you ever felt like your intellectual efforts were too narrowly focused? Or, that you were missing broader truths somehow? Both have occurred to me lately as I teach some of the esoteric details of economic theory in my AP Macroeconomics course.  This is because most economics course material is more-or-less focused on only one type of economic system (a relatively free market economy), and only one general type of government (various forms of democracy). At the same time, it is clear that most macroeconomic thinkers fall way short of grasping the relationship between the market economy as we know it and the environmental destruction of the planet that we see all around.  Is it possible that the ENTIRE economic system that we study is doomed to fail in the long run; that it is incompatible with sustainable human life on the planet? (I don’t actually think it is, but it is a question worth pondering).

I focused several lessons recently on these topics, but to help my students really grasp how these things are related, I gave them the following assignment. I’ll just put the assignment in this post, and in future posts I’ll explore some of the possible answers. I have friends who differ from me politically, some who are libertarian, and others who are quite conservative, and I wonder what answers they would give to these questions. So, without further ado–

All the Really Big Questions
AP Macro Research and Writing Assignment

There are not really correct or incorrect answers here, but what is your thinking with regard to the following questions and topics? Don’t just make things up! There are varying opinions on all of these, but use your critical thinking skills. Your worldview should be cohesive!!! These three topics are deeply and completely interrelated.

  1. Our economic system. From a worldwide perspective, is capitalism as we know it a good system? Why or why not? What would a “good system” of economics achieve? Is China on the right track with large degrees of state control? Is South Korea, with government support of certain industries? The US? Europe? Does success in one country come at the expense of another, or can all countries achieve success and prosperity? If “capitalism” isn’t an ideal system, what would replace it?

Continue reading

The Diffusion of Innovation, The Chasm, and the Tesla Model 3

Well, now that explains it...

Well, now that explains it…

Hmmm, it seems that I don’t have time to write long posts. So, I’ll just write some short ones instead. Short post number one– the diffusion of innovation theory really helps make sense of our transition to electric vehicles. As I’ve long held, EVs are clearly better vehicles. They’re mechanically more simple, smoother, quieter, quicker, more reliable, they require less maintenance, they’re cheaper to operate, AND they can be powered with renewable power, AND the entire fuel distribution network (the electric grid, in this case) is dramatically more efficient, AND the vehicles themselves are more efficient (regenerative braking, no wasted heat…). EVs will also help solve the indeterminacy problems of renewable generation, and the list goes on. Eventually we will all drive EVs, and gas-powered cars with tailpipes spewing filth will be seen as archaic.

Because I have long seen this, I would be listed as a “visionary” in the diffusion of innovation model, and because I have acted on these ideas and bought two EVs, I am also an “early adopter”.

A pattern that many have noticed, however, as they study technology, is that diffusion often gets stuck between the early adopters and more widespread use. They call this barrier “The Chasm”.  Early adopters typically adopt the innovation for reasons other than purely economic ones—in my case, I bought EV’s to lower my carbon footprint, and to try to do my part in getting humankind to operate in a more sustainable fashion. But the next phase of adoption, the early majority, consists of people who adopt the technology largely for economic reasons; they are pragmatists. “The chasm”, this barrier to adoption between the early adopter and the early majority, is something of a chicken and egg problem— in the case of EV’s, the lack of market share prevents the economies of scale from bringing down costs, and the higher costs prevent the market from expanding.

But, I’m pretty sure that right now, today, we are witnessing the electric vehicle crossing this adoption chasm after being a bit stuck for several years. And the reason? Tesla, and particularly the Model 3. The Model S (S, not 3!) has been groundbreaking in many, many ways, but it is still a $90,000 vehicle that most people can’t afford. The Model 3, however, promises to be a true game-changer.

Jumping-the-chasm impetus number one--- the Tesla Model 3.

Jumping-the-chasm impetus number one— the Tesla Model 3.

With a sticker price of below $40,000, and a range of over 200 miles, the Model 3 is likely to propel electric cars solidly into the mainstream (and 400,000 people have already paid deposits to ensure their place in the queue to get one). From there, all those natural advantages that EVs have will propel ever-further adoption—the chasm will have been crossed.

In addition, the announcement of the Model 3 prompted Chevrolet to do something akin to a magic hat trick Continue reading

No Time for Despair

Video above: Nature is beautiful, and fragile, and it needs our protection.

Ok, I desperately need to write a post here, and to catch up a bit. I ran for State Rep, it was fun, we ran a strong campaign, the election was close, but I didn’t quite make it. So, now I’ve been trying to catch back up with all the things in my life that got put on hold during the race. And, despite a lack of posts here for the past five months, I’ve certainly had plenty of sustainability thoughts. In fact, that might be part of the problem with getting started again, because I’m not quite sure where to begin. So, a short post here about a simple idea—

I read something that Al Gore said the other week after the election, that   “There’s no time for despair“. I think he’s right. True, we now seem to have a Trump administration that threatens to halt or reverse progress on protecting the environment. BUT, I’ve said all along, for years and years—individual action comes first (one such post here) and government action will follow, eventually, when there becomes a critical mass of voters. With a Trump administration we may have a setback on the government side of things, but we still have individual action. We can still affect the demand side of these equations, and this is an equally powerful tool.

And, in the “no time for despair” department, the challenges in the world have not abated. 2016 is nearly certain to be the hottest year on record. Giraffes were just recently listed as being in danger of extinction. Elephants, gorillas, and lions might all soon be gone from the wild or even extinct. Coral reefs have suffered devastating bleaching and die-off events, worldwide. Monarch butterfly numbers have plunged by 90% or more, in just the last decade. Humankind is still growing by 200,000 or more people every day, and human development is causing devastating habitat loss worldwide. Seas are being overfished, plastic pollution of the oceans continues unabated. This depressing list goes on. (I expected this– I wrote a post in 2014, “Brace Yourself“, about how things will get worse before they get better).

Giraffe in Kenya. Recent studies have shown giraffe numbers to be dropping precipitously.

Giraffe in Kenya. Recent studies have shown giraffe numbers to be dropping precipitously.

On the other hand—the good news also continues nearly unabated. The world installed 73 gigawatts of solar last year (that’s about 200 megawatts every day), and almost as much wind generation, and those numbers are still increasing. Thirty or more countries have reached grid parity with regard to solar, and grid-parity for the entire world is expected by the end of 2017. Panels are increasingly efficient, as are the production lines that make them, and new panels today pay back their energy debt in only two years. Battery technology is improving, with power densities doubling in the last five years, even as prices have fallen by more than half. Affordable electric vehicles are coming off of production lines today that go well over 200 miles on a charge. More charging stations for electric vehicles are being installed daily, and many of them are powered by renewable energy. Tesla just announced a new solar roof that it will soon sell at prices similar to conventional roofs. President Obama recently expanded a marine protected area northwest of Hawaii to include over a half million square miles, making it the largest protected area on the planet. Underground high-voltage DC lines are being built to move renewable power long distances, including one in my state of Vermont. LED lighting continues to be perfected, and is an order of magnitude more efficient than the incandescent bulbs of yesteryear. Net-zero houses are becoming common. World poverty has been cut in half in the last twenty years. This list of good things goes, on, too, at the same time as the list of bad things.

So we’re in a race, and the outcome isn’t exactly clear. That’s why I agree with Al Gore’s statement—we don’t have time for despair. Yes, many of us are deeply concerned about the impact of a Trump administration with regard to sustainability. Yes, government action in the US is likely to halt or even reverse in some cases. But we still have the power of demand, and we still have the power of individual action. So channel your concern into making a difference. Buy or lease an electric vehicle. Install solar panels or buy renewable power. Reduce your consumption. Weatherize your house. Join a group that is part of the solution. Vote with your dollars when you shop. Buy organic, and Fair Trade. Buy quality products from socially responsible producers and make them last. And don’t give up on the political process—there will be more elections, and more votes. It’s going to be a long hard slog, and there will be some setbacks, but eventually we will prevail.

 

Image credit: Giraffe—Kris Arnold, Flickr Creative Commons.

 

 

Making Sense of Economic Growth

When is a new road a good thing? Road building in Kenya.

Is a new road a good thing that will improve people’s lives, or is it environmental destruction in action? It is difficult to know using current economic measures. Road building in Kenya.

Here’s an abstract to help get us started today—though economic growth could wreck the planet, it is not necessarily going to do so. But it is sometimes difficult to differentiate between “good” growth and “bad” growth, in part because most indexes that we measure economic change with are too blunt. I’m going to suggest some alternatives here, which might bring some clarity to our understanding of economic growth, and which could help us navigate a path toward genuine prosperity.

 

Making Sense of Economic Growth

It is very common to read arguments about how dangerous economic growth is—how it is destroying the planet, how exponential growth can’t continue, and how it must be stopped. In fact, some environmentalists have long advocated various forms of “de-growth”. And yet, it is very clear that not all economic growth is bad. Growth and economic development will be critically necessary to bring poor nations out of poverty, and there are plenty of other examples of growth that simultaneously help people and help to protect the environment. On the other hand, there are certainly many cases where growth is indeed quite damaging.

 

Why Current Measures are Inadequate

Unfortunately, it’s often difficult to judge good growth from bad growth, and this is partly because the ways in which we measure growth are somewhat flawed. Since the 1930’s, growth has been most commonly measured as growth in total production of goods and services, in the form of Gross Domestic Product, or GDP. While never intended to be a measure of the overall social progress of a nation, it has been used as a proxy for that virtually since its inception (a good New York Times article about this: “The Rise and Fall of the G.D.P.“). Over the years, plenty of criticism has been directed toward GDP, as much of what it measures as positive growth is actually detrimental to society. Noted thinkers Frijof Capra and Hazel Henderson give a short summary of this argument in a report about qualitative growth

“Social costs, like those of accidents, wars, litigation, and health care, are added as positive contributions to the GDP, as are ‘defensive expenditures’ on mitigating pollution and similar externalities, and [yet] the undifferentiated growth of this crude quantitative index is considered to be the sign of a healthy economy…”

Another flaw of GDP is that it while it mostly ignores social costs, it completely ignores Continue reading

Soil Erosion—A Crime Against Humanity?

 

Water has cut about 2-feet deep, right down the the hardpan.

Water has cut about two feet deep here, right down to the hardpan.

Take a look at these pictures of soil erosion that I took right here this week in relatively-progressive Vermont. I’ll just sprinkle them in liberally here…

8

Try running a plow over that stone. The more soil washes away, the close all of these stones are to the surface.

Try running a plow over that stone. The more soil that washes away, the thinner the topsoil becomes, and the closer these stones are to the surface.

7

It’s quite the string of pictures. These farmers plowed last fall, as they do every year. Since then it has rained enough times, and hard enough, to cause this. Tons and tons of fertile soil are GONE. Then, this coming year, I’m guessing these fields will get plowed (or disked) and harrowed again, and the remaining soil will be spread around so that these gullies are filled in, and… then the same erosion will happen again, a year from now. Year after year after year, more topsoil washing away. The loss will probably even accelerate— Continue reading

Even RE Isn’t Free, and Other Thoughts

Beautiful berries---to ship or not to ship?

Beautiful berries—to ship or not to ship?

First, I just wanted to let everyone know that I accidentally hit “publish” instead of “save” on a partially-completed post yesterday, and then had to quickly delete it, but not before the program sent out the “new post” notices. So, if you got a “new post” notice with a bad link in it, that’s why. Sorry,..

Second, some thoughts on the packaging post. Mr. X had a really important observation that deserves mention. He agreed with the underlying ideas about efficient production, and to paraphrase his comments, “It would be better to grow strawberries in California and ship them to Arizona in self-driving vehicles powered by renewable power, and to put solar generation in Arizona and ship the power to California via high-voltage-DC lines…” But he took issue with my statement that the $2 price on the vinegar in the store reflects its entire cost, and he is indeed correct. That $2 price does not take into account all the costs that companies push off onto third-parties, the “negative externalities”. Whether it’s global warming from fossil fuel use, or downstream effects from plastic pollution, or abuses of workers through unfair labor practices, the jug of vinegar has costs that might not be reflected in its price on the shelf. Though, even if those hidden costs doubled the store price of the vinegar, my underlying point would still hold (and he agreed)—efficient production would be the least wasteful and therefore the most sustainable, within reason.

Again, this is another case where we need to focus on actual problems, and in this case the problem would be negative externalities, and the best solution for those is… good government. But, I digress…

A few other thoughts here. With regard to trade, packaging, and shipping—common sense still applies. The only way to get fresh blackberries in January in the US is to buy ones that have been flown up from South America. Despite the richness created in our lives when we can have fresh berries in January, it probably isn’t worth the cost. Even if the plane was somehow powered by renewable power, we need to realize that even renewable power has a cost—dammed rivers, land given over to solar farms, etc. So although using renewable energy is a goal, we need to balance it with the goal of reduced consumption.

The high-carbon way to get the berries...

The high-carbon way to get the berries… A 747 cargo flight in Anchorage, Alaska.

Related, while I think it’s better to choose packaged items over trying to make everything at home, it’s still a perfectly valid goal to strive for reduced packaging. And some home production can indeed make sense. An example in my life— Continue reading

The Packaging and Transportation Part

Moving cargo by sea is remarkably efficient in terms of carbon emissions per ton.

Moving cargo by sea is remarkably efficient in terms of carbon emissions—as low as 10 grams per ton per kilometer.

In my last, I argued that it might be a more sustainable path for people to avoid striving for self-sufficiency, and to embrace trade and efficiency instead. I’m a bit uncomfortable with this conclusion (two posts that led to this are here and here), because the quest for efficiency, when coupled with market forces, can have severe downsides. If efficiency is the only goal, then production often ends up taking a toll on people, animals, or the environment. But despite these problems that need addressed, I’m quite certain that the underlying  premise is a correct one.  This, in turn, leads to yet another logical conclusion—the “packaging and transportation” part of that last discussion.

Just to recap, here’s the train o’ logic so far—trade leads to specialization, which leads to efficiency and productivity, which leads to the group being better off. Efforts toward self-sufficiency run counter to this, and are nearly always inherently less efficient. Since efficiency is, by definition, “not wasting time, effort, or materials”, then it follows that its opposite—inefficiency—is wasteful, and (other things being equal) that the efficient path would be the more sustainable one. To expand on this, let’s look at two other common “sustainable” trends that are perhaps as prevalent as trying to be self-sufficient— Continue reading

Packaging, Transportation, and Doing-It-Yourself

Making apple cider on a small scale. Just one of many, many things you can do "yourself".

Making apple cider on a small scale. Just one of many, many things a person can “do themselves”.

And, drum roll, I find myself having ANOTHER thought about how efficiency and productivity affect our vision of what a more sustainable future might look like. Here’s the deal—there seems to be a very strong tendency, among those who endeavor to envision how future sustainable cultures and societies might function, to admire and strive for self-sufficiency, and to push for doing more things ourselves. In fact, it seems to be a near-universal trend in the world of “sustainable” ideas. It isn’t a totally bad inclination; “doing-it-yourself” often results in much more varied and interesting day-to-day work, more well-roundedness in terms of skills and knowledge, and more resilience in the face of adverse economic times. BUT, there is a huge downside—self-sufficiency and do-it-yourself activities run counter to some of those fundamental economic laws I keep talking about, namely that all-important idea that I’ve discussed before, that trade leads to specialization, which leads to efficiency, which leads to productivity, which leads to the group being better off. And when you violate those laws often enough, you can easily end up with the opposite, where things are going downhill.

So, let me give you some examples of this. When I give it some thought, I realize that there are a lot of things I can do myself. A lot. Just to mention a few, let me see… I can make pasta from scratch, fell timber and mill my own wood flooring, do all the plumbing and electrical in my house, pull and rebuild automotive engines, bake bread, can tomatoes, grow all manner of produce, train my dogs, build a barn, design solar systems, raise chickens and eggs, keep bees and raise honey, make hummus, and who knows what else.

Beekeeping, in the "things I can do" category.

Beekeeping, in the “things I can do” category.

And, if I put my mind to it, there’s even more I’m sure I could learn to do, and/or would like to learn to do—graft fruit trees, make maple syrup, grind mustard seed to make mustard, butcher my own large animals, learn much more about permaculture and agriculture, get fluent in Spanish, sew my own clothes, spin my own thread, design websites, make yogurt, etc., etc., the list goes on. And there’s no end, ever, to how long this particular list might be.

BUT, there’s a problem. Continue reading

A Call for Perspective

Wind turbines in Denmark. The nation has strong government support for wind power, and at times generates over 100% of its electricity from wind.

Wind turbines in Denmark. The nation has strong government support for wind power, and at times generates over 100% of its electricity from wind.

(Note: This is my letter to the editor that was printed in the Addison Independent this week, though they changed the title from my original above. Several of you have asked for an electronic copy or link, so here it is.)

For the last few years I have been carefully following the debate about Vermont’s solar and wind development. There have been many valid points brought up by both advocates and opponents, and there seems to be a consensus opinion forming that revolves around a middle ground of sorts. Most Vermonters do agree that we need to transition toward a renewable-energy economy, but also that common-sense guidelines should be developed with regard to the approval and siting of wind turbines, solar arrays, and their distribution networks. I do sometimes wonder, however, if the body politic is occasionally losing sight of the forest for the trees, especially when I see the tiniest of details about specific projects being debated in various public forums.

In light of this, let me attempt to bring us all back a step. In the last several centuries, we humans have benefited tremendously from the use of fossil fuels; the power they contain has underpinned most of the world’s development and wealth creation. This energy source has also enabled human populations to mushroom, and, despite a gradual slowdown, world population is still increasing by about a million people every four days. The pressures that 7 billion-plus humans are putting on the planet are beginning to break it, as oceans acidify, the planet warms, wildlife habitats shrink, soil washes away, species vanish, pollution accumulates, and sea levels rise. Though the problems are many and disparate, a good portion of them are related to the use of fossil fuels, because using them has in some ways been a bargain with the devil. Despite the benefits that these fuels have given to mankind, we now better understand that they have dangers as well, and realize that burning them is not without cost, particularly with regard to CO2 emissions. Despite efficiency improvements across the board, CO2 levels in the atmosphere are still climbing steadily, and have now passed 400-parts-per-million—higher than any time in the last four million years. Worse, these higher levels hold a hidden danger, as atmospheric CO2 is quite stable, and continues to cause warming for centuries. This warming of the planet is also likely to exacerbate all of the other problems that we humans are causing, and many of them could become mutually reinforcing, or even spiral out of control in future decades. Mankind has unknowingly, and then knowingly, been playing a very dangerous game.

Continue reading