Friday, 20 March 2009

Carbon taxes versus cap and trade II

1. My favorite read on carbon taxes from Greg Mankiw

2. Lovelock and industry figures on why cap and trade in Europe has been a failure

Wednesday, 18 March 2009

6C rise by 2100 without action to curb emissions

The Hadley Centre on their revised predictions on climate change. Without action to curb carbon use our grandchildren have nothing to look forward to.

via Climate Progress

Dirty dozen - foods to avoid

A new version of the Dirty Dozen is published citing the crops to avoid for pesticide residues. Another boost for the organic sector. So much for all those plump sweet smelling peaches in my local market in the summer.

Would also be good to have an idea on workers's exposure to chemicals. Cotton is particularly intensive in its use of pesticides and is not listed here as it is a food crop.

Shell drop renewables - another reason for pricing carbon

Economists predictions come true about investment in renewable energy falling with lower oil prices. Shell has just announced it is dropping renewables from its portfolio as it is not profitable.

Environmental groups are raging, but the reason for this is not corporate malice, but a lack of a sufficiently high price for carbon to interest investors. As their CEO Linda Cook says,

"If there aren't investment opportunities which compete with other projects we won't put money into it. We are businessmen and women. If there were renewables [which made money] we would put money into it."

Monday, 16 March 2009

Methane tax for burping cows

Livestock farmers in Europe are up in arms as governments have proposed methane taxes on cows. In Ireland, a tax of €13 per cow is proposed whilst the Danes are going for a tougher regime of €80 a cow.

The Danish Tax Commission estimates that a cow will emit four tonnes of methane (equivalent to 100 tonnes of CO2) a year in burps and flatulence, compared with 2.7 tonnes of CO2 for an average car.

Agriculture accounts for 50% of the world's methane emissions, around 5% of total man made CO2 equivalent emissions.

The problem with environmental taxes is that industries can relocate to avoid them thus undermining their effectiveness and strengthening domestic opposition to their imposition. EU farmers argue that they will lose sales to farmers in eastern Europe and Latin America. This problem of "leakage" could in theory be overcome by taxing meat that arrives from countries without a methane tax. However, in practice this is difficult and costly to set up and run a scheme.

The best way round this is to impose a methane tax globally. Negotiating this would be tricky to say the least....

Sunday, 15 March 2009

Carbon tax proposed by Nordhaus

William Nordhaus backed a carbon tax instead of the Kyoto protocol approach.

To bet the world's climate system on the Kyoto approach is a reckless gamble", he told the climate change congress in Copenhagen. "Taxation is a proven instrument. Taxes may be unpopular, but they work. The Kyoto model is largely untested and the experience we have tells us it will not meet our objective — to stablise the world climate system."

via The Guardian

Wednesday, 11 March 2009

Organic and food safety

Having an organic certification tells consumers that the food product has no pesticides used on it. Consumers also tend to think this means the food is safer. A recent food safety scandal (reported by the NY Times) of a Georgia organic peanut butter company highlights that this may not necessarily be the case.

Friday, 6 March 2009

Internet and transaction costs

The internet and before it the telephone reduces transaction costs as finding the cheapest prices takes less time. Seth Gitter decided on an old fashioned way to save money, by walking to buy pop concert tickets instead of paying a commission to Ticketmaster over the phone. (See above the group in the greatest treadmill pop video ever too)

However the internet has also left us prone to short attention spans. Attention is thus the scarce commodity in the internet age..."So being able to capture someone’s attention at the right time is a very valuable asset".

Political and ecological tipping points

Al Gore is back!

At the WSJ Eco nomics conference this week, he describes how we are living in a "genuine political emergency". When asked by a BP Director why nothing seems to be getting done about climate change, he describes how there are "tipping points" in politics. He cites the example of the civil rights battle of the 60s in Alabama when young people started asking questions about race. This started a political process that lead to desegregation and equal rights.

"Tipping points" is thus the key phrase of the early 21st century, describing both the moment we slip into ecological catastrophe but also when used in a political context, the moment we decide to do something about it.

Thursday, 5 March 2009

Development as a function of culture

Bill Easterly's excellent blog discusses the causal links between development and culture. He highlights research that shows a strong relationship between freedom/individual rights and growth and development. One interesting detail refers to:

"intriging clues about long run cultural values that are contained in linguistic structure within each culture (do you have to say the subject pronouns “I” and “he/she”, as in English, or can you drop them, as in Spanish, along with whether there are different forms of “you” depending on the status of the person you are addressing)."

Malcolm Gladwell explores a similar relationship between cultural values and economic performance. In Outliers his new book, he explains the disaster prone Korean Airlines of the 1980s and the Avianca (Colombian airline) crash in terms of the highly hierarchical cockpit relationships.

In the case of Korea, the language has 8 voices depending on which social class you are addressing. Aviation safety depends heavily on the ability of a co pilot to communicate key guidance to his superior in stressful situations. In hierarchical societies and languages, this is less likely to happen, leading to more likelihood of crashes.

Since the 1980s Korean Air has transformed its management and cockpit culture towards more equality and as a result the safety record has drastically improved.

Wednesday, 4 March 2009


In the FT this Saturday, fab environmental correspondent Fiona Harvey writes about biochar a source of increasing interest for agriculture to hold onto more carbon in the soil.

"In Brazil’s Amazon basin, farmers have long sought out a special form of fertiliser – a locally sourced compost-like substance prized for its amazing qualities of reviving poor or exhausted soils. They buy it in sacks or dig it out of the earth from patches that are sometimes as much as 6ft deep. Spread on fields, it retains its fertile qualities for long periods.

They call it the terra preta do indio – literally, “the dark earth of the Indians”. Dense, rich and loamy, this earth forms a stark contrast with the thin, poor soils of the region. (It seems a paradox, but rainforest soils have low fertility. This is why farmers who cut down the forest for agriculture have to keep on felling – after a few years of cropping, yields collapse and they have to move on.) Patches of terra preta extend for many hectares in some places but until recently, no one really knew what the mysterious dark earth was. Some guessed it was volcanic, or the sediment of old lakes, or the residue of some long-rotted vegetation. Few imagined that it was man-made.

Terra preta, modern analysis has proved, is one of the last remaining traces of pre-Columbian agriculture in the Amazon basin. It was made more than 2,500 – and perhaps as long as 6,000 – years ago by people living by the river. These cultures survived and supported complex agriculture, despite poor soil, by making their own earth. They used dung, fish, animal bones and plant waste – the usual suspects. But the key ingredient in terra preta, and what gives it its dark colour, is charcoal.

“It’s wonderful stuff,” says Simon Shackley, a social science lecturer at the University of Edinburgh. “We started to get to know about it when Dutch scientists began to look at it in the 1960s. They found these dark soils in this area of very poor soil, where it was being put on fields like compost. It’s really the product of slash-and-burn agriculture, and other organic waste, incorporated into the soils over hundreds or even thousands of years – and it does appear to be fertile indefinitely, which is really a very odd thing.”

This ancient product of the Amazon is now the subject of intense scrutiny by climate change scientists. The tenacity of the charcoal of terra preta – retaining its fertilising properties over centuries – has given them an idea. Charcoal is a form of carbon, the burnt remains of plant and animal material. If it can stay intact in the earth for so long, without being released as carbon dioxide gas, why not lock up more carbon in the earth in this manner?

Scientists have begun to refer to the charcoal made from plants for the purpose of storing carbon as “biochar”. The theory is that biomass – any plant or animal material – can be turned into charcoal by heating it in the absence of oxygen. By taking CO2 out of the atmosphere, the impact on climate change could be huge".