Five Percent: Conserve Energy

Climate Change Is Important: Energy Conservation is the First Step


March 11, 2007

“U.S. Northeast faces a hotter future” … so I can ride my bike more

Category: Big Things,Economics,Editorial,Transportation – Tom Harrison – 9:30 pm

Perhaps the fact that it finally melted a little this not-quite-spring-yet weekend is to blame, but I took my bike in to the shop to get a much needed tune-up. I’m ready to start riding to work again, and not a moment too soon. Just because this has been an exceptionally warm, or at least short winter doesn’t mean anything on the scale of global statistics, but I have to say, I’m glad. While there’s no strong evidence that extended daylight savings time actually does anything to save energy, I’m still glad, because I like light, and I don’t think it will hurt. And the Union of Concerned Scientists reports that U.S. Northeast faces a hotter future but I’m still cheery. Because I can ride.

There’s a bit of a paradox: global warming makes it easier for me to do things to reduce global warming.

Another interesting item: you don’t have to wait 9 months: you can get a Toyota Prius now.

Oil prices have been creeping up lately, and gasoline prices are higher, but they sure have fallen a lot since last summer. Could it be that we reacted to high prices by reducing demand? As I was looking for actual data to support this crazy assertion, I came across this article from 12 years ago on the same topic: oil prices were falling and it was a bad thing. At least then, the administration understood that it was a bad thing. And take a look at this graph from the US Energy Information Administration of world oil consumption growth:

oil growth

What’s interesting here is that in 2006, the US oil consumption grew by a negative amount — in other words, we used less oil. So lemme see: Katerina in August 2005, growth started to slow, 2006 we used less. How … sensible.

So here’s the paradox in this (hint: it’s not really a paradox): as economic forces work to curb our demand for the things that cause global warming, prices fall, and (as you can see in the 2007 projections) we start increasing growth in demand again. In other words, the only reason we used less oil in 2006 was that it was more expensive; that caused demand to fall, making oil … cheaper.

It’s not really a paradox, of course, because that’s what economics is all about. What’s a paradox is that our administration doesn’t understand that until we account for the other hidden costs of oil and other fossil fuels, we’ll inch our way to along to decreased supply until we hit an economic disaster. The problem is, the cost of oil and other fossil fuels is not being properly accounted for: things like pollution (CO2 emissions, for one) are not being paid for now. This is what economists call an externality: a real cost, but not one borne by the producer, and thus not reflected in the price of the product. One of the most right-wing economist theorists (and Nobel Prize winner), Milton Friedman, was pretty much against any government intervention, feeling that the free market economy could do better at just about everything … except externalities. Back in the 70’s and 80’s when pollution was just a bad smell in the air, this was his canonical example of an externality. So how should externalities be handled? They are the only thing Friedman felt should be taxed, in order that the full cost of the product could be borne by the producer. So why don’t we start finding ways to account for the costs of energy. Say, perhaps something like the Kyoto Protocol? Nah.

So until then, global warming will continue, and a couple of us will take advantage of that warmth to do things that require less energy, like riding our bikes. And until we realize that this is just a drop in the bucket (barrel?) riding season will just get longer, and longer, and longer.

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