In a couple cases recently, I have heard people talking about how the Jevons Paradox will undermine efforts to use energy more efficiently — and it certainly seems like it would fit, but it doesn’t apply to our current energy problems for several reasons: conservation, and improved efficiency are still our best options.

Or, so started a post that I began writing a couple weeks ago. Then, in some sort of karmic mind-meld, Peter Troast at EnergyCircle.com wrote a post about Jevons, with almost the same conclusion as I was going to draw. Yeah, right, I hear you say.

So anyhoo, I think this topic is important to the larger discussion of energy, especially renewable energy, so here’s a link to Peter’s post on energy efficiency, which already has a nice thread of comments and observations — take a look, it’s a good read — and, add your thoughts!

Check this out. A simple (yep, simple!) explanation of why cap and trade, and another similar program called cap and rebate, both work. From TerraPass.

I came across this excellent, straightforward, and compelling page describing how cap and trade works in the Green Room blog of the Environmental Defense Fund. If anyone knows of such a clear explanation of how a carbon tax would work, please let me know and I’ll post it.

Update, 3/17/09, Here’s another article with a good explanation of cap and trade, in particular with a good contrast with carbon tax.

This Spring and Summer, oil prices spiked. They got our attention. Boy did they get our attention!

But prices are falling again, and are now down. This is good.

So why are lower prices good? The recent oil price spike has done what it can to wake us up. We need a respite; a chance to calm down, and a chance to see that the oil market is doing what markets do. They go up, they go down. When things are clear and investors are confident, markets respond calmly. When there’s a surprise, markets over-react, then settle. When there’s general nervousness, they become volatile and hard to predict. (more…)

Cars cost a lot more than we pay for, say Dubner and Levitt of “Freakonomics” fame:

with roughly three trillion miles driven each year producing more than $300 billion in externality costs, drivers should probably be taxed at least an extra 10 cents per mile if we want them to pay the full societal cost of their driving.

Their article will be published in Time Magazine this week. In nearly the first paragraph, they define the problem:

…there are all sorts of costs associated with driving that the actual driver doesn’t pay. Such a condition is known to economists as a negative externality: the behavior of Person A (we’ll call him Arthur) damages the welfare of Person Z (Zelda), but Zelda has no control over Arthur’s actions.

That’s the good news (I guess). The bad news is they say that externalities from carbon emissions are a mere $20 Billion of that $300 Billion a year cost (traffic congestion and property damage are both far more costly unrealized costs). (more…)

New York City recently failed to pass a law that would change the price of tolls based on the time of day—higher prices during busy times and lower prices off-peak.

It’s not hard to see why this well-intentioned law didn’t pass. Take a look at this article (actually a “Freakonomics” Blog Post) in the New York Times. Are your eyes glazing over? Mine were.

The thing is, this is not only something near and dear to my environmental leanings, it is the main topic that I wrote my bachelor’s thesis on in college: change the price of something based on predictable patterns of use. So it’s possible that I am slightly more willing to understand this stuff than most people.

But my eyes glazed over anyway. (more…)

I got an Economics degree almost 25 years ago. I think I might like a refund, as it has not lived up to its promise. (more…)

In the last 35 years we have put more CO₂ into the atmosphere than we have in … all of the preceding history of the world. We must not just stop, but reverse this trend quickly. The single fastest, most effective, most dramatic change we can make to reverse global warming is to not use energy we don’t need to use. We can see why by finding some truth in a common lie told by our trusted financial advisers. (more…)

My wife and I spend a lot of time asking the question, “Why don’t people conserve energy?” Sometimes we get snarky and haughty. But it may not be that people are selfish, or uninformed, or idiots. Indeed, people may be making the most rational decision. But why? The answer reveals one reason why it is so critical that our government force action through legislation. (more…)

Today, oil prices reached another record, just short of $90/barrel. Last year, when the Prudhoe Bay facility run by BP went off line due to a pipeline problem, oil prices were near their current peak of $78/barrel. That was around 14 months ago, and today we have another clear spike. Was there another hurricane? Nope. A severe geo-political event? Nope (well, unless you count Iraq … but let’s not go there, even if it might be the immediate cause … tensions with Turkey, and all). (more…)

Please take a minute read this one page: “Global Warming: Think You’re Making a Difference? Think Again.“. Didn’t read it? Ok, how about this quote:

Wal-Mart

Wal-Mart is investing a half billion dollars to reduce the energy consumption and CO₂ emissions of their existing buildings by 20% over the next seven years. If every Wal-Mart Supercenter met this target……The CO₂ emissions from only one medium-sized (500 MW) coal-fired power plant, in just eight months of operation each year, will negate this entire effort.

Yet, “There are 151 new conventional coal-fire plants in various stages of development in the US Today.” Wal-Mart is doing a good thing, and Wal-Mart is the biggest company in the US (and in the world). If even half of these 151 plants are built, Wal-Mart’s efforts offset only about 1% of the global warming emissions created. And the article has six other equally amazing comparisons like this. C’mon — read it.

But there is a solution, says the article. And it is a “silver bullet”. (more…)

When I started writing this blog, I began to think that it is important to find a simple way to quantify the impact of changes I made (and you make) as a way to help simplify the problem of how to conserve energy. As I began to understand the problem, I realized that energy was at the heart of many of our most serious issues today: global warming, organic food, locally grown food, climate, terrorism, energy independence, geo-politics, and resource depletion. I still believe this is true.

I promoted the idea that one could measure energy most simply through your overall consumption, hence, dollars spent. I think this works at some level on a micro-economic level (your annual household budget, for example). But I have recently come to see that there’s a huge and important flaw in the general way of thinking that lead me to that simplification.

In short, my assumption is that “things” are as they are; our basic assumptions, our ways of thinking, our actions are essentially immutable. (more…)

Business Week reported in this week’s issue that ExxonMobil has been using their record profits to buy back stock. They are not using it to build new refineries, finding new sources oil, or (god forbid) researching and developing environmentally sound energy sources.

A stock buyback allows the company to reduce the supply of their shares, thereby driving up the price, which is good for stockholders. But by not expanding their ability to produce more of their product, they simultaneously reduce the supply of their product, which drives up the price. That only works because they know their will competitors do the same thing.

So guess what? (more…)

U.S. Gasoline prices are back up over $3.00 a gallon, near the record high price set after the Katerina hurricane in 2005. The cause this time is, again, a shortage of refinery capacity. But this time there wasn’t a storm. According to A Reuters reports today

AAA said it was “alarming” that gasoline prices were rising so high without the backdrop of a major geopolitical or natural event to disrupt supply, like a hurricane or a new military flare-up in the Middle East.

Good thing geopolitical or natural events that disrupt supply never happen. Like a hurricane or a flare-up in the Middle East.

This makes me and ExxonMobil happy. (more…)

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. (more…)