Bacon's Rebellion

Democracy Thrives in Sunlight

I’ll Take Some Solar, Please. Put It on my Tab.

—

by

James A. Bacon
in ,

Shrewd, very shrewd.

Dominion is asking the State Corporation Commission for permission to offer customers two options for purchasing renewable energy, be it solar, hydro, wind, biomass, wave, tide or geothermal. Under one option, customers would be billed for what it costs Dominion to acquire the “green” energy from independent green power producers. Under the other, customers could specify a fixed dollar amount to apply to the purchase of renewable energy; the amount purchased would vary with market conditions.

If I read the press release correctly, these green energy purchases from independent producers would be over and above the renewable energy that Dominion would be committed to achieve under Virginia’s voluntary goal of generating 12 percent of its own electricity from renewable sources by 2022.

Astute move. The options suggest a responsiveness to the consumer — and they take some of the political heat off legislators who resist raising the state’s renewable energy goals higher than 12 percent. If someone feels really, really strongly about renewable energy, he can put his money where their mouth is.

Now, what can we do to encourage conservation?

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  1. Anonymous Avatar
    Anonymous

    Now, what can we do to encourage conservation?

    I think it is the same answer. Give people the option of putting their money where their mouth is.

    The question should never be what can we do to encourage conservation. It should be what can we do to encourage cost effective conservation.

    Otherwise, it is a waste.

    RH

  2. Anonymous Avatar
    Anonymous

    How about this?

    Just like my idea for creating more carpools (which most people claim they think is a good idea), by paying people to participate, we will pay people for conservation.

    Put an optional line item on your tax form, for community supported agriculture. If you donate $25, you will get a $25 food basket during season.

    But, just like the renewable energy plan, you have to pay the local farmer’s full cost. Your $25 basket will be calculated at his costs instead of the grocery store cost. (Hint, I can buy broccoli and chickens cheaper than I can grow them.)

    This would be a real case of put your money where your mouth is.

    RH

  3. Larry Gross Avatar
    Larry Gross

    Let’s see. If someone decides to buy the renewable energy will they still have to pay rate increases for new coal plants or higher coal prices?

  4. Anonymous Avatar
    Anonymous

    Not if they buy all their energy on the renewable schedule.

    You would only pay the rate increases for the coal plants on the coal schedule.

    But how would you know if you were getting coal electricity or nuclear electricity, or renewable electricity?

    You wouldn’t. You would get whatever is on the grid when you turn on the light.

    But the amount you pay would be prorated via a bunch of bookkeeping.

    Sort of like going for a drive. You drive on whatever roads are available, wherever you are, and the amount you pay is prorated according to a bunch of bookeeping, depending on where you live, how much stuff you buy, how often you trade cars, insurance costs, tickets you get, etc.

    RH

  5. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Instead of sticking me with an extra bill, how about you allow me to become an independent green power producer. Then you can buy your power from me.

    Oh that’s right. We don’t want to interfere with a monopoly, do we?

  6. Groveton Avatar
    Groveton

    Darrell-

    I have been told that 42 states have legislation in place that requires the electric company to buy power generated by independents like you. Even if they can’t get the power on the grid, they have to lower the electric bill to recognize the power generated.

    I haven’t had time to look into all the facts on this. However, it sounds like Virginia is among 8 states which do not require their monopoly electricity generator to buy back “green” power. If true (and I do repeat “if”), this will be another entry on my fast growing list of GA failures.

  7. Anonymous Avatar
    Anonymous

    I think there is a big difference in the rate that they have to pay. some only pay the lowest wholesale rate, some pay the average rate, but a few are required to pay back for solar or wind generated pwoer at their highest marginal rate.

    Since they charge more to their customers for wind generated power, this seems fair to me.

    RH

  8. Larry Gross Avatar
    Larry Gross

    “Since they charge more to their customers for wind generated power, this seems fair to me.”

    how about using that same approach for Nukes?

    My understanding is that Nukes are much more expensive than coal plants.

    What if folks had the choice of choosing coal power or nuke power per the associated costs?

    what would be the difference to doing this for nukes than with wind/solar?

  9. Anonymous Avatar
    Anonymous

    “My understanding is that Nukes are much more expensive than coal plants.”

    Your ability to oversimplify astounds me.

    More expensive, how? Where do you draw the sytem boundaries, and the time boundaries?

    More expensive to build, sure. How much of that is due to interference from “public participation”?

    More expensive per kilowatt? On a technical, capital and engineering basis, I don’t think so. But by the time you get through paying for the politics involved, maybe.

    Where do you draw the pollution boundaries? Coal plants actually release more radiation than nukes (unless you have a nuke failure, then all bets are off.) Coal plants have waste that we cannot capture and simpley gets dispersed. Nuclear plants have waste that we know how to take care of (at least for a few hundred years), but we can’t reach an agreement to actually do it.

    One way to find out would be to see what the French pay for Electricity. Groveton?

    ——————————

    The real question here is what should power companies pay independent or individual producers to buy back power.

    This is a two way street. A guy with solar on his home, still needs the grid, both to get power when he dowsn’t have any and to sell back to when he has excess. The power company has to “market” his excess power when he has it, whether they need it or not.

    Now the power company is providing him a legitimate service, over and above supplying poeer to him. That service is not covered in his power supply agreement, or never was previously.

    If the solar guy now demands the right to sell back at some fixed price, he is really making a new property rights claim against property he never paid for. (The power companies distribution, marketing, and accounting property.)

    In this case there are arguments to be made both ways, but it is entirely different from claiming that you should get a different price to your home, depending on whether YOUR Electricity is generated by coal or nukes.

    They get their power from various sources, how they blend and sell it is their business. But, if you prefer coal to Nuke power, you can always offer to pay them more to supply it.

    But, if you want them to buy it from you, then you are in a different position completely.

    RH

  10. Anonymous Avatar
    Anonymous

    ” News : European Last Updated: Dec 19th, 2007 – 13:17:15

    ——————————————————————————–

    Electricity prices for Irish industry are third highest in EU and sixth highest for consumers; Irish household prices are 46% higher than UK
    By Finfacts Team
    Jul 14, 2006, 12:35

    These figures are published2 by Eurostat, the Statistical Office of the European Union.

    Across the EU25, electricity prices in euro varied by one to three for households and for industry

    In absolute values, household electricity prices were highest in January 2006 in Denmark (23.62 euro per 100 kWh), followed by Italy (21.08), the Netherlands (20.87) and Germany (18.32). The lowest prices were observed in Greece (7.01), Lithuania (7.18), Estonia (7.31) and Latvia (8.29).

    When adjusted for purchasing power, household electricity prices in Greece (8.01 PPS3 per 100 kWh) remained the cheapest, followed by the United Kingdom (9.05), Finland (9.38) and France (10.92), while the highest prices were recorded in Slovakia (24.48), Italy (20.23), Poland (20.05) and the Netherlands (19.15).

    The share of taxation in household electricity prices varied greatly between Member States, ranging from around 5% in Malta, the United Kingdom and Portugal to more than 40% in Denmark (58%) and the Netherlands (42%).

    Industrial electricity prices were highest in Italy (12.08 euro per 100 kWh), Cyprus (11.36) and Ireland (10.11), and lowest in the Baltic Member States, Latvia (4.09), Lithuania (4.98) and Estonia (5.11).

    However, when adjusted for purchasing power, Hungary (12.13 PPS per 100 kWh) and Cyprus (11.92) recorded the highest industrial electricity prices, and Finland (4.90) and Sweden (4.98) the lowest.”

    France appears to be fourth cheapest in Europe, and depends on nukes heavily.

    How does 10.92 Euro per hundred kilowatt compare to dominion prices? Sounds high.

    RH

  11. Larry Gross Avatar
    Larry Gross

    “More expensive to build, sure. How much of that is due to interference from “public participation”? “

    Can you show two comparative plants where one cost more than the other because of this?

    Why not just take the number of the ones that have no opposition for the purposes of costs?

    As you found out.. NUKE power is not cheap…

    I would disagree that the issue about about paying for customer-generated power because the question posed was whether Dominion’s approach of allowing purchase of wind/solar – at higher prices was a smart strategy.

    And so then the logical follow-up is to ask if that same approach would be consistent for other forms of power.

    That the folks who wanted to pay extra for wind/solar – could.. and the folks who wanted Nuke power could pay for it specifically.

    And if you did that – would you have to pay for the construction of power plants of a different power generation that what you agreed to pay for.

    Because .. if it did not.. then the whole idea of paying for wind power while still being charged an equal share of the coal plant construction costs would mean what?

    If the price of building coal plants or buying coal to power them goes up ..and the price of wind/solar comes down.. then the folks who chose wind/solar ought to be rewarded for that choice instead of continuing to pay for other power that they chose not to buy by choosing wind/solar.

    Otherwise, it appears to me that this is a shrewd but cynical approach to marketing..that essentially treats the purchasers of wind/solar as rubes…willing to pay more.. just to be paying more.

    I will await the verdict of the public interest and environmental groups to complete by opinion.

  12. Anonymous Avatar
    Anonymous

    “As you found out.. NUKE power is not cheap…”

    Not really. We have no idea how much of the french cost is for taxes, over and above the cost of the energy. My only point is that you need to examne the whole system, from mining to pollution abatement, from financing to insurance, from cradle to grave, before we know which one is cheaper.

    It’s like asking which is cheaper, a Hyundai or a Mercedes. Come back and ask me again in twenty years. You might find out that the right answer is that three Hyundais are cheaper than a Mercedes.

    Like you said about cities, Nukes thrive. All we can figure is that the people who made the decision decided nukes were cheaper at that place and time, considering such events as they can forsee.

    It is just like the argument that residential housing doesn’t pay its way. The argument is based on a point in time and does not consider the true life cycle costs.

    ——————————

    “Can you show two comparative plants where one cost more than the other because of this?”

    Sure.

    The cost of Seabrook two was infinite compared to the cost of Seabrook one, because it was never completed.

    Seabrook was proposed as a twin-reactor plant in 1972, at an estimated cost of $973 million. When it finally won a commercial license in March 1990, it was a single reactor and cost $6.5 billion. the original owner went broke, and the plant was completed but not operated foe several years because of protests.

    The “fallout” from that toxic political situation delayed all planned plants for many years, with resultant cost increases.

    Krasnodor was under construction when it was abandoned because of protests after Chernobyl.

    ——————————-

    “…the question posed was whether Dominion’s approach of allowing purchase of wind/solar – at higher prices was a smart strategy.”

    I was referring to Darrels post asking if he could become his own green producer of energy, and Grovetons; response that most states require the power companies to buy back.

    The two issues are related, however.

    Dominion can either allow people to optionally buy higher priced green power, or they can blend those costs in and everyone would pay a higher rate. Somehow I imagine you would oppose that approach for the same reason you oppose blending in the higher costs of peak power.

    ———————————-

    “paying for wind power while still being charged an equal share of the coal plant construction costs would mean what? “

    It would mean that you still have power when the wind isn’t blowing, and you would have peak power when you want it, smart meter or not.

    Theoretically, you could sign up for a wind only contract and agree to suffer blackouts when it isn’t available. In that case you wouldn’t have to pay the excess coal plant costs, but it wouldn’t matter because you costs would be higher anyway: savings would not be the main issue.

    Somehow, I think that would be a dumb use of the smart meter.

    ——————————–

    “If the price of building coal plants or buying coal to power them goes up ..and the price of wind/solar comes down….”

    We can always renegotiate if that ever happens.

    ———————————–

    “treats the purchasers of wind/solar as rubes…willing to pay more..”

    Huh? Isn’t this the same bunch that wants to raise the cost of coal emissions to the point where wind/solar would be competitive, so that we would ALL have to pay more?

    This is more like the toll road approach which you support: make a service available and post the price, if you don’t want to use it you don’t have to.

    Why is one hypocrisy and the other not? Because you, personally, might have to buy electricity, but not have to drive the tollroad? is it because you don’t think this is a free market without real alternatives or competition?

    RH

  13. Larry Gross Avatar
    Larry Gross

    no.. do cost comparisons between two plants that are operation and one was opposed and one was not.

    that would be a fair way to show that opposition increases the SPECIFIC cost of Nukes – as opposed to claiming that opposition increases the costs overall…

    FYI –
    * Nuclear power is cost competitive with other forms of electricity generation, except where there is direct access to low-cost fossil fuels.

    * Fuel costs for nuclear plants are a minor proportion of total generating costs, though capital costs are greater than those for coal-fired plants.

    * In assessing the cost competitiveness of nuclear energy, decommissioning and waste disposal costs are taken into account.

    The relative costs of generating electricity from coal, gas and nuclear plants vary considerably depending on location. Coal is, and will probably remain, economically attractive in countries such as China, the USA and Australia with abundant and accessible domestic coal resources as long as carbon emissions are cost-free.”

    http://www.world-nuclear.org/info/inf02.html

    and notice the last line:

    …”as long as carbon emissions are cost-free”

    so.. if someone signs up for solar or wind or nuclear with the idea that in the longer run – it will be more sustainable .. a better,long-term investment

    and you still charge them for coal plants anyhow.. then you’re not really selling them alternative power choices…

    you charging them more for the alternative power but you’re also making them pay for more polluting power at the same time.

  14. Larry Gross Avatar
    Larry Gross

    here’s the scenario I’m talking about.

    Let’s say that people sign up for all the wind/solar that is available for purchase.. and it’s more expensive than coal.

    And then we decide to tax coal for pollution – and it causes coal electricity to become more expensive than solar/wind.

    so..there’s no more wind/solar capacity…

    do the folks who originally signed up get to keep their lower costs?

    do the folks who signed up for coal have to pay their higher costs and get on waiting lists for cheaper solar/wind power?

  15. Anonymous Avatar
    Anonymous

    Larry, Seabrook overran by 1200 percent because of opposition. Even if you think they would have overrun by 100% any way, the oppositon still cost them 600%.

    FYI-

    I know all that stuff, I once did a mode to forcast electricity costs and capacity based on fuel type.

    ——————————–

    If you still charge them for coal plants anyhow, you are charging them for their use of coal plants, because they need them for back up and peaking power.

    If someone signs up ONLY for solar/wind then they have to expect to have it only when it is available. THEN they are buying and paying for alternative power sources.

    Otherwise they are buying partial alternative power sources with conventional backup, which they should pay for.

    —————————–

    If you get away with changing the rules then I imagine they would have to pay the new higher costs until “lower priced” wind solar became available.

    You don’t think it is politically acceptable to raise the gas tax, what makes you think it will be for electricity? Raising the gas tax will have the same kin of evironmetal effects, and you get a triple whammy because you reduce congestion and road needs, too.

    It would be bad political planning to make a sudden change to a regulated industry that way. Anyway, there are all kinds of contracts in place that might be hard to break.

    Carbon emissions are not cost free now. Neither is containing carbon emissions.

    —————————

    Cost of electricity = cost of coal generation + cost of coal pollution + cost of emissions prevention + cost of subsidy to solar/wind + cost of solar/wind generation + cost of solar/wind pollution + cost of solar/wind pollution prevention.

    The subsidy to solar/wind is the same as the tax on coal pollution.

    You can add the same set of costs for nuclear and hydro as well.

    You miss the point entirely when you compare the cost of solar wind electricty to coal electricity. there is only one cost for electricity, as shown in the equation above.

    When you raise the price of coal electricity, it doesn’t make solar/wind electricity cheaper. what it does is make electricity more expensive, but more of it is produced by solar/wind.

    And since the cost of pollution and cost of cleanup is included in the equation anyway, there is no net environmental benefit – except to the extent that it is paid for by the increased cost of electricity.

    You don’t get the environmental benefit of solar for “free” just because Houdini made it appear as if the cost was placed on coal. The “cheaper” solar/wind power will not be cheaper because they will in fact be paying MORE for cleaner electricity.

    Until the technology improves.

    RH

  16. Larry Gross Avatar
    Larry Gross

    “there is only one cost for electricity, as shown in the equation above. “

    Cost of electricity = cost of coal generation + cost of coal pollution + cost of emissions prevention + cost of subsidy to solar/wind + cost of solar/wind generation + cost of solar/wind pollution + cost of solar/wind pollution prevention.

    until Dominion offers wind/solar separately as an option.

    and that is my point.

    does separately mean that you only pay the cost of solar/wind “pollution” (whatever that is) and just your pro-rata share of coal pollution of coal plant costs?

    coal-produced electricity is subsidized by not having to pay for it’s pollution.

    If the rules change and all sources have to pay for their pollution – then coal is going to take a much bigger hit than solar/wind which I believe you’d have a hard time showing their pollution beyond the claim that how they are manufactured has contributions but really no more than the pollution costs of construction coal plants I would suspect.

    So..if you’re paying only for solar/wind (plus a proportional amount for back-up power) – should those folks still be paying for the construction and operation of coal/nuke plants?

    I don’t think electricity will get cheaper as a result of solar/wind technology but I do think that if all sources of electricity were priced according to how much they polluted that solar/wind would be cheaper.

    The point has already been made that if coal power was required to cut mercury pollution to the limits of technology that it could become twice as expensive… as it is now.

    Would, at that point, solar/wind become the cheaper alternative except at those times that wind/solar was not available and you had to pay for the “good stuff”?

    If you are an investor looking to put your money into a coal plant with a 50 year payback… how would you estimate your risk with regard to future pollution rules and future technological breakthroughs in competing energy technologies?

    Right now.. I would think that from an investment point of view that Nukes would be less risky than coal plants .. unless of course Dominion is already fully indemnified by passing on the shutdown costs to the ratepayers including those that purchase wind/solar.

    and that’s why I asked the original question as to what are the benefits of buying solar/wind instead of coal…

    It sounds like to be .. that Dominion is saying that they are more than happy to charge you whatever amount you wish to pay.

    but there are no benefits that accrue for doing so.. you just pay more money..

    surely Dominion is offering more than that…

  17. Larry Gross Avatar
    Larry Gross

    Electricity rates could go up by nearly 24 percent as Appalachian Power seeks to cover the costs of new environmental regulations.

    Officials with the power

    company said they need the higher rates to pay for upgrades that help the company meet Environmental Protection Agency requirements being phased in from 2009 to 2015.

    Those standards cut the allowance for sulfur dioxide, nitrogen oxide and mercury emissions, all products of burning coal at electric plants.

    Daniel Carson, vice president of Appalachian Power, said the company is spending $2 billion to work toward meeting those requirements.

    http://www.newsadvance.com/lna/news/local/article/appalachian_power_seeks_to_raise_rates_nearly_24_percent/5339/#When:18:58:00Z

    the way I see this – everytime the environmental regulations get tighter – solar and wind get more competitive…

    by the time the carbon dioxide regs hit the fan.. solar and wind WILL be cheaper…

    little by little.. they’re chipping away at the pollution incentive…

  18. Anonymous Avatar
    Anonymous

    “until Dominion offers wind/solar separately as an option.”

    If you want wind/solar without any backup, then you shouldn’t have to also pay something for coal. If you want continuos power from coal backup, then you should expect to pay for it.

    “should those folks still be paying for the construction and operation of coal/nuke plants?”

    Their back up will get old and die. They shouldbe paying for new, proportionately. Same as existing citizens should pay for new infratructure, proportionately. (Oh yeah, and the existing residents enjoyed the old ifrastrucure longer. New residents should pay less to replace that protion, proportionately.)

    But what the equation says is that it doesn’t matter waht Dominion offers, the true cost is contained in the equation, including all the costs of pollution and all the costs of cleanup.

    What the equation shows is a cap and trade. You cap the price you are willing to pay for electricity, then you trade among all the items on the right hand side in any comination that will meet that true cost on the left.

    You can PRETEND to offer only the solar parts by reducing all the money you spend on the others to zero, and shifting that to solar. But the coal option is still out there for trade.

    That means you also reduce the tax on coal to zero, and solar has to stand alone.

    What you find out then is that you can only afford a certain amount of electricity at that price. You can already do that. No one is stopping you from putting up your own wind and solar except the planning board, the zoning board, the building department, and the HOA.

    “I don’t think electricity will get cheaper as a result of solar/wind technology but I do think that if all sources of electricity were priced according to how much they polluted that solar/wind would be cheaper.” Yu really don’t get it, do you?

    It doesn’t make solar cheaper by raisning the rice of the others. Only cheaper in comparison. It changes the trade you make on the left side of the equation. But you first ADDED costs in the part where it says subsidy to solar or tax on coal.

    If the right side goes up, the left side goes up. It cannot be any other way. You can’t get something for nothing.

    “Would, at that point, solar/wind become the cheaper alternative “

    No. The cheapest alternative is the best mix of all those items on the right hand side. That is the poine where the cost curve and the benefit curve cross. There is nothing you can do to make the cost any lower, including the cost of pollution.

    It is physically and economically and thermodynamically impossible. you place a tax on coal in the form of additional regulation. that means coal spends more for pollution contol equipment to meet the new lower limit for pollution costs. You added costs on the right hand side, and that means the left hand side has to go up.

    You haven’t reduced any costs on the right hand side: solar/wind still costs the same as before.

    The artificial tax does not produce any electricity because it isn’t in the gernation term. it does change the optimum mix of the other terms.

    The cost or benefit curves will shift a littl left or right, but the intersection of those new curves will ALWAYS be higher.

    There is ONLY one value for that tax that is correct and leads to the lowest costs. It does not matter whether the tax is too high or too low, the costs will always be higher.

    Right now we claim the tax is too low, and the costs we are paying are too high because we do not adequately account for the costs of pollution.

    But, as you can see, the costs of pollution are right there in the equation. Whatever outrageous price we choose to pin on pollution, there it is. This has the same effect as not cleaning up pollution and putting a higher tax on it.

    Right side goes up, left side goes up. (If you decide bats and birds are more valuable, then right side goes up, left side goes up, but you shift back to coal.)

    BUT,

    you can (and will) change the mix and use more (or less) solar as a result of the costs for pollution or birds that you assign ofr the tax that you charge. But the end result will ALWAYS be more expensive.

    Unless we eventually have newer and cheaper solar/wind technology.

    The less money we all spend on electricity, the more there will be for other things like research.

    So, the right thing to do, the best thing to do is to get the costs of polluion right, not inflated, not understated. Get the tax on pollution right to cover external costs right, not over, not under. (If you have the cost of pollution right, then the tax should be zero, otherwise you are charging for an externality you already counted).

    Anything else, raises the cost for no more electricity, and that is a waste, just as sure as you made the electricity and then wasted it lighting the attic.

    It means you have less to spend on your next most valuable priority. That priority might be developing cheaper wind/solar technology, or it might be fart proof cows.

    Whatever it is, you better have the priorities right, or else you are right back in wasteful mode. You will have spent time and money on somthing when you could have done better.

    Politics is all about special interests getting their single priority pushed to the top of the heap, regardless of what it costs others. (Developers are costing me money.) (No-growthers are raising housing costs).

    NONE of them undertstand that if they succeed, we all lose. Or, they understand, but they figure their loss is bigger than ours.

    You CAN choose to pay more for cleanup than the pollution is costing you, but you should understand that this is a voluntary uneconomic choice for aesthetic purposes. Like drinking Chivas instead of grain alcohol. We now understand that we keep our children TOO CLEAN, and then it costs us, because their immune system doesn’t develop properly, and they have MORE EXPENSIVE diseases later.

    ——————————————————————————-

    How would I evluate the risk of more expensive pollution rules later? I would say that a claim for more damages is equivalent to a claim for more property, unpaid for. A social contract was signed, when the permits were granted under specific terms, including the proposed/calculated costs of pollution. Modifiying that contract means renewing the contract. You want cleaner air for the same electric rates? That is exactly the same as stealing or breaking a contract. Had I known you were going to set a higher price for your part of the bargain, I would not have made the investment under these terms. you want cleaner air, you pay higher rates.

    You can make a new claim for a public benefit (public property) froma 200 year flood plain instead of 100. But then you owe money to everyone who bought property with the understanding there was a hundred year flood palin. You can of course take that benefit by force of law. You can kid yourself that the public benefit was “free”. But in fact that benefit was stolen from a few members of the public, and their losses as members of the public have to be counted against the public benefit. But, when that person sells his property, the buyer assumes the cost of the new 200 year value is included (against the price). He then, has no claim that the rule is unfair. You can make new rules, but you cannot make them retroactive without compensation.

    There are no benefits of buying solar/wind as opposed to coal, as the equation shows.(assumig the values are correct to begin with) You can buy cleaner air that way, but the costs of dirty air are already included. Therefore, You can only buy cleaner air if you give up a claim for an equal amount of dirty air.

    Creeping environmentalism means you make a claim for only a little bit, thinking the cost of one part per million won’t be noticed. But, one part here and one part there, pretty soon it is grand theft auto.

    RH

  19. Anonymous Avatar
    Anonymous

    but there are no benefits that accrue for doing so.. you just pay more money..

    Well, no. In that case the benefits do accrue, but they are an externality. You, after all, are the one that claims cleaner air is worth more.

    Benefits do accrue if you pay more money. The discussion above assumes the left side of the equation is fixed.

    BUT, (and here is the important part) if the right side is correct to begin with, those new benefits will ALWAYS cost more than they are worth.

    I know all of this seems very strange. We would both like it to be different, but it isn’t.

    You can’t get something for nothing.

    You can only get something for nothing at absolute zero.

    You can’t reach absolute zero.

    You can only reach absolute zero at the speed of light.

    You can’t reach the speed of light.

    You can reach the speed of light, but it takes infinite energy.

    Stuff falls apart because entropy always increases.

    You can keep everything repaired if you apply infinite work.

    Infinite work takes infinite energy.

    Infinite energy creates infinite pollution.

    If you don’t beleive it, take a look at the cosmos some time.

    RH

  20. Larry Gross Avatar
    Larry Gross

    wow. I truly don’t follow most of what you are saying.

    but there are some clear mis impressions.

    Myself and/or enviros are not the ones who decide clean air standards.

    Different groups have different points of views – and the advocate them but in the end – the Government decides.

    You may not agree but that does not mean that clean air is an unfair cost or that electricity is priced artificially high as a result.

    The reason we use fossil fuels whether in be for generating electricity or moving vehicles is that, at this point in time, it is cheaper – if you don’t count pollution – even pollution as currently restricted, as a ‘cost’.

    so Mercury in the rivers, acid rain, SoX/Nox deposition and health effects on the Elderly, children and others are still allowed with the proviso that we think we know how much damage occurs at this particular level but if it turns out that we underestimated that damage – we can ..and will tighten the regulations even further.

    Thus, the article (one of dozen) that I sent that said that Appalachian power would have to add even more pollution prevention equipment and it would result in higher rates – 20% higher.

    this is but one of a continuing series of stricter and stricter pollution restrictions over time that have resulted in more and more expensive electricity.

    and the trend will continue.

    at some point, when future restrictions are put into place, the cost of producing electricity with coal will start to approach the cost of producing electricity from wind/solar.

    At that point, the obvious question would be why not produce the BULK of electricity from solar/wind and use the coal plants in a reduced backup capacity?

    None of this is a ‘taking’. No anti-pollution rule is.. the original rule with a promise that any future changes would constitute a ‘taking’.

    The rule is – that the government – can and will make even more changes if the government (not enviros) determines that they should be made.

    So the person that chooses to pay for wind/solar right now – should not have to pay increased costs for it in the future – especially if the technology advances such that more efficient and less costly versions are developed.

    So the worst case in terms of cost – for wind/solar appears to be right now. Future Economies of scale and technology breakthroughs would seem to indicate – at the least – that the inflation-adjusted cost won’t be any higher than now.

    You cannot say that about coal.

    It is not unlikely at all that even more pollution restrictions will be placed on coal and that the price of coal could go up also.

    And then on the backup issue – here is a solution – that even the power companies have an interest in.

    Anyone who has wind/solar has a backup unit and a battery pack.

    When they need it, it comes on.

    when the power company needs it – they can turn it on and feed the electricity back onto the grid so then the power company instead of having to build more power plants – just taps into the network of backup power units at the house equipped with wind/solar – and in fact, on “good” wind/solar days, the power company can use that source instead of burning more coal.

    But then, if someone has solar/wind and their own backup system, why do they need to be on the power grid anyhow except for more redundancy in case their own system craps out?

    so it may not cost wind/solar folks more for coal backup at all and, in fact, it could be that the power companies that would want to hook up and have access to wind/solar and backup generators at these homes.

    You say this could never happen?

    I say that not only can it happen, it will, and the time frame for it may be sooner than later if Congress and YOUR elected Congressman (as opposed to those dratted enviros) … VOTES to put MORE restrictions on coal-produced electricity.

    Why would congress do this?

    because.. the evidence of Global Warming from burning fossil fuels becomes an even bigger concern AND we know that it is technologically feasible to do wind/solar – it just costs more.

    When the time comes where the “cost” of Global Warming is perceived to be higher than the cost of wind/solar – changes will be made.

    And no.. no one is entitled to any compensation for older, higher polluting plants.

    They will stop permitting new ones and require wind/solar instead and the older ones that pollute the most will be required to upgrade to BAT (like the Appalachian Plants) and if the cost-benefit for the upgrade is more than the cost of wind/solar -those plants will be abandoned.

    In the end – people are the ones who pay for the electricity anyhow.

    companies who produce it merely pass on the costs of pollution abatement to the customers.

    so.. if people have a choice to buy wind/solar AND choose to have a backup generator on their homes – then tell me again ..why they should have to pay for coal-produced electricity.

  21. Anonymous Avatar
    Anonymous

    “if people have a choice to buy wind/solar AND choose to have a backup generator on their homes – then tell me again ….”

    You don’t listen.

    I agree. If they buy a contract under which they do not depend on coal backup, then they shouldn’t have to pay for it.

    Howevever, It would be cheaper to just pay for it than buy and operate a backup generator, and more environmentally friendly.

    It is not environmentally responsible to do such a thing (right now) because more money spent means more resources used.

    “Anyone who has wind/solar has a backup unit and a battery pack.” No, not everyone does, (most people connect to the grid so they can “sell back” excess power when they have it) and I believe those that do are being environmentally stupid because they are spending more than necessary, and therefore using more resources than necessay. The additional costs are not warranted by the additional benefits, except in special circumstances (like no grid available).

    It is just as you said, you don’t get more, you just pay more.

    ———————————–

    Regarding that statement, you do get more, you get more clean air. Are you suggesting that it might not be worth the cost?

    ——————————

    “companies who produce it merely pass on the costs of pollution abatement to the customers.”

    Yes, that is correct. That is what the equation says. They also pass on (to everybody) the costs of pollution they do not abate. And the act of pollution abatement causes pollution too. You can NEVER get to zero pollution for any activity.

    ——————————-

    “None of this is a ‘taking’. No anti-pollution rule is.. “

    No. You are simply wrong on this. The only way this could be true, is if you think you can get something for nothing by taking it.

    Look at the equation. The cost of pollution, and the cost of pollution abatement are already included. Therefore, altering the terms without compensation is a taking.

    The costs are cost of pollution, and cost of electricity production, and cost of pollution abatement (which as you point out, is related to, and included in, the cost of the amount and type of generation chosen). The benefits are the amount of electricity and the quality of environment.

    There is ONLY ONE POINT at which you get the maximum benefit (minimum cost of pollution + maximum electricity) AND the minimum cost (for production of electricity and pollution abatement).

    Over time, we recognized that pollution was a cost that was not being properly accounted for in the equation: that is that we were NOT getting the minimum cost of pollution. Whatever the cost of pollution was, it was an externality that was accepted, up until the time the Romans introduced congestion laws and London introduced air pollution controls.

    Such controls are and attemt to add a function to the equation such that we move closer to the point where we get maximum benefit and minimum cost. That function is in the equation as a tax on pollution.

    But, if that tax is too high, then it has EXACTLY the same effect as if the pollution is too high: you do not get the maximum benefit for the minimum cost. You artificially shift the balance toward some other technology, like buying your own generator. You are not getting a benefit that is justified by the cost.

    If you MANDATE such an expenditure, then that is a taking. You are ORDERING people to buy a product that isn’t worth the money. You refuse to believe this, even though you believe the mirror image, which is that excess pollution is a taking.

    The only way it is NOT a taking is if you can show that we are better off by spending more money to reduce pollution: that the costs of pollution (included in the equation) are higher than the costs of controlling it also included in the equation. IF THAT IS THE CASE, THEN THERE IS NO NEED FOR A TAKING BECAUSE YOU CAN PAY FOR IT OUT OF THE BENEFITS.

    Your way of thinking says that the two sides of that equation do not have to be equal, and it simply cannot be.

    That is why we have rules in the law about best available technology and best practicable thechnology. Otherwise, someone can claim that ALL pollution is bad, and demand an infinite price to clean it up. That would mean that no one could do anything, and it would be an infinite taking, to prevent another infinite taking.

    You can argue that the tax is (still) too low, that we are not providing the most benefit for the least money, but you cannot argue that NO pollution reduction tax is EVER a taking. That is simply wrong and impossible.

    In the case of Kepone and DDT we successfully argued that the cost of pollution was so high that the best available technolgy was to cease production, so we do have a precedent for shutting down all activity. But the precedent also says the cost of pollution has to be very high.

    So, if you want to argue that the pollution tax is too low, then you have to be prepared to show that the pollution cost is high enough to justify an increase.

    As time goes by, we get better at assessing the costs, we have more precedents, and the range in which we can agree to disagree gets narrower and narrower. Outside that range, (WHETHER TOO HIGH OR TOO LOW) we are clearly in the territory of “takings”, whether you believe it or not. As i said, you appaently believe this in one direction (pollution is a taking), but not the other.

    But we are far beyond the point at which the matter of costs can simply be a matter of perception. Now you need to be able to prove your point. As a result, Environmentalists have adoted a stratey of nibbling: we’ll just increase the standard a little, and no one will notice, but that strategy will eventually fail.

    WHEN the cost of global warming is truly higher than the cost of wind/solar, than changes WILL be made. That is exactly what the equation says.

    It isn’t so clear though, what happens when the cost of global warming is higher than the cost of cow farts, and it starts cutting into our ability to eat steak. The guy who owns the cow is likely to view that as a taking.

    And if the environmentalists succeed in the nibbbling stategy until cow farts are regulated, then what’s next?

    ————————-

    “companies who produce it merely pass on the costs of pollution abatement to the customers.”

    That is true when there is a product to be purchased. We recgnize pollution as an external cost, and we accept the cost of preventing it when it is included with the product.

    But what happens when environmentalists produce an environmental benefit, and there is no “product” to absorb the cost? Well, that is an exteranlity, too, and it is a taking, just as surely as excess unpaid for pollution is a taking.

    I own a pine forest that is suddenly inhabited by a spotted owl. In a sense, buyers of pine will pay for that in higher prices, but they don’t pay me, and there fore I have suffered a taking through an externality, just as if it was an externality of pollution.

    Environmentalists hate the idea of takings – because it means they can no longer believe in getting something for nothing. But, as the equation shows that is impossible anyway.

    Strong property rights are necessary to good environmental stewardship because strong property rights are what allow you accurately assess prices and therefore costs. That’s is what allows you to find the lowest point on the cost benefit curve.

    And if you do not find that one single point, then you are creating an environmental waste.

    You choose not to believe any of this, but I find that it is a consistent way of looking at things that answers a lot of questions and fills a lot of needs. It takes away the need to look for environmental bad guys, so that you can justify stealing through demonization.

    ——————————

    “no one is entitled to any compensation for older, higher polluting plants.”

    In my opinion this kind of thinking is ethically incorrect. They were licensed to do business and made investment under a set of rules that was based on known environmental costs. We have a social contract that needs to be observed or renegotiated – with compensation.

    This is the same ethical wrong as charging for and buying developemt rights on one hand, and not paying for them when they are taken on the other.

    It is wrong, Larry, and I’m sorry you can’t see that.

    —————————————-

    We’ll go around one last time. Increasing the tax on coal pollution does not lower the cost of wind/solar.

    Look at the equation. Assume the left side does not change: we aren’t spending any more money on this system.

    Now you increase the coal pollution tax, what happens?

    You reduce coal powered production which reduces cost of pollution abatement for coal and the xcost of coal related pollution. When those three reductions equal the amount you raise dth coal pollution tax, you are done. You haven’t changed the left side, and haven’t spent any more money.

    What happened ot wind/solar?

    Nothing.

    The end result is you spent the same money and got less electricity. (and also less coal related pollution.)

    But, you didn’t have to raise the coal pollution tax to do that. You could just produce less electricity. Order the people who own the plant to turn it off from 1:00 AM until 2:00 AM.

    That would be a taking, because you are taking control of their property without compensation. If they produce the same electricity and pay the tax out of their own pocket, you are no worse off: you still have the same coal pollution cos as before, but they are worse off because you took money out of thier pocket.

    Otherwise known as a taking.

    Don’t like that answer? Then solve the equation for th cost of electricity, and now we assume we will keep electricty production the same. The ony way that can happpen is what you suggest – we use more solar/wind. But, we already took the cost of increasing the coal tax out of the coal side. So now we have to increase the expenditures on solar/wind (and the related pollution). The end result is that you have less coal pollution and more solar/wind production, but you pay more for the same electricity.

    If it turns out that the aamount you pay more is HIGHER than the coal tax, then you paid more to achieve the same result than you needed to. You got the same electricity and less pollution, for more money.

    The amount you paid more is what you paid for cleaner air. And this is exactly the problem you were complaining about: you pay more but you don’t (apparently) get more. Well, you do get more, but it is an externality, just like the pollution was.

    Now, remember, we already had the cost of dirty air in the equation. When we reduced coal production we reduced the cost of pollution abatement and the cost of dirty air. The difference between the old cost of dirty air and the new cost of dirty air is whatt you saved. The diifernece betwwen the old cost of electricity (plus pollution abatement cost) and the new cost of solar/wind is what you paid to get that much savings in dirty air. You still have the same amount of electricity.

    If it turns out that the cost difference in electricity is more than the cost difference in dirty air, guess what?

    It is a taking.

    This time you are taking from the ratepayers who would have been better off with dirty air at a lower cost. I knw that SOUNDS crazy, but remember, we already decided what the cost of dirty air was. We did that through all kinds of scientific and epidemiological studies.

    If you have new and better solar/wind technology, then that’s different, but we don’t have it yet. We will get it sooner if we don’t waste money buying really expensive clean air.

    Read the equation, Larry. You can’t get something for nothing. If you do, you are stealing.

    Like you say, you can have your own generator, but it will cost more. It isn’t regulated, so it is dirtier. Whoever takes that route, is economically and environmentally stupid.

    RH

  22. Anonymous Avatar
    Anonymous

    “this is but one of a continuing series of stricter and stricter pollution restrictions over time that have resulted in more and more expensive electricity.”

    Theoretically these stricter regulations are based on new knowledge about the cost of pollution, right?

    But the people who invested in power plants did so under the old rules, based on the old costs of pollution abatement, and power generation.

    Now, we, the government, enviros, whoever are making a new claim, for damage rights, that never existed before. We are claiming new property, that never existed before, and we expect people who invested on our behalf in good faith, to now pay for our newly claimed property.

    This is a fraud, Larry. All the costs are on the right hand side of that equation, and we collectively will pay all of them, one way or another.

    It is just as you said, the power companies pass the costs on anyway. So, the only part about yur statement that is correct is that it has resulted in more and more expensive elctricity (and cleaner air).

    You are not paying more for electricity, you are paying more for cleaner air.

    Conservation and a clean environment are not free.

    We are making a new property claim for cleaner air, and expect people who made investments based on our explicit and implicit old property claims to pay for it.

    That is a taking.

    Just as you said, we (collectively)are going to pay the costs, one way or another. The only question now, is whther we are going to be honest about it.

    We can have incrementally stricter rules, just as we have imposed incrementally stricter regulations on development rights. The idea apparently, is that if you just take one stick from someone’s bundle of sticks, you haven’t taken anyone’s “property”.

    The courts have held that if you don’t take substantially all of someones property value, there is no taking. But if you take one stick, haven’t you taken ALL of that stick?

    If I steal your wallet, take half your money and give the rest back, would you say that is NOT a taking?

    RH

  23. Anonymous Avatar
    Anonymous

    You start with the proviso that a certain amount of pollution is “allowed” and we can reduce that any time we want.

    I think that is false and unrealistic.

    I start with the idea that any activity creates pollution. That is a physical law that no one has ever circumvented. You canot create something from nothing, and you cnnot create something from somethng else so perfectly that nothing is left over: no pollution.

    Except maybe the Guy who figured out how to create the Big Bang. It’s all been down hill ever since. If you don’t believe me, ask EMR.

    We are going to incrementally increase the pollution laws, all along believing it has no effect; each increment is free. We’ll raise the price of coal, and that will make solar/wind cheaper.

    Wrong.

    Some day we will run into a brick wall. Like, no cow farts, no steak.

    RH

  24. Larry Gross Avatar
    Larry Gross

    Ray – pollution abatement is not some static unchanging thing.

    When coal plants were first built – there was NO charges for pollution abatement.

    According to you,,, when the government required pollution abatement and then passed those costs on to customers – that’s was a “taking”.

    So we go through decades of more and more required pollution abatement and we get to the current point in time.

    and your idea is that what they have right now is fine but if they put even more restrictions on pollution that NOW it constitutes “stealing” … a “taking”.

    When in this process from the very beginning initial coal plant to now .. did the illegal “takings” actually start?

    and you’re wrong about the backup generators if they run on natural/gas propane.

    they’ll be far cleaner than other fuels.

    and.. in fact.. some peaking plants ARE natural gas – like the one if Facquier.

    so all you’re doing is distributing the generation capacity.. to a network..

    but tell me again.. at what point additional pollution abatement taking place multiple times over decades.. becomes a “taking”.

    do you consider the additional charge on tires that says “environmental disposal” to be a “taking”?

    How about when they charge you at the dump for tire disposal?

    Is that a “taking”?

  25. Anonymous Avatar
    Anonymous

    “According to you,,, when the government required pollution abatement and then passed those costs on to customers – that’s was a “taking”.”

    Larry, I have never, ever, said any such thing, or anything remotely like that.

    If the customer is paying for it, then there is no taking as far as the power plant is concerned.

    However, if the customer is required to pay more for pollution abatement than the damage from air pollution costs, then it is a taking from the customer.

    AND, in this special circumstance (diveritng coal production to solar by pollution taxes) it does also reperesent a taking to the coal power producer. he has a superior, lower price product, in this case (cost of pollution previously established by others, remember) and he is unfairly banned from the market. It is exactly as if you told him to shut down.

    Furthermore, if the customer pays for a benefit that is enjoyed by others, then the customer is creating an externality.

    If a third party is damaged by pollution then he claims externality damages to his property and expects compensation or abatement. But if he gets a benefit, he doesn’t expect to pay for it.

    So, you are right, it comes down to “When do you start?” It is an important question. My answer is that you start whenever you have an implicit contract: a social or civil agreement that cannot be broken by honorable gentlemen.

    In Oregon they backed up the property rights rules 25 years, or however long it had been in the property, whichever was longer.

    If you bought property, knowing development rights restriction were in place, then you had no claim. But if property rights restrictions were imposed on you after you bought the property, or after whoever you inheritied it from bought the property, then you were entitled to compensation.

    —————————–

    “and you’re wrong about the backup generators if they run on natural/gas propane.

    they’ll be far cleaner than other fuels.”

    Show me the data.

    The reason peaking plants run on natural gas is because they can start up quickly and the capital costs are low. They don’t run very often, so they can afford the more expensive fuel for short durations.

    You should have heard all the commotion about pollution when that plant was built. I heard one woman vehemently declare tat she was selling her farm if it got built.

    RH

  26. Anonymous Avatar
    Anonymous

    “How about when they charge you at the dump for tire disposal?”

    Suppose that the purpose of the charge was to promote hovercars, in order to avoid disposing of tires. in that case, the disposal charge is a subsiy to an alternate technology, just as a pollution tax on coal is a subsidy to solar/wind.

    If this subsidy succeeds in it’s purpose, then no one pays the disposal fee or the pollution tax. There is no benefit to the public coffers, and the idea that this is a tax is exposed as false.

    But no one in their right mind would claim that hovercars are a superior solution to disposing of tires: it is far more expensive.

    In that case, the disposal fee would be a taking because it move you way from the optimum cost/benefit point.

    And it is environmentally stupid.

    but considering a tire disposal fee alone, If this is a fee that we think is properly justified, based on actual costs of disposal/reuse/recycling, and these are costs taht we as a society approve of (we think we are getting our money’s worth), then it isn’t a taking. If we decide to hang some art in the county courthouse, because it is a nice thing to have, that isn’t a taking, even though you could argue that it increases taxes unneccessarily.

    The point is this, if there is truly a public benefit, then there ought to be enough money for the winners to pay off the losers.

    If there isn’t, then if you sum up all the costs and all the benefits to everyone, including the polluter, and you come up with a negative number. In that case there is no true public benefit, except that you are taking it from someone, somewhere.

    It works every time; it isnt a public benefit unless everyone is at least no worse off. otherwise, it is a wealth transfer: a taking.

    The whole point of environmental activities is to increase the public benefit. To then turn around and argue that only the bad guys should pay for it, desroys your entering position, your credibility, and yur ethical standing.

    RH

  27. Larry Gross Avatar
    Larry Gross

    re: “However, if the customer is required to pay more for pollution abatement than the damage from air pollution costs, then it is a taking from the customer.”

    and who decides this?

    re: “implicit contract”

    and who decides this?

    I hate to break this to you guy but we elect folks that decide these issues…

    when the Govt tells Appalachian Power that they have to put a billion dollars worth of pollution abatement and pass that cost onto you there is no discussion of an implicit contract.

    trust me Ray.. not one word about this implicit contract.

    instead – it usually goes along these lines – “you WILL upgrade your plant by 2010 or .. we will not renew your permit to discharge.

    there is no discussion about an “implicit” contract.. believe me.

    and if you are a customer of Appalachian or Dominion – you get a notice in the mail .. about how much more you are going to pay – and again.. the notice will say something like “because of required pollution abatement upgrades, we will be passing along these costs to you”..

    There is no sentence that says ” please get in touch with us if you want to discuss the implicit contract”.

  28. Anonymous Avatar
    Anonymous

    and who decides this?

    Look at the equation. Pollution costs are included, whether anyone figures out what they are or not.

    Since we are already have pollution requirements in place, those costs have been figured out. That is done so that they will know how much pollution equipment to install. It isn’t done by elected officials, but by government scientists and their consultants. They are, of course, hired by government officials.

    So now you have a situation in which the costs of pollution are known, as well as we can at this time. The costs of pollution abatement equipment is known, an dthe costs of generating power is known.

    We agree to let somone generate power under those conditions, and he agrees to make the required investment. An honorable person will recognize that as an implicit contract.

    We then decide, or discover, unilaterally that the costs of pollution are higher than previously agreed. So we add a tax to decrease the amount of pollution or increase the amount of equipment required.

    One way or another, we are going to pay for that, just as we would have paid the costs of pollution had we not. The equation still holds. As long as we pay the additional costs through rate increases, then we are paying for the cleaner air. And there is no taking.

    Let’s say that we first decided that the cost of CO2 pollution was $30 a ton, which is about waht CO2 credits trade for on the European market. (We don’ have one in the U.S.) yet.

    We later decide that the cost is $45 a ton. But we require the generator to install pollution equipment that costs $100 a ton, and we bill that cost to ourselves.

    As you point out, through force of law, we can do this.

    But if we do, we just took $55 dollars a ton out of out own pocket for nothing. We didn’ get any benefit from it.

    Even if we elect the officials and we agree to pay the bills and we agree we want the equipment installed, we still took $55 a ton out of our pocket for nothing.

    When we are stupid enough to take money out of our own pocket for nothing, it is a taking. It matters not one bit what the law is or how we go about it. The equation is what it is. If you pay more to reduce pollution thatn the pollution costs, then it is a waste, and somewhere, someone is being taken. Whether it is deliberately, or stupidly, doesn’t matter. But, if you do it deliberaely, it is not only stupid, but also dishonorable.

    Maybe you are right, and there is no word of an implicit contract. That is exactly the propblem. That contract ought to be explicit, so that property rights are spelled out.

    What I hear you saying is that we have a problem because we don’t have strong property rights.

    The example above is silly. I don’t think the government would actully demand pollution control equipment that costs $100 a ton to reduce pollution costing $45 a ton. If they tried to do that, no doubt there would be lawsuits. But if that turns out to be the case, then the government has failed in its responsibilites to me as a citizen, not to take my property unduly and without compensation.

    We don’t yet have a firm agreement on whether the price should be $30 a ton or $45 or some other figure. But that too is a matter of establishing property rights and property values. As time goes by, we get more case history, more agreements, and it gets harder and harder to just pull some number out of the hat.

    If, five years ago Sierra club and comapny got new legislation passed by going to the hearings and making claims of $100 billion in damages, then next year, they will have a hard time claiming it is suddenly $500 billion without substantial new evidence.

    Just last week some researchers came up with a new average value for one year of healthy life. That value will be used to determine whether life savng medical procedures ae worth the cost.

    The value they set was $129,000. you and I might think a year of our life is worth more than that, but that is the number that will be used to set medical policy.

    So, next time Sierra club or someone comes up with a cost of pollution claim that calculated the additional cases of asthma, etc. they will be constrained to use a number for average value of a year of healthy life that is not orders of magnitude different.

    So, over a period of time, we eventually settle on a number that is, say, $75 a ton, and it is agreed to pretty much all around.

    That is an implicit contract, whether you choose to see it that way or not. But even if it isn’t, you still have the equation, and it now tells you that if you spend $80 to prevent pollution that we all agree (isn’t that an implicit contract?) costs $75 then that is a waste, and it is taking someone’s property unnecessarily.

    But we get all this ironed out and we have a cost of pollution of $75 a ton, a cost of pollution abatement at $75 a ton an and a cost of electricity generation. So all totaled That form of electricity costs us, say, $500 per unit, and we have all agreed, regulators and power company that that’s where we are at.

    Now suppose that Solar/wind power cost $600 a unit. You could, as you point out, simply pass a law that rises the cost of coal electricity by yet another $100 a unit, to make solar copetitive.

    Whether you belive it or not, that would be economically stupid, environmentally counterproductive, and ethically wrong, because you would be taking someones property and returning no benefit.

    And sure enough, you would eliminate $75 of pollution costs. But, you had already counted that cost against the coal generation costs, so it doesn’t cost you $100 to eliminate $75 of pollution, which would be bad enough, it costs you $175.

    You are entirely correct. The Govt tells Applachian power they have to install a billion dollars worth of equipment, and f they don;t their discharge permit will not be renewed.

    And what argument does the government make? That intallation of the equipment is worth it because it will prevent more than a billion dollars in other damages.

    In other words, it makes sense according to the equation. They’ve already determined the cost of pollution damage, before they make that claim.

    We can come back next year and demand another billion, and another billion after that. but sooner or later, that equation will catch up to you and you will be making expenditures that make no sense. You simply cannot claim that the cost of pollution is infinite. If you do that, or even approach that, what it implies is that for enough money, you can take pollution to zero. Since that is impossible, there must be some price at which you ae willing to accept the cost of pollution.

    You cannot simply pull some price out of the hat that will automatically justify wind/solar, and have it make sense.

    If you do, then that is a taking.

    What you are telling me is that we can use the police power to do whatever we want, and you are right. What I’m telling you is that even the police power cannot make that equation wrong.

    We can use the police powers to do things that make no economic, environmental or ethical sense, and the way you determine that is to use the equation. If you use the equation and it tells you that what you are doing makes no economic or environmental sense, and you use the police powers to do it anyway, then that is a taking.

    Right now, we use the equation to say that the costs of pollution control equipment is justified. In order to do that, we must recognize that the equation also tells us when it is not justified.

    My ONLY point to you is that there is SOME point, at which further expenditures are not justified. We can argue about whther we are anywhere near it yet, but we cannot argue that it doesn’t exist.

    Some people refuse to see that. They think any expense is justified to eliminate any speck of pollution. But, in order to hold that position they have to eliminate all property rights. But since the starting argument is that you have nor right to pollute (damage my property), then you cannot claim that any expense is justified, because it woule eliminate the property rights you are trying to protect.

    You are right, you can use the police power to do whatever you like, you can even use it to steal. But you cannot use it to get something for nothing. That is what the equations tell you: you cannot get something for nothing, law or no law.

    And the only possible result of this is that the equations can tell you when the law is trying to get something for nothing.

    Otherwise known as stealing or taking.

    The whole point of environmental activities is to increase the public benefit. To then turn around and argue that only the bad guys should pay for it, desroys your entering position, your credibility, and your ethical standing.

    If you have to fall back on the argument that the law can do whatever it wants, then you just helped prove my point.

    RH

  29. Anonymous Avatar
    Anonymous

    It is unethical for us, as environmetalists, to claim property rights concerning externalities, and then refuse to allow property rights when we cause externalities.

    We can’t pay for development rights in some cases, charge for development rights in other cases, and then take development rights, without paying for them.

    Actually, we can, of course. As you point out. But we can’t do it ethically, because it is wrong. And we can’t do it logically, because it destroys our own arguments.

    To make the argument that we can do whatever we want with police powers, comes frighteningly close to saying that the ends justifies the means: we are allowed to do things that are wrong, because we hold the superior moral and environmental high ground.

    That kind of thinking makes me want to puke.

    RH

  30. Larry Gross Avatar
    Larry Gross

    re: puke

    puke or not.. here’s the problem:

    “Look at the equation. Pollution costs are included, whether anyone figures out what they are or not.”

    Ray.. this is YOUR equation not the governments and not the government scientists…

    and your equation does not seem to allow for what happens when we discover that pollution is more costly that previously thought…

    there is no implicit contract that states –

    “for ever and all times, what we know about pollution and it’s costs will never change and if by some chance, we change our mind – it will constitute a “taking” that we will pay for”.

    Ray.. no one could make such a statement.. in the first place…

    .. and even if they did – who are the “we” that will pay for “takings” if everyone is buying electricity anyhow?

    you just pass the increased pollution abatement costs – on to the people who need the electricity that generates the pollution in the first place.

    My question to you.. is what happens when the cost of pollution keeps going up ..to the point where less polluting alternative technologies start to affect that equation that you keep talking about?

    How is that kind of change delt with in your equation?

    Somewhere is that equation – there is a dynamic of lower prices competing with lower pollution.

    Some technologies pollute less but they cost more – BECAUSE – we don’t know how to price pollution to start with..and we have to keep changing the price of it..

    right?

  31. Anonymous Avatar
    Anonymous

    larry, all I can tell you is that the equtions are correct. They cannot be any other way. They represent the physical rules of the planet, which won’t change. governments can play by those rules or not, but if they do not they are no longer working for the common benefit. There is no other logical and mathematical conclusion that works.

    “what happens when the cost of pollution keeps going up “

    Well , yeah. I don’t like th implications of the equations any more than you do. The end game is very ugly.

    There is only one point at which you get the maximum benefit for minimum cost, but there is no guarantee that the level of maximum benefit is sufficient to sustain life.

    As the cost of pollution goes up, you spend more and more to control it, until you have nothing left for other things like food.

    “to the point where less polluting alternative technologies start to affect that equation “

    This can’t happen. Nothing affects the equation. Period. Get used to it. The less polluting technologies are already in the equation. The polluting technologies and all their costs , including the cost of pollution (WHATEVER that is), are laready in the equation.

    If the less polluting technologies cost more for the same good, including the amount they reduce pollution, well, then they still cost more.

    What is the cost of pollution? Basically it boils down to the costs for each yar of additional mortality and morbidity. We have various ways of figuring out what those are.

    We can argue about the values, but the argument still falls within some range. We can;t afford to spend all the money on the planet to save one life, so the value of one life is not infinite. That means you cannot arbirarily raise the “cost of pollution” without limit, unless you thinke we are actually facing an apocolypse.

    If that’s the case, what can we afford to do to prevent it? just as we cannot spend ALL of our money saving one life, we cannot send ALL of our money preventing pollution.

    So, there are two ways the cost of pollution increases. More pollution, and more people for it to affect. When the cost gets high enough, you get rid of some people, one way or another. The equations cannot be wrong.

    “Somewhere is that equation – there is a dynamic of lower prices competing with lower pollution.”

    Yes. The starting point is that you know the costs, for pollution and for each technology. The starting assumption is that you know the costs. If they change, you put in the new values and get a new equilibrium point.

    There is still only one point where you get maximum benefit and minimum costs. Anything you do to screw with it either reduces benefits, increases costs, or both.
    Anything you do to screw with it, usually means subsidies (with a tax on one kind of pollution being a negative subsidy).

    That’s why subsidies are the cockroaches of economics. (And the environment.)

    “we don’t know how to price pollution to start with”

    If you think that is true, then we have a major problem. The whoe argument for environmental protection is to reduce those costs. If we can’t agree on how much they are, we can’t agree on how much to spend.

    The only thing we know for certain is, that we cannot spend an infinite amount. this isn’t a question of whether environmental spending will cripple the economy, it is a question of at what point, and that point depends on the costs of pollution.

    So, at some point in time we figure what the costs are, and we figure it is to our (collecctive) benefit to permit a new power station. We have made an implicit bargain at that point.

    Later, we find out we were wrong, the pollution costs are higher. Now we want more protection. We can’t expect the power company to pay for it. The users will pay for it as you point out. If the price is high enough, they will use less. They provide us with less stuff at higher prices, and we all pay for it.

    Higher costs, less benefit; just like the equation says. The contract we made will be enforced, whether we are honest about the results or not. If we want more protection, we can’t get it from the power company for free. We can attempt to do that, but all we do is damage the power company for our onw temporary gain. It is stealing.

    I submit that we do know how to price pollution, but we are uncomfortable with it because we value life so highly (in the abstract). But when it comes down to it, we don’t put a new heart in a 100 year old man.

    Not at todays prices.

    The other problem is that we put a high price on extreme events, if global warming is apocolpse, then the price is infinite. We still can’t afford to spend an infinite amount on that problem. If we try, we need to abscond with everything everybody owns to do it: a taking on a grand scale.

    It is NOT my equation, Larry. It doesn’t belong to government our scientists, but it is what it is. They can’t change it and I can’t change it. They can ignore it, but it won’t make any difference. It will chug along in the background whaever they do.

    But if they DO ignore it, then they are no longer working in our best interests. they are not working for the common good, the most benefit at the lowest costs, and they ae wasting resources that affect the environment.

    Denying the equation is truly just that. Denial. It doesn’t change a thing.

    We can pay the costs of livng with pollution (whther we calulate what they are or not, wheter we calculate correctly or not, makes no difference. Whatever it is we live or die with.)

    We can pay the costs of abating pollution. If we don’t know how much it costs, we don’t know how much to pay. And,we can NEVER abate all pollution. Some of it, we are going to live with.

    We can pay the costs of using some other, lower polluting technolgy. it might even be cheaper, but usually it is not. But there is No new technology that is pollution free, and none that is free. New technolgy becomes old technology, and you face the exact same problem at a later date, and next time it is harder and more expensive to solve – paradoxically, because you last round was “more efficient”.

    If new technology isn’t cheaper and it produces the same goods, then the extra cost is exactly the same as paying to reduce pollution.

    But, if you could have bought a greater amount of more pollution abatement for the same amount of extra cost, then the new technology is really no better. That is the hard part to understand.

    You can have new technology that cost more and pollutes less, and it might be no better, not now, and not in the long run.

    Except that, in the long run you havemore people, and the costs go up, again. Then the technology might appear to be better – the equilibrium shifted when you chaneged costs, but over all, cost went up.

    It cannot be any other way, and when the costs get high enough, we are screwed. We don’t like to admit this, so we fool ourselves by saying we are really a little better off with a little more expense.

    This is basically a lie, because it is another version of thinking we can get something for nothing.

    We lose a lttle on every transacton and make it up on volume.

    And all of tht is for situations where we buy a product, so there is some cash flow to pay for the pollution prevention.

    But in other cases, we simply demand environmental services which we do not pay for in any shape or fashion. We expect them to show up as externalities; the same kind of externalities that we expect protection from, when they affect us.

    I hate to break it to you. There is no Santa Claus.

    RH

  32. Larry Gross Avatar
    Larry Gross

    Ray.. if the government tells you that you cannot use a chemical anymore… does that mean the end of mankind?

    What if they tell you that you can use the chemical but only at 1/2 the levels previously allowed?

    does that mean that we are 1/2 way towards annihilation and we’ll reach that point if the government contemplates even further restrictions or perhaps an outright ban?

    The number of substances that are restricted or banned..grows every year as we find more and more information about their impacts.

    But that does not mean that mankind is harmed by the banning of these things…it means the opposite….

    I just don’t get your logic.

    From the time that it was observed that certain substances could kill or sicken people… banning them is how we keep people from being harmed..

    Using your logic .. we should have never have required pollution restrictions on anything..because for every person not harmed by the harmful substance.. someone was harmed for not being allowed to harm other people with it because it was how they made a profit.

    Ray -no one has the right to harm other people no matter whether that is how they make their own livelihood or not..

    and the person who decides how much harm is being done (or not) is NOT the person who profits from it but the person who is affected by it.

    This is why any industry has to get a “PERMIT” to discharge.. as they do not..have the right to discharge…much less the unfetterd right to discharge.

    Take this back to air pollution.

    The Government – as the agent of the folks who can be adversely impacted by pollution – puts restrictions on those who pollute.

    There is no right to pollute now.. just before one polluted in the past.

    The issue is ALWAYS open to further reveiew and further restrictions. per the science done by the Government on behalf of people.

    Requiring absolute zero emissions from coal plants without an alternative way to provide power would never happen..

    ..but the idea that solar/wind might pollute far less.. to the point where coal power is required to meet the same emission levels as wind/solar IS possible.

    You seem to think that such a thing would destroy civilization as we know it.

    It would not…

    Coal plants are now 10 times cleaner than they used to and the end of the world as we know it has not happened…

    the same with cars…

    and the likelihood that further restrictions that could lead to even 10 times less emissions is not out of the question at all.

    None of this seems to “fit” the equation you talk about because your equation apparently does not recognize that less pollution is possible without an economic loss just as outlawing lead does not cause an economic loss…

    it only causes an economic loss if you think that anyone who made a living off of lead.. can only make a living from lead and not accomplish the same economic gains by using alternative processes that don’t require lead.

    Following your logic.. we would never have been able to outlaw lead in gasoline with fatal consequences…

  33. Anonymous Avatar
    Anonymous

    if the government tells you that you cannot use a chemical anymore….It means they claim that the danger or cost of pollution from that chemical is infinite, or at least it is higher than any possible known benefit from that chemical.

    That does not mean the end of mankind. But if you do that for every chemical it would mean the end: you literally could not do anything because everything pollutes, somewhat. We see the current flap over bisphenol A. Just wait until they get around to pthalate esters: those things are used EVERYWHERE.

    We are already serously considering how to control cow farts, and carbon. We will continue to make the incremental changes until we hit the wall.

    After we ban something, what happens when some chemist discovers that it is a vital precursor to the anticancer cure? What happens if he can’t get access to the chemical to discover that?

    If he does, then yu have new technology with new benefits and new costs and you reset the equation. The result might be that government changes its mind.

    ————————–

    if they tell you that you can use the chemical but only at 1/2 the levels previously allowed…..then they are telling you you can have only half the benefit. This makes that benefit rare, and it raises the price. It is a subsidy to that chemical’s competitors.

    —————————–

    The number of substances that are restricted or banned..grows every year as we find more and more information about their impacts. And so does the cost or controlling or doing without them. The incremental nature of the approach doesn’t mean it doesn’t have a limit. If you walk halfway to the door every day, ho long before you go through the door?

    —————————-

    But that does not mean that mankind is harmed by the banning of these things…it means the opposite….

    It means that we decided the cost of doing without these things was lower than the cost of controlling them. Or it means that we decided that the cost of some control plus the benefit of the remaining uses was less than the cost of doing without entirely.

    You seem to think that this means that we are automatically better off. But that is only true if you KNOW that the cost of pollution is greater than the value of the benefits that chemical provided, plus the costs of controlling it. But you are the one that says we don’t know how to price pollution, so how can you know if we are better off?

    We banned tributyl tin oxide, which is a fugicide and algaecide. It makes a very effective antifouling bottom paint, meaning our ships only have to be painted every four to eight years instead of every year. It is used in an epoxy bottom paint which is very durable, and it protects the steel.

    Instead, we use copper oxide, which is still toxic, and we use it in soft paints that slough off into the environment – every year.

    The benefit is that we do not have the harmful effects to TBTO, and we avoid whatever the morbidity and mortality is associated with that, right now it is around $129,000 per life per year. And the probablity of that actually happening is low, but whatever the total number is, it what it is.

    The cost is that we have to paint our ships four times as often, and we have the control of chemical costs, we put businesses out of work, etc. We might be better off and we might not be, but you have to know the costs to be able to say, one way or the other. And as you say, we do not know the costs.

    You are willing to assume that the people making the decisions know what they are doing and to give them the benefit of the doubt.

    I am not, because, if they are wrong in either direction then we are worse off that we might be. The only case where we are actually better off is if we were wrong before and we manage to move in the right direction, but not too far.

    ————————–

    “no one has the right to harm other people no matter whether that is how they make their own livelihood or not..”

    Precisely.

    And what this shows is that harm can happen if you move in either direction. It is only not harm if you move in the right direction – and not too far. Othwerwise you will be harming people.

    But, suppose we are actually right. Suppose we gain a $5billion dollars in benefits by shutting down a plant worth $5 million dollars. The whole world is statistically better of by $5billion, and one guy is physically worse off by $5million.

    After we previously told him it was OK to make that investment: We licensed him.

    If we are really that much better off, then we ought to be able to pay him to prevent him from harm, and we are STILL better off. Why in God’s name would we NOT be willing to pay him, under those circumstances?

    Unless we think we can get something for nothing, and we have nothing to do with the fact that he was previously allowed to do what we are now punishing him for. That we never participated in his pollution by buying his products, that we never benefited from his products (for their good parts). Even though WE claim that WE are better off by billions, we are going to gyp him out of a few million.

    I think that is wrong. Government thinks it is wrong too, because what usually happens is that we give him time: his permit expires ten years from now, or he has five years to make improvements, etc.

    It is only in cases like Bhopal and Chernobyl that we shut the doors today.

    No one has the right to harm other people, and what you don’t get, or won’t get is that harm can happen with too much regulation, too little regulation, wrong assumed cost of pollution, incorrect assessment of benefits etc. etc.

    You have no more right to harm someone that way, than they have to pollute.

    —————————–

    “Using your logic .. we should have never have required pollution restrictions on anything”

    Absolutely not true.

    My logic only says that it makes little sense to eliminate $5 billion dollars worth of benefits in order to limit $5 million in damages.

    On the other hand, if we claim we get $5 billion in benefits from redcuing pollution, then we should easily be willing to pay 5 million in damages in order to get the benefit. Especially since we licensed the polluter in the first place. (Or maybe we didn’t: no license was necessary, and now we make a new claim that licenses are necessary. Either way, we are making a new claim against our previous social contract.)

    We have no right to make a requirement for pollution abatement where the costs of the abatement are greater than the benefit of pollution reduced, precisely because we have no right to harm other people.

    That is why EPA has a national office of cost and benefit analysis. (A requirement Reagan put in place, I believe.)

    —————————-

    “and the person who decides how much harm is being done (or not) is NOT the person who profits from it but the person who is affected by it.”

    Wrong. The person affected is not the one who decides the amount of damage. Ever. That is the Job of government or a third party.

    “The issue is ALWAYS open to further reveiew and further restrictions. per the science done by the Government on behalf of people.”
    Not only that, but if I have good science and good data that I am being overly charged or over penalized, I am entitled to take that information to the government for reviw, and get redress.

    The Government – as the agent of the folks who can be adversely impacted by pollution – puts restrictions on those who pollute.
    And it is the government who decides. The govenment has an office of cost and beenfit analysis, and government has a written requirement that no person pay unduly for the costs of controlling pollution or the falure to control pollution, or the costs of administering pollution laws.

    Furthermore, the government is not ONLY the agent for those who may be adversely affected by pollution. The government is everybody’s agent, and they have an oblicgation to see to it that no one harms other people. Teh government in fact has a written obbligation to see to it that the costs and benefits for environmental laws are fairly distributed.

    Not by pollution and not by making exagggerated and unsubstantiated claims for damages from pollution. And as for unsubstantiated, you are the one that says we don’t know haow to measure it.

    It does in fact cut both ways. But it shouldn’t even matter. We as environmetalists claim to hold the superior moral ground. We should be able to recognize that if we get a pollution reduction that is too high, then it is costing us money that we could better spend on other priorities. It is utterly stupid of us to hold a position like you describe: It is Nnethical, Illogical, and Environmentally Stupid.

    ——————————–

    “There is no right to pollute now.. just because one polluted in the past.”

    I never claimed there was. this isn’t abbot a right to pollute, it is about not having the right to harm someone else.
    That means there is also no right to claim damages or excess damages from pollution that don’t really exist.
    And YOU are the one that says we don’t know how to measure those damages.

    But we do have a moral obligation to stand up to our social contracts, written or not. We cannot change the terms, arbitrarily, to our benefit, and have us make the determination of damages.

    It is wrong to set someone up to make investments under one set of rules and then change the rules in such a way that we get a benefit based on their losing their investment. There is no way to claim that is a “common good” and we should not ask or allow the government to participate in it.

    ——————————-

    “Requiring absolute zero emissions from coal plants without an alternative way to provide power would never happen..”
    Right. and why is that? Because the benefits of having power are very high. We would allow some emissions in order to get the benefits of electric power.
    Say electricpower costs 100 and emsiions from it cost Ten. now suppose that Solar/wind costs 120 and pollution from that costs 2.
    Would you pay 22 to get rid of 10?
    Maybe, you would.
    But if you did, you would have just claimed a price on coal fired electric pollution of 22 when it only costs 10.
    So what happens the next time you claim an increse in costs from pollution? Somebody will look up in the records and find out what you actually paid,, and now you have to jsutify a new higher price.
    ———————-
    the idea that solar/wind might pollute far less.. to the point where coal power is required to meet the same emission levels as wind/solar IS possible.
    Jesus, here we go again. We can require coal power to meet any standard we want. We can artificially rasie that standard high enough to make wind/solar look cheap in comparison to coal. But that will not actually make solar/wind cheaper. It might not even be cheaper that simply paying more to reduce coal emissions. It might not even be cheaper than just living with the coal emissions. If that’s the case, then how are we better off? Ther ei s no doubt that solar wind will pollute less, but that still doesn’t (necessarly) mean we will be better off with it. We think one year of morbidity is worth around $129,000. Suppose we reduce that expense by $129,000, we wipe out all expenses associated with coal pollution by using solar, but is costs us $400,000 to do it?
    We will have to waste a certain amount of money to do that, and that is money that comes out of some other worthwhile project. We already can’t reduce pollution to zero, as even you point out, but if we waste money doing what we can do, then we can’t afford to reduce as much. It is an environmental and economic waste unless you get it just right. And it is morally and ethically corrupt. It is sloppy tinking, based on the hope you can get something for nothing by demonizing “the enemy” .
    That would be the enemy that we buy electricity from.
    We can reqquire anything we want to require. But that damn equation will stillbe back there pointoing out to us whether it makes sense. Or not.
    ————————
    “Coal plants are now 10 times cleaner than they used to “
    Yep, and we walked halfway to the wall. And each successive reduction costs more and buys us less. We have already picked the low hanging fruit, and now we have to get out the ladders.
    I’m telling you that ladders are expensive and dangerous, and the fruit is harder to get and make a profit. The old easy ways are gone, and now you need to be more careful.
    ———————
    “it only causes an economic loss if you think that anyone who made a living off of lead.. can only make a living from lead and not accomplish the same economic gains by using alternative processes that don’t require lead.”
    Now you are back to trying to get something for nothing. If he can make the same economic gains, it must be equal in expense or cheaper. If it was cheaper, we would be using it already. Remember, WE already included the costs of unrecycled lead in the equation. you do not get to double count. You can’t claim that getting rid of the lead is worth more than what you said it costs to have. You can’t make economic gains from an alternative process unless it is really cheaper. And if it was cheaper, we would already use it. You can’t make the alternative process cheaper by adding a tax to lead.

    RH

  34. Larry Gross Avatar
    Larry Gross

    That does not mean the end of mankind. But if you do that for every chemical it would mean the end: you literally could not do anything because everything pollutes,

    Not everything pollutes. Waterfalls and nightshades and poisonous snakes do not pollute even though all of them can be deadly to humans.

    Here’s is a common and I think reasonable definition:

    “Pollution is the release of environmental contaminants.”

    this implies that there is a willful action of putting something into the environment that is natural but also harmful.

    Milk from cows is not a ‘contaminant” but how you produce and distribute it ..can be.

    and that’s how it is with many, many substances – natural and man made.

    and is it the onerous boot of ruthless government that says that you cannot distribute milk if you are using containers with cow poop coating them?

    this is an extreme example to show that the substance itself is not the issue but whether that substance is a contaminant and how it is released.

    and where we disagree.. if you seem to think that if a substance is banned that we have lost something that we cannot replace and that there is a finite number of things that can be banned before we reach the point where we have painted ourselves into a corner that we cannot escape from.

    It’s just not this way even though it might seem so…

    for every substance that is banned, there are thousands and thousands that are not – and never will be.

    and it is NEVER the guy who makes/releases the substance that determines it’s harm..

    it is ALWAYS the people who are affected – who ban together as “government” to confront the pollur and tell him that he does not have the right to harm THEM …

    your idea that the public has no “right” to economically harm someone who makes money off of an activity or substances that is determined to harm others is bizarre IMHO.

    You simply do not have the right to harm others.

    Beyond the Federal rules – if someone can prove that they suffered harm from something you did – they can sue you and win – and that is totally independent as to whether you feel that your activity was justified for your own benefit.

    The Government just takes this further and preemptively decides what activities and substances that you can engage in and create – IF they feel that there is even a POTENTIAL for harm.

    That is why you cannot just do some things on your own and must obtain a permit to do those things – as determined by others… not you.

    I think that’s is one of the differences when I say that one d the unfettered “right” to pollute…

    you never do.. it’s always by permission and the basis for it not your own ideas but others.

  35. Anonymous Avatar
    Anonymous

    Look at it this way.

    On the left side of the equation you have the sum of all the costs for all the stuff we have, it is costs for the common good. on the right side, you have all the individual costs for all the stuff we have, including externalties, like pollution.

    If you raise the costs on the right side for something like pollution taxes, and more expensive solar/wind power, then you raise the costs on the left side for the common good: that is, you have less of it.

    Unless, you lower the costs for other things on the right hand side, more than you raised the other costs. So, if the cost of pollution is more than the cost of the pollution tax and wind/solar power, and if you have less of it because of the other two, then the left side goes down and the common good is increased.

    Otherwise pollution may go down but the cost is higher than it was with pollution in place. You have cleaner air, but it costs more than the dirty air did, and overall the common good is decreased, despite the cleaner air.

    I know how strange that sounds, but it is because you have already calculated the costs of dirty air: for this calculation pollution is NOT an externality, it is an included cost.

    All of that is simple addition and subtraction mathematics, and it is undisputable.

    You and the government can make any rationalizations you like, but the result is still the same.

    ——————————

    “if someone can prove that they suffered harm from something you did – they can sue you and win “

    That’s right, and if someone can prove they are being overcharged for some claimed harm, they can sue and win too. There are already examples in case law for this.

    ———————————

    You simply do not have the right to harm others.

    That is right. And if you violate the rules described in the equations, then you have harmed others.

    The equations cut both ways, and you don’t seem to get it.

    For years polluters got away with murder and acted as if they could do whatever they want.

    Now, after a long string of successes environmetalists think they can get away with murder and do whatever they want. AS in “the person who decides how much harm is being done (or not) is …..the person who is affected by it.” I can claim whatever I want about how much harm you do because you are the one wearing a yellow star.

    But, in now basing what was once a valid and ethical complaint on demonization, environmentalists are undermining their own moral position.

    They THINK that as long as the make the bad guys pay, that they always win. But what the equations tell us is that this isn’t true. No matter how incrementally you go about this, you can’t always win, unless you thin it is possible to get something for nothing.

    But, we put the “bad guys” in business when we gave them a permit. We gave that permit because, at that time, we though the benefits of that operation were worth more than the costs. We, as representatives of the common weal, conceded, in granting the permit,that the other party at the table provided good and valuable property to the common weal, such that we consider the permit a “good deal”.

    in the case of discharge permits, a big part of the process is to determine the “costs” of the discharge. How much capacity is there in that system, and what else might you do with it – to get more money. As a result, the process becomes the full employment act for consultants, engineers and lobbyists, and a reenue source as much as it is a process of permission.

    To then turn around and invalidate the permit because we unilaterally claimed higher costs, and to demonize the other party as one with “no rights” is reprehensible and unethical. He brought valuable property to the table, and we brought valuable proerty to the table and we made a trade. Now we claim our property is worth more, and we want more of his to pay for it. Bait and Switch.

    ——————————-

    “IF they feel that there is even a POTENTIAL for harm.” This is another way of saying that we believe the cost of damage from this pollutant is infinite, and therefore it is worth every cent we have to prevent it. We THINK we are getting something for nothing because the bad guy is the one who pays.

    The equation just reminds us how wrong that thinking is. You think one side has all the rights and the other side has no rights. But the equation proves to us that this can never be the case. We might think the bad guy is paying, but the equation proves that if we take too much from the bad guy, then we are the ones that pay: we do wind up getting benefits, but we are paying more than they are worth.

    ——————————–

    Of course poisonous snakes pollute. Pound for pound they produce as much nitrate as any other critter. If we could figure out how to make them pay, some bureaucrat would require a permit. WE just don’t think the cost of cleaning up after them is worth the benefit. The snake has an unfettered right to pollute because our costs to collect for the damage he cause makes it not worth the evffort. But suppose we get the idea in our head that because he is extremely poisonous there is even a POTENTIAL for harm. Does that give us the right to exterminate him? Does the snake have NO RIGHT to pollute? To exist in other words? Of course that isn’t the case so we wind up making a cost and benefit acommodation: we don’t let him exist in our houses.

    In Middleburg every year the town suffers an infestation of turkey buzzards. Don’t try and tell those folks that wild critters don’t pollute.

    ————————-

    You claim no one has the right to harm another, by which you mean someone else harming you.

    The equations prove that none of us has the right to harm each other. It is a two way street, whether you choose to believe it or not. If you choose not to believe it, then you are the one harming yourself.

  36. Larry Gross Avatar
    Larry Gross

    “On the left side of the equation you have the sum of all the costs for all the stuff we have, it is costs for the common good. on the right side, you have all the individual costs for all the stuff we have, including externalties, like pollution.”

    your idea is that the equation does not change.. and if it did..it would have to balance… but you don’t even know the numbers right now.

    You have your equation that you say exactly characterizes the current situation – the truth from on high.

    and that it cannot change…

    the reality is that it changes all the time.. and will continue to ..and no it will not stay in balance either..

    because we don’t know what balance is Ray..

    We don’t know right now if the current level of pollution restrictions are “cost effective” over the longer run.

    It often turns out that we underestimated the cost of pollution and have to restrict it further.

    you seem to think when we do that that we have altered some fundamental bottom line that if we keep doing it ..we’ll break it..

    but you don’t know where that point is except that logically you think it.

    we don’t do business this way.

    When the EPA requires Appalachian Power to put a billion dollars worth of new pollution equipment on their plants .. how does that figure into your equation?

    How about 5 years from now.. they require even more expensive upgrades..

    how does THAT factor in to your equation?

    Would you know between the two how far out of balance the equation got?

    how would you know this?

    none of what you are saying could ever be applied in a practical way.. and it’s not..

    The EPA uses the best science available at the current time to help make decisions…

    that science changes.. in the future and we revisit the issue.

    we differentiate between substances that cause virtual immediate death and ones that cause longer term health impacts on SOME but not all people..

    the amount of restrictions we put into place depend on a lot of factors such as how deadly the substance is…

    you equation simply does not represent the realities…IMHO.

    it sounds like something in a textbook that gives a conceptual understanding of the process but if you actually tried to use that equation ..for instance.. in trying to determine how much of newer pollution restrictions to put in place.. I just don’t see how that equation would do anything other than say… “you can’t do more restrictions because we think there is already balance and if we do new restrictions, we screw up the equation.

  37. Anonymous Avatar
    Anonymous

    You don’t have to know what the numbers are, but whatever they are, the equation holds true.

    If you do not know the numbers thne you cannot make any claims about what constitutes the common good. if you don’t know the
    numbers, you can’t claim with any accuracy how much someone is harming you

    But, for most of these things we can agree that the cost isn’t infinite, and it isn’t zero. For some we have actual numbers. So, the solution is like a venn diagram, you can get a pretty close answer with pretty gross inputs.

    “It often turns out that we underestimated the cost of pollution and have to restrict it further.”

    Thats OK, but don’t expect to put all of the cost of the restriction solely on the polluter. You have a prior agreement with him that you must observe.

    “When the EPA requires Appalachian Power to put a billion dollars worth of new pollution equipment on their plants .. how does that figure into your equation?”

    If the EPA requires AP to put on a billion dollars worht of new pollution equipment then one of three things will happen.

    The cost of damage caused by pollution will go down by a billion dollars and the common good is unchanged.

    The cost of pollution damage will go down by less than a billion, in which case we overpaid for polltution protection, and we are worse off than before.

    The cost of pollution will go down by more than a billion, and we are worse off than we might be because we didn’t buy enough, but we are better off than we were.

    We do not know what the cost of pollution damage is exactly, but we can make pretty good statistical guesses. However, we are biased toward guessing too high because we want to avoid as you say, perceived risk. As a result, we may be paying a terrible additional price for avoiding perceptions.

    Most people, like you, do not understand that paying that additional price hurts us as much as the pollution damage does. it amounts to making bad priorities, and it is wasteful.

    Then comes the question of who pays.

    The utlity is the initial payer and we like to demonize them and think they are paying the costs.
    But, those costs are eventually borne by the ratepayers. They ripple through the economy and we all pay, in the end.

    Therefore, when we demand too much pollution control, we are the ones paying the price of excess equipment an operations that don’t really buy us much, and if we don’t buy enough pollution equipment, then we are the ones that pay more than necessary in pollution damages.

    It isn’t us against them. If we demand too much, or too little, then it hurts us. That is whay it is important to get it right. If we don’t know and don’t agree on the numbers, then we need to try harder to find out, otherwise we are the ones damaging ourselves, and we don’t have the right to do that, as you say.

    If it isn’t a utility, and it is a commercial company that plays in a global market, then the question of who pays gets a lot murkier.

    “the amount of restrictions we put into place depend on a lot of factors such as how deadly the substance is…

    you equation simply does not represent the realities…IMHO”

    Of course it does. it is greatly simplified in the term “dollar cost of pollution damage” but all that stuff is in there.

    Basically, it is based on the free amount in the environment (we don’t count the damage form the 95% of batteries that are recycled), times the likelihood of exposure (we don’t count the explosive residue form deep mines agaisnt everbody), times the toxicity, and potential for bioaccumulation, genetic disruption etc. From all that we figure out how many people might get sick or die prematurely, and we multiply that by a statistical cost of an averge life.

    The result is the cost of pollution death and illness in dollars. We tend to overestimate that cost, for good reason, but we shouldn’t go nuts about it, because it is extremely wasteful to do so.

    It is inexact, be we are getting better. We can now compare two cities with different ozone levels and see differences in asthma levels.

    “you can’t do more restrictions because we think there is already balance and if we do new restrictions, we screw up the equation.”

    Absolutely not. What it says is that if you put in new restrictions you need to be pretty sure you are really getting a similar savings in cost of pollution. Too high is no good, and too low is no good.

    Therefore, while you to want to be conservative, you don’t want to hypothecate yourself intothinking you are getting huge savings in asthma when you are not.

    When you are multiplying small numbers, (parts per billion_, times big numbers, (billions of people) it is easy too be wrong. We should recognize that and not always assume that our damage is real and we can demand whatever we want from the polluters.

    We should recognize that there are political forces at work here too.

    I don’t know about you, but I’d hate to make a big political contribution to buy more scrubbers and get nothing but hot air.

    “Would you know between the two how far out of balance the equation got?”

    It is the wrong question. The equation ALWAYS balances.

    The question is, after you balance the first equation, and after you balnce the second equation, is the second cost higher or lower than the earlier one.

    If the idea is to add costs for pollution tax add costs for more scrubbbers, and add costs for expensive solar/wind power and pay for it with a reduction in pollution damage,that’s a very tough sell. After that with each iteration you will add more and more expense, and get back less and less reduction. that is why it is particularly dangerous to thnk we can continually get better by incrementally increasing standards.

    That is a fools game.

    We have been picking low hanging fruit, and the answer has been easy up to now – we have mostly been bettter off. This as lulled us into a sense that we will always be better off following the same path.

    We have made a lot of past judgements: this benefit will be worth the cost. Someday we will revisit them with actual data, and verify our models.

    This is not textbook stuff. We pay for pollution control and we nee dto understand if we are getting what we pay for.

    RH

  38. Larry Gross Avatar
    Larry Gross

    “You have a prior agreement with him that you must observe.”

    Ray, the only prior agreements with polluters is their permit which usually has to be renewed and usually has the caveat that it can be changed if circumstances warrant.

    What other agreements would you be thinking of?

    “If the EPA requires AP to put on a billion dollars worht of new pollution equipment then one of three things will happen.
    .
    .
    We do not know what the cost of pollution damage is exactly, but we can make pretty good statistical guesses. However, we are biased toward guessing too high because we want to avoid as you say, perceived risk. As a result, we may be paying a terrible additional price for avoiding perceptions.”

    we not only don’t know but the equation you speak of is not in play and no.. we most often UNDERESTIMATE the damage and then have to go back and re-tighten the restrictions.

    Virtually NEVER do we decide that we have gone overboard and then undo the restrictions.

    How can you NOT see the reality of this?

    The reality is that we chronically UNDERESTIMATE. why do you not see this?

    “Most people, like you, do not understand that paying that additional price hurts us as much as the pollution damage does. it amounts to making bad priorities, and it is wasteful.”

    Ray, I would posit that I understand it much better than you do..and further, I’m willing to be honest about the realities of pollution rather than stick to a dogma that cannot deal with what actually happens.

    Out of all the millions of decisions to restrict pollution – what percentage turned out to be way overboard and needed to be undone because we overestimated the harm?

    re: who pays

    Who pays is always the consumer not the producer.

    some folks demonize the producer but I would ask you – who is it that is giving money to legislators to influence the laws and regs?

    do you think that affects folks who suspect that the power company motives are not pure?

    re: “the” equation ..ozone…asthma levels…

    this is an example of what I am talking about with respect to your equation…

    ozone is but one factor in not only asthma levels but other diseases and not only a single type of human but those who are healthy, those who are sick, those who are young and old…

    and then does the pollution just lower their quality of life or does it shorten their lifespan..

    way too much stuff for your equation to deal with.. in any kind of a meaningful way unless you want to admit that your equation probably has thousands of variables and it’s more theoretical than practical.

    “Absolutely not. What it says is that if you put in new restrictions you need to be pretty sure you are really getting a similar savings in cost of pollution. Too high is no good, and too low is no good.”

    how do you know?

    what tells you that you’ve made an error is estimating?

    “This is not textbook stuff. We pay for pollution control and we nee dto understand if we are getting what we pay for.”

    Ray – here is the bottom line.

    When the EPA tells Appalachian Power to put a billion dollars worth of new pollution reduction equipment on their plant…

    … there is no 3 bears equation that you plug the numbers into and out comes …

    way too much
    way too little
    just right

    your idea is that there is such a sweet spot and that if we go way to much we’ve wasted money…

    … and I agree with that…

    …but then your solution is to assume that more pollution restrictions are ASSUMED violate the “way too much” aspect if they change the status quo ..

    Nothing about the status quo tells us that we have reached balance and that further restrictions automatically put us into the realm of wasting money…

    More often or not.. it’s the other way around…

    like we know that the mercury that comes from power plants does enormous harm… and, in fact, may be affecting aquatic critters and their reproduction…

    but at this point.. we have not required further reductions because they would be very, very costly…

    still.. if further evidence emerges about the link between mercury and damage to the ecology.. further restrictions will be done…

    we took this same approach with DDT..

    we allowed it until the evidence became overwhelming that it was driving birds like the eagles to extinction through thin eggs shells..

    but tell me this..

    how does your equation value restricting DDT verses not having Eagles around?

    You say there has to be a dollar cost…

    how do you value the existence of eagles?

    It appears to me that you would argue that unless the eagles are worth more than the DDT – that the eagles have to go …

    is that your environmentalist view or your property rights view?

  39. Anonymous Avatar
    Anonymous

    how do you value the existence of eagles?

    Actually, there are people who do that sort of thing, and there are procedures for doing it. For example, one way we value the existence of a park is by studying how far people are willing to travel to visit it.

    But, what you are suggesting is that there are things with infinite value, and therefore we can afford an infinite expense to save them.

    But, if we spend all we have to save the eagles, the will be nothing to spend on us….

    As EMR says, we need fewer people usng fewer resources.

    Who wants to be first?

    In the specific case of DDT we decided that the cost of not having eagles was higher than the cost of not having DDT. The cost of not having DDT probably included human deaths asscoiated with malaria, but overall we decided the lang term choice was to do without DDT. There are other cheaper ways of controlling malaria and learning to live with mosquitos.

    “there is no 3 bears equation that you plug the numbers into and out comes …”

    Actually, there is.

    We just aren’t smart enough to know all the numbers, yet. Your argument seems to boil down to the idea that we are facig apocolypse. We may even be facing some apocolypse we haven’t even identified, yet. But, whatever it is and whatever it costs, we can’t afford not to err on the cautious side.

    That’s fine, until we run out of money. Or, we can take EMR’s approach and eliminate a bunch of people. This is a good approach because it reduces the pollution and reduces the cost of pollution by loweing the probabilites that someone will be affected.

    But it’s a hard approach to sell.

    “we most often UNDERESTIMATE the damage and then have to go back and re-tighten the restrictions.”

    That’s your opinion, and for many well publicized threats, it is probably correct. But, we have picked the easy fruit. Every time we tighten the restrictions the cost is higher and the benefit is smaller. If we continue this path, sooner or later we get to the point where it either isn’t worth it, or we can’t afford it, even if it is.

    As EMR says, we are squandering the resources we wll need later to fix things.

    Scientists are now reevaluating the likeliehood of Tunguska type events, that could wipe out millions of people. Should we invest resources in devices to potenetially divert asteroids or should we spend it reducing the effects of mercury?

    (I’d vote for mercury, between those two, but it is sheer speculation.)

    We can decide to spend money on whatever we want, and we can use whatever stupid irrational fears we can dream up in order to rationalize our actions. We KNOW that people act irrationally in the face of impossibly long odds.

    But once that money is spent, we either get our money’s worth or we don’t, and there is only so much we can spend.

    In the cost estimating world, a rule of thumb is that whatever you spend on a project, it will cost 2% of that amount to come up with a cost estimate that is correct within 20%. It can easily cost 15% to come up with an estimate within 5%.

    That kind of money is almost never spent, and routine cost overuns are the result. We are not going to knwo the numbers in that equation, exactly. But we can do two things, we can work harder to find out, to make sure our overruns are less. And we can get numbers that are enough closer to allow us to make better choices on priorities.

    Should we be more worried about mercury, pthalate esters, AIDS, or terrorists?

    Right now, that isn’t happening. Those decisions are made in response to one-issue lobbyists, and whoever screams the loudest, gets the money. Every one-issue lobbyist has some phrase that includes the word “critical”.

    As Bertram Russel said about religion “at most, one of them is correct.”

    ————————

    Too high is no good, and too low is no good.”

    how do you know?

    Well, that is a mathematical deduction. If the rules of math are true, that statement is true. It is pretty much a truism anyway. You buy too much food, and it is a waste, you buy too little, and it is a waste.

    If the question is how do you know if you are too high or too low, well that’s tho point. You argue that if we spend too much on pollution control, that is OK. But the fact is that it isn’t OK.

    The effect of spending too much is exctly the same as the effect of spending too little: someone gets hurt.

    You seem to agree with that, but you think it is OK if the person being hurt is someone you don’t like: a polluter, developer, or commuter.

    ——————————–

    “your solution is to assume that more pollution restrictions are ASSUMED violate the “way too much” aspect if they change the status quo ..”

    Nope. It is too much if the cost of pollution controls is more than the cost of pollution controlled.
    You wouldn’t spend $500 on a super high efficiency light bulb if it didn’t last long enough to save you $500 on electricity. (This is a simplification, actually you could spend it if it saved you on electricity and the pollution that would have been produced along with the electricity saved.)

    It’s got nothing to do with the status quo.

    But here the thing. WE made some decision about what was the right amount of pollution control (at one time it was zero). WE decided we wanted the benefits produced enough to live with the pollution produced (after whatever abatement we thought we could aford). WE decided what was the right amount. People made investments based on those rules, and the we change the rules. Changing the rules is equivalent to taking another property right. If we make the claim that this new change is to the public benefit, then the public hs an obligation to see to it that their benefit isn’t really some one else’s expense.

    That’s how you determine if you have the “right amount”. You don’t let people steal it, you make them pay for it, and the market will decide the right amount. But if the market doesn’t feel the pain of the costs, it is like any other free resource: it will be over used.

    You can change the status quo, for the public benefit, but you have to take the costs from the public, and convince them the benefit is worth it (new taxes or whatever).

    A claim of public benefit that is paid for by only some individuals is a public taking of their property.

    RH

  40. Anonymous Avatar
    Anonymous

    suppose I put you in a room with a dozen eagles and a supply of mice and water. The mice and water are enough for one man or a dozen eagles.

    how long before you star fighting the eagles for your water and mice?

    who will win the fight?

    The eagles will win because they don’t have any soft-headed ideas about reserving humans or cutting back on their use of the (apparent) biosphere.

    RH

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