Durham's Bull

Biofuels and the Environment

"Spurred by federal subsidies and two years of surging commodity prices, farmers increasingly are digging up the grass to plant crops, raising concerns among cattle ranchers, hunters and environmental groups about the future of land where Sioux hunters chased grazing buffalo a mere century and a half ago."

A nice piece in today's Post examining the law of unintended consequences, biofuels edition. 

We have already seen the impact of federal subsidies on corn prices in Mexico, and the subsequent protectionism that was induced. 

This is perhaps even more striking because the outcomes we are seeing seem to be in direct contradiction with the stated goals of our federal biofuels policy. 

The knowledge problem is as relevant today as it was when Hayek wrote of it in 1945.  We should be mindful of this as the next round of government directed stimulus efforts are constructed and implemented.

The Marginal Impact of Gas Prices on Climate Change

"To be sure, a cap-and-trade system or a carbon tax would raise the price of gasoline, encouraging consumers to drive less and to buy more fuel-efficient cars– but the magnitude of these effects would be relatively small.  For example, CBO has estimated that a price of $28 per metric ton of CO2 in 2012 would lead to a reduction of about 10 percent in total U.S. emissions compared with a no-action scenario."

That's from the blog of Peter Orszag, Director of the Congressional Budget Office. 

This seems like a high price to pay.  He notes that there are other avenues with a lot more bang for our buck. 

Follow the link for the complete analysis.

Bush and Disaster

I'm not a huge W. fan, as anyone who knows me can attest, but one has to admit that he has been dealt an unfortunate hand. 

Most obvious is 9/11, but a recent article counts 422 natural disasters on his watch. 

More Energy Independence Nonsense

Tom Friedman is making another comparison between the U.S. and a much smaller, much more homogenous country.  He proceeds to tell of how they reached energy "independence."

I've remarked previously on what a nonsensical idea the whole thing is.  Think about all of the costs imposed on the Danish people in the process.  Were they worth it?  You be the judge. 

Excerpt:

"What was the trick? To be sure, Denmark is much smaller than us and was lucky to discover some oil in the North Sea. But despite that, Danes imposed on themselves a set of gasoline taxes, CO2 taxes and building-and-appliance efficiency standards that allowed them to grow their economy — while barely growing their energy consumption — and gave birth to a Danish clean-power industry that is one of the most competitive in the world today. Denmark today gets nearly 20 percent of its electricity from wind. America? About 1 percent."

The Economics of Manipulation

"The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels."

A nice piece from the Times on how subsidies in developing nations are putting the squeeze on US consumers.

Water Markets?

"The prices of all sorts of basic commodities are soaring, and now there may also be reason for many to worry about the most fundamental of necessities—water. Some experts believe so, at least, and they are spreading doom-laden warnings of a Malthusian crisis in the world’s water supply."

From the Economist.

David Zetland, a visiting scholar at GMU's Mercatus Center, is an expert on the subject, and blogs all about it here.

The Bureacracy that is HUD

"And for the first time in our nation’s history, poverty is rising faster in suburbs than in urban cores. In this new era, HUD’s each-city-is-a-separate-whole approach is not only too inflexible and short-sighted, it also hinders effective regional growth."

Get rid of HUD.  Most of our urban sprawl can be traced back in one way or another to poor decisions on the part of these short-sighted planners. 

Market Failure? Think Again

"The Ford Motor Company, which devoted itself for nearly 20 years to putting millions of Americans into big pickup trucks and sport-utility vehicles, is about to drastically alter its focus to building more small cars."

Markets at work.

An Economist's Take on Offshore Drilling

"Thus the Democrats have it precisely backwards. The problem with Republican proposals to re-open domestic oil drilling is not that we desperately need the oil right now, whereas new oil discoveries would not come on line for 5 years or more. Rather it is that we might truly desperately need the oil in 20 or 30 years, and so don’t want to use it up over the next decade."

The rest from Jeff Frankel.

Klein on the Carbon Cost of Meat

"It's better for the environment to try and cut meat out of your diet, but you can do a lot to reduce energy usage on the margins by simply switching from high-carbon meats like beef to lower carbon alternatives. Indeed, a recent study out of Carnegie-Mellon concluded that, for the average American family, shifting to an entirely local diet would have about the same energy impact as replacing one day per week's meat with chicken, fish, or vegetables."

More.