Nanny State vers. 2

Thacher Park is the closest substantial chunk of public land near Albany. It's signature feature is an escarpment of hundred foot tall cliffs, with a walk that descends to the cliff base, before ascending back on the last 50 feet of the historically important Indain Ladder trail.

Despite being operated by the New York State Office of Parks Recreation and Historic Preservation, most of the Indian Ladder trail (the only other easy access below the cliffs), while on state park land, is closed off to the public.

And oh yes; the rest is closed six months of the year, including Easter weekend.

So go enjoy the view from the parking lot, but don't try walking to what is truly unique about this fabulous area.

Thoughts on freebies

Skiing last weekend I chanced into FREE lift tickets. I was very happy:

* I enjoyed myself much more than I'd been anticipating. While I was in a bad mood before coming into the freebies (there was also a teenager involved ...), I was immediately relaxed and carefree afterwards.

* I felt free to stop anytime, not needing to "get my money's worth."

Neither of these sentiments seems to make much sense under standard consumer choice theory. Or at least the latter. Maybe the former is some kind of positive feedback from the unanticipated gift and hence higher consumer surplus from the trip.

If my reactions are typical (and I believe they are), how do we exploit such behavior to make better policy?

About the GOP budget "plan"

All you need to know.

1. The key philosopy: "limits the federal budget from growing faster than the family budget." I guess that's a pretty clear rejection of fiscal policy.

2. Oh yes. The blueprint budget has lots of blue print, but alas, few proposed numbers.

3. Intriguingly, it apparently proposes that the laws of supply and demand be repealed. It complains about proposed energy (carbon) taxes but calls for increased development of wind and solar:

Keeps Energy and Fuel Costs Low
Instead of taxing all energy users with a new national energy tax ... Republicans want energy independence
with increased development of all our natural resources, including
renewable energy sources, such as wind and solar.

While we're at it let's just change some basic physics as well. That could create energy independence in a big hurry.

Oil demand will go up again

More and more cars will do their thing.

Small is beautiful

Or at least cheap. So says Amory Lovins, writing in Freakonomics, on the economics of scale in power production.

Maybe my furnace should really be an electrical generator.

Siena sustainability report to BOAT

What I presented to the:

Siena College Board of Associate Trustees November 6, 2008
Notes on Campus Sustainability Efforts prepared by Dr. James Booker, Economics Dept. and Environmental Studies Dept.

Categories based on the College Sustainability Report Card
(see http://www.greenreportcard.org/ ) .

Siena accomplishments are in italics. We have a very long way to go, but lots of low hanging fruit!

Administration – actions at the administrative or trustee level.

• mission/strategic plan/capital campaign : Franciscan commitment to "reverence for all creation" => endowed chairs
• commitments to sustainability agreements:
• sponsorship of sustainability events: "Sustainability Day" and others; student Environmental Club
  

Climate & energy; green buildings

• electricity usage: substantial restraint
• fuel sources:
• heating efficiency: consumption reduced through lower T
• new construction: environmentally friendly materials used.
• cleaning agents: environmentally friendly in most buildings

Transportation - how schools promote alternative transportation options.

• pedestrian friendly initiatives:
• vehicle fleets:
• incentives for car-pooling/transit:

Food & recycling, dining services and campus recycling

• organic, local, sustainable: corn based disposable containers
• paper recycling/reuse/reduction: bins increasingly avalaible; printing reductions
• general recycling: some visibility

Investment priorities, transparency, and shareholder engagement

• holdings & proxy voting records
• socially responsible choices
• proxy voting
  

Of cap and trade

Brad DeLong thinks about the real world differences between carbon taxes and cap and trade. He clearly has in mind the caps that are in some way subsidized: given away or sold at below market clearing prices.


While carbon taxes and cap and trade ARE theoretically identical if the caps are auctioned by government, they have vastly different equity (but not efficiency) properties when given way. Economists need to be very clear about this.

I would say that to first order cap-and-trade and carbon taxes are the same,
that there are five first-order[second-order?] differences:

Cap-and-trade involves less redistribution because the losses of the
losers are partially offset by their initial awards of tradeable permits.

Cap-and-trade runs the risk that the cap will be set at the wrong place and
so the price will go damagingly above its social optimum value.

Carbon taxes run the risk that the tax will be set too low and so the quantity
emitted will go damagingly above its social optimum value.

Carbon taxes have the advantage that the government gets money that it can use for
good--either to cut existing taxes that have large deadweight losses or to
expand underfunded programs that have large social benefits.

Carbon taxes have the disadvantage that the government gets money that it can use
for ill, and that the recipients and beneficiaries of that ill-used money will then dig in and defend their rent-seeking gains beyond death itself.

and that there are two third-order
differences:

It's easier to get not-too-bright Republicans to vote against something that is actually in their long-run interest if you can demagogue it by calling it a tax.
It's easier to get not-too-bright Democrats to vote for something that actually is not in their long-run interest if you can demagogue it by claiming that it's just a restriction on the behavior
of corporations and not something that directly impacts people.

I don't have a dog in this fight: I think second- and third-order pluses and minuses roughly
offset each other. But the substantive case for action seems very clear--and the
fact that oil has risen above $100 a barrel without killing the economy just
makes it more painful to think of what a hideous waste of opportunity our
failure to take Al Gore's advice back in 1993 and put on a carbon tax that
IIRC was going to max out at $10/barrel...