The Ways of Naysaying

A brief lesson, via Kevin Drum:

Stephen J. Hadley, the national security adviser, told reporters, "What they're saying to us is" that "Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," The Associated Press reported.

Which is another way of saying, Saudi Arabia is selling all the oil it cares to sell. No doubt if and when oil clears at $200 a barrel, the Saudis will sell as much as its customers demand, and nothing more. This isn't to say they're deliberately trying to jack up oil prices (the rise of the last few years is likely more due to fundamentals in supply rather than political or financial machinations), but it's clear Saudi Arabia isn't going to change its ways to suit the current desires of the US.

(Post title from a book by SJC grande dame Eva Brann, with whom I had the misfortune of never having a class.)

UPDATE: Hadley's comment should also considered in the light of King Abdullah's recent declaration that certain Saudi oil fields will go untapped for the sake of future generations -- a clear recognition that oil is on the way to becoming permanently scarce.

Towards a Social Policy for Climate Change

One thing blogging is good for is encouraging your inner autodidact, and so something I'd like to work out on this blog is what an equitable policy concerning climate change would look like. This is a matter not only of ethics but also of understanding how policy is currently made concerning low-income households, and what it means to add climate change to the mix there. I've studied aspects of this at MSPP, of course, but I think that getting a clearer idea of what it entails -- really fleshing it out -- would add enormously to the policy debate over climate change when it will likely begin in earnest in 2009. Right now, the outfit doing the best and the most work on this topic is the Center for Budget and Policy Priorities' new climate office, and I'll probably be turning to it a number of times going forward.

Mac Users Always Have This Much Fun

Via Yglesias, the Bird and the Bee's new video:

Tool Time, Now With Market-Based Mechanisms

I was watching an old episode of Home Improvement (don't ask), and in it one of Tim Allen's sons, per the conventions of late 80s/early 90s sitcoms, goes on an environmental crusade against Binford Tools, the company that underwrites Allen's fictional TV show. The son meets with the Binford CEO, who explains to him that the company is committed to being environmentally responsible. The son counters by saying that, in fact, all Binford's done is buy pollution credits -- an allusion, I presume, to the cap-and-trade system set up in the 90s to combat acid rain -- and that Binford's claim to environmental responsibility is a sham.

Two thoughts:

1. Sitcom writers get a bad rap, but let this be said: They do their homework. Working in something like emissions trading -- an arcane topic now, and even more so 15 years ago -- into a sitcom plot takes some skills.
2. It's important to remember that emissions trading has always been viewed askance by a certain cohort of environmentalists. A emissions credit, in effect, gives a company the right to pollute, and for some, that is profoundly immoral. Indeed, emissions trading has something of a center-right provenance to it: I believe Reagan's secretary of state George Schultz was an early proponent of emissions trading, Bush the Elder was a strong supporter of getting emissions trading into the 1990 Clean Air Act, and the US negotiators to Kyoto were pushing cap-and-trade for carbon emissions over the objections of the Europeans. (Of course, now the EU has gone all in.)

Perhaps the bipartisan enthusiasm for cap-and-trade now has to do with the rightward shift in American politics over the last few decades. You certainly don't see that many greens today deploring the immorality of allowing polluters to buy credits to comply with regulations. Certainly not in toto: carbon offsets routinely get raked through the coals (no pun intended), and cap-and-trade is often dismissed in whole or in part. But even then the preferred alternative is usually a carbon tax, which embodies the same principle as cap-and-trade: Pollution is OK, so long as you pay for it. I don't lament at all that the moral absolutism about pollution, as embodied by the kid in the Home Improvement episode, has largely fallen away among greens, but it's kind of interesting to see one example of how much attitudes about the environment have changed over the last 15 years.

One thing that hasn't changed, however: Tim Allen is still the douchebag's comedian.

Ivory Tank

I'm not sure if Matt's moniker for our shared institution -- a term for "a public policy school that feels like a Brookings franchise" -- is accurate, but it sure sounds cool.

The New Joke Going Around

A: We're really addicted to oil.

B: How addicted are we?

A: So addicted, even our alternative energy sources depend on it:

In the comment section of theoildrums coverage of the Grangemouth refinery shutdown, we find that a diesel shortage has caused construction to stop on a $300 million wind farm.

[...]

A wind-farm construction project brought to a standstill because of a lack of fossil fuel.

Read the whole post. As the author notes, transitioning away from fossil fuels means not just finding alternatives, but doing so intelligently:

A great concern of mine is the likelihood of falling into the "Tragedy of the Energy Investing Commons". As the energy crisis deepens, more money, expertise and resources will be thrown at any energy alternative that produces energy, irrespective of its quality, density, energy surplus or environmental impacts. Many of these technologies will be dead ends (energy sinks). Many will produce some energy. Some will procure new forms of energy valuable to future society, and at meaningful scale. However, all will drain resources, both liquid fuels and non-energy inputs away from non-energy society. If their energy contributions are marginal, or of differing quality than we depend on, this will accelerate the usage of our remaining high quality fossil stocks. If our energy consumption was well-diversified, and/or redundant, a shortage in diesel would not lead to problems with wind turbine construction.

Thinking about how to develop a really truly diversified energy regime is going to be a hard problem, not least because we're so used to having not just the energy punch of petroleum, but its portability as well. If our alternatives to oil (biodiesel, say) are subject to more constraints than we're used to, folks aren't going to be happy.

Amen

Michael O'Hare (emphasis mine):

The ease with which politicians say "gas prices are too high" combines their cowardice (or cynicism and irresponsibility, or maybe just ignorance) with a widespread confusion of price with cost in the public mind, one for which we educators probably have to answer though a supine and feckless press isn't helping at all. The distinction is no piece of technical arcana, but one of the most fundamental keys to getting policy right, and in this case, a very big batch of policy with enormous consequences. If you don't understand the difference, you do what Hugo Sanchez Chavez does and suppress the price by enormous public subsidies. Unfortunately, the cost of anything is quite independent of what we want it to be, or the price at which it is offered, because cost [is] a reality sort of thing, the value of the economic resources consumed in providing it.

Quite so, except for that last sentence. The confusion of price with cost is pernicious not just because it leads to bad economic policies, but because it assumes that the quantity we consume of something is constant. Such a belief precludes the possibility of increased efficiency, conservation, or other measures to reduce the quantity of that which we're consuming. High gas prices aren't fun, but they're especially not fun when you have an economy like ours that is A) built around the automobile, and B) has taken only cursory steps to increase the fuel efficiency of our automobile fleet. Cost is dependent on, if not what we want it to be, then on what we do, and there is much we can do, at least in the long run, to change our gasoline consumption patterns; likewise with (coal-based) electricity. (To be fair, O'Hare makes this point, more or less, in the next paragraph.)