Quebec buys NB Power

Huh. Quebec has bought all of the electricity generating stations in my province. They bought all of NB power. I'm confused, they bought them for 4.8 billions dollars, which was NB power's debt. Was the debt greater than the value of NB power? Otherwise this seems like a low price, even considering that residential users get a five year price freeze.

Now NB energy decisions will be made in Quebec. Is there any precedent for this sort of thing in Canada? The article says they're also looking into buying PEI's power plants.

I have no idea how this works in practice, and to what extent NB can still make laws to regulate electricity production in the province. I also don't know if NB power still has a monopoly, or if others can enter the business.

US diplomat in Afghanistan Resigns

A US diplomat in Afghanistan has resigned. He wrote a letter, which was published in the Washington Post. It's worth a read, for anyone thinking about what Canada's role there should be or if there should be a role.

He was a fairly junior diplomat, so I don't think there will be much fallout, but his analysis of the situation seems accurate to me.

Biofuels and rainforests

As politicians began to realise that carbon emissions from oil were problematic, or alternatively, that oil was a finite research, they began to search for non-polluting, sustainable alternatives.

Unfortunately, one of their bright ideas involved using plant fuels to run vehicles, and implementing mandatory minimum standards for biofuel content in gasoline. The idea was that the carbon came from plants, so it was carbon that they had taken out of the air, and also that plants were a renewable source. Sadly, the disadvantages of most biofuels outweigh the advantages.

In America, the most common biofuel used is corn ethanol, which may not even produce as much energy as is required to make it. And it drives up the price of food by diverting corn from food for humans to food for cars. Everyone except corn farmers and politicians agrees that this is a bad idea.

One proposed alternative is sugarcane ethanol. This is a better option than corn, in that it actually contains more energy than is needed to make it. And, say some, it wasn't going to be eaten anyway (not directly), so isn't it a good thing?

Well, no. We don't eat sugar directly, but the land we grow it on could have been used to grow other food. Or we may cut down forests to grow more sugar to power cars. Which produces carbon emissions. Which defeats the point. And you'd have to cut down a lot of forests to replace gasoline entirely.

Unfortunately, cutting down a lot of forests is exactly what people are doing in countries where palm oil is grown, and replacing them with palm oil plantations. The oil goes to make biodiesel for Europe, which has mandated that it be used in fuels. Today it was revealed that a provision to in an important treaty about the rainforests which would have slowed down this process of converting nature to gasoline substitute was removed.

Instead it allows plantations to be classified as natural forest, and countries can be rewarded for keeping forests intact. So they could be paid for deforestation. Quite possibly this was done to ensure Europe can meet it's biodiesel quotas. I fear measures to "combat global warming" which are done in bad faith, or without thinking them through. Biofuel policies are currently making things worse, not better.

Flashes of Memory

All through today I've had random bits of memory from scenes long distant flashing through my mind. None have been particularly significant. I just remembered the house where I was billeted for a grade 8 band trip. The rest have been equally random, with no apparent, conscious triggers. Usually they've been places I was only ever temporarily, such as campgrounds, hotels or the like.

I had this sort of thing happen a lot during my first couple of months in Cuba, when I was still getting used to Spanish and spent a lot of time mute, with only my thoughts. But that seemed more guided, or at least I was reliving whole scenes, or periods of my life.

These are just flashes of nothing. Does anyone else ever have that happen?

lacklustre

This country sucks at protesting. Yesterday was the International Day of Climate Action to put pressure on governments leading up to the Copenhagen meeting. In the biggest city of the country (Toronto), about 200 people showed up. It was very, very underwhelming.

In my small town of 8000 in France, about 1000 people marched on the streets to protest cuts in service at the local hospital. They know how to get things done over there (hint: It's not voting, or at least not merely voting).

Hindsight makes everyone look silly

When discussing the past, people often express wonder and amazement at behaviour which goes against current values.

"How could they think slavery was right?"

"Why were colonizers so brutal"?

"Why didn't they see that gays should be treated just like other people?"

"Did they really think codpieces looked good?"

And so on. It's relatively easy to spot these things in the past, because they conflict with current values. The contrast is glaring and evident.

What people are less apt to realize is that future generations will say similar things about our own society as well. It's hard to say exactly what they'll find wrong with us, because we don't know in what way values will change.

I've got one pretty good guess though. If we keep emitting carbon and permanently (on a human timescale) change earth's climate for the worse, future generations will curse us for it. Their lives will stuck, and they will have stories of the paradise that earth once was and how we ruined it.

At some point, future generations will no longer emit carbon (perhaps because we'll have used all of the oil), much like we no longer use slaves. No longer doing what the past did makes it easier to criticize. They'll shake their heads in wonder.

"They knew it was bad. Why did they do it? I can't believe how stupid they were. We had one planet and they ruined it. For what? To move giant rolling hulks of metal (cars) back and forth?

Maybe a new religion will form, dedicated to cursing us. People will read books written in our time just to laugh at them, much like we laugh at old discussions of the justice of slavery.

Really, from the perspective of the future, what we're doing now will look like the stupidest thing ever done in a long history of human stupidity.

Of course, it's not really our fault, just like past stupidity wasn't really the fault of those who did it. We're only human, and so were they. We think we've changed, but we haven't really. Read an old book, and you'll see things seem pretty similar to the present. I was struck by this while reading Thucydides. All of the same faults and virtues, in an older time, on a smaller scale.

So any humans could be as stupid as we are. It just so happens we've acquired a much bigger capacity to do damage. But we're no worse (or better) than those who chose to keep slaves or do other things we call terrible today. Take that for what it's worth.

In the future though, it's likely that few people will recognize this, and they'll think we were the dumbest humans in human history.

I can't really blame them for that. We do the same thing today, looking at the past.

Day of Climate Action

Today is the International Day of Climate action, from a group endorsing a target of 350 PPM of C02. You should go out and find a protest, and send a message to the government that at least some people don't want the earth to become radically different within their lifetime.

The Canadian government has been pretty lousy on this front. They have been supporting oil sands production, and lobbying against efforts to limit the use of oil shale energy in certain american states. They've also been at the forefront of undermining the international treaty, they've been even more strident than the Obama administration in demanding that it be watered down.

This website has lists of protests across the world. Find one near you and go to it. http://www.350.org/

I should explain a bit about the 350 target. It's been endorsed by James Hansen, among others. Throughout the history of human civilization (ie. not that long on a planetary scale), global temperature has stayed pretty constant, and so has CO2, at around 280PPM. During longer history, CO2 has varied between 200 in ice ages, and 280 in interglacials. Note that just that 80 PPM difference was enough to go from an ice age to where we are now.

Well, we're now at 387, which is more than 100 PPM higher than the norm. We're already seeing effects, particularly in the arctic. Note that the full extent of warming from the amount of CO2 in the atmosphere won't be felt for a couple of decades more, as it takes time for the full effect to occur.

Meaning that even if we stopped all CO2 emissions tomorrow, we'd still have more warming. Quite possibly enough to take us past natural tipping points which would cause more warming, such as:

1. Ice melting, and the darker ground/ocean exposed beneath reflects less light, causing more warming.

2. Permafrost melting, releasing methane, an extremely powerful (though somewhat short lived )greenhouse gas.

3. Methane frozen at the bottom of the ocean melts, releasing itself into the atmosphere.

4. Forests such as the Amazon die, releasing CO2.

We already have number one occuring at a large scale, number two has been occuring at a small scale, there are scattered reports of number three. I'm less sure about number four, though deserts are spreading.

These effects are already beginning at our current level of CO2 PPM, and before the full amount of warming from that CO2 concentration has occured.

The current target that developed nations are discussing is keeping CO2 below 450 PPM. They don't look set to achieve even that, but ignore that for a moment. If we emit 63 more PPM (almost the difference between an ice age and a normal human climate), we may well face enough warming to push us past these tipping points. This will release even more CO2, causing more warming, causing more CO2 release, and there's not much we'll be able to do about any of that.

So, simply put, the best efforts of the international community don't look to be nearly good enough. That's why many are calling for 350 as a target. We've already past it, but that's sort of the point. We've already got too much CO2 in the atmosphere. Current proposals of 450 PPM call for allowing even more.

People and governments need to realize that this won't do, and that the correct target is backwards. There are a few things we can do to lower CO2 concentrations, such as allowing more forests to grow, or sowing biochar in farmers fields (google it). But we must also make massive efforts to slow and then stop our emissions.

It you want to know more about any of this, or if part of it wasn't clear, feel free to ask questions.

And, go find a rally today, and show your support. Your future quite literally depends on cutting CO2 emissions today.

Nation Building

Most of you have probably heard about the fraud in the Afghan election. They are now planning a second round of voting. One major hurdle appears to be that it would have to be held in winter, which would make it logistically impossible in much of the north.

I think this drives home the absurdity of the whole enterprise. Here we have a disunited, tribal society which has never been a nation as such, with borders based on arbitrary lines drawn in colonial times. Illiteracy is widespread. It is commonly accepted that the authority of the "central" government doesn't extend much beyond Kabul, if it exists at all. Local power rests in the hands of warlords, tribal leaders or the taliban, which are not necessarily distinct categories. There is a war ongoing in much of the country, and it is occupied by the militaries of foreign powers.

It seems risible to imagine that these are conditions which will allow for a representative democracy.

To top it all off, it turns out that the mighty mechanisms of representative government in the country, which people for some reason seem to agree would have been legitimate if not for fraud, can be defeated by snow.

Math is hard

We are told in the New York Times that part of the proposed climate deal, an arrangement to help poor countries shift away from carbon could cost "a staggering 100 billion dollars" per year. However would we raise such a colossal sum, the article asks? Why, it might be the most difficult part of any climate accord!

The GDP of the United States is more than 14 trillion dollars, the EU has a GDP of 12 trillion Euros. Japan has over four trillion. Australia and Canada combined add a bit over 2 trillion. And there are a few more rich countries outside of those areas that I could add.*

All together, this makes about 37 trillion dollars per year in rich country GDP. 100 billion is 0.27% of that total. The New York Times would have us believe that this is the biggest challenge facing a world climate change deal.

I would say instead that the biggest challenge is getting everyone to reduce carbon emissions, and reduce them enough to make a difference.

But what do I know?

* These figures are based on the most exhaustive research I could drag myself to do. I looked at wikipedia, and rounded the numbers for total GDP.

Climate refugees

Bangladesh is one countries most vulnerable to climate change. The ganges river delta covers most of the country. River deltas, being low-lying, are more vulnerable to rising sea levels, stronger storms and other effects of climate change. Here is Bangladeshi climatologist Dr. Atiq Rahman, from an article by Johann Hari:

He handed me shafts of scientific studies as he explained: "This is the ground zero of global warming." He listed the effects. The seas are rising, so land is being claimed from the outside. (The largest island in the country, Bhola, has lost half its land in the past decade.) The rivers are super-charged, becoming wider and wider, so land is being claimed from within. (Erosion is up by 40 per cent). Cyclones are becoming more intense and more violent (2007 was the worst year on record for intense hurricanes here). And salt water is rendering the land barren. (The rate of saline inundation has trebled in the past 20 years.) "There is no question," Dr Rahman said, "that this is being caused primarily by human action. This is way outside natural variation. If you really want people in the West to understand the effect they are having here, it's simple. From now on, we need to have a system where for every 10,000 tons of carbon you emit, you have to take a Bangladeshi family to live with you. It is your responsibility." In the past, he has called it "climatic genocide".

It's from last year, but the rest of the article is worth reading if you're interested.

I saw an interesting article on the same topic today, talking about climate refugees in Dhaka, the country's capital. One bit caught my attention:

Dhaka's population was 177,000 in 1974. Now, with more than 12 million inhabitants, it is one of the most densely populated cities on earth and its infrastructure is buckling under the strain.

The city's population grew 67 fold in that time. The mind boggles. It is the most densely populated city in the world. A city simply can't grow that fast and grow well, least of all in a poor country without the resources for the required infrastructure building program. People just have to make do. In practice, this means many live in slums which they build themselves from whatever they can find.

This is a story repeated the world over in developing countries, where there has been a marked trend towards this sort of urbanization. But Bangladesh may be the most extreme case, and if climate change continues, the pressure will only increase as land is lost to the rivers, to the sea and to salt.

And, if current climate trends continue, the problem will just get worse.

goobedy-boogle! bwa fuh smern!

A homeless man just shouted directly in my ear a few minutes ago on my walk home. It hurts. Worst of all, it was just meaningless gibberish:

"ALL THE WAY TO GOOP!!!!!"

And, after I walked on, wishing him a good night:

"F**KING GLABLUH NINE ONE ONE SMAR GLA"

Or something like that.

Hopefully this isn't the pain of (mild) permanent hearing loss. I think there's a tort in here somewhere.

Investment advice: gamble

An article in the globe and mail today recommends (or at least it gives prominent voice to those who do) investing in US stocks to take advantage of the lower US dollar. They say it's cheaper to buy US assets now since the US dollar is down. This is correct.

But, it's only a good investment if the US dollar rises against the loonie again. That's what the people advocating buying US stocks are betting will happen. But it's just that, a bet. If the US dollar keeps falling instead, then your cheap assets will only get cheaper.

One investor says “As we've seen, when the dollar has got to parity or traded above parity it hasn't stayed there long.”. So they expect the US dollar to rise, and the value of US stocks to rise with it. Which would be good for you if you bought stocks before the rise.

This could well happen. But it could well not happen. If China decides to alter its strategy keeping low the value of its currency to help its exports then it will stop buying US treasury bonds.* This will lower demand for US dollars, and lower the value of the dollar.

This could well be a good thing as far as America is concerned, as it would help reduce their unsustainable trade imbalance. But it would most certainly not be a good thing for any Canadians who were convinced they should buy US denominated assets based on a newspaper article.

Feel free to invest in US stocks, but be aware that if you're unsure which way the dollar will go, then you're essentially gambling.

* For those following this, you may have noticed that this is exactly what the US government has been asking China to do for the last several years (stop keeping the renminbi undervalued). Yet at the same time there is widespread worry that China might "stop buying US treasury bonds", which, of course, is exactly what they've been asking them to do. So the policy has been a little muddle-headed here.

If China did stop buying them, then the budget deficit could still be financed, the central bank could buy the bonds instead. This would lower the exchange rate.

Voluntary standards don't work

I saw an article today about how a voluntary carbon emissions reduction market has produced little effect.

Lots of times politicians will propose voluntary standards by an industry to solve a problem. They will say this is preferable than government intervention in order to not interfere with the market.

This is silly. Most likely, the politicians know this, and are just trying to avoid doing anything about the problem or want to help their friends in industry. But, we can't rule out that they're merely idiots.

In either case, (one of) the reason(s) that it's silly is because the very nature of market competition means than voluntary action by corporations to do something that cuts profits puts them at a competitive disadvantage. You can't afford to be nice if it puts you out of business.

Some amount of this sort of thing will always get done because some firms have market power which lets them take small hits in profitability in order to gain a better reputation (this is especially true of large corporations). Or smaller businesses will often do things not directly profitable in order to build there reputation in the community and hopefully increase sales (with the side benefit of feeling nice about it).

But these effects will almost always be very small. The bottom line is, after all, the bottom line. Hence the failure of the voluntary carbon market.

If you want corporations to do something, then make them do it, so that they all play by the same rules. You can't expect them to do the right thing if doing so will put them out of business.

Wind Energy Drying Devices

I exaggerated slightly in an earlier post when I said that I could find problematic assumptions in any New York Times article. This one is good.

It says that most people living in private homeowners associations in the states are banned from drying laundry outside. And, apparently 60 million people live in private homeowners associations.

In response, some states have been passing laws guaranteeing people's ability to dry their clothes outside, to the ire of these private associations. That's where the title of this post came from, a lawmaker passed a law to protect "wind energy drying devices" (clotheslines).

All of this is news to me, and all of this is odd to me. Seems clothes drying outside is banned and disdained because it is seen as something poor people do. Which lowers property values.

I probably find this odd because we've always had a clothesline in our backyard. Rather than poverty, it makes me think of sunny days. We can certainly afford to run the dryer, but that's not really the issue. Dryers damage clothes; some clothes shouldn't even go in them at all. And it's not very hard to put them out on the line or take them in. I'd never even really thought of it as an environmental issue.

But I guess millions beg to differ. Do we have similar attitudes/laws in Canada?

It all depends how you look at it

Most people believe that humans have been extremely successful in exploiting potatoes, wheat, corn et cetera for their own benefit.

An equally plausible theory would be that corn, wheat, potatoes and many other things have been extremely successful in exploiting humans for their own benefit, increasing their numbers and spread o'er the earth beyond what their ancestors might have though possible.

These little guys have been pretty effective at using us for their purposes as well.

Behind the scenes influence in American healthcare

For anyone interest in how the american health industry has manipulated public opinion over the years, this speech from a former insider is a good start. Here is the final paragraph:

"

">During my 20 years in corporate communications and public affairs, I participated in the steady growth and influence of largely invisible persuasion -- and at a time when newsrooms are shrinking and investigative journalism seems to be vanishing. The number of PR people long ago surpassed the number of working journalists in this country. And that ratio of PR people to reporters will continue to grow. The clear winners as this shift occurs are big, rich corporations and other special interests. The losers are average Americans, most of whom are completely unaware how their thoughts and actions are being manipulated to achieve corporate goals on Capitol Hill."

/

More about money

I'd like to expand on what I wrote in the last post. I used desalination as an example, but my point had to do with how we use money to value things. I believe this has led to a common mental error. Money is so commonly used to measure wealth that we take it to actually be wealth.*

It is not. It is what we use to value wealth, and to buy wealth.

The difference is important, though it may not be obvious. I'll give an example. Take a cow. You can buy it with money, or sell it for money. In other words, we give the cow a value in money. With that money, you could also buy lots of things more useful to you than a cow.

That's all however. If you were on a desert island, the cow would be valuable, but the money would not be. The other things you could have bought with money might be valuable, but the itself would be of no use. We use our money to value wealth, and buy wealth. It is a store of value in the sense that we can hold on to it in order to buy valuable things in the future.

But it itself is not actual value. It is the resources and inputs at the base of our economy which provide us with value.

The prevalence of money makes this easy to forget. What is the practical impact of this?

It means that we mistake money for actual wealth. Currently, the actual source of most of our wealth consists of fossil fuels, and the machines we have built that are powered by fossil fuels. If these get more expensive, either because production of them peaks or because we put the proper environmental price on them, then the dollar cost of things that require their use increases.

So we say things like "Nuclear power costs X$ per kilowatt of energy" or "if we switch from oil, wind power can produce energy for X$"

But, we don't build a wind turbine or a nuclear plant from money. We build them using machinery powered by fossil fuels. We extract uranium using machines powered by fossil fuels.

And so on. This analysis applies to more or less everything. But when we discuss these and other issues in the newspaper, we hear of the dollar amounts, with little discussion of the underlying sources of use and production.

It is possible to figure out the dollar prices of the things in the human created economy you see about you. Much less possible is figuring out what was required to create them. They are the products of an incredibly complex system.

If there is one thing that the financial crisis ought to have clearly demonstrated, it is that those in charge of this system do not understand it. It is certainly beyond the grasp of even the brightest human to understand it both in breadth and in depth.

Money masks this complexity for us, by giving a perceived order and intelligibility to things. It gives rise to the commonplace illusion that we can actually produce things with money.

As I mentioned in the comments to the previous post, it does also serve many valuable functions. But one of its harmful functions is masking our awareness of the nature of the world we live in.

I will say it again, and clearly. Money is a way to measure wealth, and is a means to acquire wealth, but it is not itself wealth. Thinking of it as actually being wealth is a mental error.

It controls and facilitates many things in our economy, but it is not the basis of the economy, which is and will always be the resources needed for what we make and consume.

* wealth: 2. abundance of valuable material possessions or resources

4.all property that has a money value or an exchangeable value b : all material objects that have economic utility; especially : the stock of useful goods having economic value in existence at any one time

note: If you think I mean that a man with 100 million dollars in his bank account is not wealthy (a synonym for rich)....well, that's not what I mean to say.

A man with 100 million dollars can buy lots of valuable things. Hence he is wealthy (rich).

Unless he happens to be on a desert island.

Money warps perceptions

I was reading about saltwater desalination, and an article mentioned that it could now be done for a few dollars per thousand gallons. This is still more expensive than just taking it from rivers in most places, so it doesn't get done very much. But I thought it sounded pretty good as a price to pay for water if we had no choice.

Then I thought about it a bit more. You don't run a desalination plant with money. You run it with electricity, and manpower, and inputs of raw materials.

You need money to buy those things, but dollar costs are not a reliable indicator of long run feasibility if you expect the prices of any of the inputs to fluctuate. A more useful indicator would be how much energy is required to produce a given amount of water.

So if, as I expect, the price of electricity rises, then the costs of desalinated water also increase. It's not very useful to think of these costs in terms of their short-term dollar values.

Unfortunately, this error in perception (that money is actual value, as opposed to a medium of exchange for things of value) distorts much of our thinking. I'm quite aware of it, but I still fell for it here, and I imagine it still distorts other assumptions that I have about the world.

* I still think desalination could be a good idea in many places, but I wanted to make the larger point about our assumptions regarding money.

In the long run, we're all warm

Global warming is (or was) often portrayed as a moral issue concerning the well-being of our descendants and of future generations. Among those who accepted that greenhouse gases produce a greenhouse effect, there was still a widespread perception that most of the unpleasantness would be in the distant future.

Recently though, it's been getting much clearer that while future generations will still face big problems from warming, it is also very much a short term issue for those of us alive today. Particularly those of us young enough to be reading this on facebook.

In other words, not only is it a moral issue of us versus our descendants, it's also a matter of self interest to prevent global warming.

I'm bringing this up because Britain's met office just released a report which serves as a good summary of current expectations.

They predict a 4 degree rise over baseline temperatures by....2055, unless we get our act together. This danger exists because of what are called "feedback effects", which refer to natural systems which either release more greenhouse gases or cause more warming as the earth warms. Some possible feedback effects include:

1. The melting of ice replaces a white surface (ice), with a darker surface (seawater, ground, trees, etc.), which reflects less light, and hence less heat, back into space.

2. There is a lot of carbon trapped in permafrost in the north of Canada, Russia and in Alaska. As permafrost melts, this releases the gas in the form of methane, which is much more harmful than CO2.

3. Rising temperatures throw off the rain cycle, which may well destroy vulnerable ecosystems such as the amazon. As the trees go away, they release CO2 they had formerly been trapping.

4. There is methane frozen at the ocean floor in something called "methyl hydrates". As the ocean warms, these could melt, increasing warming.

There are others as well. Anyway, the met office predicts that average temperatures will rise 4 degrees. If that doesn't sound too bad, I suggest you take a closer look at that picture I included at the top. The oceans warm by less than 4 degrees, and land warms by considerably more. It averages at four, but the disruptions on land are considerably greater than it would seem at first glance.

What effects would this have?

1. Extreme disruption of ecosystems. The amazon and other forests dependent on abundant rainfall in warm regions could turn to desert. Crops dependent on certain weather conditions could stop growing.

2. The destruction of coral reefs from acidification. Some of the CO2 released dissolves in the oceans, making them more acidic. This kills coral.

3. The monsoon, vital for asian agriculture, could stop or change greatly. It's dependent on weather cycles caused by ocean temperature.

4. Sea level rise as glaciers on land melt. Not only would this impact people living on the coast, it could also spread salt onto agricultural lands, ruining them for production.

5. The disruption of water supply to regions dependent on melt water from glaciers. Notably, the Indian subcontinent and China are dependent on melt water from the Himilayas. If the glaciers appear only in winter, this could ruin regional agricultural systems.

This is pretty terrible. And, it should be noted that real world conditions have been consistently exceeding worst-case scenarios from climate models, so it could well get worse. It may in fact already be too late to stop many of these things from happening, as there is a long time lag between the time carbon is emitted to the atmosphere and when it has it's effects.

But to do nothing ( our current policy, more or less), would inevitably make the problems even worse, so we must try. This should be priority number one right now. Everything else is just a sideshow.

Myths about Iran

For those interested in the Iranian issues I mentioned earlier, this is a good article.

Reading between the lines

The New York Times has an article about the Swiss health system, and how it is in some ways similar to the bills currently before the US congress, minus the public option (a government run insurance plan that people could choose to buy).

What struck me was actually a small thing in the first paragraph, it serves as an excellent example of a larger trend:

Like every other country in Europe, Switzerland guarantees health care for all its citizens. But the system here does not remotely resemble the model of bureaucratic, socialized medicine often cited by opponents of universal coverage in the United States.

This creates a contrast, implying that some places do resemble the model of "bureaucratic, socialized mediciine" cited by opponents of universal coverage. But, as those of us living in Soviet Canuckistan are aware, our system certainly isn't like that, and none of the European ones are.

Ironically, the health care system that most exemplifies the fears of right wing opponents of universal health care is....the United States of America. The business of american health insurance companies is to collect premiums and then use the money to pay private sector bureaucracies whose purpose is to find ways to deny coverage.

This sort of thing would be trivial, except that it's widespread. Show me an article in the NYT, and I'll find you a similar flaw*. Collectively, this warps political discourse. It is normal in American politics to assume that there are actual, existing bureaucratic nightmare systems. There are many other unexamined assumptions on all subject matters which shape our narratives.

I long thought this was normal, and natural, and that's how newspapers are. But when I went to France, I noticed that it rarely happened. I read Le Monde and, I noticed a conspicuous absence of that sort of thing. Every week with Le Monde there came a NYT supplement, and I frequently found myself annoyed while reading it, as it made such silly errors when compared to the French press.

* Seriously, find me any political or economic article, a normal one, not an in-depth one, and I can show you how it has errors which warp our perception of the world.

Infrastructure Change is Hard

There's an interesting article in the New York Times about efforts to build solar electricity plants in the american desert. Basically, they need water (for cooling, and for cleaning mirrors), and it turns out that there isn't much water in the desert. And, what water there is, is generally already in use for agriculture.

Also, did I mention that the water generally comes from non-renewable aquifers?

These seem like big hurdles. In theory, it could be sustainable by building lots of desalination plants in California, and using large amounts of electricity to make freshwater and somehow safely getting rid of the salty brine that's left over so as to not kill the ocean, and pumping the water through a massive set of pipelines over the mountains and into the desert.

One wonders if that would actually produce enough energy to power all of the infrastructure needed to supply the water. In any case, it seems difficult.

A lot of people, including otherwise intelligent economists, simply assume that if oil supply falls short and prices rise, that price signal will simply lead to new forms of energy being invented and put into place. I used to believe this, but in light of practical problems like this, the idea seems increasingly suspect. Technology isn't created or powered by a magical process that will solve all of our problems, much as the history of the past couple of centuries might make it seem that way.

The theoretical basis people use to justify their belief that new technology will automatically come into place given price rises in old energy is the supply and demand curve, and something called the substitution effect.

If the price of one thing rises (eg. apples), then we have an incentive to replace it with something else that will serve a similar purpose (oranges). This much is true, if simple, but the fault lies in assuming that it works for all things*, and for all things fairly quickly. The details of energy infrastructure substitution are more difficult than apples and oranges. Some problems:

1. Consumer goods are easy to substitute. Infrastructure, however takes a long time, particularly when the infrastructure either hasn't been invented or perfected yet. You will always have unforeseen problems such as the water shortage mentioned above.

So even if people want to switch to something new, it might take a while for that to materialize.

2. You may simply have no good substitutes. So far, nothing has been shown to combine the portability and power of fossil fuels. We can and should still try to develop alternate forms of energy, but we have no magic guarantee that they will provide us with the same abilities as our current sources. Inasmuch as we depend on lots of energy to keep our society going, this means we need to prepare for this second possibility.

Which is why I think we ought to put in place a carbon tax NOW. Price signals will have some effect in moving us to the right direction, but we have no idea how fast, smooth or even possible the transition will be. So best to push the process along faster now, and not assume that "the market will take care of it when the time comes".

And since the energy we will use to build these new sources of energy will come from fossil fuels, trying to build new sources will only get harder if oil gets scarcer and prices rise. Better to start now while prices are still reasonable.

* Insulin is a good example where the substitution effect does not work. Economics deals with these situation through a concept called elasticity of demand, and elasticity of supply. In other words, how easy is it to go without or supply more of a certain product. Insulin is not easy to go without, to say the least, so it has a "inelastic" demand. Large increases in price do not reduce demand.

So, technically what I'm saying here is that oil has a fairly inelastic demand and supply. But people forget about elasticity (if they knew about it) when they imagine new energy sources will spring forth out of the ether once the incentives are right.

Because effective substitution is a common outcome in our society does not mean that it is inevitable. Large spikes in price or substitution to inadequate substitutes are also possibilities allowed by the model.