The concept of being "Green" is gaining increasing momentum in the developed world. One hopes that the removal of the Bush regime from power will result in improved legislation to slow the decline of the Earth's natural wealth which is being rapidly depleted. Bush aside, no major policy leader in any nation except China has bothered to propose measures to curb the growth of population. Meanwhile, European countries and many other countries have policies which encourage childbirth and increasing population seemingly to support their aging and selfishly infertile populations whilst reducing the need for importation of foreign labourers. While the economic decisions of humans are ultimately to blame for most environmental destruction, the quantity of humans certainly contributes directly to these problems as does the population of any pest species. We have already mentioned on this blog the 12 Monkeys scenario. In the spirit of Malthus, population limitation must be made a priority for governments. If measures are taken quickly to impose limits on population growth, 12 Monkeys can be avoided.
Unlike most of human history, we are now at a stage of having not just exceeded, but having overwhelmed the carrying capacity of our environment given the standard of living that we demand. In the absence of extremely harsh environmental regulation and economic restriction, Reproduction can no longer be seen as a right, but as a privilege, one which must be approved and earned by the collective authority. China's template solution allows only one child per couple and imposes varying degrees of penalties for any violations. A better solution would be one of progressive taxation. The degree of progression could be debated, but the overall outcome should be a birthrate which is less than or equal to the deathrate.
Such scheme would also have a positive effect on economic development, education, economic opportunity, and wealth per capita in nearly every region on Earth.
Showing posts with label CLIMATE. Show all posts
Showing posts with label CLIMATE. Show all posts
2008-04-27
2007-09-17
The Northwest Passage
In all of recorded history, the Northwest Passage has been blocked by arctic ice making the route unnavigable. It is now open for business, a cause for great concern.
2007-09-05
Irrational Living Practices
Every year, some fairly predictable natural disaster occurs and devastates large areas of land creating human death and misery and property damage. Earthquakes, flooding, and hurricanes come to mind. After the disaster, affected regions usually prey upon the sympathy of others to rebuild their homes and cities through both charity and governmental subsidy. A notable example is the aftermath of Hurricanes Katrina and Rita. The Army Corps of Engineers was widely blamed for the failure of the levies and the subsequent flooding. 1) The inefficiencies of the legal code to deploy National Guard soldiers without the consent of a State Government combined with 2) the normal inefficiencies and ineffectiveness of government at all levels and 3) a general lack of psychological preparedness for infrequent devastating events resulted finally in an anarchistic, violent scenario of devastation and distress. The reconstruction efforts have basically followed in the same mode despite billions in subsidies and tax cuts.
The critical problem which is politically incorrect to address is who decided it was a good idea to build their house in a flood zone in the first place. In the case of New Orleans, the sad answer was everybody, but especially the poor. Since in economic terms the wealthy had far more to lose, it makes sense that the wealthiest areas of New Orleans were constructed on somewhat more secure ground. It is not fair to say, however, that the risks living below sea level next to one of the world's largest rivers which regularly changes course was properly priced into the housing market. Most people who build their houses in flood zones are either ignorant of the risks, risk loving and possibly irrational, a very high personal discount rate, or a very high preference for living in those areas. Unfortunately psyche of humans, like many pack or herd species, is far more prone to feel secure in a clearly irrational situation so long as everyone else does the same.
A related problem of course is the question of climate change. Far more people are in far greater danger than Katrina owing to probable climate change from human activity. Many major cities are rationally addressing the fallout by considering dikes and other technologies to ensure the cities survive intact. Others are intelligent and ambitious enough to build flood-proof houses.
Whenever possible, avoiding a confrontation with nature is the wisest course of action. Reducing greenhouse emissions and not constructing cheaply in a predictable future disaster area are good rules of thumb. In the event of an inevitable but unfortunate catastrophe, federal governments in all of their fiscal inefficiency ought not be expected to pay.
The critical problem which is politically incorrect to address is who decided it was a good idea to build their house in a flood zone in the first place. In the case of New Orleans, the sad answer was everybody, but especially the poor. Since in economic terms the wealthy had far more to lose, it makes sense that the wealthiest areas of New Orleans were constructed on somewhat more secure ground. It is not fair to say, however, that the risks living below sea level next to one of the world's largest rivers which regularly changes course was properly priced into the housing market. Most people who build their houses in flood zones are either ignorant of the risks, risk loving and possibly irrational, a very high personal discount rate, or a very high preference for living in those areas. Unfortunately psyche of humans, like many pack or herd species, is far more prone to feel secure in a clearly irrational situation so long as everyone else does the same.
A related problem of course is the question of climate change. Far more people are in far greater danger than Katrina owing to probable climate change from human activity. Many major cities are rationally addressing the fallout by considering dikes and other technologies to ensure the cities survive intact. Others are intelligent and ambitious enough to build flood-proof houses.
Whenever possible, avoiding a confrontation with nature is the wisest course of action. Reducing greenhouse emissions and not constructing cheaply in a predictable future disaster area are good rules of thumb. In the event of an inevitable but unfortunate catastrophe, federal governments in all of their fiscal inefficiency ought not be expected to pay.
2007-06-19
More on Pigovian Taxes
Steven Levitt of Freakonomics has a great post in favour of further petroleum taxes. Interestingly, he argues that carbon taxation to prevent global warming is less important than reducing congestion and traffic accidents for social welfare. I suspect that he is not properly factoring in the globally felt negative externalities of global warming, but his conclusion is nonetheless correct that at least a tax of USD 1.00 on petroleum is dearly needed.
The most economically efficient solution to the issue of congestion, ie a proper Pigovian tax, would be a system like London's centre where only those vehicles which have paid a daily fee may enter. Their system relies on sophisticated network of cameras and plate recognition software to automatically bill and fine drivers.
Traffic accidents are doubtless a problem which should be seriously considered. I would expect that insurance and lawsuits already captures those externalities, but I do think a tax on vehicle size and weight per mile driven would help to counter the runaway arms race of personal safety that exists in vehicle addicted nations. I am mostly referring to the exorbitant demand for SUVs particularly for women. The individual driver, surrounded by an armada of SUVs piloted by cellphone distracted drivers, is not inclined to purchase a Volkswagon Golf. Thus the rational individual, in the interests of self preservation, chooses to join the backwards collective. This lesson I learned quite vividly on my first visit to Texas.
Nonetheless, a gasoline tax would as Levitt suggests have a beneficial effect on many things including congestion, traffic accidents, climate change and obeisity.
The most economically efficient solution to the issue of congestion, ie a proper Pigovian tax, would be a system like London's centre where only those vehicles which have paid a daily fee may enter. Their system relies on sophisticated network of cameras and plate recognition software to automatically bill and fine drivers.
Traffic accidents are doubtless a problem which should be seriously considered. I would expect that insurance and lawsuits already captures those externalities, but I do think a tax on vehicle size and weight per mile driven would help to counter the runaway arms race of personal safety that exists in vehicle addicted nations. I am mostly referring to the exorbitant demand for SUVs particularly for women. The individual driver, surrounded by an armada of SUVs piloted by cellphone distracted drivers, is not inclined to purchase a Volkswagon Golf. Thus the rational individual, in the interests of self preservation, chooses to join the backwards collective. This lesson I learned quite vividly on my first visit to Texas.
Nonetheless, a gasoline tax would as Levitt suggests have a beneficial effect on many things including congestion, traffic accidents, climate change and obeisity.
2007-06-06
Green Energy Technology
Last Friday, on NPR Science Friday, two developers of clean energy technology were interviewed.
Klaus Lackner, director of the Lenfest Center for Sustainable Energy at Columbia University, presented technology which could relatively cheaply sequester carbon directly from the atmosphere. His breakthrough was not so much in the basic principle, but in significantly reducing the cost. He believes that very soon the CO2 from a litre of petroleum could be sequestered for merely an additional USD 0.07 per litre. Emissions could be sequestered into sodium bicarbonate (baking soda) or calcium carbonate (chalk, antacid).
Meanwhile, Jerry Woodall a very accomplished inventor at Perdue University has developed a simple means of using aluminum, gallium, and water to generate hydrogen. His proposed aluminum cycle could be a very useful way to allow hydrogen fuel portability at about 40% energy efficiency. The hydrogen could then be used in fuel cells or if necessary, combusted.
Today from New Scientist: University of Utah scientists have developed a means of recovering waste heat energy through an acoustic heat engine which converts heat to sound to electricity also at about 40% efficiency. One cubic centimetre of these small devices could recover about 1 W of power.
Klaus Lackner, director of the Lenfest Center for Sustainable Energy at Columbia University, presented technology which could relatively cheaply sequester carbon directly from the atmosphere. His breakthrough was not so much in the basic principle, but in significantly reducing the cost. He believes that very soon the CO2 from a litre of petroleum could be sequestered for merely an additional USD 0.07 per litre. Emissions could be sequestered into sodium bicarbonate (baking soda) or calcium carbonate (chalk, antacid).
Meanwhile, Jerry Woodall a very accomplished inventor at Perdue University has developed a simple means of using aluminum, gallium, and water to generate hydrogen. His proposed aluminum cycle could be a very useful way to allow hydrogen fuel portability at about 40% energy efficiency. The hydrogen could then be used in fuel cells or if necessary, combusted.
Today from New Scientist: University of Utah scientists have developed a means of recovering waste heat energy through an acoustic heat engine which converts heat to sound to electricity also at about 40% efficiency. One cubic centimetre of these small devices could recover about 1 W of power.
2007-05-06
Happy Planet Index
Human Development and quality of life most often comes at the price of environmental destruction. The New Economics Foundation's HPI makes a fair attempt to rank different countries on the basis of human quality of life or happy human years per environmental footprint. Vanuatu has the highest HPI. Maximising measures such as these rather than artificial production or velocity measures such as GDP should be the aim of economists and policymakers.
2007-05-02
Larry Summers on Climate Change
2007-04-18
The Economics of Climate Change
In fall 2006, the Stern Review of the Economics of Climate Change,a British government commissioned study, was released. Most scientific or economic criticisms have said that the review did not go far enough in assessing the effect of climate change, although it did present extremely stark warnings for the future. Martin Weitzman has a upcoming book review of the Stern Review in the upcoming Journal of Economic Literature. Brad DeLong also has a great post on this topic. Combined with UN reports on climate change, the evidence for highly destructive global climate change is conclusive and undeniable. The solutions to this crisis are clear, and yet the corruption and inefficiency of the geopolitical system allows the perpetuation of such egregious harm to life on Earth and human well being. How and when will it end?
2007-04-04
Progress in Environmental Protection
No thanks to Republican appointed Supreme Court justices, the Supreme Court ruled April 2 that the Environmental Protection Agency must regulate the emissions of greenhouse gasses. Enforcement of this obligation will still be an uphill battle with Republicans controlling the Presidency, but the precedent of this decision could have positive lasting consequences. The dissenting viewpoint of the Republican judges that this type of ruling exceeds the limited authority of the courts in a democratic society if anything undermines the legal authority of the Constitution of the United States itself. How can the Supreme Court have no authority to rule on the necessity to regulate a pollutant which exacerbates a mass extinction event? NY Times opinion.
2007-03-20
Freedom of the Press
I had a discussion recently with a friend regarding sensationalistic television news stories in the United States and what it says about our society in general. The discussion was provoked by a local Bay Area television news story which targeted the fears and frustrations of drivers concerning high gasoline prices in California. Rather than addressing the root causes of rising petroleum price or the strong economic arguments behind high consumption taxes on fossil fuels, the story instead targeted the anger and frustration of lower-income, uninformed drivers.
I have almost completely given up consuming television news media, but these stories get to the heart of the failure of modern American "democracy". The founders of the United States realised that freedom of the press and more abstractly, freedom of information, was fundamental to the proper functioning of a representative republic where the will of the masses translates ultimately into political policy and law. Unfortunately, the capitalist environment in which this "free press" operates, has transformed mass media into either infotainment, sensationalism, or fear-mongering. The purpose is simply to sell advertising by any psychological technique necessary to attract viewership and boost ratings. A society whose press is controlled by commercial interests is arguably as bad as or worse than one with governmental controls over the dissemination of information. The same distortions and manipulations are possible: media-driven public support for the invasion and occupation of Iraq proves the point.
The makers of the gasoline price stories are probably reasonably intelligent people of above average education. They likely understand that raising gasoline prices and especially raising prices through taxation are extremely beneficial overall to the global economy and environment. However, the stories lament high gasoline taxes, claiming they are an injustice. Ignoring economists or sensible policy makers who might actually enlighten the public, they focus on the petty frustrations of gasoline consumers of low education and attempt to elicit similar anxieties in the viewer and thereby making the viewer more likely to sit through the commercial. The wider repercussions of misinforming the public are of no concern to the television producers. En masse, people are controlled by fear, not responsibility. Their consumption of information and their political reactions will follow the same overall trend.
As a college student exploring the ideas of libertarianism, one of the strongest arguments I found for maintaining a government paternalistic presence in the media was the manifestly brilliant quality of BBC, PBS, NPR and other publicly sponsored media in stark contrast to the base intellectual standards and low overall quality of commercially driven and advertisement interrupted media. While a high value should be placed on freedom and choice, it should not completely supersede pragmatism, efficiency, and social progress.
I have almost completely given up consuming television news media, but these stories get to the heart of the failure of modern American "democracy". The founders of the United States realised that freedom of the press and more abstractly, freedom of information, was fundamental to the proper functioning of a representative republic where the will of the masses translates ultimately into political policy and law. Unfortunately, the capitalist environment in which this "free press" operates, has transformed mass media into either infotainment, sensationalism, or fear-mongering. The purpose is simply to sell advertising by any psychological technique necessary to attract viewership and boost ratings. A society whose press is controlled by commercial interests is arguably as bad as or worse than one with governmental controls over the dissemination of information. The same distortions and manipulations are possible: media-driven public support for the invasion and occupation of Iraq proves the point.
The makers of the gasoline price stories are probably reasonably intelligent people of above average education. They likely understand that raising gasoline prices and especially raising prices through taxation are extremely beneficial overall to the global economy and environment. However, the stories lament high gasoline taxes, claiming they are an injustice. Ignoring economists or sensible policy makers who might actually enlighten the public, they focus on the petty frustrations of gasoline consumers of low education and attempt to elicit similar anxieties in the viewer and thereby making the viewer more likely to sit through the commercial. The wider repercussions of misinforming the public are of no concern to the television producers. En masse, people are controlled by fear, not responsibility. Their consumption of information and their political reactions will follow the same overall trend.
As a college student exploring the ideas of libertarianism, one of the strongest arguments I found for maintaining a government paternalistic presence in the media was the manifestly brilliant quality of BBC, PBS, NPR and other publicly sponsored media in stark contrast to the base intellectual standards and low overall quality of commercially driven and advertisement interrupted media. While a high value should be placed on freedom and choice, it should not completely supersede pragmatism, efficiency, and social progress.
Mankiw on Friedman on Global Warming
2007-02-22
California: Abysmal, but the Best the USA Has to Offer
Excerpts from a recent Paul Krugman column in the NY Times concerning California's energy conservation policies.
2007-02-09
The Pigou Club Manifesto
Most readers of this blog will probably already realise that the best way to eliminate carbon emissions is a direct consumption tax on fossil fuels. In the Pigou Club Manifesto Greg Mankiw outlines the seven most important benefits of such a tax.
2007-01-18
A Warning
Recently, Winnipeg scientists have resurrected the H1N1 influenza virus of 1918 which killed 50 million people with a death rate of 2%. The procedure by which the virus was resurrected was impressive and hopefully will lead to a defence against H5N1 or other future influenzas. Nothing against the Winnipeg scientists nor their research, but it is reminiscent of a very dangerous scenario which must be addressed:
In the brilliant Terry Gilliam film '12 Monkeys' (torrent), a lab scientist working silently develops a virus to wipe out 95% of mankind while making the surface of the Earth uninhabitable. There is a sizable population of humanity who in light of the continued and seemingly inevitable destruction of Earth's biodiversity caused by one single species, would support a mechanism to eliminate that species and the threat by whatever means necessary. The only practical means of carrying this out would be the development of an airborne, highly infectious and deadly virus with a long incubation period. While your average misanthrope is not determined enough to wipe out mankind, a motivated biologist who not so abnormally values non-human life on the same scale as human life could very easily rationalise and carry out the decision to develop the ultimate weapon of mass destruction. I have met several people who in principle are not opposed to such an idea leading me to completely reconsider the likelihood of this event.
Biological science should not be stopped for fear of this scenario. While oversight should be strengthened especially where virus work is concerned, security and oversight in the field should not interfere with scientific progress.
Life on this planet will go on with or without humanity. Humanity surely has many thousands more species to eliminate forever, but the real question is whether humanity itself will survive. Ultimately, humanity's probability of survival is directly proportional to its degree of conservation and stewardship of other life on the planet. Given our current direction, I am betting on 12 Monkeys, this time without the time travel.
In the brilliant Terry Gilliam film '12 Monkeys' (torrent), a lab scientist working silently develops a virus to wipe out 95% of mankind while making the surface of the Earth uninhabitable. There is a sizable population of humanity who in light of the continued and seemingly inevitable destruction of Earth's biodiversity caused by one single species, would support a mechanism to eliminate that species and the threat by whatever means necessary. The only practical means of carrying this out would be the development of an airborne, highly infectious and deadly virus with a long incubation period. While your average misanthrope is not determined enough to wipe out mankind, a motivated biologist who not so abnormally values non-human life on the same scale as human life could very easily rationalise and carry out the decision to develop the ultimate weapon of mass destruction. I have met several people who in principle are not opposed to such an idea leading me to completely reconsider the likelihood of this event.
Biological science should not be stopped for fear of this scenario. While oversight should be strengthened especially where virus work is concerned, security and oversight in the field should not interfere with scientific progress.
Life on this planet will go on with or without humanity. Humanity surely has many thousands more species to eliminate forever, but the real question is whether humanity itself will survive. Ultimately, humanity's probability of survival is directly proportional to its degree of conservation and stewardship of other life on the planet. Given our current direction, I am betting on 12 Monkeys, this time without the time travel.
2007-01-16
Science Further Undercut
Economically and scientifically relevant data on the Earth are no longer important priorities for NASA as shown by budgetary cuts in satellite based Earth observation. Robotic space exploration is the only scientifically or economically effective sort, yet funds are being diverted instead on a fool's errand to send men to the Moon and Mars. Observation of the Earth is important especially to measure climate change. Hopefully the ESA will pick up the pieces on this.
2006-12-25
Celebration and Reflection
Happy Christmas! Since the domination of Christianity in Rome, it has replaced the pagan holiday of Saturnalia though now has become just as secular as surely Saturnalia must have been during its decline. Let us celebrate our lives, friends, and families. Let us exchange tokens of our affection in examples of the wonderful progress that humanity has achieved after the brilliant collaborative effort by learned and well-intentioned people of science: iPods, computers, cell phones, DVDs, what have you.
When you have finished, take some time to reflect on the mentalities of those who worked to bring you the iPods or the ability to read this blog: people such as Galileo Galilei, Issac Newton, Allan Turing, James Maxwell, Benjamin Franklin, etc. Then take some time to reflect on the political leaders that have tended to dominate while the scientists progressed to our current state. Surely the scientists had a great deal more to do with our current quality of life than did those politicians and rulers and those rulers who did give us progress did so only through listening to the scientists and technocrats.
As we close 2006, let us all recognise that humanity has tried its very hardest to spite the unquestionably positive phase it has entered in the information technology revolution and revert to: a) the Dark Ages of ignorance by religious fundamentalism and jihad; b) the breakdown of the International political system of diplomacy between cooperative sovereign nation states as seen in the run up to the Great War with the war in Iraq. c) the utter fecklessness of International negotiation and treaty organisations a la mode de League of Nations in performing their vital roles to coordinate and enforce basic regulations for the peace and prosperity of mankind on the planet. I refer of course to the collapse of the Kyoto Protocols or any system to limit and reduce the emission of Greenhouse gases and other factors in the sixth extinction currently taking place. As with the League, the non-participation of the United States in climate protection was the decisive factor in its ineffectiveness. d) the erosion of civil liberties and the enforcement of basic constitutional law with a popular nationalistic, jingoistic mobilisation for war against innocuous innocent bystanders with the ultimate aim of seizing military position, valuable resources, and as some sort of unholy experiment in a backwards and ill-founded ideology disturbingly similar to the Fascism or Communism of Eurasia in the 20th Century. Iraq has lost on the order of 600,000 people as a result of the Invasion, only one order of magnitude below the relative losses witnessed in 20th century conflicts.
As we approach January, let us remember Janus, the god of mirrors, the god of doorways, the god of two faces - one looking forward, one backward. New Years, the modern acknowledgement of Janus is coming soon, and so let us reflect.
So far the twenty-first century since the birth of Jesus, which was to be the payoff for the ~10 millennia of human effort and suffering that went before has been a reminder of the lessons of the previous century. We can either choose to learn those lessons the easy way, through an intellectual study of the past and a willingness to cooperate and act properly as responsible, sentient, civilised beings, or to continue to give in to our racial, sectarian, and nationalistic passions on a clear path toward self-destruction.
That having been said, Robert X. Cringely, one of the technocrats, points out in a much less dramatic way some simple examples of how our resources could have been better applied this second millennium since Jesus. It seems almost non sequitur after all I have said, but believe it or not, this post has provoked my end of year meditation.
When you have finished, take some time to reflect on the mentalities of those who worked to bring you the iPods or the ability to read this blog: people such as Galileo Galilei, Issac Newton, Allan Turing, James Maxwell, Benjamin Franklin, etc. Then take some time to reflect on the political leaders that have tended to dominate while the scientists progressed to our current state. Surely the scientists had a great deal more to do with our current quality of life than did those politicians and rulers and those rulers who did give us progress did so only through listening to the scientists and technocrats.
As we close 2006, let us all recognise that humanity has tried its very hardest to spite the unquestionably positive phase it has entered in the information technology revolution and revert to: a) the Dark Ages of ignorance by religious fundamentalism and jihad; b) the breakdown of the International political system of diplomacy between cooperative sovereign nation states as seen in the run up to the Great War with the war in Iraq. c) the utter fecklessness of International negotiation and treaty organisations a la mode de League of Nations in performing their vital roles to coordinate and enforce basic regulations for the peace and prosperity of mankind on the planet. I refer of course to the collapse of the Kyoto Protocols or any system to limit and reduce the emission of Greenhouse gases and other factors in the sixth extinction currently taking place. As with the League, the non-participation of the United States in climate protection was the decisive factor in its ineffectiveness. d) the erosion of civil liberties and the enforcement of basic constitutional law with a popular nationalistic, jingoistic mobilisation for war against innocuous innocent bystanders with the ultimate aim of seizing military position, valuable resources, and as some sort of unholy experiment in a backwards and ill-founded ideology disturbingly similar to the Fascism or Communism of Eurasia in the 20th Century. Iraq has lost on the order of 600,000 people as a result of the Invasion, only one order of magnitude below the relative losses witnessed in 20th century conflicts.
As we approach January, let us remember Janus, the god of mirrors, the god of doorways, the god of two faces - one looking forward, one backward. New Years, the modern acknowledgement of Janus is coming soon, and so let us reflect.
So far the twenty-first century since the birth of Jesus, which was to be the payoff for the ~10 millennia of human effort and suffering that went before has been a reminder of the lessons of the previous century. We can either choose to learn those lessons the easy way, through an intellectual study of the past and a willingness to cooperate and act properly as responsible, sentient, civilised beings, or to continue to give in to our racial, sectarian, and nationalistic passions on a clear path toward self-destruction.
That having been said, Robert X. Cringely, one of the technocrats, points out in a much less dramatic way some simple examples of how our resources could have been better applied this second millennium since Jesus. It seems almost non sequitur after all I have said, but believe it or not, this post has provoked my end of year meditation.
2006-09-19
Mineral Slime
It is pitiful that despite all humanity has accomplished, burning dead plants is still the dominant energy source for developed economic activity. Advancing technology it seems has been lowering the costs of discovering and mining new sources of fossil fuel more than it has been developing alternative sources absent of negative externalities.
The latest oil discovery in the Gulf exemplifies this phenomenon. I was able this weekend to purchase petroleum at about 0.50 USD per litre. While on paper, the financial markets and economy are given a boost by this phenomenon, this masks the real destruction that finds like this have on a properly quantified economy which incorporates environmental and welfare statistics. The true cost of that petrol to society was something more like 1.50 USD per litre. In reality, new oil discoveries are like a methamphetamine addict getting their hands on a new bag of meth. While they may consider themselves much better off at the time, the long run consequences are dire and their behaviour in consuming it is irrational.
Nearly every sensible economist agrees that heavy carbon taxation is desperately needed worldwide to counter the negative externalities created from burning hydrocarbons. For a while, even good economists where questioning the true existence of a global warming phenomenon. Those days are past. The scientific evidence is irrefutable. The necessity is clear, but the political action has yet to be taken.
The latest oil discovery in the Gulf exemplifies this phenomenon. I was able this weekend to purchase petroleum at about 0.50 USD per litre. While on paper, the financial markets and economy are given a boost by this phenomenon, this masks the real destruction that finds like this have on a properly quantified economy which incorporates environmental and welfare statistics. The true cost of that petrol to society was something more like 1.50 USD per litre. In reality, new oil discoveries are like a methamphetamine addict getting their hands on a new bag of meth. While they may consider themselves much better off at the time, the long run consequences are dire and their behaviour in consuming it is irrational.
Nearly every sensible economist agrees that heavy carbon taxation is desperately needed worldwide to counter the negative externalities created from burning hydrocarbons. For a while, even good economists where questioning the true existence of a global warming phenomenon. Those days are past. The scientific evidence is irrefutable. The necessity is clear, but the political action has yet to be taken.
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