The Wind Lobby’s Policy Two-Step

On Tuesday, June 20, 2017, the American Wind Energy Association (AWEA) announced the publication of a report touting wind as both a cost-effective and a reliable source of energy for the electricity grid. The report—which was supported with AWEA funding and written by the Analysis Group—presents energy-source diversity on the grid as a necessary good and wind’s emergence as a product of market forces. IER’s initial response can be found here and today we will follow up with an addendum from IER’s chief economist, Dr. Robert Murphy. Murphy’s commentary can be read below:

The Analysis Group report illustrates the familiar two-step in current energy policy debates. On the one hand, it is considered critical to keep in place measures such as state-based Renewable Portfolio Standards (RPS) and federal measures such as the Production Tax Credit (PTC) and the so-called Clean Power Plan (CPP). On the other hand, when critics object to the distortions that these measures cause, the defenders rush to claim that these policies have very little impact on the energy sector, because the major changes are all driven by market fundamentals. So which is it? If most of the changes really are driven by the market, then the interventionists shouldn’t defend RPS, PTC, CPP, and so on with such vigor.

To reiterate, this contradiction is evident in the Analysis Group report. Ostensibly the report seems to knock down the objections to interventions that promote wind and solar power, by claiming that the major changes in the electricity generation sector are caused by fundamentals, rather than government policies:

[T]he evidence shows that electricity markets have undergone a fundamental shift, one that is dominated by fundamental forces of electricity market supply, demand, and pricing that took shape with the shale gas boom and the economic downturn in the 2008-2009 period, but that also includes the rapid growth of renewables as costs declined and performance improved. (Analysis Group, p. 23)

We don’t need to argue about this conclusion. Let’s assume for the sake of argument that the Analysis Group is right.

In that case, the strong advocates for RPS, PTC, CPP, and other energy-sector interventions are wrong for thinking their favorite measures are actually that important. They should join forces with IER, where we have been saying all along that we don’t favor one energy source versus another. Rather, our point has always been that a neutral tax and regulatory environment—where policymakers and officials do not penalize or reward particular technologies—is most conducive to consumer well-being.

Besides making economic sense, the de-politicization of energy markets would reduce conflict. For example, the Analysis Group authors are somewhat cynical about certain players in the debate, when they write that objections about grid reliability sometimes “reflect a first line of defense by opponents of the changes underway in the industry” (p. 2). But this claim only makes sense in the context of political interventions. If we had a relatively free market in energy, any industry group who saw their market share decreasing would have no one to complain to, except their customers. The only reason we are even talking about “offense” and “first line of defense” in this context, is that certain groups are advocating policy measures where the government will intervene to help some energy sources and hurt others. No wonder the debate has become politicized.

As an additional point, we should clarify the Analysis Group’s contention regarding consumers and diversification. On page 2 they write: “The ongoing diversification of generation supply…has lowered wholesale electricity costs in most parts of the U.S. and has contributed to recent declines in consumers’ overall cost of living.”

No doubt, the supporters of the PTC and other renewables mandates would take this as evidence that their policies help consumers.

However, it’s not the diversification of energy sources per se that causes electricity prices to drop. It depends on the cause of the diversification. For example, the fracking boom did indeed cause the price of natural gas to fall, which led to a shift away from coal-fired and into gas-fired power plants. This is a market phenomenon which clearly benefits consumers; falling costs of production ultimately lead to lower retail prices in a competitive market.

But if a change in the energy mix results not from market forces but instead from political mandates, then this raises energy prices for consumers (other things equal). And finally, to the extent that tax credits lower wholesale (and hence retail) prices, note that this outcome is still less advantageous than if a general tax cut were given to the energy sector as a whole (rather than singling out specific producers).

The post The Wind Lobby’s Policy Two-Step appeared first on IER.

from Raymond Castleberry Blog http://raymondcastleberry.blogspot.com/2017/06/the-wind-lobbys-policy-two-step.html
via http://raymondcastleberry.blogspot.com

The Wind Lobby’s Policy Two-Step

On Tuesday, June 20, 2017, the American Wind Energy Association (AWEA) announced the publication of a report touting wind as both a cost-effective and a reliable source of energy for the electricity grid. The report—which was supported with AWEA funding and written by the Analysis Group—presents energy-source diversity on the grid as a necessary good and wind’s emergence as a product of market forces. IER’s initial response can be found here and today we will follow up with an addendum from IER’s chief economist, Dr. Robert Murphy. Murphy’s commentary can be read below:

The Analysis Group report illustrates the familiar two-step in current energy policy debates. On the one hand, it is considered critical to keep in place measures such as state-based Renewable Portfolio Standards (RPS) and federal measures such as the Production Tax Credit (PTC) and the so-called Clean Power Plan (CPP). On the other hand, when critics object to the distortions that these measures cause, the defenders rush to claim that these policies have very little impact on the energy sector, because the major changes are all driven by market fundamentals. So which is it? If most of the changes really are driven by the market, then the interventionists shouldn’t defend RPS, PTC, CPP, and so on with such vigor.

To reiterate, this contradiction is evident in the Analysis Group report. Ostensibly the report seems to knock down the objections to interventions that promote wind and solar power, by claiming that the major changes in the electricity generation sector are caused by fundamentals, rather than government policies:

[T]he evidence shows that electricity markets have undergone a fundamental shift, one that is dominated by fundamental forces of electricity market supply, demand, and pricing that took shape with the shale gas boom and the economic downturn in the 2008-2009 period, but that also includes the rapid growth of renewables as costs declined and performance improved. (Analysis Group, p. 23)

We don’t need to argue about this conclusion. Let’s assume for the sake of argument that the Analysis Group is right.

In that case, the strong advocates for RPS, PTC, CPP, and other energy-sector interventions are wrong for thinking their favorite measures are actually that important. They should join forces with IER, where we have been saying all along that we don’t favor one energy source versus another. Rather, our point has always been that a neutral tax and regulatory environment—where policymakers and officials do not penalize or reward particular technologies—is most conducive to consumer well-being.

Besides making economic sense, the de-politicization of energy markets would reduce conflict. For example, the Analysis Group authors are somewhat cynical about certain players in the debate, when they write that objections about grid reliability sometimes “reflect a first line of defense by opponents of the changes underway in the industry” (p. 2). But this claim only makes sense in the context of political interventions. If we had a relatively free market in energy, any industry group who saw their market share decreasing would have no one to complain to, except their customers. The only reason we are even talking about “offense” and “first line of defense” in this context, is that certain groups are advocating policy measures where the government will intervene to help some energy sources and hurt others. No wonder the debate has become politicized.

As an additional point, we should clarify the Analysis Group’s contention regarding consumers and diversification. On page 2 they write: “The ongoing diversification of generation supply…has lowered wholesale electricity costs in most parts of the U.S. and has contributed to recent declines in consumers’ overall cost of living.”

No doubt, the supporters of the PTC and other renewables mandates would take this as evidence that their policies help consumers.

However, it’s not the diversification of energy sources per se that causes electricity prices to drop. It depends on the cause of the diversification. For example, the fracking boom did indeed cause the price of natural gas to fall, which led to a shift away from coal-fired and into gas-fired power plants. This is a market phenomenon which clearly benefits consumers; falling costs of production ultimately lead to lower retail prices in a competitive market.

But if a change in the energy mix results not from market forces but instead from political mandates, then this raises energy prices for consumers (other things equal). And finally, to the extent that tax credits lower wholesale (and hence retail) prices, note that this outcome is still less advantageous than if a general tax cut were given to the energy sector as a whole (rather than singling out specific producers).

The post The Wind Lobby’s Policy Two-Step appeared first on IER.

The Wind Lobby’s Policy Two-Step

On Tuesday, June 20, 2017, the American Wind Energy Association (AWEA) announced the publication of a report touting wind as both a cost-effective and a reliable source of energy for the electricity grid. The report—which was supported with AWEA funding and written by the Analysis Group—presents energy-source diversity on the grid as a necessary good and wind’s emergence as a product of market forces. IER’s initial response can be found here and today we will follow up with an addendum from IER’s chief economist, Dr. Robert Murphy. Murphy’s commentary can be read below:

The Analysis Group report illustrates the familiar two-step in current energy policy debates. On the one hand, it is considered critical to keep in place measures such as state-based Renewable Portfolio Standards (RPS) and federal measures such as the Production Tax Credit (PTC) and the so-called Clean Power Plan (CPP). On the other hand, when critics object to the distortions that these measures cause, the defenders rush to claim that these policies have very little impact on the energy sector, because the major changes are all driven by market fundamentals. So which is it? If most of the changes really are driven by the market, then the interventionists shouldn’t defend RPS, PTC, CPP, and so on with such vigor.

To reiterate, this contradiction is evident in the Analysis Group report. Ostensibly the report seems to knock down the objections to interventions that promote wind and solar power, by claiming that the major changes in the electricity generation sector are caused by fundamentals, rather than government policies:

[T]he evidence shows that electricity markets have undergone a fundamental shift, one that is dominated by fundamental forces of electricity market supply, demand, and pricing that took shape with the shale gas boom and the economic downturn in the 2008-2009 period, but that also includes the rapid growth of renewables as costs declined and performance improved. (Analysis Group, p. 23)

We don’t need to argue about this conclusion. Let’s assume for the sake of argument that the Analysis Group is right.

In that case, the strong advocates for RPS, PTC, CPP, and other energy-sector interventions are wrong for thinking their favorite measures are actually that important. They should join forces with IER, where we have been saying all along that we don’t favor one energy source versus another. Rather, our point has always been that a neutral tax and regulatory environment—where policymakers and officials do not penalize or reward particular technologies—is most conducive to consumer well-being.

Besides making economic sense, the de-politicization of energy markets would reduce conflict. For example, the Analysis Group authors are somewhat cynical about certain players in the debate, when they write that objections about grid reliability sometimes “reflect a first line of defense by opponents of the changes underway in the industry” (p. 2). But this claim only makes sense in the context of political interventions. If we had a relatively free market in energy, any industry group who saw their market share decreasing would have no one to complain to, except their customers. The only reason we are even talking about “offense” and “first line of defense” in this context, is that certain groups are advocating policy measures where the government will intervene to help some energy sources and hurt others. No wonder the debate has become politicized.

As an additional point, we should clarify the Analysis Group’s contention regarding consumers and diversification. On page 2 they write: “The ongoing diversification of generation supply…has lowered wholesale electricity costs in most parts of the U.S. and has contributed to recent declines in consumers’ overall cost of living.”

No doubt, the supporters of the PTC and other renewables mandates would take this as evidence that their policies help consumers.

However, it’s not the diversification of energy sources per se that causes electricity prices to drop. It depends on the cause of the diversification. For example, the fracking boom did indeed cause the price of natural gas to fall, which led to a shift away from coal-fired and into gas-fired power plants. This is a market phenomenon which clearly benefits consumers; falling costs of production ultimately lead to lower retail prices in a competitive market.

But if a change in the energy mix results not from market forces but instead from political mandates, then this raises energy prices for consumers (other things equal). And finally, to the extent that tax credits lower wholesale (and hence retail) prices, note that this outcome is still less advantageous than if a general tax cut were given to the energy sector as a whole (rather than singling out specific producers).

The post The Wind Lobby’s Policy Two-Step appeared first on IER.

Creating Influencer-Targeted Content to Earn Links + Coverage – Whiteboard Friday

Posted by randfish

Most SEO campaigns need three kinds of links to be successful; targeting your content to influencers can get you 2/3 of the way there. In this Whiteboard Friday, Rand covers the tactics that will help your content get seen and shared by those with a wide and relevant audience.

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How to create influencer-targeted content - Whiteboard Friday

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Video Transcription

Howdy, Moz fans, and welcome to another edition of Whiteboard Friday. This week we’re going to chat about how to create content that is specifically influencer-targeted in order to earn the links and attention and amplification that you often need.

Most SEO campaigns need 3 types of links:

So it’s the case that most SEO campaigns, as they’re trying to earn the rankings that they’re seeking, are trying to do a few things. You’re trying to grow your overall Domain Authority. You’re trying to get some specific keyword terms and phrases ranking on your site for those terms and phrases.

So you need kind of three kinds of links. This is most campaigns.

1. Links from broad, high-Domain Authority sites that are pointing — you kind of don’t care — anywhere on your site, the home page, internal pages, to your blog, to your news section. It’s totally fine. So a common one that we use here would be like the New York Times. I want the New York Times to link to me so that I have the authority and influence of a link from that domain and, hopefully, lots of domains like them, very high-Domain Authority domains.

2. Links to specific high-value keyword-targeted pages, hopefully, hopefully with specific anchor text, and that’s going to help me boost those individual URLs’ rankings. So I want this page over here to link to me and say “hairdryers,” to my page that is keyword targeted for the word “hairdryers.” Fingers crossed.

3. Links to my domain from other sites, in my sector or niche, that provide some of that topical authority and influence to help tell Google and the other search engines that this is what my site is about, that I belong in this sphere of influence, that I’m semantically and topically related to words and phrases like this. So I want appliancegal.com to link to my site if I’m trying to rank in the world of hairdryers and other kinds of appliances.

So of these, for one and three, we won’t talk about two today, but for one and three, much of the time the people that you’re trying to target are what we call in the industry influencers, and these influencers are going to be lots of people. I’ve illustrated them all here — mostly looking sideways at each other, not exactly sure why that is — but bloggers, and journalists, and authors, and conference organizers, and content marketers, and event speakers, and researchers, and editors, and podcasters, and influencers of a wide, wide variety. We could fill up the whole board with the types of people who are in the influencer world or have that title specifically, but they tend to share a few things in common. They are trying to produce content of one kind or another. They’re not dissimilar from us. They’re trying to produce things on the web, and when they do, they need certain elements to help fill in the gap. When they’re looking for those gap-filling elements, that is your opportunity to earn these kinds of links.

Content tactics

So a few tactics for that. First off, one of the most powerful ones, and we’ve talked about this a little bit here on Whiteboard Friday, but probably not in depth, is…

A. Statistics and data. The reason that this is such a powerful tool is because when you create data, especially if it’s either uniquely gathered by you, unique because you have it, because you can collect it and no one else can, or unique because you’ve put it together from many disparate sources, you’re the editorial curator of that data and statistics, everyone like this needs those types of statistics and data to support or challenge their arguments or their assertions or their coverage of the industry, whatever it is.

  • Why this works: This works well because this fills that gap. This gives them the relevant stats that they’re looking for. Because numbers are easy to use and easy to cite, and you can say, “Feel free to link to this. You’re welcome to copy this graph. You’re welcome to embed this chart.” All those kinds of things. That can make it even easier, but much of the time, just by having these statistics, you can do it.
  • The key is that you have to be visible at the time that these people are looking for them, and that means usually ranking for very hard to discover, through at least normal keyword research, long-tail types of terms that use words like “stats,” “data,” “charts,” “graphs,” and kind of these question formats like when, how much, how many, number of, etc.

It’s tough because you will not see many of those in your keyword research, because there’s a relatively few number of these people searching in any given month for this type of gap-filling data, so you have to intuit often what you should title those things. Put yourself in these people’s shoes and start Googling around for “What would I need if I had to write some industry coverage around this?” Then you’ll come up with these types of things, and you can try modifying your keyword research queries or doing some Google Suggest stuff with these words and phrases.

B. Visual content. Visual content is exceptionally valuable in this case because, again, it fills a gap that many of these folks have. When you are a content marketer, or when you’re a speaker at an event, or when you’re an author or a blogger, you need visual content that will help catch the eye, that will break up the writing that you’ve done, and it’s often much easier to get someone else’s visual content and simply cite your source and link to it than it is to create visual content of your own. These people often don’t have the resources to create their own visual content.

  • Why this works: So, for everyone who’s doing posts, and articles, and slide decks, and even videos, they say, “Why not let someone else do the work,” and you can be that someone else and fill these gaps.
  • Key: To do this well, you’re going to want to appear in a bunch of visual content search mediums that these folks are going to use. Those are places like…
    • Google Images most obviously, but also
    • Pinterest
    • SlideShare, meaning take your visuals, put them up in some sort of slide format, give some context to them and upload them to SlideShare. The nice thing about SlideShare, SlideShare actually reproduces each individual slide as a visual, and then Google Images can search those, and so you’ll often see SlideShare’s results inside Google Images. So this can be a great end around for that.
    • Instagram search, many folks are using that especially if you’re doing photos. You can see I’ve illustrated my own hair drying technique right here. This is clearly Rand. Look at me. I’ve got more hair than I know what to do with.
    • Flickr, still being used by many searchers, particularly because it has a Creative Commons search license, and that should bring up using a Creative Commons commercial use license that requires attribution with a link is your best bet for all of these platforms. It will mean you can get on lots of other Creative Commons visual and photography search engines, which can expose you to more of these types of people as they’re doing their searches.

C. Contrarian/counter-opinions. The last one I’ll cover here is contrarian or counter-opinions to the prevailing wisdom. So you might have an opinion like, “In the next three years, hairdryers will be completely obsolete because of X.”

  • Why it works: This works well because modern journalism has this idea and modern content, in fact, has this idea that they are supposed to create conflict and that they should cover both sides of an issue. In many industry specific sorts of fields, it’s often the case that that is a gap that goes unfilled. By being that sort of challenger to conventional wisdom or conventional thinking, you can fill that gap.
  • The key here is you want to either rank in Google search engine for some of those mid or long tail research type queries. These can be competitive, and so this is challenging, but presenting contrarian opinions is often great link bait. This is kind of a good way to earn links of all kinds in here.
  • Second, I would also urge you to do a little bit of comment marketing and some social media platforms, because what you want to start is to build a brand where you are known for having this contrarian opinion on this conventional topic in your space so that people point all these influencers to you when they’re asked about it. You’re trying to build up this branding of, “Well, I don’t agree with the conventional wisdom around hairdryers.” Hairdryers might be a tough topic for that one, but certainly these other two can work real well.

So using these tactics, I hope that you can go reach out and fill some gaps for these influencers and, as a result, earning two of the three exact kind of links that you need in order to rank well in the search results.

And we’ll see you again next week for another edition of Whiteboard Friday. Take care.

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from Raymond Castleberry Blog http://raymondcastleberry.blogspot.com/2017/06/creating-influencer-targeted-content-to.html
via http://raymondcastleberry.blogspot.com

The Philosophic Roots of the Paris Agreement Part IV: Conservationism

Previous posts in this series have linked the philosophical roots of the global climate-change movement to the doctrines of Deep Ecology (optimal, fragile, sacrosanct nature) and Malthusianism (the people problem). A third sister intellectual/activist movement is conservationism, or less-is-more as a physical (versus economic) imperative.[1]

Nonuse or less use for its own sake is different and beyond self-interested, voluntary conservation, or market-based efficiency, wherein cost-minimization/profit-maximization by the economic actor reduces usage. In personal situations, it generally is an affordability decision to not buy; in business settings, it is paring inputs (reducing cost) for a desired, given output.

Unlike natural conservation, conservationism is thus about personal sacrifice (going without) and government intervention to reduce energy production or usage.

Market-based Conservation (Efficiency)

Less-is-more conservationism can be contrasted with more-from-less/less-to-more conservation. The history of the energy industry is replete with examples of increasing energy efficiency without the heavy hand of government.

“Today the [wellhead petroleum] conservation movement is led by sober business men and is based on the cold calculations of the engineers,” wrote resource economist Erich Zimmermann in 1933. “Conservation, no longer viewed as a political issue, has become a business proposition” (Zimmerman, p. 784).

Turning to electricity, the natural evolution of business efficiency can be appreciated in terms of how much coal is  required to generate a kilowatt hour of electricity. At Samuel Insull’s Commonwealth Edison Company in Chicago, for example, new power plants required the following pounds of coal to produce one kilowatt hour of electricity: 1888 (12 pounds), 1894 (6 pounds), 1903 (2.5 pounds), 1921 (1.8 pounds), and 1924 (1.5 pounds) (Bradley 2011, 483). That progress has continued. Approximately a pound of coal now is required per kWh in electric generation, and this efficiency can be expected to increase in the next decades.

From Conservation to Conservationism

The (Malthusian) fear of mineral energy depletion inspired conservationism, an “ism” predicated on the belief that less energy consumption is good per se. Such a policy was rejected in the 19th century by the father of energy economics, W. S. Jevons. He feared that freezing coal usage meant that “Britain should be stationary and lasting as she was, rather than of growing and world-wide influence as she is” (Bradley, 2009, p. 242).

A century later, amid America’s (regulation-created) energy crisis, when the mainstream view was that we were running out of oil and natural gas, neo-Malthusians saw salvation on the demand side.

Wholesale shortages of petroleum products that threatened the same at retail (to trigger gasoline lines) inspired the first congressional hearing on energy conservation. This March 1973 event (seven months before the Arab Embargo) attracted the first wave of energy conservationists and environmentalists from organizations such as the Environmental Defense Fund, Friends of the Earth, and the Sierra Club (Bradley, 2009, pp. 243–44).

An energy intelligentsia got busy promoting conservationism as a cure for the energy crisis. The Ford Foundation’s A Time to Choose: America’s Energy Future (1974) reached three major conclusions (Bradley, 2009, p. 244):

  • the energy crisis is real and long-lived;
  • “conservation is as important as supply”; and
  • the U.S. needs an integrated national energy policy.

Energy conservation in the Ford report, headed by S. David Freeman, went well beyond self-interested economic conservation—economizing by eliminating waste in response to higher prices. The report proposed ending energy demand growth by creating a federal-level Energy Policy Council. Assisted by a Citizens’ Advisory Board, the council would set conservation goals for the nation, for each region, and for each industry sector. A first step was to set “a uniform system of accounting for energy” for industry to follow. Government energy planning was born—and not to go away even when oil and gas shortages turned to surplus in the next decade (Bradley, 2009, p. 245).

Amory Lovins (Romantic Conservationism)

In 1976, the 29-year-old energy representative of the UK environmental group, Friends of the Earth, wrote an essay that impacted the energy policy world. “Energy Strategy: The Road Not Taken?”, the most reprinted piece in the history of Foreign Affairs, coined the term soft energy paths to differentiate energy conservation and decentralized renewable technology from the “hard” path of central-station power plants fueled by oil, gas, coal, or uranium.

Lovins was soon testifying before the US Congress and advising President Carter on the proposition that the least-cost energy option was not to produce energy, but to save it. In 1977, Lovins presented his case in romantic, something-for-everyone terms to a congressional subcommittee (Bradley, 2009, p. 251):

A final feature of the soft energy path that I wish to commend to this committee as politicians is that it helps to avoid conflict between constituencies by offering advantages to all of them; jobs for the unemployed, capital for businesspeople, environmental protection for conservationists, increased national security for the military, opportunities for small business to innovate and for big business to recycle itself, savings for consumers, world order and equity for globalists, energy independence for isolationists, exciting technologies for the secular, a rebirth of spiritual values for the religious, radical reforms for the young, traditional virtues for the old, civil rights for liberals and states’ rights for conservatives.

To critics, however, Lovins was “selling a dream without presenting the bill” (quoted in Bradley, 2009, p. 250).

Daniel Yergin: Fooled by Shortages

The esteemed energy historian Daniel Yergin went Malthusian during the energy crisis, believing that oil and gas reserves were fixed and rapidly depleting. Costs and prices could only rise, in his view, since demand had overtaken supply.

In their 1979 book, Energy Future: Report of the Energy Project at the Harvard Business School, Yergin and Robert Stobaugh concluded that “the government must be the champion of conservation and solar” (Stobaugh and Yergin, p. 229). One major policy goal was to reduce energy usage between 30 and 40 percent with only “modest adjustments in the way people live” (Yergin, p. 136) This was not a free market program or outcome.

Hayek on Conservationism

In The Constitution of Liberty (1960), economist F. A. Hayek evaluated “the necessity of central direction of the conservation of natural resources” (p. 370), a view that was “particularly strong in the United States, where the ‘conservation movement’ has to a great extent been the source of the agitation for economic planning and has contributed much to the indigenous ideology of the radical economic reformers” (pp. 367–68). The US debate was about keeping more oil and gas in the ground via state wellhead-conservation regulation to better the future.

While not denying that economic error could produce real waste in the “consumption of irreplaceable resources” (p. 369), Hayek cautioned that government was unlikely to have the knowledge of future conditions of price and scarcity that would enable it to impose the “right” solution.

“Any natural resource represents just one item of our total endowment of exhaustible resources, and our problem is not to preserve this stock in any particular form, but always to maintain it in a form that will make the most desirable contribution to total income,” he wrote (p. 374).

Hayek also noticed a circularity problem in the conservationist argument: postponed consumption was still supply lost for the future. Quoting fellow economist Anthony Scott, Hayek noted the irony that “the conservationist who urges us ‘to make greater provision for the future’ is in fact urging a lesser provision for posterity” (p. 374). In other words, production had to be avoided indefinitely, not merely postponed, or it was not supply-side conservation. Yet this would create perpetual non-usage in the present—an impossibility.

Conclusion

Conservationism, substituting a physical standard for a consumer-driven one, is market conservation gone too far. An individual or business can overinvest in conservation just as it can underinvest in the same. Personal preferences and net-present-value economics, not engineering, dictate energy usage in a free society.

The hidden premise of conservationism—the unsustainability of carbon-based energies—is in full intellectual debate. Depletion, pollution, energy security, climate change—these issues, one by one, have been exaggerated by anti-fossil-fuel activists, a story told in many other posts at this website.

Natural consumer decisions about energy are not a “market failure” requiring government subsidies and mandates. No wise government planner or bureaucracy can know the “optimal” level of energy consumption, and any government involvement must be evaluated against public-sector failures.

The case for government conservationism has not been made. Energy policy predicated on market conservation is merited on consumer, producer, taxpayer, and civil grounds.


Bibliography

Bradley, Robert. Capitalism at Work: Business, Government, and Energy. Salem, MA: M & M Scrivener Press, 2009.

Bradley, Robert. Edison to Enron: Energy Markets and Political Strategies. Hoboken, NJ: John Wiley & Sons and Scrivener Publishing, 2011.

Hayek, F. A. The Constitution of Liberty. Chicago, IL: University of Chicago Press, 1960.

Lovins, Amory. “Energy Strategy: The Road Not Taken?” Foreign Affairs 55 (1): 65–96 (October 1976).

Stobaugh, Robert, and Yergin, Daniel. “Conclusion: Towards a Balanced Energy Program.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 216–33. New York: Random House, 1979.

Yergin, Daniel. “Conservation: The Key Energy Source.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 136–82. New York: Random House, 1979.

Zimmermann, Erich. World Resources and Industries. New York: Harper & Brothers, 1933.

[1] Conservationism as a political-economy term was introduced in Bradley (2009), including pp. 187, 218, 242, and Bradley (2011), including pp. 226-27, 509. A fourth intellectual/activist strand, small-is-beautiful (E. F. Schumacher), will be next in this Paris series.

The post The Philosophic Roots of the Paris Agreement Part IV: Conservationism appeared first on IER.

from Raymond Castleberry Blog http://raymondcastleberry.blogspot.com/2017/06/the-philosophic-roots-of-paris_22.html
via http://raymondcastleberry.blogspot.com

The Philosophic Roots of the Paris Agreement Part IV: Conservationism

Previous posts in this series have linked the philosophical roots of the global climate-change movement to the doctrines of Deep Ecology (optimal, fragile, sacrosanct nature) and Malthusianism (the people problem). A third sister intellectual/activist movement is conservationism, or less-is-more as a physical (versus economic) imperative.[1]

Nonuse or less use for its own sake is different and beyond self-interested, voluntary conservation, or market-based efficiency, wherein cost-minimization/profit-maximization by the economic actor reduces usage. In personal situations, it generally is an affordability decision to not buy; in business settings, it is paring inputs (reducing cost) for a desired, given output.

Unlike natural conservation, conservationism is thus about personal sacrifice (going without) and government intervention to reduce energy production or usage.

Market-based Conservation (Efficiency)

Less-is-more conservationism can be contrasted with more-from-less/less-to-more conservation. The history of the energy industry is replete with examples of increasing energy efficiency without the heavy hand of government.

“Today the [wellhead petroleum] conservation movement is led by sober business men and is based on the cold calculations of the engineers,” wrote resource economist Erich Zimmermann in 1933. “Conservation, no longer viewed as a political issue, has become a business proposition” (Zimmerman, p. 784).

Turning to electricity, the natural evolution of business efficiency can be appreciated in terms of how much coal is  required to generate a kilowatt hour of electricity. At Samuel Insull’s Commonwealth Edison Company in Chicago, for example, new power plants required the following pounds of coal to produce one kilowatt hour of electricity: 1888 (12 pounds), 1894 (6 pounds), 1903 (2.5 pounds), 1921 (1.8 pounds), and 1924 (1.5 pounds) (Bradley 2011, 483). That progress has continued. Approximately a pound of coal now is required per kWh in electric generation, and this efficiency can be expected to increase in the next decades.

From Conservation to Conservationism

The (Malthusian) fear of mineral energy depletion inspired conservationism, an “ism” predicated on the belief that less energy consumption is good per se. Such a policy was rejected in the 19th century by the father of energy economics, W. S. Jevons. He feared that freezing coal usage meant that “Britain should be stationary and lasting as she was, rather than of growing and world-wide influence as she is” (Bradley, 2009, p. 242).

A century later, amid America’s (regulation-created) energy crisis, when the mainstream view was that we were running out of oil and natural gas, neo-Malthusians saw salvation on the demand side.

Wholesale shortages of petroleum products that threatened the same at retail (to trigger gasoline lines) inspired the first congressional hearing on energy conservation. This March 1973 event (seven months before the Arab Embargo) attracted the first wave of energy conservationists and environmentalists from organizations such as the Environmental Defense Fund, Friends of the Earth, and the Sierra Club (Bradley, 2009, pp. 243–44).

An energy intelligentsia got busy promoting conservationism as a cure for the energy crisis. The Ford Foundation’s A Time to Choose: America’s Energy Future (1974) reached three major conclusions (Bradley, 2009, p. 244):

  • the energy crisis is real and long-lived;
  • “conservation is as important as supply”; and
  • the U.S. needs an integrated national energy policy.

Energy conservation in the Ford report, headed by S. David Freeman, went well beyond self-interested economic conservation—economizing by eliminating waste in response to higher prices. The report proposed ending energy demand growth by creating a federal-level Energy Policy Council. Assisted by a Citizens’ Advisory Board, the council would set conservation goals for the nation, for each region, and for each industry sector. A first step was to set “a uniform system of accounting for energy” for industry to follow. Government energy planning was born—and not to go away even when oil and gas shortages turned to surplus in the next decade (Bradley, 2009, p. 245).

Amory Lovins (Romantic Conservationism)

In 1976, the 29-year-old energy representative of the UK environmental group, Friends of the Earth, wrote an essay that impacted the energy policy world. “Energy Strategy: The Road Not Taken?”, the most reprinted piece in the history of Foreign Affairs, coined the term soft energy paths to differentiate energy conservation and decentralized renewable technology from the “hard” path of central-station power plants fueled by oil, gas, coal, or uranium.

Lovins was soon testifying before the US Congress and advising President Carter on the proposition that the least-cost energy option was not to produce energy, but to save it. In 1977, Lovins presented his case in romantic, something-for-everyone terms to a congressional subcommittee (Bradley, 2009, p. 251):

A final feature of the soft energy path that I wish to commend to this committee as politicians is that it helps to avoid conflict between constituencies by offering advantages to all of them; jobs for the unemployed, capital for businesspeople, environmental protection for conservationists, increased national security for the military, opportunities for small business to innovate and for big business to recycle itself, savings for consumers, world order and equity for globalists, energy independence for isolationists, exciting technologies for the secular, a rebirth of spiritual values for the religious, radical reforms for the young, traditional virtues for the old, civil rights for liberals and states’ rights for conservatives.

To critics, however, Lovins was “selling a dream without presenting the bill” (quoted in Bradley, 2009, p. 250).

Daniel Yergin: Fooled by Shortages

The esteemed energy historian Daniel Yergin went Malthusian during the energy crisis, believing that oil and gas reserves were fixed and rapidly depleting. Costs and prices could only rise, in his view, since demand had overtaken supply.

In their 1979 book, Energy Future: Report of the Energy Project at the Harvard Business School, Yergin and Robert Stobaugh concluded that “the government must be the champion of conservation and solar” (Stobaugh and Yergin, p. 229). One major policy goal was to reduce energy usage between 30 and 40 percent with only “modest adjustments in the way people live” (Yergin, p. 136) This was not a free market program or outcome.

Hayek on Conservationism

In The Constitution of Liberty (1960), economist F. A. Hayek evaluated “the necessity of central direction of the conservation of natural resources” (p. 370), a view that was “particularly strong in the United States, where the ‘conservation movement’ has to a great extent been the source of the agitation for economic planning and has contributed much to the indigenous ideology of the radical economic reformers” (pp. 367–68). The US debate was about keeping more oil and gas in the ground via state wellhead-conservation regulation to better the future.

While not denying that economic error could produce real waste in the “consumption of irreplaceable resources” (p. 369), Hayek cautioned that government was unlikely to have the knowledge of future conditions of price and scarcity that would enable it to impose the “right” solution.

“Any natural resource represents just one item of our total endowment of exhaustible resources, and our problem is not to preserve this stock in any particular form, but always to maintain it in a form that will make the most desirable contribution to total income,” he wrote (p. 374).

Hayek also noticed a circularity problem in the conservationist argument: postponed consumption was still supply lost for the future. Quoting fellow economist Anthony Scott, Hayek noted the irony that “the conservationist who urges us ‘to make greater provision for the future’ is in fact urging a lesser provision for posterity” (p. 374). In other words, production had to be avoided indefinitely, not merely postponed, or it was not supply-side conservation. Yet this would create perpetual non-usage in the present—an impossibility.

Conclusion

Conservationism, substituting a physical standard for a consumer-driven one, is market conservation gone too far. An individual or business can overinvest in conservation just as it can underinvest in the same. Personal preferences and net-present-value economics, not engineering, dictate energy usage in a free society.

The hidden premise of conservationism—the unsustainability of carbon-based energies—is in full intellectual debate. Depletion, pollution, energy security, climate change—these issues, one by one, have been exaggerated by anti-fossil-fuel activists, a story told in many other posts at this website.

Natural consumer decisions about energy are not a “market failure” requiring government subsidies and mandates. No wise government planner or bureaucracy can know the “optimal” level of energy consumption, and any government involvement must be evaluated against public-sector failures.

The case for government conservationism has not been made. Energy policy predicated on market conservation is merited on consumer, producer, taxpayer, and civil grounds.


Bibliography

Bradley, Robert. Capitalism at Work: Business, Government, and Energy. Salem, MA: M & M Scrivener Press, 2009.

Bradley, Robert. Edison to Enron: Energy Markets and Political Strategies. Hoboken, NJ: John Wiley & Sons and Scrivener Publishing, 2011.

Hayek, F. A. The Constitution of Liberty. Chicago, IL: University of Chicago Press, 1960.

Lovins, Amory. “Energy Strategy: The Road Not Taken?” Foreign Affairs 55 (1): 65–96 (October 1976).

Stobaugh, Robert, and Yergin, Daniel. “Conclusion: Towards a Balanced Energy Program.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 216–33. New York: Random House, 1979.

Yergin, Daniel. “Conservation: The Key Energy Source.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 136–82. New York: Random House, 1979.

Zimmermann, Erich. World Resources and Industries. New York: Harper & Brothers, 1933.

[1] Conservationism as a political-economy term was introduced in Bradley (2009), including pp. 187, 218, 242, and Bradley (2011), including pp. 226-27, 509. A fourth intellectual/activist strand, small-is-beautiful (E. F. Schumacher), will be next in this Paris series.

The post The Philosophic Roots of the Paris Agreement Part IV: Conservationism appeared first on IER.

The Philosophic Roots of the Paris Agreement Part IV: Conservationism

Previous posts in this series have linked the philosophical roots of the global climate-change movement to the doctrines of Deep Ecology (optimal, fragile, sacrosanct nature) and Malthusianism (the people problem). A third sister intellectual/activist movement is conservationism, or less-is-more as a physical (versus economic) imperative.[1]

Nonuse or less use for its own sake is different and beyond self-interested, voluntary conservation, or market-based efficiency, wherein cost-minimization/profit-maximization by the economic actor reduces usage. In personal situations, it generally is an affordability decision to not buy; in business settings, it is paring inputs (reducing cost) for a desired, given output.

Unlike natural conservation, conservationism is thus about personal sacrifice (going without) and government intervention to reduce energy production or usage.

Market-based Conservation (Efficiency)

Less-is-more conservationism can be contrasted with more-from-less/less-to-more conservation. The history of the energy industry is replete with examples of increasing energy efficiency without the heavy hand of government.

“Today the [wellhead petroleum] conservation movement is led by sober business men and is based on the cold calculations of the engineers,” wrote resource economist Erich Zimmermann in 1933. “Conservation, no longer viewed as a political issue, has become a business proposition” (Zimmerman, p. 784).

Turning to electricity, the natural evolution of business efficiency can be appreciated in terms of how much coal is  required to generate a kilowatt hour of electricity. At Samuel Insull’s Commonwealth Edison Company in Chicago, for example, new power plants required the following pounds of coal to produce one kilowatt hour of electricity: 1888 (12 pounds), 1894 (6 pounds), 1903 (2.5 pounds), 1921 (1.8 pounds), and 1924 (1.5 pounds) (Bradley 2011, 483). That progress has continued. Approximately a pound of coal now is required per kWh in electric generation, and this efficiency can be expected to increase in the next decades.

From Conservation to Conservationism

The (Malthusian) fear of mineral energy depletion inspired conservationism, an “ism” predicated on the belief that less energy consumption is good per se. Such a policy was rejected in the 19th century by the father of energy economics, W. S. Jevons. He feared that freezing coal usage meant that “Britain should be stationary and lasting as she was, rather than of growing and world-wide influence as she is” (Bradley, 2009, p. 242).

A century later, amid America’s (regulation-created) energy crisis, when the mainstream view was that we were running out of oil and natural gas, neo-Malthusians saw salvation on the demand side.

Wholesale shortages of petroleum products that threatened the same at retail (to trigger gasoline lines) inspired the first congressional hearing on energy conservation. This March 1973 event (seven months before the Arab Embargo) attracted the first wave of energy conservationists and environmentalists from organizations such as the Environmental Defense Fund, Friends of the Earth, and the Sierra Club (Bradley, 2009, pp. 243–44).

An energy intelligentsia got busy promoting conservationism as a cure for the energy crisis. The Ford Foundation’s A Time to Choose: America’s Energy Future (1974) reached three major conclusions (Bradley, 2009, p. 244):

  • the energy crisis is real and long-lived;
  • “conservation is as important as supply”; and
  • the U.S. needs an integrated national energy policy.

Energy conservation in the Ford report, headed by S. David Freeman, went well beyond self-interested economic conservation—economizing by eliminating waste in response to higher prices. The report proposed ending energy demand growth by creating a federal-level Energy Policy Council. Assisted by a Citizens’ Advisory Board, the council would set conservation goals for the nation, for each region, and for each industry sector. A first step was to set “a uniform system of accounting for energy” for industry to follow. Government energy planning was born—and not to go away even when oil and gas shortages turned to surplus in the next decade (Bradley, 2009, p. 245).

Amory Lovins (Romantic Conservationism)

In 1976, the 29-year-old energy representative of the UK environmental group, Friends of the Earth, wrote an essay that impacted the energy policy world. “Energy Strategy: The Road Not Taken?”, the most reprinted piece in the history of Foreign Affairs, coined the term soft energy paths to differentiate energy conservation and decentralized renewable technology from the “hard” path of central-station power plants fueled by oil, gas, coal, or uranium.

Lovins was soon testifying before the US Congress and advising President Carter on the proposition that the least-cost energy option was not to produce energy, but to save it. In 1977, Lovins presented his case in romantic, something-for-everyone terms to a congressional subcommittee (Bradley, 2009, p. 251):

A final feature of the soft energy path that I wish to commend to this committee as politicians is that it helps to avoid conflict between constituencies by offering advantages to all of them; jobs for the unemployed, capital for businesspeople, environmental protection for conservationists, increased national security for the military, opportunities for small business to innovate and for big business to recycle itself, savings for consumers, world order and equity for globalists, energy independence for isolationists, exciting technologies for the secular, a rebirth of spiritual values for the religious, radical reforms for the young, traditional virtues for the old, civil rights for liberals and states’ rights for conservatives.

To critics, however, Lovins was “selling a dream without presenting the bill” (quoted in Bradley, 2009, p. 250).

Daniel Yergin: Fooled by Shortages

The esteemed energy historian Daniel Yergin went Malthusian during the energy crisis, believing that oil and gas reserves were fixed and rapidly depleting. Costs and prices could only rise, in his view, since demand had overtaken supply.

In their 1979 book, Energy Future: Report of the Energy Project at the Harvard Business School, Yergin and Robert Stobaugh concluded that “the government must be the champion of conservation and solar” (Stobaugh and Yergin, p. 229). One major policy goal was to reduce energy usage between 30 and 40 percent with only “modest adjustments in the way people live” (Yergin, p. 136) This was not a free market program or outcome.

Hayek on Conservationism

In The Constitution of Liberty (1960), economist F. A. Hayek evaluated “the necessity of central direction of the conservation of natural resources” (p. 370), a view that was “particularly strong in the United States, where the ‘conservation movement’ has to a great extent been the source of the agitation for economic planning and has contributed much to the indigenous ideology of the radical economic reformers” (pp. 367–68). The US debate was about keeping more oil and gas in the ground via state wellhead-conservation regulation to better the future.

While not denying that economic error could produce real waste in the “consumption of irreplaceable resources” (p. 369), Hayek cautioned that government was unlikely to have the knowledge of future conditions of price and scarcity that would enable it to impose the “right” solution.

“Any natural resource represents just one item of our total endowment of exhaustible resources, and our problem is not to preserve this stock in any particular form, but always to maintain it in a form that will make the most desirable contribution to total income,” he wrote (p. 374).

Hayek also noticed a circularity problem in the conservationist argument: postponed consumption was still supply lost for the future. Quoting fellow economist Anthony Scott, Hayek noted the irony that “the conservationist who urges us ‘to make greater provision for the future’ is in fact urging a lesser provision for posterity” (p. 374). In other words, production had to be avoided indefinitely, not merely postponed, or it was not supply-side conservation. Yet this would create perpetual non-usage in the present—an impossibility.

Conclusion

Conservationism, substituting a physical standard for a consumer-driven one, is market conservation gone too far. An individual or business can overinvest in conservation just as it can underinvest in the same. Personal preferences and net-present-value economics, not engineering, dictate energy usage in a free society.

The hidden premise of conservationism—the unsustainability of carbon-based energies—is in full intellectual debate. Depletion, pollution, energy security, climate change—these issues, one by one, have been exaggerated by anti-fossil-fuel activists, a story told in many other posts at this website.

Natural consumer decisions about energy are not a “market failure” requiring government subsidies and mandates. No wise government planner or bureaucracy can know the “optimal” level of energy consumption, and any government involvement must be evaluated against public-sector failures.

The case for government conservationism has not been made. Energy policy predicated on market conservation is merited on consumer, producer, taxpayer, and civil grounds.


Bibliography

Bradley, Robert. Capitalism at Work: Business, Government, and Energy. Salem, MA: M & M Scrivener Press, 2009.

Bradley, Robert. Edison to Enron: Energy Markets and Political Strategies. Hoboken, NJ: John Wiley & Sons and Scrivener Publishing, 2011.

Hayek, F. A. The Constitution of Liberty. Chicago, IL: University of Chicago Press, 1960.

Lovins, Amory. “Energy Strategy: The Road Not Taken?” Foreign Affairs 55 (1): 65–96 (October 1976).

Stobaugh, Robert, and Yergin, Daniel. “Conclusion: Towards a Balanced Energy Program.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 216–33. New York: Random House, 1979.

Yergin, Daniel. “Conservation: The Key Energy Source.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 136–82. New York: Random House, 1979.

Zimmermann, Erich. World Resources and Industries. New York: Harper & Brothers, 1933.

[1] Conservationism as a political-economy term was introduced in Bradley (2009), including pp. 187, 218, 242, and Bradley (2011), including pp. 226-27, 509. A fourth intellectual/activist strand, small-is-beautiful (E. F. Schumacher), will be next in this Paris series.

The post The Philosophic Roots of the Paris Agreement Part IV: Conservationism appeared first on IER.