Bryan Caplan and David Henderson

Energy, Environment, Resources

A Category Archive (406 entries)

Obama vs. Wall Street Journal on Global Oil Markets

Energy, Environment, Resources
David Henderson
Both Obama and the WSJ are wrong: The WSJ is more wrong. Here's an excerpt from the Wall Street Journal's Review and Outlook (unsigned) editorial, "Obama on Oil Markets: Supply and demand seem to be elusive concepts," on President Obama's... MORE

The Moral Case for Fossil Fuels: Recap

Books: Reviews and Suggested Readings
Bryan Caplan
Everything I've written about The Moral Case for Fossil Fuels, my favorite book this year:1. The thesis.2. We owe civilization to fossil fuels.3. We can live with warming.4. Refining the case.The book's a great Christmas present, all the way down... MORE

The Moral Case for Fossil Fuels: Refining the Case

Economic Philosophy
Bryan Caplan
The Moral Case for Fossil Fuels is the best book I've read all year, and makes a great holiday gift.  But there's still room for improvement.1. Epstein centers his moral case around "human life as the standard of value."  This... MORE

The Moral Case for Fossil Fuels: We Can Live With Warming

Books: Reviews and Suggested Readings
Bryan Caplan
Rolling Stone (ahem) includes Alex Epstein, author of The Moral Case for Fossil Fuels, on its list of top "global warming deniers."  Epstein:[T]hose who dispute catastrophic global warming are accused of denying the greenhouse effect and global warming. I experienced... MORE

The Moral Case for Fossil Fuels: We Owe Civilization to Fossil Fuels

Books: Reviews and Suggested Readings
Bryan Caplan
According to this popular cartoon, getting rid of fossil fuels is a free lunch.The wise will roll their eyes at this wishful thinking.  But no one exposes its sheer absurdity better than Alex Epstein in The Moral Case for Fossil... MORE

The Moral Case for Fossil Fuels: The Thesis

Books: Reviews and Suggested Readings
Bryan Caplan
When Alex Epstein's The Moral Case for Fossil Fuels arrived in my mailbox, I expected it to be bad.  For two reasons:1. In my experience, readable books about climate change usually just demagogically preach to the choir.2. I correctly surmised... MORE

Krugman's On-Again, Off-Again Analysis

Energy, Environment, Resources
David Henderson
Krugman's bashing gets in the way of clear thinking. In his most recent New York Times column, "Pollution and Politics," Paul Krugman fluctuates between claiming one doesn't need to do the analysis and actually doing the analysis. The issue: the... MORE

Carbon Taxes: The Tax Interaction Effect

Energy, Environment, Resources
David Henderson
UPDATE: I made an important mistake. Robert Murphy corrected me in an e-mail. Correction below. Robert P. Murphy, one of the economists who writes frequently for Econlib, has published a number of pieces on the "tax interaction effect." He has... MORE

The New Brownsville U-Turn

Labor Mobility, Immigration, Outsourcing
David Henderson
I flew into the Corpus Christi airport late last night and waited in line for my rental car. Behind me was a young dark-skinned man who appeared to be from India and he was shouting in a foreign language--Hindi, I... MORE

Henderson on Piketty, Part 6

Books: Reviews and Suggested Readings
David Henderson
This is my final installment from "The Unintended Case for More Capitalism," my review of Capital in the Twenty-First Century by Thomas Piketty. Piketty, not to his credit, sometimes uses ad hominems in place of actual argument. I note two.... MORE

About That 97 Percent

Energy, Environment, Resources
David Henderson
I've posted before (here and here) about the John Cook study that purports to find that 97% of climate scientists believe that humans are the main cause of global warming. Now Richard Tol, a professor of the economics of climate... MORE

What Does Fusion Mean for the Future?

Energy, Environment, Resources
Art Carden
Writing at Forbes.com (for whom I am also a contributor), William Pentland discusses Lockheed Martin's alleged breakthroughs in fusion technology. We've heard "fusion is just around the corner!" for a very long time now, but as Tyler Cowen notes, this... MORE

My 1984 CEA Memo on Alaskan Oil Exports

International Trade
David Henderson
Earlier this week, I posted a 1983 memo that I wrote to my boss at the Council of Economic Advisers, Martin Feldstein, about a meeting to discuss relaxing the limits on exports of Alaskan oil. Below is a follow-up memo... MORE

My 1983 CEA Memo on the Ban on Alaskan Oil Exports

International Trade
David Henderson
Last week, I posted here and here about Larry Summers's excellent talk in which he advocated removing the ban on U.S. oil exports. I then remembered that when I was the Senior Economist for Energy Policy with President Reagan's Council... MORE

Larry Summers on Oil Exports, Part II

Energy, Environment, Resources
David Henderson
Yesterday, I posted about Larry Summers's excellent speech making the case against government restrictions on exports of oil and natural gas. It was getting overly long and so this is Part II. I'll start by highlighting, and responding to, the... MORE

The Closing of the Liberal Mind (pt. 2)

Labor Market
Scott Sumner
A few weeks ago I did a post pointing out that pundits on both the left and the right have moved further to the extremes, and away from sensible policy views. I just noticed another example today, an article... MORE

Larry Summers on Oil Exports, Part I

Energy, Environment, Resources
David Henderson
I believe that the question of whether the United States should have a substantially more permissive policy with respect to the export of crude oil and with respect to the export of natural gas is easy. The answer is affirmative.... MORE

Reply to Scott Sumner on Global Warming

Economic Methods
David Henderson
Scott Sumner writes: I recall that when liberals favored lots of "command and control" regulation to address global warming, and conservatives favored a carbon tax. That was the "market solution" comparable to the market-based approach to reducing sulfur emissions from... MORE

California Drought: A Pricing Problem

Energy, Environment, Resources
David Henderson
A simple economic truth is that water-price hikes can get the job done without the expense--and the inefficiency--of conservation ads and water police--as well as the discord that can arise when neighbors snitch on and shame each other. Also, people... MORE

The Environment: Own It and Save It

Energy, Environment, Resources
David Henderson
The title of this blog post is the same as the title of one of my chapters in The Joy of Freedom: An Economist's Odyssey. In that chapter, I show how private ownership of resources leads people to take better... MORE

Landfills as Inventories

Energy, Environment, Resources
Art Carden
In honor of of the estimable Mike Munger's 25th appearance (!!) on EconTalk, I thought I'd offer a couple of words about what's probably my favorite Munger EconTalk podcast: "Munger on Recycling," from July 2, 2007. Here's his accompanying article... MORE

Who Caused the August 1990 Spike in Oil Prices?

Energy, Environment, Resources
David Henderson
Who caused the August 1990 spike in oil prices? If you learned that someone had reduced the supply of oil substantially just before the spike, wouldn't you think that that someone caused the price increase? You might think that I'm... MORE

Low-Carbon Alternatives: Solar and Wind Suck

Energy, Environment, Resources
David Henderson
One of the blogs that I check literally every day is Timothy Taylor's "Conversable Economist." In baseball parlance, his posts are virtually always doubles, triples, or home runs. A recent home run is his "Evaluating Low-Carbon Energy Alternatives." In it,... MORE

The Stockpile Solution

Energy, Environment, Resources
Bryan Caplan
If I were convinced that the fate of mankind hinged on massive reductions in carbon emissions, I would still be pessimistic about unilateral taxes or cap-and-trade.  As I told Yoram:National emissions regulations can have perverse global effects.  If relatively clean... MORE

Bauman Climate Bet

Economic Methods
Bryan Caplan
Yoram and I have digitally shaken on our global warming pause bet.  Via Twitter: @bryan_caplan yes, once we clarify concerns of @wonkinakilt You're betting avg(2015-2029)-avg(2000-2014)<=0.05C, yes? If so I accept!-- Yoram Bauman (@standupecon) June 10, 2014... MORE

The Cato Institute's Randal O'Toole has recently released a Policy Analysis arguing that low-capacity light rail is a bad deal for cities. I found it especially interesting in light of Scott's post last week on "private affluence and public squalor,"... MORE

Bauman Climate Bet Bleg

Economic Methods
Bryan Caplan
The Economist confirms that global warming has paused over the last 15 years:Between 1998 and 2013, the Earth's surface temperature rose at a rate of 0.04°C a decade, far slower than the 0.18°C increase in the 1990s. Meanwhile, emissions of... MORE

While there's much to like in Yoram Bauman's Cartoon Introduction to Climate Change, this page nicely captures my reservations about his approach: He's tolerant of economically illiterate action, but intolerant of economically literate inaction.  (Click to enlarge).[Excerpted from The Cartoon... MORE

Cartoon Introduction to Climate Change: Pollution Taxes Illustrated

Books: Reviews and Suggested Readings
Bryan Caplan
Here's another page from The Cartoon Introduction to Climate Change that's worth more than all the demagogic words spoken about pollution taxes.  Now in stores.  Click to enlarge.[Excerpted from The Cartoon Introduction to Climate Change by Grady Klein and Yoram... MORE

Krugman Defends Price Theory

Microeconomics
David Henderson
One of my frustrations when reading Paul Krugman's blog is that I often get the feeling that I'm not reading a post by an economist. We economists tend to talk about relative prices, how prices motivate behavior (incentives), etc. Krugman... MORE

Last Spring, a student came to my class wearing a shirt reading "Basketball Never Stops." I need to get a shirt that says "Economics Never Stops." David's recent post on uncertainty and global warming was a good reminder. Public policy... MORE

Uncertainty Can Go Both Ways

Energy, Environment, Resources
David Henderson
In a recent response to Byran Caplan on global warming, Yoram Bauman rested part of his argument against cost/benefit analysis on the issue of uncertainty. Bauman wrote: Reason #1 is that CBA has trouble dealing with uncertainty: if there's a... MORE

Partial Response to Yoram Bauman

Energy, Environment, Resources
David Henderson
In his latest reply to co-blogger Bryan Caplan, Yoram Bauman writes: If more economists like Bryan were upfront about their agreements with basic climate science then I would feel better about not having time to respond to people like David... MORE

I offered to give Yoram the last word in our exchange.  Here it is.P.S. Yoram's non-fiction graphic novel officially releases on June 5.  That week, with his kind permission, I'll be posting a few pages from his book. Normal 0... MORE

Cartoon Introduction to Climate Change: Rejoinder to Yoram Bauman

Behavioral Economics and Rationality
Bryan Caplan
Here is my (delayed) rejoinder to Yoram's response to my review of his Cartoon Introduction to Climate Change.  He's in blockquotes, I'm not.As with most academics, Bryan keeps his words of praise to a minimum and instead focuses on criticisms.... MORE

Los Angeles Times Distorts

Energy, Environment, Resources
David Henderson
Los Angeles Times reporter Brian Bennett, in the first paragraph of a recent news story, writes: Sen. Marco Rubio of Florida, a GOP star and possible 2016 presidential contender, does not believe human activity is causing climate change, he said... MORE

Partial Reply to Yoram Bauman

Energy, Environment, Resources
David Henderson
UPDATE BELOW Co-blogger Bryan has graciously published Yoram Bauman's response to Bryan's critique of his The Cartoon Introduction to Climate Change. As Bryan notes, he will not be able to get around to responding to Yoram soon, and so I... MORE

Yoram Bauman, co-author of The Cartoon Introduction to Climate Change, asked to respond to my review.  I'm about to go to my parents' golden anniversary party, so I probably won't respond until late next week.Here's Yoram: Normal 0 MicrosoftInternetExplorer4 Response... MORE

The Cartoon Introduction to Climate Change

Cost-benefit Analysis
Bryan Caplan
Stand-Up Economist Yoram Bauman is back with another non-fiction graphic novel, The Cartoon Introduction to Climate Change.  As with his previous Cartoon Introductions to Economics (micro and macro), there is much to like.  Bauman thoughtfully interweaves physical science and economics. ... MORE

Feminizing Famine

Energy, Environment, Resources
James Schneider
Recently, I've been rereading parts of Cormac Ó Gráda's Famine: A Short History. The book juxtaposes an interesting pair of facts. The first fact describes how famine is marketed (for lack of a better word): The sense that the horrors... MORE

Krugman's Strange Post on Solar Power

Energy, Environment, Resources
David Henderson
Paul Krugman has a strange post on solar power that contradicts basic microeconomics. He writes: Like just about everyone who has looked at the numbers on renewable energy, solar power in particular, I was wowed by the progress. Something really... MORE

Paris Flirts With Banning Cars Based on License-Plate Number

Energy, Environment, Resources
James Schneider
Recently, a lack of wind and rain has inflicted unusually high smog levels on Paris. On Monday, March 17, Paris combatted the dangerously high levels of pollution by barring cars with even-numbered license plates from the roads. The intent was... MORE

David Friedman on Bill Nordhaus; Timothy Taylor on Bad Academic Writing

Energy, Environment, Resources
David Henderson
David Friedman has lately been picking apart a piece written by Yale University's Bill Nordhaus in the New York Review of Books two years ago. I did so in my class on Energy Economics two years ago, drawing on this... MORE

Even When More Isn't Merrier, It Can Still Be Better

Energy, Environment, Resources
James Schneider
In 1966, Paul Ehrlich visited India to study butterflies. This trip provided a perfect rhetorical device to help his readers imagine the dangers of overpopulation. He was able to describe his firsthand reaction to Delhi: As we crawled through the... MORE

1.6%, Not 97%, Agree that Humans are the Main Cause of Global Warming

Energy, Environment, Resources
David Henderson
UPDATE BELOW Mark Bahner, a commenter on my previous post on global warming and on David Friedman's post, has sifted through the data behind John Cook's statement that 97% of climate scientists who stated a position believe that humans are... MORE

David Friedman on the 97% Consensus on Global Warming

Energy, Environment, Resources
David Henderson
As David Friedman points out, it is hard for us who are not climate scientists to know what is true or false about global warming. But one thing we can sometimes do is check what various writers on climate science... MORE

Sitting on an Ocean of Alaskan Oil

Energy, Environment, Resources
David Henderson
Co-blogger Bryan wrote an excellent post yesterday, "Sitting on an Ocean of Talent," in which he compared people's actual opposition to major increases in immigration to their supposed lack of opposition to producing a hypothetical precious resource named Leonium. As... MORE

More Likely Than Not? This is Scientific?

Energy, Environment, Resources
David Henderson
UPDATE BELOW 2nd UPDATE BELOW Reason science correspondent Ron Bailey, in the January 2014 issue of Reason, digs into how the Intergovernmental Panel on Climate Change (IPCC) deals with the fact that the globe has not warmed for the past... MORE

The Pigou Club Reconsidered

Energy, Environment, Resources
David Henderson
Last Friday, I highlighted Ross McKitrick's exposition of the argument that taking account of the "tax interaction effect" (TIE) leads to the conclusion that the optimal Pigovian tax on carbon is less, and possibly substantially less, than the one that... MORE

Friday Night Video: McKitrick on Carbon Taxes

Energy, Environment, Resources
David Henderson
If you have paid much attention to the debate about carbon taxes, you know that there is a "Pigou Club," of which Harvard economist Greg Mankiw is a founding member, and that these members advocate a tax on carbon.... MORE

Of Fossil Fuels, Forests, and the Future of Prosperity

Energy, Environment, Resources
Art Carden
We live on a heavily-wooded suburban lot in Hoover, Alabama, just outside of Birmingham, surrounded by neighbors and a very short drive from Samford. Periodically, we'll roast hot dogs over sticks and branches we find in the yard (see "heavily-wooded")... MORE

McKenzie on Driving vs. Walking

Energy, Environment, Resources
David Henderson
Which is more polluting--driving a mile to work or walking that mile? The easy answer is, of course, driving. Cars have tailpipes; people don't. Far more energy is needed to push a 3,000-pound car along the road than is needed... MORE

Assad Pulls a Keystone

Energy, Environment, Resources
David Henderson
Why has the little nation of Qatar spent 3 billion dollars to support the rebels in Syria? Could it be because Qatar is the largest exporter of liquid natural gas in the world and Assad won't let them build a... MORE

We Calculate: You Decide

Energy, Environment, Resources
David Henderson
Patrick J. Michaels and Paul C. "Chip" Knappenberger have figured out a marvelously clever way of showing the effects of various levels of carbon reduction on the temperature 2050 and by 2100. They use a term called "climate sensitivity" and... MORE

Friday Night Video: Murphy on the Optimal Carbon Tax

Energy, Environment, Resources
David Henderson
This is Bob Murphy's testimony on the optimal carbon tax, given Thursday, July 17, 2013. It's excellent. His written testimony is here. The best my Senator, Barbara Boxer, chair of the committee, came up with was to attack not... MORE

We-e-ee Are NEVER EVER EVER--Running Out of Oil!

Energy, Environment, Resources
Art Carden
Here's an extra credit assignment I gave my principles of macro students last week when we were talking about supply and demand. Fans of Russell Roberts might recognize that this is inspired in part by chapter 1 of The Invisible... MORE

Better Mixed Economy: Henderson on Litan and Schramm

Growth: Causal Factors
David Henderson
What should be done to increase the growth rate of the sluggish U.S. economy? This is the main issue that economists Robert Litan and Carl Schramm address in their book, Better Capitalism. The book is mistitled. As valuable as many... MORE

Uncertainty Can Go Both Ways

Energy, Environment, Resources
David Henderson
In the latest issue of Regulation magazine is a symposium on carbon taxes. The lead article is by Bob Litterman and then four authors, including me, responded. Here's an excerpt from my piece. On two other issues, I disagree with... MORE

The June issue of Cato Unbound features a lead essay on recycling by Mike Munger and, so far, response essays from Edward Humes, Melissa Walsh Innes, and Steven Landsburg. As of right now, there are also "conversation" essays from Mike... MORE

Superfreakonomics on Geo-Engineering

Energy, Environment, Resources
David Henderson
Back in 2009, I posted three pieces on Steven D. Levitt and Stephen J. Dubner's book Superfreakonomics. As with their first book, there were strengths and weaknesses. I highlighted them here, here, and here. I never posted, though, on their... MORE

Look Out the Window, or, Stop and Smell the Bacon

Energy, Environment, Resources
Art Carden
Ronald Coase famously advised economists to "look out the window" every so often. It's advice I (try to) take to heart. Here's an example. On Monday afternoon, I was standing behind our building waiting for a few people and "enjoying"... MORE

I was pleased to see my old friend Ben Haller challenging me in the comments on my global warming econometrics bleg.  He's in blockquotes, I'm not:The more crap you throw into the regression, the more it will be overfit and... MORE

Global Warming Econometrics Bleg

Energy, Environment, Resources
Bryan Caplan
What happens if you regress annual global temperature 1880-2011 on CO2, linear trend, and other stuff trending positively or negative over this era?  The list of regressors should ideally include not just other climatological variables, but placebo variables like church... MORE

Gray Lady Down: Justin Gillis's Misleading News Story

Energy, Environment, Resources
David Henderson
How to Mislead and Undercut While Appearing to be Writing a News Story A friend who is an avid reader of the New York Times sent me a link last night to a piece by New York Times reporter, and... MORE

Physics Applied to Economics

Economic Education
David Henderson
When I teach my Energy Economics course, in the first problem set, one of the problems is the following: Name an energy activity that the government is currently engaged in that you think should be eliminated and give your reasons... MORE

Friday Night Video: Henderson on War for Oil

Energy, Environment, Resources
David Henderson
A friend of mine recently found a link to a video that a man named Jim Turney did of a talk I gave in Monterey in February 1991. It's at the annual convention of the Libertarian Party of California. The... MORE

Was the Iraq War About Oil?

Energy, Environment, Resources
David Henderson
Reader warning: If you do not "do" nuance, then please don't read this post and especially don't comment. On this 10th anniversary of the U.S. government's invasion of Iraq, there have been many articles assessing the war. I wrote a... MORE

Acemoglu and Robinson on Global Warming

Energy, Environment, Resources
David Henderson
I'm spending a large part of my day writing a book review of Daron Acemoglu and James A. Robinson's Why Nations Fail. Given the main theme of the book, which I like to focus on in reviews, I can't find... MORE

Nominations for Top Economic Stories of 2012

Energy, Environment, Resources
Garett Jones
Here are three, all good news, more possible:1.  QE3, all hail Scott Sumner.  The ECB's unconventional easings to banks and sovereigns deserve mention as well.  Perhaps someone will make a lot of money betting on high average inflation in the... MORE

Does An Increase in Supply Lead to Higher Prices

Economic Education
David Henderson
Last week, I received an e-mail from the son of a friend of mine. The son is a student at a school in the Northeast. Here's the relevant part of the e-mail: I took a globalization class this past semester... MORE

Murphy on Frum and Global Warming

Energy, Environment, Resources
David Henderson
Earlier this week, Robert Murphy, a frequent writer of Econlib Feature Articles, had an excellent critique of a piece on global warming by David Frum. Were I to quote all the good parts, I would end up quoting almost the... MORE

Obama's War on Coal?

Energy, Environment, Resources
David Henderson
I was working Sunday on a talk I'm giving on October 23 in Dallas on Obama's economic policies. One thing I had taken as given, having talked to a few people who I thought had followed the issue closely, is... MORE

Hanson on "Bankrupt California," Part Two

Energy, Environment, Resources
David Henderson
I promised in yesterday's post to cover the parts of Victor Davis Hanson's article that dealt with other aspects of California. Immigration aside, I found myself agreeing with a number of them and wanting to extend some. 1. Gas prices.... MORE

Freakonomics on Shale Gas

Energy, Environment, Resources
David Henderson
Steve Sexton over at Freakonomics has an excellent piece on shale gas. It lays out some basic economics beautifully. Before I continue, a disclosure: I have invested in a fracking operation in Colorado. I wish I hadn't, but that's another... MORE

Robert Murphy: A New Result on Carbon Taxes

Energy, Environment, Resources
David Henderson
Just about every public discussion of carbon tax swaps implicitly assumes that the distortions emanating from the tax code must decrease if the government begins taxing a negative externality (carbon emissions) and uses the revenue to reduce tax rates on... MORE

A Relook at Enron

Energy, Environment, Resources
David Henderson
But the historian must look deeper. Was Enron really a free-market, capitalistic company even when its apparent self-interest lay elsewhere? Or were profit centers dependent on tax subsidies, advantageous regulation, or checks written on the U.S. Treasury? Was Enron passive... MORE

Indian Fertility: A Bet With John Nye

Energy, Environment, Resources
Bryan Caplan
I think that bad economic policy, not "overpopulation," is India's main economic problem.  But whatever you think about the social effects of population growth, it's clear that Indian fertility is sharply declining.  I expect this rapid decline to continue, but... MORE

Gains from Exchange

Economic Education
David Henderson
Last month I received this e-mail from a student I taught in the Spring quarter at the Naval Postgraduate School: Today my [deleted so as not to identify the instructor] instructor pointed out that there was a transfer of wealth... MORE

Jenkins on CAFE and GM

Regulation
David Henderson
Holman Jenkins has hit a home run with his analysis in today's Wall Street Journal of the CAFE (Corporate Average Fuel Economy) mess. It's titled "GM Faces Its Own Regulatory Cliff." I've written about this here, here, here, and here.... MORE

Failure to Arbitrage: Gasoline Markets

Energy, Environment, Resources
David Henderson
Andrew P. Morriss and Donald J. Boudreaux have an excellent piece in today's Wall Street Journal, which, by the way, has several excellent pieces. (More on that in posts later today.) It's titled "A Coca-Cola Solution to High Gas Prices."... MORE

Some Economics of Sanctions on Iran

International Trade
David Henderson
The experience with sanctions on Iran suggests some of the difficulties. In that case, the internal group likely to benefit most from sanctions is the Pasdaran, or Revolutionary Guards, which, coincidentally, may also prove to be the group most in... MORE

Robert Murphy on Global Warming

Energy, Environment, Resources
David Henderson
Robert Murphy has a first-rate piece on global warming in which he covers some important new ground. First, here's ground he and I (in a post on his earlier article) have already covered but he says it particularly well: Yet... MORE

Bob Murphy's Critique of Bill Nordhaus

Energy, Environment, Resources
David Henderson
In March, I had a post about William Nordhaus's article in the New York Review of Books, an article in which he responded to claims by 16 scientists who are global warming skeptics. That post gave rise to a lot... MORE

Eugenics, Malthusianism, and Trepidation

Economic Philosophy
Bryan Caplan
The Nazis were eugenicists and Malthusians (see Mein Kampf, chapter 4).  They wanted to murder "the inferior" because they were convinced there wasn't enough food to go around.  The Malthusianism told them that millions had to die; the eugenics told... MORE

Are Resources Exhaustible?

Energy, Environment, Resources
David Henderson
If resources are not fixed but created, then the nature of the scarcity problem changes dramatically. For the technological means involved in the use of resources determines their creation and therefore the extent of their scarcity. The nature of the... MORE

The Problem with a Variable Tax on Gasoline

Energy, Environment, Resources
David Henderson
"Let's make our demand for gasoline even more inelastic." Other economists suggest a gasoline tax that would increase as gasoline prices fall toward a predetermined floor and decrease as pump prices rise above it. This way, OPEC countries would be... MORE

Nordhaus's Global Warming Graph

Energy, Environment, Resources
David Henderson
In a recent article in the New York Review of Books, Yale University economist William Nordhaus presents a graph showing changes in global mean temperatures from 1880 to 2011. Take a look. The data appear to be annual and he... MORE

Bob Murphy on the Heartland Institute

Energy, Environment, Resources
David Henderson
The ever-productive Bob Murphy, a regular at Econlib Feature Articles, has a good article today on "L'Affair[e] Heartland." In it, he reminds the reader to read Megan McArdle's excellent reporting on the issue. One excerpt: Not only did McArdle keep... MORE

Gasoline "Demand:" Find the Flaw

Economic Education
David Henderson
If the Department of Energy is to be believed, weekly gasoline demand has fallen 7% on average from a year ago, to its lowest level since 2001. But few market observers believe it. The Energy Information Administration's weekly report on... MORE

David Friedman on Nordhaus and Boyer

Energy, Environment, Resources
David Henderson
[E]arth's climate was not designed for us, hence there is no a priori reason to assume that large negative results due to a few degrees of warming are more likely than large positive ones. This is from David Friedman's latest... MORE

Gold and Oil Prices

Energy, Environment, Resources
David Henderson
Oil prices aren't high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be "normal". And, because gasoline prices are low... MORE

James Manzi Watch

Books: Reviews and Suggested Readings
Arnold Kling
In the Journal of Economic Perspectives, Paul Joskow writes, a sensible deployment strategy is to combine a long-run plan for rolling out smart-grid investments with well-designed pilots and experiments. Using randomized trials of smart grid technology and pricing, with a... MORE

Does Obama Bear Responsibility for the Increased Gasoline Price?

Energy, Environment, Resources
David Henderson
Cato Institute scholars Peter van Doren and Jerry Taylor write that President Obama is not responsible for the spiraling price of gasoline. They correctly blame the price increase on the increase in the price of oil. They focus on the... MORE

Solar Power Update

Energy, Environment, Resources
Arnold Kling
MIT Technology Review reports, By the end of the decade, manufacturers in the United States could make solar panels that are less than half as expensive as the ones they make now. Would that be so impressive? Compared with Moore's... MORE

O'Reilly and Dobbs to Obama: Be More Socialist

Energy, Environment, Resources
David Henderson
I'm sitting in my hotel room in Chiang Mai, Thailand watching The O'Reilly Factor. I might as well have been watching Amy Goodman's Democracy Now! The content was almost indistinguishable. O'Reilly and Dobbs were saying that Obama should be taking... MORE

Happy Birthday, Eugen and Julian

Austrian Economics
David Henderson
As the NBER web site points out, February 12 is the birthday of economists Eugen Bohm-Bawerk and Julian Simon. Here is the bio of Bohm-Bawerk in The Concise Encyclopedia of Economics. One highlight from that bio: Böhm-Bawerk was also one... MORE

Lessons from Solyndra

Central Planning vs. Local Knowledge
David Henderson
An even more serious problem concerns the restructuring of the original Solyndra loan guarantee, a move that placed new, private investors at the front of the line in the event of a default. The result was that the government's (i.e.,... MORE

My University of Rochester Talk

International Trade
David Henderson
On Thursday evening, Feb. 9, I'll be giving a public talk at the University of Rochester in Rochester, New York. It will go from 7:30 to 9:00, with ample time during that time period for Q&A. The talk is titled:... MORE

Alex Tabarrok on Innovation

Energy, Environment, Resources
Arnold Kling
At The Atlantic. The U.S. Department of Energy, for example, estimates that small and environmentally friendly hydro-electric projects could generate at least 30,000 MWs of power annually. That's equivalent to the generating capacity of about 30 nuclear power plants. Moreover,... MORE

Outsourcing our Carbon Emissions

Energy, Environment, Resources
Arnold Kling
The blogger at The Oil Drum writes: We are dealing with a large number of countries with very different energy intensities. The big issue would seem to be outsourcing of heavy manufacturing. This makes the energy intensity of the country... MORE

Solar Power

Energy, Environment, Resources
Arnold Kling
Joshua Gans writes, What interested me more was the growing evidence that solar energy might be subject to a Moore's Law rate of improvement. According to Ramez Naam in Scientific American, the cost of solar photovoltaic models has been falling... MORE

Bet on Oil Prices

Energy, Environment, Resources
David Henderson
In my executive MBA class yesterday, the one I do by video teleconference, I covered Bob Murphy's piece on oil prices as an application of some of the economics of futures markets. One part of Murphy's article that I highlighted... MORE

If Timothy Taylor were Energy Secretary

Energy, Environment, Resources
Arnold Kling
He would champion the Drill-Baby Carbon Tax. On one side, there would be a national commitment to move ahead with all deliberate speed in developing the vast U.S. fossil fuel energy resources that are now technologically available. On the other... MORE

Caught My Eye

Trade Barriers
Arnold Kling
Timothy Taylor writes, The single most costly trade barrier concerns rules against importing ethanol. The fact that such rules exist at all, of course, strongly suggests that the key issue in ethanol policy is not how much gasoline we can... MORE

David Friedman on Global Warming

Cost-benefit Analysis
David Henderson
After about a 3-week hiatus, David Friedman is blogging again. And the first one he did after starting is excellent. It's on global warming. Here's the opening paragraph: The argument for large and expensive efforts to prevent or reduce global... MORE

Me on KQED FM on Friday

Business Economics
David Henderson
I'll be on KQED-FM (San Francisco) on Friday, September 2 sometime between 9:00 and 10:00 a.m. (PDT). The topic? Solyndra, the welfare-receiving corporation that suspended operations yesterday and plans to declare bankruptcy. UPDATE: Well, when it came to policy, it... MORE

A Day That Should Live in Infamy

Regulation
David Henderson
Today is the 40th anniversary of President Nixon's announcement of price controls on the American economy. He imposed an immediate freeze on all wages and prices that lasted for 90 days. Then he went through the various phases of control,... MORE

Democracy in America, 2011

Energy, Environment, Resources
Arnold Kling
The WSJ reports, Energy Secretary Steven Chu came out swinging Friday against a House bill that would repeal a 2007 federal law effectively outlawing older forms of incandescent bulbs... "We are taking away a choice that continues to let people... MORE

Murphy to U.S. Government: Sell Assets

Fiscal Policy
David Henderson
Do you think that if the U.S. government doesn't take on more debt in August, it will have to raise taxes, cut spending, use the Ron Paul/Dean Baker solution of having the Federal Reserve Bank extinguish government bonds, or default... MORE

Worth Reading

Energy, Environment, Resources
Arnold Kling
Michael Lind on the abundance of fossil fuels. Jason Collins on Oded Galor's theory of population, genetics, and economic growth. More on Galor from Tyler Cowen. Megan McArdle on the failure of Obamacare to enlist the uninsured with pre-existing conditions.... MORE

UCS's Flawed Economic Reasoning

Energy, Environment, Resources
David Henderson
Last week, I received a request from the Union of Concerned Scientists to sign a letter asking the government to impose even higher miles-per-gallon standards on cars. The letter explains: Last year, the Environmental Protection Agency (EPA), the National Highway... MORE

Liberty, Population, and Cognitive Dissonance

Energy, Environment, Resources
Bryan Caplan
My target essay at this month's Cato Unbound is up.  From the intro:People have been fretting about the "population problem" for at least fifty years. But over those five decades, the perceived problem has practically reversed. From the sixties to... MORE

Robert Solow on Sustainability

Energy, Environment, Resources
David Henderson
In the comments on my post on sustainability, commenter Bill referenced a talk by Bob Solow in 1991. It's quintessential Solow. The talk has his trademark sense of humor and his trademark clarity. A few of his points: 1. Like... MORE

David Friedman on "Sustainability"

Energy, Environment, Resources
David Henderson
As I mentioned in an earlier post, my university is big on "sustainability;" it has just been having an extended event designed to boost the idea. I responded to an email urging faculty members to introduce sustainability into one of... MORE

A Problem With Minimum Requirements

Central Planning vs. Local Knowledge
David Henderson
"To rely upon a reserve requirement for the meeting of cash-withdrawal demands of banks' customers is analogous to trying to protect a community from fire by requiring that a large water tank be kept full at all times: the water... MORE

Energy Subsidies

Energy, Environment, Resources
Arnold Kling
Tim Carney writes, Environmental policy is not driven by tree-hugging activists, earnest liberal bloggers, or ecologically minded citizens. Instead, it flows from the lobbyists and executives of well-connected multinational corporations and built-for-subsidy startups that see profit in the loan guarantees,... MORE

What is Cornucopia? Boudreaux vs. DeLong

Energy, Environment, Resources
David Henderson
Blogger and GMU economics professor Don Boudreaux has challenged blogger and Berkeley economics professor Brad Delong to a bet. Brad has turned down the bet and proposed his own bet, a bet that Don has not accepted. It seems to... MORE

My Review of Hubbard and Navarro

Energy, Environment, Resources
David Henderson
From "Good on Taxes, Bad on Trade," my review of Glenn Hubbard's and Peter Navarro's book, Seeds of Destruction in the latest Policy Review: The strongest chapter, by far, is the one titled, "Why You Can't Stimulate Your Way to... MORE

Greens, The Road, and Left Behind

Energy, Environment, Resources
Bryan Caplan
When I watched The Road, it seemed nearly apolitical.  At the most abstract level, you could take it as a defense of Hobbes against Locke.  But it's hard to see how liberals, conservatives, libertarians, or anyone else would see it... MORE

Betting Stakes and Julian Simon

Energy, Environment, Resources
David Henderson
When writing my previous post on my own experience with stakes in betting, I couldn't find a bet that I had thought I offered. Now I have. In a Red Herring article in June 1998, at http://www.davidrhenderson.com/articles/0698_inmemoriamjuliansimon.html, "In Memoriam: Julian... MORE

Raising the Stakes

Energy, Environment, Resources
David Henderson
There's a lot of discussion on this blog on raising the stakes. For the record, I offered to bet Paul Krugman $1,000, in a Simon-Ehrlich kind of bet, on the future price of oil. He didn't respond. (See http://www.davidrhenderson.com/articles/0297_isthereanewdigital.html and... MORE

Portrait of an Elitist

Energy, Environment, Resources
Arnold Kling
In today's business section, the Washington Post profiles energy secretary Steven Chu. Aides say Chu's ability to understand and absorb technical information sets him apart from the previous 11 energy secretaries... "People don't appreciate what's going on," he says, "that... MORE

Economists Signing Petitions

Energy, Environment, Resources
David Henderson
Dan Klein and David Hedengren have a piece at Cato on economists signing petitions. One of their basic findings is how little overlap there is between the group of economists who sign anti-freedom petitions and the group who sign pro-freedom... MORE

Since there's a lot of interest in my case against high-IQ misanthropy, here's a fuller discussion from Selfish Reasons to Have More Kids:You Don't Have to Raise the Average to Pull Your Weight        Eighty percent of success is showing... MORE

Good News about the Oil Spill

Energy, Environment, Resources
David Henderson
Terry Hazen, a microbial ecologist at the Lawrence Berkeley National Laboratory who published a groundbreaking study of microbial activity Tuesday in the online research journal Science Express, has had a team of researchers out in the Gulf since May 25... MORE

Oil Bubble Talk is Back

Energy, Environment, Resources
Arnold Kling
CNBC quotes Peter Beutel, I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn't be anywhere near where it... MORE

Two Tyler Retweets

Finance: stocks, options, etc.
Arnold Kling
The sole purpose of this post is to retweet two of Tyler Cowen's assorted links. 1. How to tell when a CEO is lying. I was expecting to click through and read, "His lips are moving," but in fact it... MORE

Locavores vs. Basic Economics

Central Planning vs. Local Knowledge
Arnold Kling
Steven Landsburg writes, How many grapes were sacrificed by growing that California tomato in a place where there might have been a vineyard? How many morning commutes are increased, and by how much, because that New York greenhouse displaces a... MORE

Exacerbating Problems Always

Regulation
David Henderson
First, the Environmental Protection Agency can relax restrictions on the amount of oil in discharged water, currently limited to 15 parts per million. In normal times, this rule sensibly controls the amount of pollution that can be added to relatively... MORE

Green Jobs!

Energy, Environment, Resources
Arnold Kling
The latest announcement about U.S. industrial policy says, Abengoa SA... was offered a $1.45 billion loan guarantee by the U.S. Department of Energy to build a 250-megawatt solar plant in Arizona, and Abound Solar Manufacturing was offered a $400 million... MORE

Economics, Libertarianism, and the BP Spill

Energy, Environment, Resources
Arnold Kling
Ed Glaeser writes, Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But... MORE

Food Pessimism and Liberty: Rhetoric I'll Bet Against

Energy, Environment, Resources
Bryan Caplan
Tyler makes a strong case that libertarians should take "the new food pessimism" seriously:The Julian Simon-savvy crowd that reads MR might not be so impressed, but I wouldn't write off these worries so quickly...  Note that agriculture and land markets are... MORE

Focusing Illusion, Climate Change, and Demagoguery

Energy, Environment, Resources
Bryan Caplan
While reading Schkade and Kahneman's "Does Living in California Make People Happy?," I was shocked to discover the paper's underlying agenda:The original motivation for this study concerned the accuracy with which people could predict the effect of a specified change... MORE

Are Americans Really Getting Less Green?

Energy, Environment, Resources
Bryan Caplan
Steven Hayward says that American environmentalism is in steep decline:In 1990, according to an ABC News/Gallup survey series, 75 percent of Americans said they considered themselves to be environmentalists, with only 24 percent saying they did not. The numbers have... MORE

Will Iceland's Volcano Boost Geoengineering?

Energy, Environment, Resources
Bryan Caplan
When Mount Pinatubo erupted in 1991, I don't think I even heard about it.  But this one event depressed global temperatures by about 1 degree Fahrenheit.  Given all the attention the latest volcano's getting, I thought the predicted effect might... MORE

Expressive Recycling

Energy, Environment, Resources
Bryan Caplan
Like me, Tyler Cowen often believes that people's beliefs are irrational and their motives are expressive.  But unlike me, he doesn't think that low stakes are an important reason for these tendencies.  In fact, he delights in the counter-intuitive view... MORE

The Gist of Julian Simon

Energy, Environment, Resources
David Henderson
In a comment on Bryan Caplan's post today, Steve asks: Could someone please provide a distillation of Simon's work? The link is to his website, where all I can find is a list of published papers. I gave such a... MORE

The Next Bubble?

Energy, Environment, Resources
Arnold Kling
Nick Schulz and I write, If Congress and the president want to push the country in a greener direction, there are easier -- and safer -- ways of doing it. Put a price, in the form of a tax, on... MORE

Borenstein's Biased Reporting

Energy, Environment, Resources
David Henderson
I posted last week on Andrew C. Revkin's and John M. Broder's New York Times news story, to show how clever journalists can bias the reader at every turn. In today's local Monterey County Herald appears an Associated Press news... MORE

Murphy on Geo-Engineering

Energy, Environment, Resources
David Henderson
The option of geo-engineering makes it much safer to continue using fossil fuels and thereby pass on extra trillions of dollars of wealth to the next generation at possibly little or even no cost. So writes Robert Murphy in the... MORE

NY Times' Non-Reporting Reporting

Energy, Environment, Resources
David Henderson
If you want to see a great example of a purported news story in which the reporters try to bias the story one way, check out today's New York Times story on Climategate. I preface this by saying that I... MORE

I Hate This Story

Energy, Environment, Resources
Arnold Kling
I've written about it before, but Wired reminds me, Startup companies that enjoy DOE support, most notably Tesla Motors and Fisker Automotive, have an extraordinary advantage over potential competitors since they have secured access to capital on very cheap terms.... MORE

Morning Commentary

Finance: stocks, options, etc.
Arnold Kling
Bill Easterly is not of fan of military nation-building in Afghanistan. He writes, critics of top-down state plans for economic development are also not fans of top-down state plans for military development. If the Left likes the first, and the... MORE

The Malevolent Invisible Hand

Energy, Environment, Resources
Bryan Caplan
Lately my colleague Dan Klein has presented new evidence that the "invisible hand" was more central to Adam Smith's thought that most scholars now believe.  Perhaps that's why this passage from Will and Ariel Durant jumped out at me.  It's... MORE

Climate Science and Macroeconomics

Economic Methods
Arnold Kling
Nick Rowe compares and contrasts climate science with macroeconomics. After listing some similarities, he turns to differences. D1. Macroeconomists are trying to explain people; climate scientists aren't. People are harder to explain. In particular, people's behaviour depends on what they... MORE

The Economics of Electric Cars

Energy, Environment, Resources
Arnold Kling
I have begun reading Startup Nation, a book about Israeli entrepreneurialism. Unfortunately, the first anecdote is about an attempt, requiring huge capital commitments and considerable government intervention, to create an infrastructure for electric cars. The idea is to build a... MORE

They Laughed at Me When I Said it

Energy, Environment, Resources
Arnold Kling
The Dominion Post reports The eco-pawprint of a pet dog is twice that of a 4.6-litre Land Cruiser driven 10,000 kilometres a year, researchers have found. Thanks to a reader for the pointer (no pun intended).... MORE

Trip to Yosemite

Energy, Environment, Resources
David Henderson
I'm heading for Yosemite later this afternoon. My goal: get to the top of Half Dome. I made it almost the whole way last year. If I get to the cables (in this picture from the web--that's not me; that's... MORE

Lie to Me, 2

Energy, Environment, Resources
David Henderson
Back in February, I posted an enthusiastic entry on the TV show, "Lie to Me." I enjoy the show, although I'm not sure how scientific the basis is for detecting whether a person's lying based on movements of eyes, mouth,... MORE

The Economics of "Going Green"

Energy, Environment, Resources
Arnold Kling
A reporter called me to give the "anti" side of the case for going "green." It's not hard. It is a matter of basic economics. 1. Suppose that a gallon of gas costs $2.50 and an hour of labor costs... MORE

True or False?

Energy, Environment, Resources
David Henderson
Econlog is a blog devoted to economics education. So here's a quote from a recent book. Being producers, the advisory group was more concerned with increasing production--for instance, by opening up the Arctic to more development--which would presumably increase its... MORE

Krugman on Climate

Energy, Environment, Resources
David Henderson
Today, Paul Krugman's New York Times column is one that I don't hate. I don't love it either, but it actually has some strengths as well as weaknesses. Strengths Krugman writes: Yes, limiting emissions would have its costs. As a... MORE

Medicare and Overfishing

Economics of Health Care
Arnold Kling
Vermont Public Radio reports, [Robert] Kuttner says the first red herring about single-payer health care is that it limits choice for the patient, and if you want proof look at Medicare. Indeed, Medicare does very little to restrict patients' access... MORE

Will Obama Consider Geoengineering?

Energy, Environment, Resources
Bryan Caplan
EconLog readers will already be familiar with geoengineering.  Now Obama's science advisor says the idea on the table:John Holdren told The Associated Press in his first interview since being confirmed last month that the idea of geoengineering the climate is... MORE

James Hamilton on the Oil shock of 2007-2008

Energy, Environment, Resources
Arnold Kling
Highly Recommended. Back in September, when Congress was getting to ready to vote on TARP, I was in a Congresswoman's office arguing futilely against it. One of my lines was that I thought that most people were more adversely affected... MORE

Clyburn Undercuts Own Case

Energy, Environment, Resources
David Henderson
In an otherwise good article in Friday's Wall Street Journal, "How Can Greens Make Themselves Less White?", Journal writer Naomi Schaefer Riley fails to make a telling point against Democratic Rep. James Clyburn. Riley points out that Clyburn is trying... MORE

Greenspan and CAFE

Monetary Policy
David Henderson
The latest issue of The Freeman: Ideas on Liberty carries two articles written or co-authored by me. The first, "Was Money Really Easy Under Greenspan?," by Jeff Hummel and me, goes after the view that Greenspan conducted a loose monetary... MORE

Tysonomics

Fiscal Policy
David Henderson
In today's Wall Street Journal, Laura D'Andrea Tyson has a defense of "Obamanomics." At least that's the title the Journal gave it. The article is worth looking at for a number of reasons: 1. In discussing President Obama's spending plans,... MORE

The Oil Cycle

Energy, Environment, Resources
Arnold Kling
In Catherine Rampell's list of sectors that had the greatest sales growth last year, I was struck by how many of them are energy-related. Assuming that farming was driven by ethanol, the top four sectors were essentially oil plays. Oil... MORE

Plastic Logic

Central Planning vs. Local Knowledge
David Henderson
In coastal California, where I live, various cities have weekly publications that are distributed at a zero price, have a cutting-edge, vaguely (sometimes explicitly) leftist slant, and almost always are uncritically "environmentalist." They rarely take on any policy that most... MORE

Jenkins on CAFE

Energy, Environment, Resources
David Henderson
My favorite Wall Street Journal columnist, Holman W. Jenkins, Jr., has another good column today on how the Corporate Average Fuel Economy law hampers the Detroit-based auto companies (note: not the U.S. auto industry.) Jenkins points out that in an... MORE

Tom Friedman's Gas Tax

Energy, Environment, Resources
David Henderson
I think people make the worst cases for their policy proposals when they write or speak as if they think there is no credible intellectual argument against their position. A case in point is a column in today's New York... MORE

John Baden Joins the Pigou Club

Energy, Environment, Resources
Arnold Kling
He writes, Rather than a bailout, free the Big Three. Dump CAFE altogether and replace it with an honest and surely more efficient energy tax. Mr. Obama could transcend stalemates and end the 30-year-old fraud of our CAFE fuel-economy rules.... MORE

Two Bad Ideas

Economics of Education
Arnold Kling
Louis Gerstner writes Abolish all local school districts, save 70 (50 states; 20 largest cities). Some states may choose to leave some of the rest as community service organizations, but they would have no direct involvement in the critical task... MORE

Energy Independence

Energy, Environment, Resources
David Henderson
Unfortunately, or fortunately, depending on how you look at it, presidential campaign years give us economists a lot of "teaching moments," that is, chances to educate the public about basic, important economic truths. This campaign year is no different. I... MORE

Gasoline Delivery: Inside the Black Box

Energy, Environment, Resources
Bryan Caplan
Yesterday I had two lucky breaks at the gas station.  First, they cut the price while I pulling up to the pump.  Second, a delivery man was refilling the station's tanks, which gave me a chance to ask him some... MORE

Questions I Would Like to See Asked

Energy, Environment, Resources
Arnold Kling
I would love to see this question asked at a Presidential debate: If half of the troubled mortgage loans are for non-owner-occupied homes, that is for houses owned by speculators, do your proposals still make sense? My understanding is that... MORE

Two Interesting Things James Hamilton Told Me

Energy, Environment, Resources
Bryan Caplan
Noted energy economist James Hamilton just spoke at GMU. The two most interesting things he said: 1. OPEC has almost no effect on world oil prices; most countries produce less than their quota, and when countries want to produce more,... MORE

Are Refineries Really a Bottleneck?

Energy, Environment, Resources
Bryan Caplan
When I was writing my New York Times column on the gas tax, my editor pushed me to argue that other economists were underestimating the price-sensitivity of the supply of gasoline. I resisted. A wide range of economists seemed to... MORE

Climate Change Discussion

Energy, Environment, Resources
Arnold Kling
At Cato Unbound, Jim Manzi argues for low-cost solutions to climate change. Joseph Romm makes the case that we are headed for catastrophe if we do not do anything. My sense is that over the past year, the debate has... MORE

Oil Econ 101 Revisited

Energy, Environment, Resources
Arnold Kling
Robert Higgs writes, If we were talking about bananas, everybody would see immediately the foolishness of seeking “banana independence.” Nobody would fall for half-baked arguments about our addiction to foreign bananas or our love affair with banana bread. It’s obviously... MORE

Two from Will Wilkinson

Behavioral Economics and Rationality
Arnold Kling
He suggests that there are no limits to growth. In a special issue of the American Economic Review about thirty years ago, some physical chemists wrote that once the energy problem is solved, nothing is scarce. If material X is... MORE

Maybe the Variance of Gas Prices Actually Has Increased

Energy, Environment, Resources
Bryan Caplan
People seem to be searching harder for bargain gas prices. But according to search theory, the reason to search is price variation, not price. On closer examination of pump prices, though, I want to retract my observation that gas price... MORE

Posner Gets Behavioral

Energy, Environment, Resources
Bryan Caplan
Here's something you wouldn't expect Richard Posner to write:I wonder, too, whether the recent decline in U.S. gasoline consumption doesn't represent to some degree an irrational panic reaction. To take a huge loss on the sale of your SUV in... MORE

Will I Win My Oil Bet? The Wolfers Factor

Energy, Environment, Resources
Bryan Caplan
Justin Wolfers says that current price of oil is a better predictor of future oil prices than oil futures markets:And it turns out that they all do worse than one simple forecast: the current oil price. That’s right: the most... MORE

Inconvenient Arithmetic and Engineering

Energy, Environment, Resources
Arnold Kling
Kevin Bullis writes, Over the past couple of weeks, T. Boone Pickens, an oil tycoon, has been using some of his billions to run television ads supporting...what seems to be the biggest wind farm in the country. It would nearly... MORE

Some Denialist Arguments

Energy, Environment, Resources
Arnold Kling
From David Evans. The signature of an increased greenhouse effect is a hot spot about 10km up in the atmosphere over the tropics. We have been measuring the atmosphere for decades using radiosondes: weather balloons with thermometers that radio back... MORE

Expectations and Oil

Energy, Environment, Resources
Arnold Kling
Tyler Cowen asks, Over the two previous days oil fell $10.50 a barrel. By definition this is driven by news about supply and demand but has so much news come out so quickly? Maybe the news is that the political... MORE

Solar Energy Update

Energy, Environment, Resources
Arnold Kling
McKinsey folks write, During the next three to seven years, solar energy’s unsubsidized cost to end customers should equal the cost of conventional electricity in parts of the United States (California and the Southwest) and in Italy, Japan, and Spain.... MORE

Bad News for Me?

Energy, Environment, Resources
Bryan Caplan
New York Mercantile Exchange futures prices actually go out 8 years, and show little decline during that period. As my colleague John Nye suggested this morning, though, a flat nominal price for 8 years with 3% inflation implies a 20%... MORE

Cowen and Simon

Energy, Environment, Resources
Bryan Caplan
I've rarely gained any leverage with Tyler by pointing out his inconsistencies. But I can't resist. Take a look at his first book, In Praise of Commercial Culture. Despite his recent post, this book happily used Julian Simon's refutation of... MORE

Was Julian Simon a Technical Analyst?

Energy, Environment, Resources
Bryan Caplan
Tyler has an especially edifying post on resource scarcity. Most interesting point raised:It's amazing how much, on this issue, some people resort to what can only be called technical analysis -- inferring future price movements from past trends -- when... MORE

Long-Run Commodity Prices: Essential Readings

Energy, Environment, Resources
Bryan Caplan
In chapter 1 of The Selfish Reason to Have More Kids, I'm going to spend a little time discussing the largely imaginary problem of increasing resource scarcity. I knew the general pattern from folks like Julian Simon, but I wanted... MORE

Oil: Some Tentative Conclusions and Open Issues

Energy, Environment, Resources
Arnold Kling
James Hamilton writes, The "fundamentals" price of oil depends on a number of factors that cannot be perfectly foreseen. Among these are (1) will the world enter a deep and prolonged recession in 2007, and (2) will global oil production... MORE

A Question for Paul Krugman

Finance: stocks, options, etc.
Arnold Kling
Early in 2007, the price of oil was $60 a barrel. Recently, it has been above $130 a barrel. Which of the following does Paul Krugman believe: (a) market fundamentals justified $60 a barrel then, and they justify $130 a... MORE

My Model of the Oil Market: Option Value

Energy, Environment, Resources
Arnold Kling
Near the end of a "tiny theoretical paper," Paul Krugman writes, the actual data we have on crude oil don’t show the signatures of a market driven by speculative demand. Inventory data don’t show a big accumulation; and the market... MORE

Spotted on the Gas Pump at the Local Texaco

Energy, Environment, Resources
Bryan Caplan
1. A big sign saying that due to the increase in "drive-offs," customers using cash now have to pay in advance. 2. A big sign telling customers that the station will soon adopt a discount for cash (and the Texaco... MORE

30-Year-Old Gasoline Mystery Solved

Energy, Environment, Resources
Bryan Caplan
During the last energy crisis in the 70s, adults talked a lot about fuel efficiency. Kids often asked, "If gas costs more, why don't you just drive faster?" Adults usually responded, "You actually burn more gas that way." And then... MORE

Are My Days of Freedom Numbered?

Energy, Environment, Resources
Arnold Kling
The Guardian reports James Hansen, one of the world's leading climate scientists, will today call for the chief executives of large fossil fuel companies to be put on trial for high crimes against humanity and nature, accusing them of actively... MORE

The Dollar and the Gas Pump

Energy, Environment, Resources
Bryan Caplan
Oil is sold on world markets, and the dollar is now very weak. What would the dollar price of gas be today, if the dollar were as strong as it was back in 2002? Here's a back-of-the-envelope calculation (gas price... MORE

Religious Education

Energy, Environment, Resources
Arnold Kling
S.1389 proposes Climate Change Education Act - Requires the Director of the National Science Foundation to establish a Climate Change Education Program to: (1) broaden the understanding of climate change, possible long and short-term consequences, and potential solutions; (2) apply... MORE

Entrepreneurs, Government, and Energy

Energy, Environment, Resources
Arnold Kling
The Times (London) reports on a start-up that is using genetically altered bacteria to produce oil, “Our plan is to have a demonstration-scale plant operational by 2010 and, in parallel, we’ll be working on the design and construction of a... MORE

Domestic Issues

Income Distribution
Arnold Kling
Income distribution, education, health care, and oil prices. David Henderson rushes in where few right-of-center economists dare to tread. He talks about the income distribution. The average number of earners per family for the top quintile is 2.16, almost three... MORE

Price Controls on Gas: Is the Public Getting What It Wants?

Energy, Environment, Resources
Bryan Caplan
According to a new Gallup survey, 53% of Americans want price controls on gas. So it looks like the democratic process is failing to deliver the policies the public wants. But wait: 79% of the public opposes gas rationing. Since... MORE

What's the Cheapest Way to Reduce Global Temparture By 3°C?

Energy, Environment, Resources
Bryan Caplan
This is a question I asked Robin at today's lunch. Soon afterwards, I learned that AEI just had the first of a series of conferences on this topic, known as "geoengineering":For more than twenty years, policymakers have struggled to find... MORE

Irreversible Climate Change Policy

Energy, Environment, Resources
Arnold Kling
Megan McArdle writes, Ryan Avent has been doing some great posting on cap and trade versus carbon taxes. With all information known, the two are theoretically identical. But in the real world they will differ; the question is how much.... MORE

Climate Change vs. Entitlements

Energy, Environment, Resources
Arnold Kling
Megan McArdle writes, Certainly, the long-term economic outlook is extremely uncertain, but I’m not sure what “who knows!” is a better answer to cumulatively worsening climate problems than to cumulatively worsening fiscal problems. Her point is that ignoring climate change... MORE

Did Japan's Gas Tax Holiday Work?

Energy, Environment, Resources
Bryan Caplan
A reader sent me a gated article claiming that Japan's version of the gax tax holiday passed roughly 100% of the savings on to consumers. But I can't find any confirmation on google. Does anyone know anything about this? Links?... MORE

Various Technology Readings

Energy, Environment, Resources
Arnold Kling
MIT professors on biosolar cells, life extension, and other hopeful technologies. The discussions are extremely terse, and for that reason somewhat unsatisfying. Freeman Dyson writes, in the context of a review of William Nordhaus' book on global warming, I consider... MORE

Cap and Trade: Be Afraid

Energy, Environment, Resources
Arnold Kling
Peter Orszag writes, because of the long-term nature of climate change, the key issue from an environmental perspective involves the long-term emissions and concentration paths of greenhouse gases, not the year-to-year fluctuations in emissions. The most cost-effective cap-and-trade design would... MORE

Forward prices and oil

Energy, Environment, Resources
Arnold Kling
Charles Engel writes, The amount of oil pumped out of the ground doesn’t just depend on the current price. If I don’t pump the oil today, I can pump it tomorrow. Tomorrow’s price matters, bubble or no bubble. Let’s start... MORE

Ignorant Masses, Dogmatic Elites

Energy, Environment, Resources
Arnold Kling
Concerning polling results on the issue of global warmaing, Andrew Gelman writes, Among college grads, there is a big partisan divide between Democrats and Republicans. Among non-graduates, the differences are smaller. This is completely consistent with research that shows that... MORE

Oil: Where Krugman and I Disagree

Energy, Environment, Resources
Arnold Kling
As expected, Paul Krugman clarifies his thinking. there are only two things you can do with the world's oil production: consume it, or store it. If the price is above the level at which the demand from end-users is equal... MORE

Oil, Inventories, and Bubbles

Energy, Environment, Resources
Bryan Caplan
Krugman says that since we're not building up inventories, the high price of oil isn't a bubble:The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding -- an increase in... MORE

The Cynical Case for the Gas Tax Holiday: From EconLog to the NYT

Energy, Environment, Resources
Bryan Caplan
I've finally made the Gray Lady: Today's New York Times features my op-ed inspired by Sunday's post, "I'll Shill for Hillary." I hope critics don't misrepresent me as an economic apostate; I'm not dissenting from the standard analysis, just taking... MORE

Environmental Disasters

Energy, Environment, Resources
Arnold Kling
According to Iain Murray's new book, the worst disasters come from environmental policy. It is remarkable the magnitude of the harm caused by government relative to the harm caused by the private sector from which it protects us. My co-blogger... MORE

Jim Hamilton Uses Murray Rothbard's Favorite Epithet

Energy, Environment, Resources
Bryan Caplan
I never thought of these two economists at the same time, until Hamilton called the 2005 Energy Bill "monstrous"!As a result of ethanol subsidies and mandates, the dollar value of what we ourselves throw away in order to produce fuel... MORE

The Simon-Ehrlich Rematch: Was There Any Wheat Amongst the Chaff?

Energy, Environment, Resources
Bryan Caplan
You've probably heard about the famous Simon-Ehrlich wager, but did you know the Ehrlich asked for a rematch? Paul Ehrlich and Steve Schneider proposed to bet $1000 on each on the following:1. The three years 2002-2004 will on average be... MORE

Energy Scenarios

Energy, Environment, Resources
Arnold Kling
I spell out my conjectures. ScenarioMost Economical TimeframeRemarksCarbon Competition2008-2020Cheapest energy sources, except for political barriersConservation2008-2015Smarter electric grid, better car batteriesNu-cu-lar2013-2030It works, but at what risk?Franken-fuels2020 and beyondThe most likely revolutionSolar Singularity2025 and beyondHope it happens... MORE

Who Owns Oil

Energy, Environment, Resources
Arnold Kling
Nansen G. Saleri writes, Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies. Even a 10% gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional... MORE

Kurzweil on Solar Power

Energy, Environment, Resources
Arnold Kling
LiveScience quotes Ray Kurzweil. "It is doubling now every two years. Doubling every two years means multiplying by 1,000 in 20 years. At that rate we'll meet 100 percent of our energy needs in 20 years." Simple. Next problem? This... MORE

Cap and Rent-Seek

Energy, Environment, Resources
Arnold Kling
The Washington Post reports, Under pressure from agriculture industry lobbyists and lawmakers from agricultural states, the Environmental Protection Agency wants to drop requirements that factory farms report their emissions of toxic gases, despite findings by the agency's scientists that the... MORE

Solar Power Arithmetic

Energy, Environment, Resources
Arnold Kling
Marc Danziger writes, For a 3KW installation (about 275 sf of cells), the total cost to me would be approximately $18K. Let us use my favorite asset valuation equation: profitability = rental rate plus appreciation rate minus interest cost The... MORE

Ron Bailey on Sustainability

Energy, Environment, Resources
Arnold Kling
He sums up a lot of information including. the amount of land needed to grow enough food to feed a person has plummeted from about one-and-a-quarter acres in 1950 to about half an acre today. Jesse Ausubel, director of the... MORE

Dogs: I Take it Back

Energy, Environment, Resources
Arnold Kling
When I wrote, Which do you think takes a bigger toll on the environment, owning a dog, or owning an SUV? My bet would be on the dog. I'm thinking of all of the resources that go into dog food.... MORE

Energy Conservation

Energy, Environment, Resources
Arnold Kling
The McKinsey Global Institute likes to beat that drum. They argue that in the U.S. and other developed economies, there is a big opportunity to save energy in lighting. In China and developing regions, the opportunity is more efficient heating... MORE

The Cause of Everything

Energy, Environment, Resources
Arnold Kling
India News reports, The recent cold wave sweeping across Mumbai and other parts of India could be attributed to global warming, experts said Tuesday here at an environmental conference. Thanks to Sean Corrigan for the pointer.... MORE

Venezuela Plays the Oil Card

Energy, Environment, Resources
Arnold Kling
Bloomberg reports, Petroleos de Venezuela SA, the state oil company, cut off sales of crude, gasoline and diesel to Exxon Mobil Corp. in retaliation for the freezing of $12 billion in assets in a legal dispute. Two possibilities: 1. Venezuelan... MORE

Dogs and the Environment

Energy, Environment, Resources
Arnold Kling
John Whitehead discusses environmental taboos, including plastic bags and not cleaning up after your dog. Actually, I think that where I live, at least 10 percent of dog-owners do not clean up after their dogs. But I want to raise... MORE

Moore on Climate Preferences

Energy, Environment, Resources
Bryan Caplan
A year ago, I asked:Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?"While reading Henderson's encyclopedia, I came... MORE

Climate Debate Daily

Energy, Environment, Resources
Arnold Kling
No, I am not planning that here. It's the name of a new web site, which bears a not-coincidental resemblance to Arts and Letters Daily, an old favorite on our blogroll. Current links include a Time Magazine portrait of Lester... MORE

McKitrick on Global Warming

Energy, Environment, Resources
Arnold Kling
Ross McKitrick writes, In a greenhouse, movement of air is diminished, so the radiative portion of the energy drain must intensify. Physics can predict with certainty that in order to increase outbound radiation from a greenhouse, temperature inside the greenhouse... MORE

Inconvenient Truth about Energy

Energy, Environment, Resources
Arnold Kling
Robert Bryce writes, Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez's Venezuela. But the world marketplace doesn't work like that.... MORE

Mankiw on Fairy Godmotherism

Energy, Environment, Resources
Arnold Kling
Greg Mankiw writes, As a former energy secretary during the Clinton administration, Richardson has presumably studied these issues. But here he demonstrates extraordinary ignorance (or perhaps extraordinary disingenuousness) about the economic impact of cap-and-trade systems. By contrast, Obama shows extraordinary... MORE

Iowa's Terms of Trade Improve

Energy, Environment, Resources
Arnold Kling
The Financial Post reports, Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade. At the centre of the imminent food catastrophe is corn - the main... MORE

Global Warming Scorecard

Energy, Environment, Resources
Arnold Kling
According to an unflattering analysis by Douglas Hoyt, climate models have made 1 correct prediction ("win"), 27 incorrect predictions ("losses"), and 4 predictions that cannot be judged either correct or incorrect ("ties"). Of the models' "losses," the one I consider... MORE

Some Responses on Global Warming

Energy, Environment, Resources
Arnold Kling
The response to my global warming question has been mostly either bitter denunciation or support, but few answers. However, Anand Gnanadesikan understands what I am looking for. For example, he recommends this paper. This study highlights the role of water... MORE

Who Are the Climate Scientists?

Energy, Environment, Resources
Arnold Kling
Before I get to that, here is a BBC rebuttal to climate skeptics. The statement that water vapour is "98% of the greenhouse effect" is simply false. In fact, it does about 50% of the work; clouds add another 25%,... MORE

My Global Warming Question

Energy, Environment, Resources
Arnold Kling
I posed it here. what are the most persuasive reasons for believing that the rise in temperature is due to increased atmospheric carbon dioxide?... MORE

More Hawkish than Mankiw

Energy, Environment, Resources
Arnold Kling
A new economics blogger is really keen to hike the gas tax. You may criticize the high-tax ways of Europe, but here the latter is dead right: with taxes at $5-6 a gallon, they are about right in pricing the... MORE

Biofuels Sense and Nonsense

Energy, Environment, Resources
Arnold Kling
The nonsense comes from Robert Zubrin The only way to break the monopoly on the vehicle fuel supply currently held by OPEC is through legislation. Congress should require that all future vehicles sold in the United States be flexible-fueled, capable... MORE

The State of the Oil Market

Energy, Environment, Resources
Arnold Kling
James Hamilton see hope. these numbers convince me that we are likely to see a significant increase in production in 2008, and an economic downturn would surely produce a drop in demand. I'm standing by the assessment I offered last... MORE

The Climate Skeptic

Energy, Environment, Resources
Arnold Kling
I'm not sure why I never came across this site before. It expresses views that are quite close to mine. For example, The modelers begin with certain assumptions about climate that they build into the model. For example, the computers... MORE

Global Warming and CO2

Energy, Environment, Resources
Arnold Kling
Mathematician David Evans writes, After further research, new high-resolution ice core results (data points only a few hundred years apart) in 2000–2003 allowed us to distinguish which came first, the temperature rises or the CO2 rises. We found that temperature... MORE

Pushback on my Skepticism

Energy, Environment, Resources
Arnold Kling
Former frequent commenter General Specific writes, In a subsequent post, I'll consider each of these issues in more detail. In the mean time, Wikipedia has a page up on this topic. And in particular, consider the case of Carl Wunsch,... MORE

Standards of Proof

Economic Methods
Arnold Kling
Bryan writes, isn't Arnold's standard of scientific evidence strangely strict? Few results in economics rest on an "experiment or a naturally-occurring event where the results are extremely unlikely to occur unless X is true." I thought I was simply stating... MORE

Climate Skeptic Movie

Energy, Environment, Resources
Arnold Kling
Katy of Sybil's Star posts The Great Global Warming Swindle, a counter-documentary on Global Warming. It comes across as very persuasive, but I take the view that you can make a persuasive propaganda film for just about any position on... MORE

Roberts' Rule of Ridicule

Energy, Environment, Resources
Bryan Caplan
Here's a gem of ridicule from my colleague Russ Roberts. The National Academy of Sciences reports that divorce is bad for environment, because singles use more resources than couples. Russ exposes this "finding" as a bizarre combination of the obvious... MORE

Solar power--when should it scale?

Energy, Environment, Resources
Arnold Kling
Some recent stories about solar power. 1. Solar concentration technology: A new mechanism for focusing light on small areas of photovoltaic material could make solar power in residential and commercial applications cheaper than electricity from the grid in most markets... MORE

I Like Ike

Energy, Environment, Resources
Arnold Kling
Fortune Magazine reports on Al Gore joining the venture capital firm Kleiner-Perkins: "What we are going to have to put in place is a combination of the Manhattan Project, the Apollo project, and the Marshall Plan, and scale it globally,"... MORE

Switch to Switchgrass?

Energy, Environment, Resources
Arnold Kling
Ricardo Hausmann writes, Rodrigo Wagner and I have estimated that there are some 95 countries that have more than 700m hectares of good quality land that is not being cultivated. Depending on assumptions about productivity per hectare, today’s oil production... MORE

MIT Guys

Energy, Environment, Resources
Arnold Kling
I took a lot of notes on 4 talks given at "MIT on the Road." Unlike the Valley Guys, who think that four new JavaScript function calls constitutes an economic revolution, the MIT folks had lots of interesting things to... MORE

Random Things to Read

Income Distribution
Arnold Kling
Terry J. Fitzgerald in the Minneapolis Fed Review: Fringe benefits have become an increasingly important part of employee compensation over the past 30 years. The BLS estimates that benefits currently account for about 30 percent of employer costs for employee... MORE

Global Warming: The Experts Speak

Energy, Environment, Resources
Bryan Caplan
Yes, I'm an elitist: When laymen and experts disagree, my presumption is that the laymen are wrong and the experts are right. Whether the subject is economics, toxicology, or global warming, that's my starting point (though not always my ending... MORE

Economic Policy, Energy and Otherwise

Energy, Environment, Resources
Arnold Kling
Megan McArdle points to Scott Adams At the risk of oversimplifying, our current energy policy in The United States involves shooting bearded people. At the risk of stepping on a funny line, I would say that our energy policy is... MORE

Carbon Footprints and Central Planning

Energy, Environment, Resources
Arnold Kling
Megan McArdle discusses the issue of whether urban hipsters or suburban ticky-tackies have the more carbon-intensive lifestyle. This is one of those questions for which the answer is too difficult to calculate. For example, there was a story making the... MORE

Why No Oil Shock Effect?

Macroeconomics
Arnold Kling
Olivier Blanchard and Jordi Gali write, Since the 1970s, and at least until recently, macroeconomists have viewed changes in the price of oil as as an important source of economic fluctuations, as well as a paradigm of a global shock,... MORE

Pigou Club Excludes Politicians

Energy, Environment, Resources
Arnold Kling
From a Wall Street Journal story: The biggest political battle in Washington over climate change may not pit Democrats against Republicans. Instead, it could be economists versus politicians. Many academics, even conservatives, favor a tax on carbon emissions. Many lawmakers,... MORE

Freeman Dyson on Global Warming

Energy, Environment, Resources
Arnold Kling
He writes, The warming effect of carbon dioxide is strongest where air is cold and dry, mainly in the arctic rather than in the tropics, mainly in mountainous regions rather than in lowlands, mainly in winter rather than in summer,... MORE

Gas Taxes and Foreign Policy

Energy, Environment, Resources
Arnold Kling
Jerry Taylor and Peter Van Doren write, some observers have argued that if gasoline taxes were increased and other taxes decreased so that overall revenue remained constant, a gasoline tax hike would provide a “double dividend.” That is, it would... MORE

If That Was Their Answer, What Was the Question?

Energy, Environment, Resources
Bryan Caplan
When Democratic candidates were asked, "What would you do to reduce gas prices?," their answers made very little sense. Which brings me to a Jeopardy-inspired puzzle: If those were their answers, what question were they really answering? To what policy... MORE

Democratic Candidates on the Price of Gas: I'm Not Making This Up!

Energy, Environment, Resources
Bryan Caplan
Democratic candidates were asked "What would you do to reduce gas prices?" Their answers, with one exception, should make any economist wince. Here's Dodd, who leads with a long-winded complaint about foreign energy dependence and global warming, and ends with:I've... MORE

Various Links

Political Economy
Arnold Kling
Michael Cannon describes how the self-selection process in politics works against my ideas for reforming health care. “Insulation” is another term for spending Other People’s Money. Politicians are predisposed not to see spending Other People’s Money as a problem, because... MORE

Another Energy Futures Market?

Energy, Environment, Resources
Arnold Kling
Kevin Hassett writes If you want some action in the next few years, you can operate in existing markets. If you want to buy the right to sell your alternative fuel for the equivalent of $70 at any time in... MORE

Climate Models

Energy, Environment, Resources
Arnold Kling
James C. McWilliams writes, For many purposes that are well demonstrated with present practices, AOS models are very useful even without the necessity of carefully determining their precision compared with nature. These models are structurally unstable in various ways that... MORE

Climate Preferences: Seek Life, Seek Heat

Energy, Environment, Resources
Bryan Caplan
In the past, I've asked people if they would prefer their climate to be warmer, cooler, or about the same, and reported that a straw poll of my undergrads leans in a pro-warmer direction. Now a new NBER paper strikingly... MORE

Free Market or Artificial Market?

Energy, Environment, Resources
Arnold Kling
Evidently, there is a company offering a solution to CO2. It is called Planktos. Our primary focus is to restore damaged habitats in the ocean and on land. Through iron-stimulated plankton blooms in the oceans and afforestation projects in Europe,... MORE

Solar Dreams

Energy, Environment, Resources
Arnold Kling
The U.S. Department of Energy reports, Acciona Energy announced on June 7th that Nevada Solar One, a 64-megawatt solar thermal power plant near Boulder City, Nevada, is now online. The new facility is the largest of its type to be... MORE

Armstrong Answers

Energy, Environment, Resources
Bryan Caplan
I emailed Scott Armstrong my questions about his climate change bet, and he graciously responded:The bet is about the size of the forecast errors, not about direction. There are better ways of designing a competition. I had to go for... MORE

Climate Bet Details

Energy, Environment, Resources
Bryan Caplan
Armstrong has just offered Al Gore a $US20,000 ($23,000) bet that the Intergovernmental Panel on Climate Change temperature forecasts are wrong.This passage intrigued me. What counts as "being wrong"? Here's what I learned at the bet's official website:Scott Armstrong of... MORE

Climate Betting

Energy, Environment, Resources
Arnold Kling
Michael Duffy writes, Professor Scott Armstrong is at the Wharton School at the University of Pennsylvania. Dr Kesten Green is with the Business and Economic Forecasting Unit at Monash University. They're experts in forecasting techniques... Armstrong and Green looked at... MORE

Hydrocarbon Pessimism: Get Your Story Straight

Energy, Environment, Resources
Bryan Caplan
A sharp post by David Friedman:One argument is that we are running out of hydrocarbons and should therefore reduce our use of hydrocarbons, reduce energy consumption and switch to alternative energy sources. The other argument is that we are, by... MORE

OPEC and Global Warming

Energy, Environment, Resources
Bryan Caplan
True or false? "OPEC has done more to reduce global warming than all the world's environmental protection agencies put together." Discuss.... MORE

Tyler on Tyson's

Energy, Environment, Resources
Bryan Caplan
Some pretty reasonable remarks by Tyler about the future of Tyson's Corner provoked a remarkably angry set of comments. When I first moved to Virginia ten years ago, I lived across the street from Tyson's II, and Tyler lived in... MORE

The Waste of Recycling

Energy, Environment, Resources
Bryan Caplan
"Recycling is the philosophy that everything is worth saving except your time" - I still don't know who coined the quip, but I repeat it every chance I get. If that's not enough for you, though, here's Mike Munger on... MORE

Freeman Dyson on Biotech and the Future

Energy, Environment, Resources
Arnold Kling
He writes, We can imagine that in the future, when we have mastered the art of genetically engineering plants, we may breed new crop plants that have leaves made of silicon, converting sunlight into chemical energy with ten times the... MORE

A Pigou-Hanson Synthesis for Global Warming

Energy, Environment, Resources
Arnold Kling
Ross McKitrick writes climate models predict that, if greenhouse gases are driving climate change, there will be a unique fingerprint in the form of a strong warming trend in the tropical troposphere, the region of the atmosphere up to 15... MORE

Climate Change, Capital Mobility, and Futures Markets

Energy, Environment, Resources
Arnold Kling
Robert Haddick writes, Unless China, India, and other rapidly expanding economic centers in the developing world fully participate in greenhouse gas reduction efforts, regulatory schemes in the west will simply displace economic activity from the "clean" developed world to the... MORE

Arnold also writes: Pearce himself said, and I agree, that skepticism about climate models should increase one's concern about both tails. That is, the models may under-predict global warming. In fact, that is my number one concern with the issue.... MORE

Climate Change--a Range of Views

Energy, Environment, Resources
Arnold Kling
First, there is Larry Summers. Those who still deny that human activity is warming the planet, or claim that “business as usual” can continue indefinitely without profoundly adverse consequences, are increasingly seen as the moral and intellectual equivalent of those... MORE

Non-normal Distributions

Energy, Environment, Resources
Arnold Kling
David A. Shaywitz reviews Nassim Taleb's views on randomness. The problem, insists Mr. Taleb, is that most of the time we are in the land of the power law and don't know it. Our strategies for managing risk, for instance--including... MORE

Global Warming vs. the Outside Temperature

Energy, Environment, Resources
Arnold Kling
Today, the high school where I teach had an "environmental awareness" seminar. I walked in during the middle, so I did not catch the woman's name. The kids said that she had worked with Al Gore, and that many of... MORE

Pigou Club Gains

Energy, Environment, Resources
Arnold Kling
A sign that the Pigou Club is gaining traction is that the Washington Post has an article called Tax on Carbon Emissions Gains Support that does not mention Greg Mankiw. The article does, however, quote some real, um, knowledge-challenged people... MORE

Rent-seeking and CO2 Emissions

Energy, Environment, Resources
Arnold Kling
Which do you think has higher priority? The Financial Times reports, A European summit agreed to toughen regulations against old-fashioned incandescent bulbs by 2009 as part of a bid to cut greenhouse gas emissions. But earlier in the week officials... MORE

Energy Fallacy

Energy, Environment, Resources
Arnold Kling
A blogger writes If consuming less bad energy is a goal, then moving more citizens over to good energy is a viable part of that goal. To move more people over to good energy, there has to be more readily... MORE

Alternative Energy and Rent-Seeking

Energy, Environment, Resources
Arnold Kling
In this essay, I put together some recent ideas. Subsidizing "good" energy in order to justify using "bad" energy is like eating salad in order to justify eating dessert. It is an exercise in self-deception. ...The most important, inconvenient truth... MORE

Rent-Seeking and Global Warming

Energy, Environment, Resources
Arnold Kling
The Wall Street Journal writes, The emerging alliance of business and environmental special interests may well prove powerful enough to give us cap-and-trade in CO2. It would make Hollywood elites feel virtuous, and it would make money for some very... MORE

The Proactionary Principle

Energy, Environment, Resources
Bryan Caplan
I've already defended blanket skepticism about supposedly impending disasters. Here's a neat essay by Max More defending a "Proactionary Principle" against the far more popular "Precautionary Principle." Intro: "We can call this “the” Proactionary Principle so long as we realize... MORE

A Fun Stupid Question

Energy, Environment, Resources
Bryan Caplan
Daylight savings time is going to be longer this year. When I heard this, I started laughing about the following stupid question: "Will it be good for plants?"... MORE

Social Security and Global Warming

Energy, Environment, Resources
Arnold Kling
Mark Thoma writes, Here's what I've noticed. Some of the same people who argue there's too much uncertainty about the climate 75 years in the future to justify drastic action now use the so-called crisis in Social Security funding 75... MORE

More on Weitzman and Global Warming

Energy, Environment, Resources
Arnold Kling
My latest essay: Weitzman implicitly shares my concern with climate models. Obviously, we have nothing to worry about if the models are too pessimistic. If it turns out that over the next decade global temperatures edge down, or rise more... MORE

Weitzman on Global Warming

Energy, Environment, Resources
Arnold Kling
I love Martin Weitzman's paper. From his conclusion: On the political side of the Stern Review, my most-charitable interpretation of its urgent tone is that the report is an essay in persuasion that is more about gut instincts regarding the... MORE

World GDP and Global Warming

Energy, Environment, Resources
Arnold Kling
Jonah Goldberg writes, Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800 percent, by one estimate. How much of that 0.7 degrees can be laid at the feet of that 1,800... MORE

Oil is Oil

Energy, Environment, Resources
Arnold Kling
Shame on Reason for giving us this essay on "terror-free" oil. I usually give Citgo a pass because most of the company's profits wind up on the hands of the Venezuelan government, headed by the socialist, Castro-loving, anti-globalization, and virulently... MORE

Climate Prediction Markets

Energy, Environment, Resources
Arnold Kling
Mark Bahner writes, The U.S. government should set up a prize fund totaling $400 million, payable in 2031. The prize fund would be open to any U.S. university with accredited science or engineering programs. The fund would be awarded as... MORE

The Pig Club

Energy, Environment, Resources
Arnold Kling
Also in the Milken Institute Review, Jerry Taylor and Peter Van Doren write, A comprehensive study recently published by the nonpartisan International Institute for Sustainable Development estimates that federal and state subsidies for ethanol in 2006 were somewhere between $5.1... MORE

Energy Diversification

Energy, Environment, Resources
Arnold Kling
I thought that the most disagreeable part of the Bush State of the Union Address was on energy. If you want to reduce gasoline consumption by 20 percent, then join the Pigou club and tax gasoline. If you assume that... MORE

Global Warming Heretics

Energy, Environment, Resources
Arnold Kling
Robert M. Carter, et al write, peer review is both too inbred and insufficiently thorough to serve any audit purpose, which we believe is now essential for science studies that are to be used to drive trillion-dollar policies. The authors... MORE

What Kind of Global Warming Skeptic?

Energy, Environment, Resources
Arnold Kling
'Jane Galt' writes, As I read it, the Stern Report basically assumes that there are low diminishing returns to income (it sets the elasticity of marginal utility of consumption, or η, to 1). It strikes me as odd to see... MORE

The Pigou Club's Powerful Members

Energy, Environment, Resources
Arnold Kling
Ron Bailey writes, 77 percent of the world’s known oil reserves are in the hands of state-owned oil companies. Such “companies” do not respond with alacrity to market signals and so are under-investing in new production technologies and even in... MORE

Energy Economics and Politics

Energy, Environment, Resources
Arnold Kling
James Surowiecki writes, Unfortunately, the ethanol produced in the U.S. comes from a less-than-ideal source: corn. Corn ethanol’s “net energy balance”—the amount of energy it yields in proportion to how much energy goes into its production—is significantly lower than that... MORE

The Sixth Warmest Year

Energy, Environment, Resources
Arnold Kling
A major news story is that 2006 is likely to be the sixth warmest year on record. Lubos Motl says that it also is likely to be the coldest year since 2002. I'm not sure what the right unit of... MORE

Hal Varian on the Stern Report

Energy, Environment, Resources
Arnold Kling
He wrote, According to [William] Nordhaus, the assumptions used in the Stern Review imply that per capita yearly consumption in 2200 will be $94,000 as compared with $7,000 today. So, is it really ethical to transfer wealth from someone making... MORE

DeLong, Dasgupta, and Stern

Energy, Environment, Resources
Arnold Kling
On the question of choosing a discount rate to determine the cost of global warming, Brad DeLong chimes in. A consumption-to-output ratio of 77.5% is far from absurd, and so Dasgupta's critique of Stern fails. His mistake is in failing... MORE

The Stern Swindle

Energy, Environment, Resources
Arnold Kling
Concerning the discount rate assumptions used in the Stern climate review, Partha Dasgupta writes, suppose, following the Review, we set delta [the rate of subjective time preference] equal to 0.1% per year and eta [the elasticity of marginal utility with... MORE

Energy in 2050

Energy, Environment, Resources
Arnold Kling
Ron Bailey looks at an article by MIT chemist Daniel Nocera. Nocera suggests, assuming heroic conservation measures that would enable affluent American lifestyles, that "conservative estimates of energy use place our global energy need at 28-35 TW in 2050." This... MORE

Climate Engineering

Energy, Environment, Resources
Arnold Kling
A number of readers have sent in links to articles suggesting that climate engineering may be feasible. For example, T.M.L. Wigley writes, Future climate change may be reduced through mitigation (reductions in greenhouse gas emissions) or through geoengineering. Most geoengineering... MORE

How to Fight Global Warming

Energy, Environment, Resources
Arnold Kling
I elaborate on the idea of using man-made climate change to fight climate change, whether man-made or not. Climate engineering, or what I call Operation Sunscreen, would mean trying to alter the heat absorption properties of the atmosphere. The goal... MORE

Climate Change

Energy, Environment, Resources
Arnold Kling
The latest analysis is known as the Stern report. From chapter one, on climate science: Climate models use the laws of nature to simulate the radiative balance and flows of energy and materials. These models are vastly different from those... MORE

California Energy Tax Proposal

Energy, Environment, Resources
Arnold Kling
Paul Romer writes, Greg Mankiw correctly points out that the tax in Prop 87 is not a Pigovian tax--that is, a tax on oil for the purpose of reducing oil consumption to socially optimal levels. However, the revenues from Prop... MORE

Dissing Ethanol

Energy, Environment, Resources
Arnold Kling
John Baden writes, First, the energy content of ethanol is low when compared with gasoline or diesel. While diesel contains around 140,000 Btu per gallon, and gasoline 115,000 Btu, denatured ethanol contains only 78,000 Btu per gallon. We can’t cheat... MORE

Greg Mankiw Pumps for a Higher Gas Tax

Energy, Environment, Resources
Arnold Kling
He writes, We should raise the tax on gasoline. Not quickly, but substantially. I would like to see Congress increase the gas tax by $1 per gallon, phased in gradually by 10 cents per year over the next decade. He... MORE

Ethanol Enthusiasts

Energy, Environment, Resources
Arnold Kling
Lester B. Lave and W. Michael Griffin write, Brazil, together with some Caribbean nations, is exporting some 200 million gallons of ethanol to the United States annually. But the United States doesn’t make it easy. Brazil pays a 2.5% duty... MORE

California Dreaming

Energy, Environment, Resources
Bryan Caplan
California's latest crazy initiative helps James Hamilton get in touch with his inner Bastiat: The only reason I can imagine for a specific tax on California oil producers is the apparent belief by the proponents of the tax that these... MORE

What is Recycling?

Energy, Environment, Resources
Arnold Kling
Don Boudreaux writes, But I do discard paper plates - for the same reason I recycle my china rather than discard it: it would be wasteful to do otherwise. After all, I could recycle paper plates. Careful washing would enable... MORE

The Sun and Global Warming

Energy, Environment, Resources
Arnold Kling
N. Scafetta and B.J. West write, We find good correspondence between global temperature and solar induced temperature curves during the pre-industrial period such as the cooling periods occurring during the Maunder Minimum (1645–1715) and the Dalton Minimum (1795–1825). The sun... MORE

Energy and Environmental Cost-Shifting

Energy, Environment, Resources
Arnold Kling
Dan Lewis writes, Even if we [in Europe] succeed in making big cuts in carbon emissions, these would not include the pollution created by imports. This is the accounting flaw at the heart of the Kyoto treaty. Globalization means energy-intensive... MORE

Global Warming and Models

Energy, Environment, Resources
Arnold Kling
Richard S. Lindzen writes, Even if we attribute all warming over the past century to man made greenhouse gases (which we have no basis for doing), the observed warming is only about 1/3-1/6 of what models project. His point is... MORE

Empiricism and Global Warming

Energy, Environment, Resources
Arnold Kling
I am reading Frederick Crews' The Follies of the Wise, which collects essays he has written over the years attacking creationists, UFO believers, Freudians, and others. The common thread is his unrelenting empiricism. Greg Mankiw exposed my skepticism on Global... MORE

Carbon Tax Club?

Energy, Environment, Resources
Arnold Kling
Greg Mankiw asks everyone to join what he calls The Pigou Club, by which he means economists who favor carbon taxes or gasoline taxes. The idea is that instead of taxing stuff that we want more of--work, saving, risk-bearing--we should... MORE

Global Warming and Model Dependence

Energy, Environment, Resources
Arnold Kling
J.S. at Environmental Economics writes, We all are aware of the well-funded campaigns to discredit the science of global warming, and I’m the last one who wants to add more uncertainty to the mix. He points to this set of... MORE

Is Civilization the Product of Global Warming?

Energy, Environment, Resources
Bryan Caplan
Patri Friedman has written the most interesting thing I've read on global warming in years: I think humans naturally tend to a more anthrocentric viewpoint, where civilization arose because we had evolved enough to create it. It is fascinating and... MORE

Feldstein vs. Nordhaus

Energy, Environment, Resources
Arnold Kling
If you want to reduce gasoline consumption or carbon emissions, should you use a tax or tradable rights? Martin Feldstein argues for tradable gasoline rights (TGR's). The government would decide how many gallons of gasoline should be consumed per year... MORE

Global Warming, con't

Energy, Environment, Resources
Arnold Kling
A new study says Three top climate researchers claim that the greenhouse gases already in the atmosphere should have warmed the world more than they have. The reason they have not, they say, is that the warming is being masked... MORE

Global Warming Question, Con't

Energy, Environment, Resources
Arnold Kling
Here are a couple of more references on decarbonization: John Whitehead shows a trend decline of about 2 percent per year in the U.S.(we are decarbonizing faster than most of the world). Jesse Ausubel (last chart) shows a graph which,... MORE

Global Warming Question

Energy, Environment, Resources
Arnold Kling
What accounts for the relationship between total world GDP and world average temperature? For background, here is some data on GDP, from chapter 5 of Brad DeLong's Macroeconomics textbook (I did the multiplication to get the last column). yearworld population... MORE

Rare Sighting

Energy, Environment, Resources
Arnold Kling
An explanation of Oil Econ 101. Only drastic reductions in U.S. oil use would lead to elimination of oil imports. Until then, the United States will continue to import oil. And U.S. consumers will pay the world price for oil,... MORE

Bryan, Read Thyself

Energy, Environment, Resources
Arnold Kling
I can't believe that Bryan wrote about people getting upset about high gas prices without mentioning anti-market bias. This is the perfect example of the public thinking that high prices are due to an outbreak of excess greed (profits are... MORE

Gas: What's the Big Deal?

Energy, Environment, Resources
Bryan Caplan
Jane Galt tries to explain why people freak out about gas prices. My thoughts: 1) Most Americans buy gas at least once a week 2) They buy a lot of it 3) They buy it by itself--if the price of... MORE

More on Energy Idiots

Energy, Environment, Resources
Arnold Kling
I try to explain energy policy so that even a TV talking head might understand. Let's go s-l-o-w-l-y. Start by asking yourselves these questions: * Should the goal of U.S. energy policy be to raise long-term domestic energy production, or... MORE

Senate Republicans: Give More Money to Iran

Energy, Environment, Resources
Arnold Kling
The Reuters story says Senate Republicans unveiled a proposal on Thursday to soften the blow of rapidly rising gasoline prices by suspending a retail fuel tax and paying for the lost revenue by also suspending some oil industry tax breaks.... MORE

Global Warming

Energy, Environment, Resources
Arnold Kling
The Competitive Enterprise Institute used a recent Time Magazine cover story as a stimulus to give the non-alarmist view on global warming. Obviously, CEI has a particular viewpoint, but there are a lot of facts presented, so it seems to... MORE

Oil Hoarding

Energy, Environment, Resources
Arnold Kling
James Hamilton summarizes and comments on a blog discussion of the fact that oil futures prices are high relative to spot prices. He writes, There is currently very little spare capacity in global oil production, meaning that a supply disruption... MORE

Climate Science

Energy, Environment, Resources
Arnold Kling
Amidst the usual riff-raff of comments on my previous post, I received at least one good suggestion, which was to look at the web site realclimate.org, and in particular their FAQ page.... MORE

Scientific Consensus or Religious War?

Energy, Environment, Resources
Arnold Kling
Mark Thoma writes, Paul Krugman tackles the trashing of science by oil companies, Exxon in particular, to cloud research pointing to global warming. He quotes from the Krugman piece, which appears to be a typical type M argument. At the... MORE

Friedman Extends Hotelling

Energy, Environment, Resources
Bryan Caplan
David Friedman re-explains Hotelling's analysis of natural resources, then argues that - due to insecure property rights - Hotelling's rule underestimates how fast prices will rise: Suppose I own underground oil, but I believe there is a substantial chance, say... MORE

Dilbert Learns Oil Econ 101

Energy, Environment, Resources
Arnold Kling
The cartoon is here. Thanks to Lynne Kiesling for the pointer.... MORE

Oil Company Speculators

Energy, Environment, Resources
Arnold Kling
From the Economic Report of the President's energy chapter: Prices on contracts for future deliveries of crude oil (called crude oil futures) indicate that market participants expect oil prices to remain elevated at or near current levels through at least... MORE

More Wood Chip Commentary

Energy, Environment, Resources
Arnold Kling
Robert Zubrin writes Congress could make an enormous step toward American energy independence within a decade or so if it would simply pass a law stating that all new cars sold in the U.S.A. must be flexible-fuel vehicles capable of... MORE

More than Corn--it's Wood Chips!

Energy, Environment, Resources
Arnold Kling
Forget Oil Econ 101. Steven Pearlstein writes that the President's State of the Union rhetoric about energy independence, cars running on alternative energy and ending our addiction to Mideast Oil -- that could have come straight from the mouth of... MORE

Strategic Petroleum Futures

Energy, Environment, Resources
Arnold Kling
Marc Sumerlin writes, The market for long-dated oil futures contracts is not sufficiently large or liquid enough to fully and inexpensively hedge the vast quantity of investment that is needed for the U.S. to substantively reduce its dependency. Hedging is... MORE

Simonizing Economics

Energy, Environment, Resources
Bryan Caplan
When I was finishing up my book on voter irrationality, I had a lot of trouble tracking down any quotes confirming my belief that economists roughly buy into Julian Simon's views on the benefits of population. In the end, I... MORE

Gasoline Tax

Energy, Environment, Resources
Arnold Kling
In the September American Economic Review, Ian W. H. Parry and Kenneth A. Small write, The British government has defended high gasoline taxes on three main grounds. First, by penalizing gasoline consumption, such taxes reduce the emissions of both carbon... MORE

Taxing OPEC

Energy, Environment, Resources
Arnold Kling
Andrew Samwick points to a paper by Jayanta Sen that suggests that it is in the interest of oil consuming nations to tax oil. Sen writes, a tax on crude would transfer wealth of $100+ billion a year from foreign... MORE

Carter's Policies Not Just in Iraq

Energy, Environment, Resources
Arnold Kling
Bryan thinks that Iraq is the victim of Carter-era energy policy. But we in the United States have no reason to feel secure from such economic idiocy. James Hamilton notes that energy legislation now under consideration wants to punish price-gouging,... MORE

Oil Econ

Energy, Environment, Resources
Arnold Kling
Anthony de Jasay writes, Some miracle of an unexpected kind will very likely occur one day to make some renewable energy source economical, but until it does, responsible oil companies will make haste slowly toward biomass, solar or wind power... MORE

Oil Shale

Energy, Environment, Resources
Arnold Kling
James Hamilton expresses doubts about oil shale. The fact that large quantities of heat are required to obtain a usable fuel from the rock means that this is a far less efficient source of energy than conventional oil. Shell claims... MORE

Bait and Switch: The Cynic's Argument for Gas Tax Cuts

Energy, Environment, Resources
Bryan Caplan
Lots of economists in the blogosphere have been arguing about the effects of cutting gas taxes on the price of gas. Here's James Hamilton's summary, which ends with the following: [E]lasticities are never really zero, and are easy to underestimate... MORE

Evolution vs. Intelligent Design

Business Economics
Arnold Kling
In my latest essay, I write, While I have little faith in individual corporations, I have more faith in decentralized market processes. For example, although I have no admiration for any oil company in particular, I believe that we will... MORE

Taxes and Prices: In Defense of the Simple Story

Energy, Environment, Resources
Bryan Caplan
Alex Tabarrok chides the man-in-the-street for believing that cutting gas taxes will cut gas prices: Does the lifting of the tax change the demand for gasoline? No. Does it change the physical supply? No. At least not by much in... MORE

Gas Price Variance Up!

Energy, Environment, Resources
Bryan Caplan
With the whole country bemoaning the rise in the average price of gas, a far more economically surprising change has been almost overlooked: The massive rise in the variance of the price of gas. Before the hurricane, the spread between... MORE

Our Vast Oil Reserves

Energy, Environment, Resources
Arnold Kling
From a RAND study: The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming...For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1... MORE

Economic Impact of the Hurricane

Energy, Environment, Resources
Arnold Kling
The first place I went for an economic assessment of the impact of Hurricane Katrina was James Hamilton's www.econbrowser.com, because of his expertise in energy. I was not disappointed. For example, he wrote, One of the questions I am almost... MORE

Son of Simon

Energy, Environment, Resources
Bryan Caplan
In the spirit of the original Simon-Ehrlich bet, people who disagree about the long-run price of oil are putting their money where their mouth is. According to the Laissez-Faire Books blog, energy expert Matthew Simmons has bet NYT columnist John... MORE

Gas Prices, Fuel Efficiency, etc.

Energy, Environment, Resources
Arnold Kling
Lots of blather going around the blogosphere about gas prices and fuel efficiency. Most of it violates Oil Econ 101. Perhaps the most reasonable blog take is by Andrew Samwick. The aspect of SUVs that does annoy me is that... MORE

Oil Econ 102

Energy, Environment, Resources
Arnold Kling
Terrific econoblog featuring James econbrowser Hamilton and Robert (what, no blog?) Kaufmann on long-term oil supply and policy issues. Hamilton writes, If you ask people today to make huge sacrifices that later turn out to be unnecessary or to be... MORE

The Peak in Oil Supply

Energy, Environment, Resources
Arnold Kling
is still in the future, according to Daniel Yergin. There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million... MORE

Energy Legislation

Energy, Environment, Resources
Arnold Kling
Alan Reynolds writes, Ethanol already gets an indefensible tax break at the pump of 51 to 71 cents a gallon, but Congress now wants to compel everyone to add it to their tanks. But doing so would leave us with... MORE

The Latest Oil Shock

Energy, Environment, Resources
Arnold Kling
According to James Hamilton, The sustained run-up in oil prices has coincided with a large increase, not decrease, in world oil production. World oil production had previously fallen off in response to the lower demand brought about by the recession... MORE

Rock on, Alex

Energy, Environment, Resources
Bryan Caplan
Alex Tabarrok make a real splash on Lawrence Kudlow today. And while most of the talk centered on Social Security reform, there was an exhilirating digression on oil economics.... MORE

Knowledge Problem

Business Economics
Arnold Kling
Lots of good stuff recently at Knowledge Problem. Lynne tells us what to think of the new energy legislation. If you support a forward-looking, dynamic, creative, innovative approach to energy, this is not the legislation for you. If you are... MORE

Nuclear Power Regulation

Energy, Environment, Resources
Arnold Kling
Randall Parker recently sent an email to a few economics bloggers about nuclear power plant regulation. In particular, he asked whether we think that the Price-Anderson Act, which limits the liability of nuclear power plants for accidents, represents an excess... MORE

A Dagger in the Heart of America

Energy, Environment, Resources
Bryan Caplan
As late as 1999, it was our single largest foreign supplier of oil. But then a hostile regime took over, struck up close friendships with our bitter enemies, and started strangling our economy. By 2003, it had cut its exports... MORE

Gas Price Conspiracy?

Energy, Environment, Resources
Arnold Kling
The Cincinnati Enquirer writes, How can prices climb so much, seemingly overnight, when the gasoline in the tank beneath the station was bought by the retailer a day or two before and was probably refined from crude oil weeks or... MORE

The Energy Outlook

Energy, Environment, Resources
Arnold Kling
I presume that Alan Greenspan is a relatively well-informed observer. Clearly, limited substitution possibilities across fuels have resulted in persistent cost differentials, but those very differentials inspire the technologies that, over time, reduce such limitations. A clear example is gas-to-liquids... MORE

More Gas for Washington

Energy, Environment, Resources
Arnold Kling
The Washington Post reports, A who's who of right-leaning military hawks -- including former CIA director R. James Woolsey and Iraq war advocate Frank J. Gaffney Jr. -- has joined with environmental advocates such as the Natural Resources Defense Council... MORE

Learning from Lomborg

Energy, Environment, Resources
Bryan Caplan
There's a reason why Bjorn Lomborg has been rewarded for writing The Skeptical Environmentalist with a pie in the face. The book's good, very good - and that's bound to anger the touchy, gloomy Greens he's debunking. The book has... MORE

Energy Conservation

International Trade
Arnold Kling
In this essay, I argue that energy conservation is not a useful tool of foreign policy. In my view, the worst policy option of all is to subsidize the use of alternative forms of energy. If other forms of energy... MORE

Oil Economics

Energy, Environment, Resources
Arnold Kling
Robert Bryce wrote, Many of the leading neoconservatives who pushed hard for the Iraq war are going green. James Woolsey, the former director of the Central Intelligence Agency and staunch backer of the Iraq war, now drives a 58-miles-per-gallon Toyota... MORE

Global Warming

Energy, Environment, Resources
Arnold Kling
Global warming is the topic this week discussed by Richard Posner and Gary Becker. Posner writes, [The Kyoto Protocol] is either too much or too little. It is too much if, as most scientists believe, global warming will continue to... MORE

Nanotechnology and the Economy

Growth: Causal Factors
Arnold Kling
Ronald Bailey reports, Nanotechnology would make it possible for 100 billion people to live sustainably at a modern American standard of living, while indoor agriculture using high-efficiency inflatable ten-pound diamond greenhouses would help restore the world's ecology. The ultimate limit... MORE

Inelastic Demand for Gasoline

Energy, Environment, Resources
Arnold Kling
A company called CNW marketing research offers a timely study, as reported on CNN Money. It would take gasoline prices hitting a sustained $2.75 a gallon to get 19 percent of those surveyed thinking about a more fuel-efficient vehicle; another... MORE

Energy Price Outlook

Energy, Environment, Resources
Arnold Kling
Are high oil prices a temporary spike, caused by the evil oil cartel? Or are they a reflection of dwindling oil supplies? I'd like to hear from Lynne Kiesling on this. Meanwhile, here are my hunches. First of all, I... MORE

Oil: Marginal vs. Average Cost

Energy, Environment, Resources
Arnold Kling
The Washington Post's Steven Pearlstein needs to learn the difference between marginal cost and average cost. Without some miracle breakthrough like controlled fusion, energy independence is unattainable, probably undesirable and discussion of it avoids the real question of why the... MORE

Oil Bubble?

Efficient Markets Hypothesis
Arnold Kling
Any time a price increases rapidly, somebody argues that there is a bubble (although I have not heard anyone proclaim a health care bubble). Here is Frank P. Leuffer on oil. IEA figures for the first half of the year... MORE

Environmental Economics

Energy, Environment, Resources
Arnold Kling
Joe Katzman has a long, thoughtful post on the economics of common resources, notably water. Perhaps it's also time to factor these eco-services into a variant of GNP, so their depletion and restoration would both show on a national balance... MORE

An Energy Internet?

Energy, Environment, Resources
Arnold Kling
Richard Smalley writes, Consider, for example, a vast interconnected electrical energy grid for the North American continent. By 2050 this grid will interconnect several hundred million local sites. There are two key aspects of this future grid that will make... MORE

Sustainability

Energy, Environment, Resources
Arnold Kling
Michael Lind offers an optimistic assessment of the prospects for sustaining a world population of 9 billion. As affluence grows, the amount of energy and raw materials "consumed" by machinery will escalate even more rapidly than human consumption. But this... MORE

Run Out of Oil?

Energy, Environment, Resources
Arnold Kling
George Will quotes Cafe Hayek's Russ Roberts' pistachio example. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite.'' But that distinguishes oil not at all from land, water or pistachio nuts. Russell Roberts,... MORE

Ronald Reagan's Economics

Supply-side Economics
Arnold Kling
Jane Galt writes, High inflation was the result of a dozen years of bad fiscal and monetary policy under two Republicans -- Nixon and Ford -- and two Democrats -- Johnson and Carter -- that was brought under control only... MORE

Gas Tax Debate

Energy, Environment, Resources
Arnold Kling
David Ignatius is pro: The best plan I've seen for doing the politically impossible comes from an energy economist named Philip Verleger. ...Verleger favors what he calls a "prospective gasoline tax," which would allow the country four years to get... MORE

Oil Reserves and Backwardation

Energy, Environment, Resources
Arnold Kling
I summarize my thinking about the Strategic Petroleum Reserve in an essay. I am not persuaded that the "convenience yield" of the SPR justifies its costs. However, even if it does, I believe it makes sense to have a rule... MORE

Backwardation

Efficient Markets Hypothesis
Arnold Kling
As of May 20th, the June 2004 futures contract for light crude oil was at $41.66, while the June 2005 futures contract was at $35.58. When futures prices are below spot prices, this is known as "backwardation." I believe that... MORE

Gasoline Hysteria

Energy, Environment, Resources
Arnold Kling
It's not just Democrats. National Review Online's James S. Robbins writes, A strategic plan for secure and sustained energy would have many elements — shifting imports to more stable, friendlier countries, exploiting more domestic resources, pursuing alternative energy sources, and... MORE

A Glimmer of Hope on Oil

Energy, Environment, Resources
Arnold Kling
In forecasting oil prices, I tend to defer to the efficient markets hypothesis. In some sense, oil in the ground has to compete with bonds and other interest-bearing assets. So, a reasonable approximation is that oil prices should be expected... MORE

The Future of Oil

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling and Don Boudreaux have already pointed to an article by Morris Adelman, who was at MIT back when Krugman and I were in grad school there. There is not, and never has been, an oil crisis or gap.... MORE

Oil Econ, Once More

Energy, Environment, Resources
Arnold Kling
I really like Edward Lotterman's latest. No one studies elasticities of demand for oil more than OPEC. Its leaders know that in the very short term — i.e., a few weeks or months — a 10 percent price hike may... MORE

Oil Econ Follow-up

Energy, Environment, Resources
Arnold Kling
Earlier, I posted on the Strategic Petroleum Reserve. Nick Schulz has some more on the gas price issue. Ketchup at a retail grocery store is $0.16 an ounce meaning it rings in at an impressive $20.48 a gallon, almost ten... MORE

Strategic Petroleum Reserve

Energy, Environment, Resources
Arnold Kling
With oil prices high, should the Strategic Petroleum Reserve be reduced? Steve Antler criticizes John Kerry for making such a suggestion. In contrast, Fred Singer has called the Strategic Petroleum Reserve, a wasteful effort by government to protect against an... MORE

Water Usage

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling writes, our water use has not gone up in 20 years. If we paid prices for water that reflected the true cost of its use, and if farmers could transfer their property rights over water to non-agricultural users,... MORE

Environmentalist Forecasting Model

Energy, Environment, Resources
Arnold Kling
My view of environmentalists is that they use the fixed-coefficients production function for long-term forecasting. Thus, they ignore substitution and technological change. Ronald Bailey reviews the many mistaken predictions based on this methodology. For example, For the first Earth Day... MORE

Nanotechnology and the Great Race

Growth: Causal Factors
Arnold Kling
I once wrote an essay that I called The Great Race, in which I argued that two factors that affect the future are technological change in the private sector and the growth of entitlement spending. Many posts in this blog... MORE

New Energy Legislation

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling, who believes that rent-seekers should be prosecuted, is in an accusatory frame of mind concerning the latest energy legislation. She writes, choosing to expand ethanol mandates as a renewable energy initiative is a big mistake. Using more ethanol... MORE

Peak-load Pricing

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling and Vernon Smith explain peak-load pricing to the new governor of California. current policy unfairly forces consumers to pay rates based on the average hourly cost of energy and industry capital investment. As a result, peak utility cost... MORE

Basic Oil Economics

Energy, Environment, Resources
Arnold Kling
Holman Jenkins makes some useful points. nowadays U.S. consumption of Persian Gulf oil totals about $18 billion a year, less than we spend on computer parts from Asia. The price mechanism works: Oil would flow in greater volume from higher-cost... MORE

California Reality

Energy, Environment, Resources
Arnold Kling
As a dean at Berkeley, Hal Varian has a personal interest in California. In his column today, he offers some plain-spoken economics lessons. Most California voters think the electricity crisis contributed to the state budget deficit. If only things were... MORE

Comment of the Week, 2003-09-24

Energy, Environment, Resources
Arnold Kling
On the subject of the environment and technology, D-squared writes, Future generations cannot make contracts with us, so their preferences about the rate of extraction don't figure in the market price. Suppose that the desire for ivory threatens to make... MORE

Environment-friendly Farming?

Energy, Environment, Resources
Arnold Kling
Jonathan Rauch says that agriculture tends to abuse the environment. The trade-offs are fundamental. Organic farming, for example, uses no artificial fertilizer, but it does use a lot of manure, which can pollute water and contaminate food. Traditional farmers may... MORE

Auction Toxic Waste?

Energy, Environment, Resources
Arnold Kling
How should the location of undesirable land uses, such as toxic waste dumps or prisons, be determined. Citing Julian Simon, Herbert Inhaber suggests using a reverse auction, in which the Federal government offers to compensate local residents for living near... MORE

Electricity Economics

Energy, Environment, Resources
Arnold Kling
In the wake of the electricity blackout, I have been disappointed that economists have contributed more noise than signal in their comments. For example, Paul Krugman wrote, Under the old regulatory system, power companies had strong incentives to ensure the... MORE

Hydrogen Cars

Energy, Environment, Resources
Arnold Kling
Randall ("FuturePundit") Parker takes down hydrogen cars by pointing to a number of scientific studies. The biggest problem with hydrogen as a means to reduce pollution is that it has to be produced from another energy source and the most... MORE

Comment of the Week, 2003-07-18

Energy, Environment, Resources
Arnold Kling
I may have been on vacation for over a week, but the site was active with comments. On the limits-to-growth thread, Harold wrote, Less land is required for agriculture every year. Even less would be if so many governments would... MORE

Limits to Growth?

Energy, Environment, Resources
Arnold Kling
Bjorn Lomborg and Olivier Rubin have an article that concisely challenges the thesis that environmental limits to growth are binding. [the limits-to-growth argument's] real weakness is the underlying assumption that planet Earth has finite, essential resources (such as oil, water,... MORE

Oil Import Tariff?

Energy, Environment, Resources
Arnold Kling
Charles Krauthammer's premise, that reducing demand for oil will reduce terrorism, violates what I call Oil Econ 101. But he does offer the least costly way to achieve the goal. Slap, say, a $5 (or $10--the bazaar is open) tax... MORE

Ethanol Mandate

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling points to this article by Joel Schwartz on the ethanol mandate. what if our elected officials ... forced you to pay $180 more each year for gasoline that contains an antiquated additive you don't need, and that could... MORE

Oil Econ 101

Energy, Environment, Resources
Arnold Kling
I once wrote an essay called Oil Econ 101, in which I argued that while we can lower our consumption of oil, that would not reduce our dependence on Saudi oil. Ram of postpolitics.com suggested I might want to comment... MORE

California Energy Crisis Redux?

Energy, Environment, Resources
Arnold Kling
Could California suffer another "energy crisis?" Lynne Kiesling writes, California has a lower construction rate for proposed generation projects than other states that have implemented electricity restructuring...even in states that started with higher capacity relative to demand, such as Texas... MORE

California Energy Regulation

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling bemoans electricity regulation policy in California. [The original deregulation effort] was much more about freeing up restrictions on trade in wholesale electricity markets, although it did a pathetic job of that, requiring buyers and sellers to use the... MORE

Comment of the Week, 2003-05-07

Energy, Environment, Resources
Arnold Kling
In the thread about capitalism as a benevolent system, Ward mused, Maybe there should be a school of Austrian Environmentalism that studies innovative ways to clean up or maintain the environment. To which Lynn Kiesling replied, one organization that does... MORE

Regulatory Pollution

Energy, Environment, Resources
Arnold Kling
Discussing a forthcoming study of air pollution by Joel Schwartz, Ronald Bailey writes, For example, [Schwartz argues that] a proposal to raise the prices of conventional cars and use the extra money to lower the prices of electric cars—which are... MORE

Fishy Economics

Energy, Environment, Resources
Arnold Kling
How can we deal with the problem that unrestricted access to fish leads to over-fishing? This is almost a textbook exercise in Coase economics. One solution is fish farming, in which a business owns the fish that it breeds in... MORE

Economics of Hydrogen, II

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling quotes an engineering analysis of hydrogen as a fuel source for automobiles. I can assure you that there is no way that spending heat energy to make hydrogen to be burned to make heat energy can be anything... MORE

Economics of Hydrogen

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling has written a five-part article on hydrogen fuel cells. She looks at technical issues as well as economic issues, and each part in the series offers insightful analysis. The last installment questions the wisdom of the Bush Administration's... MORE

Economics for Environmentalists

Energy, Environment, Resources
Arnold Kling
At the fascinating Longbets web site, Robert A. Freling of the Solar Electric Light Fund makes this bet: By the year 2020 solar electricity will be as cheap or cheaper than that produced by fossil fuels I wish that environmentalists... MORE

Economics of Hydrogen

Energy, Environment, Resources
Arnold Kling
Gregg Easterbrook lets a lot of the air out of the hydrogen balloon. Pure hydrogen is not an energy source, except to stars. As it will be used in cars or to power homes and offices, hydrogen--like a battery--is an... MORE

Synthetic Fuels Program

Energy, Environment, Resources
Arnold Kling
About a year ago, Paul Romer pointed out that In the next century we’re going to be moving back and forth, experimenting with where to draw the line between institutions of science and institutions of the market. In this context,... MORE

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