policy Archives - Amateur Earthling

Five Times Faster by Simon Sharpe

Five Times Faster takes a systems approach to understanding why we haven’t made nearly as much progress on climate as we need to over the last 30 years of trying. Sharpe — a former UK climate diplomat — looks at the problem from 3 different angles: the way we assess and communicate the potential impacts of climate change; the way we think about the economy in the context of climate action, and finally how diplomacy and international agreements around climate action have been structured and negotiated. In each of these contexts he highlights the need for more consideration of non-linearity, feedbacks, and the potential for changing the underlying dynamics of the climate, economic, and political systems.

Carbon Captured by Matto Mildenberger

Carbon Captured is another book in the vein of Leah Stokes’ excellent Short Circuiting Policy and Making Climate Policy Work by David Victor and Danny Cullenward. It examines the political economy of climate policymaking over the last ~30 or so years starting mostly in the late 1980s when the issue started showing up on national policy agendas.

The central idea of the book (as Mildenberger repeats many, many times) is that carbon-intensive power centers enjoy political representation on both the Labor and Capital ends of the political spectrum that organizes most national parties. Mining and industrial unions as well as the owners fossil-fuel based businesses have all fought climate policy, and this means that no matter who is in power, someone is going to me working against the energy transition. Before 1990 carbon intensity just wasn’t a dimension anybody thought about in politics. In most places it’s still not a dominant political axis, though in the US it seems like the parties tried very hard to turn climate action into a partisan litmus test for the time being.

On top of this idea of “double representation” Mildenberger layers a couple of additional dimensions: how “corporatist” vs. pluralist are a country’s policymaking institutions, and whether the Labor movement has a deep, direct connection to leftist political parties (he ignores the analogous variable on the right, since he found that conservative parties are universally deeply tied to the interest of capital). With these variables in mind he explores the climate policy trajectories of 7 wealthy countries: the US, Australia, Norway, Germany, the UK, Japan, and Canada.

The idea is that a country’s level of corporatism vs. pluralism, and how tightly integrated Labor is with the left-leaning political parties will strongly influence what kind of policy trajectory the country takes. Countries with political institutions that reinforce the double representation of carbon interests will tend to take weak action earlier, with little public engagement, while those with less institutionally entrenched interests will tend to have more open conflict, likely resulting in later — but potentially more aggressive — policies. I wasn’t particularly convinced of this on the basis of the 7 case studies he explored.

It was kind of tragicomic that he chose the Clean Power Plan as the US example of “late but costly” climate policy, given that it was immediately repealed and never implemented, and then the policy targets were met anyway ahead of time with net cost savings. In contrast to his predictions, to me the IRA seems more like a policy implemented late but which is entirely composed of carrots rather than sticks (with the possible exception of the methane fee).

Regardless of whether this hypothesis is valid it was still very interesting to read these condensed policy histories. It definitely gave me some surprising wider context.

CRISPR Ethics in the Real World

Every discussion of CRISPR gene editing technology seems to come with an obligatory but superficial mention of the ethical dilemmas it brings up, especially in the context of applying it to the human germ line. Everyone asks questions like Should we remove sickle cell anemia from the gene pool? Where do we draw the line between curing diseases and building designer babies? What if everyone opts for 6-foot tall blonde-haired, blue-eyed archetype? Should we allow trans-human enhancements like taking genes from the mantis shrimp to give ourselves hyperspectral 16-color vision? What if only the rich have access, and become a ruling cadre of genetic elites, passing heritable enhancements down through their segregated bloodlines? Aren’t we playing God? How can we avoid becoming a society that looks like Gattaca or Brave New World? What thoughtful, proactive regulations can we enact to ensure this technology is used only for good, and that ethical boundaries are respected?

These questions are a fine starting point, but they also seem to be where popular explorations of this technological quandary end. I listened to Ezra Klein’s interview with Walter Isaacson on the topic this morning over coffee, and big chunks of it sounded like they could have been taken verbatim from the recent documentary Human Nature.

This hypothetical ethical discussion feels like it’s taking place in relation to a hypothetical society that makes well-reasoned policy decisions based on a shared idea of what’s right and good in the best long-term interests of society at large. A society that, having made those good decisions, can actually enforce them.

How can anybody think that’s the world we live in?

The Water Will Come by Jeff Goodell

I first came across Jeff Goodell’s writing in Rolling Stone, which published Why the City of Miami is Doomed to Drown in 2013. (Interestingly, the article has since been re-named Miami: How Rising Sea Levels Endanger South Florida.) I’ve referred to that article many times as a case study in the creeping reality of sea level rise, and society’s denial of the issues at hand, so I grabbed a copy of The Water Will Come as soon as I heard it existed. Plus, I get a shiver every time I say the title. It’s almost biblical. Like something out of the Book of Revelations. Messianic and mythic, but… also true.

At the same time, I’ve been reading Kim Stanley Robinson’s book New York, 2140, set in an amphibious, post-diluvian New York City. (The combo is a trip. It’s almost like they collaborated on the books. I would love to hear a conversation between them about it some time.)

But Goodell’s book begins and ends with Miami, making forays to Venice, the Netherlands, Manhattan, and Lagos in between. It reads like a kind of disaster tourism — the author seeking out people and places in various stages of realization about sea level rise, and presses them into acknowledging what it means for their city, their livelihood, their future. The responses range from denial, to complete freakout, to stoic commitment to place — going down with the ship.

Continue reading The Water Will Come by Jeff Goodell

Thoughts on The Color of Law

Richard Rothstein's recent book The Color of Law looks at the history of racism in US housing policy. It focuses especially on African Americans, and the constitutionality of these policies in light of the reconstruction era amendments that ended slavery.

Throughout the book, Rothstein makes a big point of the difference between de jure (in law) segregation and de facto (in fact) segregation. The purpose of the book (belied in its subtitle: "A forgotten history of how our government segregated America.") is to remind us that residential segregation did not just happen because private citizens expressed discriminatory preferences. Instead, he lays out the gory details of how government at all levels — through laws, official policies, financing terms, and officially sanctioned lack of enforcement — has enacted de jure segregation for more than a century. This has often included creating and enforcing segregation where it did not previously exist, in the West, and in the northern industrial centers as successive waves of migration from the South took place in the first half of the 20th century. He argues that because this segregation was perpetrated by the government, with the full force of law, we have a constitutional obligation to ameliorate the harm it has done to generations of African Americans.

The book felt kind of like a hybrid between Michelle Alexander's The New Jim Crow (about successive & evolving systems of black subjugation after the end of slavery, especially drug-war mediated mass incarceration) and Kenneth T. Jackson's Crabgrass Frontier (a history of suburbanization in the US). One of the main themes in The New Jim Crow is the remarkable adaptability of our systems of race-based social control. We outlawed slavery, but just a few decades later, Jim Crow was in full force, disenfranchising blacks throughout the south. The Civil Rights reforms of the 1960s outlawed many Jim Crow practices, but it wasn't long before the War on Drugs and mass incarceration had filled the gap.

Density or Exclusion: the Perils of Local Zoning

In my last post, I suggested that while we like to think of housing as an investment, it’s really more like a crappy savings plan, potentially redeemed by the fact that you can live inside the piggy bank. Land can be a profitable speculative investment, but allowing land to appreciate and drag the cost of housing upward in real terms is fundamentally incompatible with housing being affordable.

Economists (including Adam Smith, David Ricardo, Thomas Paine, Henry George, Thomas Friedman, Joseph Stiglitz, and Matt Yglesias) have highlighted the negative impacts of allowing land owners to collect monopolistic “ground rents” but nobody seems to care. So now tens of trillions of dollars worth of real estate in the US is predicated on the idea that landowners get to retain these speculative gains. Barring a glorious Georgist Revolution, this is probably the arrangement we have to work within.

Build, Baby Build!

Luckily, in a city with increasing land values, where property owners get to keep all of those unearned financial gains, there’s an All American Capitalist Solution™ of sorts, which can potentially keep housing affordable, even when land is expensive: build more housing on less land. By building densely, high land costs can be shared across more households, reducing the overall impacts of expensive land, and allowing home buyers & renters to pay primarily for housing instead of land.

Continue reading Density or Exclusion: the Perils of Local Zoning

What is Housing in the US?

Housing as an Investment

There’s a powerful cultural narrative in the US that says when you buy a home, you’re not only securing a place to live, you’re making an investment.

When I say “investment” I mean a thing that you can put some money into, and get more money out of later, in real inflation adjusted terms, net of the expenses associated with having the thing in the first place. Houses — as in, physical structures that shelter human beings — are clearly not this kind of thing. Anyone who has had to maintain an older home knows this. Roofs collapse. Pipes corrode. Walls need to be painted. Like bicycles, laptops, and virtually all other durable goods, left to their own devices, houses are depreciating assets: they lose utilitarian value over time. However, we’ve done an incredibly good job of ignoring this as a society. How do we fool ourselves?

We tend to ignore inflation. If you bought a house for $100,000 in the year 2000, and sold it in 2016 for $140,000, even if you didn’t put a single penny into maintenance, taxes, or insurance, you just barely broke even in terms of real purchasing power, if we’re talking about the house purely as an investment.

We tend to ignore the ongoing expenses of homeownership. In practice, you can’t avoid spending money on maintenance, taxes and insurance, but few homeowners record every property expense, and calculate whether they’ve come out ahead upon selling a home. Especially if the building is older “naturally occurring affordable housing”, maintenance costs can easily end up being a few percent of the building’s value each year. Property taxes and home insurance are also substantial expenses, typically less salient to homeowners than the purchase and sale prices of the home.

We can think of inflation and property expenses as cancelling out a fair chunk of any increase in the nominal value of a home. With 2% inflation, and spending 3% of the home’s value every year on maintenance, property taxes, and insurance, a home’s value needs to increase about 5% every year in nominal terms just to cover its own costs. In other words, if you bought a house for $100,000 in the year 2000, and sold it for $200,000 in 2016, you didn’t quite break even — again, if we’re looking at the house purely as an investment.

We tend to notice the accrual of home equity. Ideally, as you pay off a mortgage, the fraction of its value that is covered by your equity rather than the bank’s debt increases! Even if you just break even after accounting for inflation and ongoing expenses, you’ll hopefully have a larger chunk of change on hand to put into buying your next home. Continuing with the example purchase above (grabbing a mortgage calculator off the internet) if we assume a 20% ($20,000) down payment and an $80,000, 4%, 30 year fixed rate loan, after 16 years of payments, the remaining loan amount is about $49,000. So assuming you sell the home at the “break even” price, including expenses, of $200,000, you end up with $151,000 after paying off the loan. This is $131,000 more than you started with, which feels totally awesome! You “invested” $20,000 and “earned” $131,000, more than a 650% increase!

Continue reading What is Housing in the US?

Overpopulation isn’t the Problem

Some folks in Boulder like to make analogies to exponential global population growth in discussions about our local land use decisions (see for example Frosty Woolridge, Frosty Woolridge again, Robert Baker, David Brandt, or the venerable Al Bartlett himself). These analogies are inappropriate in multiple ways.

First, steep declines in fertility worldwide have largely defused the population bomb. Second, even if the bomb were still ticking, the population changes we see in Boulder, and more generally the Front Range of Colorado, the US and the booming megacities of Asia aren’t about population growth per se, they’re about migration. In the developing world, it’s migration from rural areas to cities. In the already rich countries, it’s mostly migration between cities, often from low-wage regions to areas with better jobs and higher quality of life. Or it would be anyway, if we actually let people build housing in those places.

How we choose to build and rebuild cities to accommodate these migrations and humanity’s peak population later this century will largely determine our ultimate impact on the Earth’s climate and biosphere, and the quality of life that humanity has access to. Contrary to many “population bomb” narratives, the main problem here as it relates to climate isn’t the impact of large numbers of poor people, because small numbers of rich people are responsible for the overwhelming majority of current greenhouse gas emissions. How we accommodate those wealthy, high emissions populations makes a big difference, both directly, and through the example it sets for the rapidly expanding global middle class.

Continue reading Overpopulation isn’t the Problem

Decoupling & Demand Side Management in Colorado

Utility revenue decoupling is often seen as an enabling policy supporting “demand side management” (DSM) programs. DSM is a catch-all term for the things you can do behind the meter that reduce the amount of energy (kWh) a utility needs to produce or the amount of capacity (kW) it needs to have available. DSM includes investments improving the energy efficiency of buildings and their heating and cooling systems, lighting, and appliances. It can also include “demand response” (DR) which is a dispatchable decline in energy consumption — like the ability of a utility to ask every Walmart in New England to turn down their lights or air conditioning at the same time on a moment’s notice — in order to avoid needing to build seldom used peaking power plants.

For reasons that will be obvious if you’ve read our previous posts on revenue decoupling, getting utilities to invest in these kinds of measures can be challenging, so long as their revenues are directly tied to the amount of electricity they sell. Revenue decoupling can fix that problem. However, reducing customer demand for energy on a larger scale, especially during times of peak demand, can seriously detract from the utility’s ability to deploy capital (on which they earn a return) for the construction of additional generating capacity. That conflict of interests is harder to address.

But it’s worth working on, because as we’ll see below, DSM is cheap and very low risk — it’s great for rate payers, and it’s great for the economy as a whole. It can reduce our economic sensitivity to volatile fuel prices, and often shifts investment away from low-value environmentally damaging commodities like natural gas and coal, toward skilled labor and high performance building systems and industrial components.

The rest of this post is based on the testimony that Clean Energy Action prepared for Xcel Energy’s 14AL-0660E rate case proceeding, before revenue decoupling was split off. Much of it applies specifically to Xcel in Colorado. However, the overall issues addressed are applicable in many traditional regulated, vertically integrated monopoly utility settings.

Why can’t we scale up DSM?

There are several barriers to Xcel profitably and cost-effectively scaling up their current DSM programs. Removing these impediments is necessary if DSM is to realize its full potential for reducing GHG emissions from Colorado’s electricity sector. Revenue decoupling can address some, but not all of them.

There are the lost revenues from energy saved, which impacts the utility’s fixed cost recovery. If the incentive payment that they earn by meeting DSM targets is too small to compensate for those lost revenues, then the net financial impact of investing in DSM is still negative — i.e. the utility will see investing in DSM as a losing proposition. Xcel currently gets a “disincentive offset” to make up for lost revenues, but they say that this doesn’t entirely offset their lost revenues.
Even if the performance incentive is big enough to make DSM an attractive investment, the PUC currently caps the incentive at $30M per year (including the $5M “disincentive offset”), meaning that even if there’s a larger pool of cost-effective energy efficiency measures to invest in, the utility has no reason to go above and beyond and save more energy once they’ve maxed out the incentive.
If this cap were removed, the utility would still have a finite approved DSM budget. With an unlimited performance incentive and a finite DSM budget, the utility would have an incentive to buy as much efficiency as possible, within their approved budget, which would encourage cost-effectiveness, but wouldn’t necessarily mean all the available cost-effective DSM was being acquired.
Given that the utility has an annual obligation under the current DSM legislation to save a particular amount of energy (400 GWh), they have an incentive to “bank” some opportunities, and save them for later, lest they make it more difficult for themselves to satisfy their regulatory mandate in later years by buying all the easy stuff up front.
It is of course the possible that beyond a certain point there simply aren’t any more scalable, cost-effective efficiency investments to be made.
Finally and most seriously, declining electricity demand would pose a threat to the “used and useful” status of existing generation assets and to the utility’s future capital investment program, which is how they make basically all of their money right now.

Revenue decoupling can play an important role in overcoming some, but not all, of these limitations. With decoupling in place, we’d expect that the utility would be willing and able to earn the entire $30M performance incentive (which they have yet to do in any year) so long as it didn’t make regulatory compliance in future years more challenging by prematurely exhausting some of the easy DSM opportunities.

Continue reading Decoupling & Demand Side Management in Colorado

Cities Without Traffic

Vintage Congestion — Ditch the vintage 1962 vision of Autopia. Cars are not people. The freedom to drive everywhere is “not quality of life”. We can have cities without traffic.

It’s an underlying axiom, a chanted mantra, a litany:

More people means more cars.
More cars means more traffic.
More traffic means more congestion.
We hate congestion, ergo:
NO MORE PEOPLE.

The litany was recently recited by John D. English in his Daily Camera guest opinion, imploring Boulder to “preserve our quality of life” by protecting the right of motorists to drive in the city without encountering traffic congestion. But cars are not inextricably linked to people, and the freedom to drive everywhere is not quality of life. Equating these things stalls infill development in the name of auto dependence, and keeps half the city trapped in late-20th century office park purgatory. It preserves not quality of life, but underused asphalt oceans, impenetrable superblocks, and sad bike lanes painted on the side of roads that might as well be freeways.

The assumption that more people must inevitably mean more cars means different things to different people. To the member of traditional Motordom with an interest in infill development, it means we need to build more regional road capacity (induced demand be damned!). To auto-dependent neighborhood activists who cannot stomach the thought of Change in Our Fair Town, it means infill is unacceptable.

We can have more people, fewer cars, and less driving. Other cities have already done it, and we’ve implicitly stated it as a goal in our Transportation Master Plan (TMP) and Climate Commitment. The key to success is dramatically revising Boulder’s parking policies, and creating great streets for people.

Continue reading Cities Without Traffic