Video (couldn’t embed). Economist says impacts will cost $60 Trillion USD.
Posts tagged economist.
Great map from The Economist showing which European countries are pursuing shale gas fracking and which have banned it.
The Economist is also hosting a live debate on the topic of shale gas this week. Check it out here.
No drilling permits required in Norway? Hard to believe.
This article correlating the gap between two types of crude oil prices with economic growth doesn’t make any sense to me for three reasons. First, economies around the world are booming and recovering despite the spike in across-the-board energy prices. Slovakia, for example, experienced higher costs per gallon of oil than the U.S. yet its growth rate is among the highest in the world. Same holds for the Scandinavian and e-bloc countries. (There’s a food price argument here, too, but I’ll spare your lovely souls!). To say that price increases in crude affects U.S. economic to the extent that “120,000” jobs are lost belies the fact this hasn’t happened elsewhere - never mind arguing, as this article does, that the gap between two oil indexes has a direct effect over economic recovery. It’s flat out BS.
Second, you may be thinking that the above examples show that economies are more complex than a 1:1 ratio of oil prices to job losses and economic recovery. Well, you’re absolutely right - economies are ultra-complex beasts, which shows why this article is deeply flawed. Economies are not 100% tied to the cost of one commodity. Nor are they tied to a market gap within a particular commodity, and there are many commodities!
The U.S. economy is one of the most complex in the world, and it is not uni-dependent on one source of crude over another. The article claims that WTI is a better choice than Brent Crude, and that if only U.S. consumers purchased WTI the economy would be recovered. This is booger balderdash and snakey trickery!!
Housing and local tax receipts are huge drivers of growth, in fact, these are the key growth metrics, which are nowhere mentioned in the article. One could argue that VMT is down, causing growth to slow. But VMT is down only slightly at around 3-4% (and there are signs VMT is on the rise).
Even if people are traveling less, there are barely any correlations between driving less and economic growth. Recall that millions of people have moved to cities over the past 10 years, and they voluntarily gave up their vehicles. Nor does the article take into account a) the number of people who are retiring (e.g., baby boomers leaving the job market in the millions) b) the mega trend that young people are not interested in buying cars relative to the previous generation and c) car, truck, and tractor sales are (surprisingly) robust (I own stock in Ford and pay attention to sales).
Which brings me to the third reason why I believe this article if FOS and economists have no friggin clue what’s going on in the world. No one chooses where their gasoline comes from when they visit the Shell, Hess, or 7-11. Despite the argument that BC and WTI are experiencing a historically wide spread, prices at the pump do not favor one source of crude over another. The local Shell station competes with the local 7-11 who competes with the local Hess, and all try to balance complex, volatile, sometimes arbitrary costs-of-operations all with respect to the crude markets.
OK, a fourth problem. The article concludes that the price gap between the two is closing. Well, if this is the case than the opposite argument should hold true for the author - that as the gap closes, the U.S. economy will grow. Is the author willing to bet that as the gap closes, an equal amount of economic growth will occur?
I get what the author is trying to say - that consumers are losing jobs and spending less because of the price of energy. He’s flat wrong. The spread between Brent Crude and Sweet is not hurting the recovery to the extent argued.
Click here to read Harvard economist, Greg Mankiw's excellent argument to increase the gas tax $.10 per year for 10 years. ›
Central reasons: Reduce debt; environment/climate case; dumps CAFE standards; increases city density; and increases national security.
Harvard economist Robert Stavins says a major disaster is needed for the U.S. to act on climate change ›
If the name looks familiar, it’s because Nobelist Stavins was lead author of the IPCC’s 2nd and 3rd reports. He’s is current lead author on the section covering international negotiations for the IPCC’s forthcoming 5th assessment. (emphasis below are not mine).
“It’s unlikely that the U.S. is going to take serious action on climate change until there are observable, dramatic events, almost catastrophic in nature, that drive public opinion and drive the political process in that direction,” Stavins, director of Harvard’s Environmental Economics Program in Cambridge, Massachusetts, said today in an interview in Bloomberg’s Boston office.
President Barack Obama failed to get legislation through Congress that would have established a cap-and-trade system of pollution allowances to control greenhouse-gas emissions blamed for global warming. Instead, the administration is pushing regulations for carbon pollution through the Environmental Protection Agency, a far inferior approach, according to Stavins.
In an excellent overview of climate adaptation, The Economist writes that climate changes are inevitable, and communities have to adapt. We all (should) by now have a basic understanding that sea level rise will impact coastlines. But, it is the “imapacts” part that we need to understand better.
The other day, I wrote about what salt water can do to building foundations and piers. This is a real impact from sea level rise. In fact, salt from the Mediterranean Sea is encroaching the Nile river delta, ruining soils that nourish date farms and even eating away the foundations of the ancient pyramids. NPR covered it here. Tides ebb and flow into and out of the mouths of rivers that empty into the sea. The freshwater-saltwater transition zones form either deltas or estuaries (quick summary of difference between delta/estuaries here). These zones of brackish/saltier water are expected to expand into areas where people have built infrastructure, such as the footings for bridges, electricity and fiber optic cables buried under ground, storm water pipes, piers and boat moors, etc. These things were not necessarily built to withstand corrosion from salt. To combat the creeping saline water, Urban planners and hazards planners have to act now by conducting infrastructure assessments to locate high risk vulnerabilities.
The Economist expands on tangible impacts by opening up the discussion of human migration.
Ideally, there would be opportunities to move to cities in other countries, too; the larger the region in which people can travel, the easier it is to absorb migrants from struggling areas. This is one reason why adaptation is easier for large countries or integrated regions. Within the EU, Greeks and Italians will be better placed to move to cooler climes than inhabitants of similarly sized countries elsewhere.
What happens to the people who live in cities that cannot deal with very high sea level rise? Mass migrations are expected to occur, and, the article argues, cities are better prepared to absorb population increases. To demonstrate, Hurricane Katrina should come to mind (to be fair, migrations from sea level rise will be very slow, and not occur so spectacularly from one event. Still, people will migrate from flood prone areas in droves, and cities will need to be prepared to absorb a typically poorer demographic.). Estimates range from 100,000 to 300,000 people permanently fled the NOLA region after Katrina.