February 28, 2006
There's been a bunch of comment in the blogosphere today about hiking gas taxes -- with the rough consensus that it's ok environmental policy, tough on the poor, and politically risky (though perhaps not quite as unthinkable as it once was).
So it's interesting to note that Oregon -- often considered a policy innovator among US states -- is in the middle of an experiment that could eventually lead to a repeal of the state gas tax.
Oregon's transportation department is recruiting volunteers to test a system that would charge people based on how far they drive, not on how much gas they use. The trial will test two rate structures -- some participants will pay a flat rate of 1.2 cents per mile, while others will pay a variable rate depending on whether they're driving during rush hour; a control group would continue to pay normal gas taxes. (See here for details, or if you're interested in volunteering.)
The state is interested in this sort of approach for a bunch of reasons, but if I read things correctly, they're mostly worried that gas tax revenues are poised to fall, perhaps significantly, over the upcoming years.
Here's the issue: if gas prices remain relatively high, or keep rising over time, economists project a gradual per-capita decline in gas consumption, as people replace their cars with more efficient ones. And if cars keep getting more and more fuel efficient, then total gas revenues could actually fall, even as the demands on the road network increase. Ultimately, states may be forced to choose between continual gas tax hikes and persistent funding shortfalls for roads -- both of which are bound to make lots of people unhappy. Under a pay-by-the-mile system, however, transportation funding would be keyed to how much people actually drive -- so the state would still keep up its funding no matter how efficient the cars get.
Obviously, shifting from gas taxes to mileage-based taxes has some signficant downsides. First, the gas tax does create a slight incentive for fuel-efficient cars; getting rid of it could put Hummers on a more even footing with hybrids. And second, it's not entirely clear that a falloff in highway funding would be a bad thing. Obviously, most drivers want the roads maintained in good working order; but, in my mind at least, a lot of highway spending seems like it's pretty wasteful.
That said, we've been pretty interested in the pay by the mile idea, despite the potential downsides. Fully developed, the technology could facilitate two innovations that could be far more powerful at promoting fuel conservation than the exisiting gas tax. First, the same technology used to track mileage for taxing purposes could also be used for a more comprehensive congestion pricing system -- which could simultaneously clear up congestion, reduce driving, and promote bus ridership by keeping streets and highways flowing. And second, it could pave the way for Pay-As-You-Drive car insurance, which would have the same effect on driving overall as roughly doubling the cost of gas.
If you want to get really fancy, you could even fine tune the pay-by-the-mile taxes, to increase fees for cars with the worst pollution or CO2 emissions, the most road space (SUVs require longer stopping distances, and tend to use up a little more space on streets and highways), or the worst safety records.
Of course, pay-by-the-mile taxes suffer from one huge drawback: they're much more complicated than gas taxes, not just because they require special technology but also because a properly "fine tuned" system -- one that accounts for all the different externalities of driving, ranging from pollution to congestion -- could be pretty incomprehensible to the average driver. And mileage-based taxes would be vulnerable to all sorts of political shenanigans, as car manufacturers would jockey for special exemptions or rates for certain kinds of vehicles. All of which means that, even though I'm very excited by the tests, I'm not yet ready to support the idea -- and certainly not until we see how drivers really react to the system.
Poll: Americans Hate/Love Higher Gas Tax
Americans strongly reject new gas taxes. According to a new NY Times/CBS poll, 85 percent oppose higher federal gas taxes. Not too surprising--except that the very same poll also found something quite different...
reject support new gas taxes--so long as the tax revenue is earmarked for specific investments. The most popular investment? Fighting global warming. 59 percent would support a gas tax if the result was less climate change. Slightly less popular was reducing dependence on foreign oil: 55 percent supported the tax in that case.
So surely gas tax increases would be super-popular if they abetted core American desires like fighting terrorism and reducing income taxes? Uh, nope. Only 28 percent would support a higher gas tax if its intent were to reduce other taxes. And only 24 percent would support it as a measure to fight terrorism.
I'm not sure I understand what exactly the poll reveals. But my hunch is that when it comes to gas consumption we Americans are a conflicted bunch; and we tend to see our fossil fuel use in ethical or even moral terms. We're not necessarily interested in paying more for gas in order to take home bigger paychecks, or even to defend ourselves. But when it comes to offsetting some of the harm of gasoline use--things like climate change--we would support higher gas taxes with a landslide.
February 27, 2006
The Odd Decouple
This is good news: according to NW Current, more and more utilities are becoming interested in "decoupling" -- which could be the single most cost-effective step I've heard of for encouraging conservation.
Here's how decoupling works. Utility rates are pretty tightly regulated: rate structures are dictated by utility commissions and the like. Traditionally, rate structures link a utility's profits to its sales: the more a utility sells, the greater its profits. But that creates a huge disincentive for conservation: if utilities get people to cut their consumption, they cut into their own earnings. In fact, a private utility that tries to get its customers to use gas more efficiently could actually run the risk of a shareholder lawsuit.
Under decoupling, though, utility rates are structured so that a utility's profit margins can rise when consumption falls. (In other words, a utility's earnings are "decoupled" from its gross sales.) This simple change can make it profitable for utilities to promote conservation. And as a result, decoupling aligns the utility's incentives with the incentives of its customers: everyone has an incentive to use energy more efficiently. Northwest Natural, an Oregon gas company, has been operating under a decoupled rate structure since 2002. One result -- it's shifted staff from marketing (trying to get people to buy more gas) to customer service. Whee!
Decoupling is one of those nifty little ideas with a huge potential payoff for a seemingly insignificant change. It doesn't take much to make decoupling a reality -- it relies on a simple alteration to the rules, rather than regulatory strictures or costly upgrades to technology. So it's nice to see it catching on.
Income Inequality Bonanza
In the New York Times, columnist Paul Krugman deflates the notion that widening income gaps are the result of education and specialized skills:
...a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.
The Economic Policy Institute makes the same point on their website: "Since 2000, the real earnings of college-educated workers (those with bachelor's degrees) have fallen quite steeply..." So having a degree doesn't guarantee that you'll grab a big slice of income pie. But who is capturing all the wealth?
As Krugman points out, big income gains have lately been restricted to a very tiny slice of Americans:
Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. [Emphasis added.]
In other words, not only are the ultra-rich getting richer, but they're getting richer much, much faster than the plain old rich. And even if you count yourself among the fortunate few who earn more than 90 percent of American households, your gains (as a class) have been very slow.
And the picture looks even bleaker for young workers.
Against that backdrop, the Christian Science Monitor reports that incomes for younger Americans are actually falling. Among the findings:
- Income fell 8 percent, adjusted for inflation, for those under 35 and 9 percent for those aged 35 to 44.
- The median income for men under age 44 was significantly lower in 1997 than in 1970, after adjusting for inflation, according to a long-term analysis by the Census Bureau in the late 1990s. For those over 45, incomes barely held their own during that period.
- The entry of women into the workforce in those decades has helped push median family incomes up over time. But even when men and women are included together, younger workers (age 25-34) are earning well below what they did in 1970. And at all ages, evidence suggests that families are putting in more hours of work to make their household incomes rise.
Add to these financial stresses the skyrocketing cost of healthcare, education, and housing (no, it's not really cheaper today) and you have a recipe for a rather unhealthy looking economy. What's most astonishing to me, however, is how little play these stories get in the media.
Business page-dominating stats like GDP and the Dow simply don't tell us very much about the economy--or at least about how the economy actually affects people. It will be interesting to see which gets more media attention: the increasingly fragile income dynamics for ordinary Americans or the 2005 GDP numbers that the feds are just about to release. I'll go out on a limb and guess it's gonna be GDP.
February 24, 2006
Signs of the Echo Boom
Washington state just came out with new estimates of population increase in the state, breaking down the share of growth in recent years that resulted from migration (in-migrants minus out-migrants) vs. natural increase (births minus deaths).
Overall, the state saw a significant uptick in net migration in 2005. From 2000 through 2004, the net inflow of new residents from outside the state had slowed quite a bit, compared with the late 1980s thorugh mid 1990s -- when in-migration was red-hot. Now, after a cooling-off period, it seems that the state is attracting legions of new residents again.
Also interesting to note: after roughly a decade in which the total number of births remained fairly stable, births are on the upswing again, reaching their highest level ever in 2005. (See the blue line on the right). The period of relative stability in the number of births was, in a way, a fluke -- boomers were moving past their reproductive peak as the relatively small "baby bust" generation entered their prime childbearing years. So even as pouplation grew, the number of births didn't.
Now, the "echo boom" generation -- the children of the boomers -- are entering their reproductive peak. And we're seeing the fruits, so to speak, right now: more babies born than ever.
At the same time, natural increase (births minus deaths -- the pink line in the chart) went up by a much smaller amount. The number of deaths is rising along with the number of births, as boomers inch closer to retirement.
It'll be interesting to see if these two trends keep cancelling one another out. Natural increase has been a surprisingly constant force in the state's population trends -- the slow-steady tortoise, compared with the on-again, off-again hare of migration.
The Accounting Scandal of GDP
Just in time for the release of new GDP numbers at the end of this month, Alan Durning has penned a piece on why these figures are as bogus as Enron's balance sheets--and a new program to dethrone GDP once and for all.
Read the full piece on Tidepool.org, NEW's online news service.
Here's an excerpt:
Estimated twelve times a year by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA), GDP is not a profit-and-loss statement for the nation, as many assume. It is a tally of finished goods and services. GDP math counts all spending as good, whether it's on weddings or divorces, college tuition or Botox injections, prenatal care or cyberporn.
Consequently, everyone from President Richard Nixon to Nobel Prize-winning economist Simon Kuznets (who helped devise it in the 1930s), has denounced the GDP (and its sibling, GNP) as a measure of progress. Still, the public, led on by the media, continues to treat BEA's GDP figures as society's report card -- and we've organized our national economy to get "A's." GDP announcements send waves through the nation, nudging investment decisions, changing interest rates, and making or breaking political careers.
To improve GDP accounting, the National Research Council panel, chaired by Katharine Abraham of the University of Maryland, proposed that BEA build a set of "satellite accounts" that assign a dollar value to such unpaid activities as housework, studying, and parenting. They also propose that satellite accounts subtract from GDP some of the environmental costs of production.
These outrigger accounts would put the main financial accounts into perspective as never before. For one thing, the satellite accounts would be huge. One study estimated that Australians produce goods and services in their own homes for their own consumption -- by cooking, cleaning, doing repairs and yard work -- worth nearly half as much as GDP. And housework is just one of five new accounts the Abraham panel proposes!
February 23, 2006
The Whales Among Us
The long term outlook for Puget Sound's resident orcas depends in part on the health of the Columbia Chinook salmon, which are themselves struggling because of the four dams on the Lower Snake River. In a word: To save the whales, we may need to first save the salmon. Saving the salmon may mean tearing out the dams. And tearing out the dams would mean bridging a nasty political divide in the Northwest.
Few issues in regional conservation raise tensions faster than talk of breaching those dams. But if we are to protect the Sound's orcas, the subject will have to be revisited. Again. And writer David Neiwert does so in an exceptionally nuanced article in the Seattle Weekly. He points out, rightly, that we simply don't know as much as we should about the resident orcas, especially about their wintertime travels and diet. We need more scientific research in a hurry. And if the best evidence is right--that Columbia Chinook are a necessary component of orca recovery--we'll also need some skillful politicking because either the whales will continue to face insufficient food or the dams will have to come down. As Neiwert casts the issue, we'll have to bridge the cultural and political divide between Puget Sound urbanites, who love the whales, and rural inland northwesterners who want the dams in place.
It's tragic, in a sense, that the fate of the orcas may rest on political machinations. The southern resident orcas, perhaps even more than the salmon, are an emblem of the ways that ecosystems and wild creatures are not just local phenomena. They rely on the integrity of whole landscapes with all their biological complexity, even though those landscapes are sometimes overlaid by a fragmented and poisonous political system.
At the very end of the article, Neiwert touches on what I think may be the key. The policies to protect orcas--cleaning up toxics, easing sprawl, restoring fisheries--have other effects too. Namely, they're pretty good for people. So in the face of staunch political opposition, maybe it's time for conservationists to try another tactic: showing that the policies in the best interest of orcas are also in the best interest of people.
If that sounds woefully anthropocentric to you, well, I agree that it is. But consider why the orcas get so much attention: it's at least in part because they exhibit signs of intelligence, even appearing to mimic certain human behaviors such as family life. The Western Grebes and geoducks of Puget Sound are struggling too, but they don't get nearly the conservation resources because they're simply not as charismatic. We're eager to protect the orcas at least in part because they remind us of ourselves.
Whether or not that's a bad thing is a subject for another (and longer) post, but it's useful to remember that, in a metaphysical sense, protecting the orcas is also partly about protecting ourselves. And in a practical sense, we inhabit the very same ecosystems as the orcas. So a Northwest with natural systems resilient enough to support a flourishing orca population is likely to be one that supports a flourishing human population too.
February 22, 2006
Always Low Toxics? Well, Sometimes, At Least
A while back I wrote about all the "fake news" -- really, just corporate P.R. -- that comes into my email inbox as a result of our work on flame retardants in people's bodies. Most of the news stories are really just press releases from companies touting the fact that they'd removed PBDEs and other hazardous substances from their products. Any single press release, by itself, is hardly worthy of notice. But viewed as a whole, the steady drumbeat of companies announcing that they'd managed to make their products less toxic seemed like an important, if unheralded, good news story.
So here's some more "fake news" that just came into my inbox that I thought might be worth mentioning:
Wal-Mart First to Retail Market with Notebook Computer that Restricts the Use of Hazardous Substances
Now, I'm not trying to toot Wal-Mart's horn; I'm sure that there are plenty of legitimate criticisms of the company's business practices. Still, the fact that Wal-Mart is selling computers that comply with Europe's toxicity standards strikes me as significant for two reasons. First, Wal-Mart is such a major retailer that this might signal a significant boost in sales of less-toxic computer equipment in North America. And second, the fact that it's being sold by Wal-Mart probably means that this computer meets the retailer's standards for cost efficiency -- which probably means that this computer not only meets European toxicity standards, but does so at little added cost compared with similar models. And this second point -- that manufacturers can reduce hazardous materials in consumer products without adding major costs -- really does seem worthy of note.
The Time of Their Life
According to the latest figures, life spans in the British Columbia are still on the rise. In 2005, life expectancy for newborns topped 81 years for the first time ever, up a little over two months from 2004:
To me, the most remarkable thing about this chart is that life expectancy growth has been so steady -- the increases have been almost linear -- and is showing no signs of slowing down. Which suggests that we're nowhere near the end of life span increases. Indeed, as this article points out (abstract only, unless you're willing to pay), lifespans around the world have grown fairly consistently for about 160 years. Moreover, mortality experts who have predicted over the years that we're approaching an 'ultimate ceiling' for life expectancy have repeatedly been proven wrong. Which might suggest that lifespans will continue to rise for quite some time.
Of course, if current trends continue life expectancy in the province will approach 100 years by the time that this year's newborns reach 81--as unthinkable now, perhaps, as a lifespan of 81 years might have been at the dawn of the 20th century. But even if the growth in life expectancy does slow down some, we're still going to see major increases in the number of elderly people over the next few decades, as the baby boomers hit retirement age. Those demographic shifts are going to force some major rethinking about how we as a society deal with seniors -- to make sure that their lives aren't just long, but also pleasant and affordable.