Monthly Archives: April 2008

Beware of the Unintended Consequences of Mandates

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Like my last post, here’s, another reminder that mandates and set-asides carry unintended consequences. In 2005, The Independent in the UK thought that biofuels were part of the answer to our problems. They promoted a biofuel quota because they were shortsighted and believed biofuel promoters who claimed there were no problems with biofuel. The Independent opined:

At last, some refreshing signs of intelligent thinking on climate change are coming out of Whitehall. The Environment minister, Elliot Morley, reveals today in an interview with this newspaper that the Government is drawing up plans to impose a “biofuel obligation” on oil companies. This would require major firms such as BP and Shell to blend a fixed proportion of biofuels with the petrol and diesel they sell on Britain’s garage forecourts. This has the potential to be the biggest green innovation in the British petrol market since the introduction of unleaded petrol a decade and a half ago.

The beauty of biofuels – petrol made from sugar beet and diesel made from oilseed rape – is that they are “carbon neutral”. The quantity of C02 they produce when burnt has already been absorbed by the crops used to make them. There is no reason why a biofuel quota should not work.

Now they have changed their tune. The biofuel spree has helped to increase the cost of food, drive up energy prices, and increase carbon dioxide emissions, and increase environmental degradation. Now The Independent says:

From today, all petrol and diesel sold on forecourts must contain at least 2.5 per cent biofuel. The Government insists its flagship environmental policy will make Britain’s 33 million vehicles greener. But a formidable coalition of campaigners is warning that, far from helping to reverse climate change, the UK’s biofuel revolution will speed up global warming and the loss of vital habitat worldwide.

Amid growing evidence that massive investment in biofuels by developed countries is helping to cause a food crisis for the world’s poor, the ecological cost of the push to produce billions of litres of petrol and diesel from plant sources will be highlighted today with protests across the country. . .

. . .

A study by the RSPB published today criticises the introduction of the RTFO as “over-hasty” and “utter folly”. The conservation body said there is already widespread evidence that biofuel production is destroying vast areas of unspoilt habitat and has made at least one species extinct.

It’s a good reminder next time government says that all we need is a quota or a mandate. Almost always there are unintended consequences. It’s too bad that the unintended consequences of the biofuel mandates in the EU and in the US are so great.

H/T The Corner

Unintended Consequences of Dumb Tax Policy

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Here’s a wonderful example of tax policies which only cost America. In short, foreign tankers are coming to the US, taking on some diesel, and then going to other countries and we give them tax credits for the service. From the National Review:

The problem began when Sen. Chuck Grassley (R., Iowa), the friend of farmers, inserted the so-called “Blenders’ Credit” into the Jobs Act of 2004. The idea was to increase biofuels production and consumption in the U.S., as biofuels were thought to be environmentally friendly and a viable alternative to fossil fuels. The credit provides $1 for each gallon of biodiesel that is mixed with regular diesel in the United States. The provision has not dramatically increased domestic consumption, but it has increased production and exports to Europe’s thriving and subsidized diesel markets.

Under World Trade Organization rules, the U.S. government cannot extend the credit only to American companies or to fuels produced in America. Thus, foreign companies are eligible whenever they bring their biodiesel stateside for mixing. But the limited American market for the fuel has given birth to an unintended consequence known as “Splash and Dash.”

Rep. John Shadegg (R., Ariz.) demonstrated the concept’s simplicity last week by referring to an article that received little attention when it was published last year. It works like this: A foreign tanker carrying 9 million gallons of biodiesel from Brazil or Malaysia sails to an American port. While it waits, 9,000 gallons of American diesel is added — that’s right, a .1 percent blend — so as to earn the blender a $9 million tax credit. The tanker heads to Europe, where diesel cars are far more common and biodiesel is further subsidized.

In some cases, tankers have reportedly made round trips from Europe to the U.S. simply to collect the subsidy. Thus we “import” and “export” the same fuel from and to the same country.

Nice work Republicans. This law was enacted when the Republicans controlled the House, the Senate, and the Presidency.

Republicans, if you want to be known as a party that is good on taxes, you have to quit giving out preferential tax treatment to pet groups like farmers. This is the kind of thing that results.

Why Didn’t Obama Write “Dreams From My Mother”

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Ann Althouse isn’t in love with Obama’s book Dreams From My Mother:

And let me add that I found “Dreams From My Father” a perplexing read. For me, the most moving part is the introduction to the new edition, in which he says that he really ought to have written about his mother — as if her “dreams” have more to do with what he is. Certainly, they should. He lived with her (and her parents), and the father abandoned him. Why does his book consign her to the background? His narrative is based on the idea that that his absent father represents his true identity, and I had the sense that, for some reason, he decided that the story of embracing his patrilineal racial identity would make the best narrative. After all, he sold the book proposal based on the excitement created by his distinction as the first black president of the Harvard Law Review. The story he tells culminates with a trip to Africa as an adult to meet the many relatives who had nothing to do with his upbringing. This he presents as the ultimate homecoming. From a feminist perspective, this troubled me. Had the introduction not reassured me that he knew he owed so much more to his mother, I would have felt downright angry.

Thanks Claire

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A couple days ago, Claire Wyatt passed away. He was my scout leader in 1985 and took us on a trip to Coyote Gulch in southern Utah. It was hard hiking through the desert, but it as a great trip. It was the first time I had been backpacking in southern Utah and I’ve been back a number of times. Here are some pictures from that original trip.

Trav Dan Chris Clair Coyote Gluch

Escalante (13)

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Where in the world is my wife?

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thames2, originally uploaded by GrfxDziner.

When I talked to Laura today she asked for a picture of Big Ben or Westminster Abbey, something more Londony than people in the Underground. So here’s a new picture of London.

Paul Krugman and the libertarians agree–ethanol is “a terrible mistake”

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It’s not everyday that a left-of-center economist like Paul Krugman agrees with the libertarians. But it’s not every day that politicians make as colossal mistake as they have with subsidizing and mandating biofuel and ethanol. But the case against the mandates and subsidies for ethanol, the case is clear. They are a scam. Earlier I wrote what I think is a path forward on ethanol policy.

Here’s Krugman’s take on biofuel:

Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.

The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”

This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.

And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states. [emphasis added].

This is what is sick about American biofuel policy–we are increasing the hardship for the poorest people in the world so politicians can court votes in farm states. That’s offensive.

Ron Bailey, who writes for the libertarian Reason magazine agrees with Krguman about ethanol’s problematic nature. Bailey writes:

Politicians in both the United States and the European Union are mandating that vast quantities of food be turned into fuel as they chase the chimera of “energy independence.” For example, Congress passed and President George W. Bush signed misbegotten legislation requiring fuel producers to use at least 36 billion gallons of biofuels by 2022-which equals about 27 percent of the gasoline Americans currently use each year and is about five times the amount being produced now. And the European Union set a goal that 10 percent of transport fuels come from biofuels by 2020.

The result of these mandates is that about 100 million tons of grain will be transformed this year into fuel, drawing down global grain stocks to their lowest levels in decades. Keep in mind that 100 million tons of grain is enough to feed nearly 450 million people for a year.

. . .

Expanding acreage to grow biofuels is bad for biodiversity and may even boost the carbon dioxide emissions that contribute to man-made global warming. Avery notes that food production needs to double because there will be more people who will want to eat better by 2050, at which point world population begins to slide back downwards. Turning food into fuel makes that goal much harder to achieve. Avery is right when he argues, “Biofuels are purely and simply the biggest Green mistake we’ve ever made and we’re still making it.”

Utah legislator still wants to ban open wifi connections

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Earlier this year, Rep. Bradley Daw of Utah introduced a bill to ban open wifi connections in Utah. I previously wrote about his plans here and here. His bill attracted a lot of attention from tech blogs and others. Despite this attention, he is undeterred because he believes that banning unencrypted wireless internet connections will reduce sex crimes.

A few months ago, after I read Rep. Daw’s bill, I email him and explained my concerns. He wrote me a cordial response and I didn’t think anything else of it until he sent me a second response. In the second email he defended himself by stating that he wasn’t overreacting because sex crimes are a really big problem. To demonstrate his point, he provided the following links to a series of stories about sex offenders in Utah. He wrote that all of the sex offenders profiled in the stories below started off with pornography addictions.

In no way do I want to minimize the seriousness of sex crimes. People are seriously damaged when they are the victims of these heinous crimes. But what does open wifi have do to with sex crimes?

Maybe its true that all sex offenders start with pornography addictions, but that does not mean that we should ban open all wifi connections. Rep. Daw believes that open wifi connections lead to sex crimes. I sincerely doubt it.

Let’s consider Rep. Daw’s central thesis that open wifi leads to sex crimes. How how far should be go in preventing people from viewing pornography? Why stop at open wireless connections? Why not ban wireless connections that only use WEP encryption? WEP encryption is very weak and can be cracked in a few minutes. To protect people from pornography shouldn’t we require everyone to use WPA encryption?

But that is not enough either. Banning all wireless internet won’t make a real difference with pornography, so why don’t we ban all pornography on the internet? Even this extreme measure wouldn’t make much of a difference.

There are a lot of benefits from open wireless connections. So instead of banning them to protect people from sex offenders, lets look for some real solutions that will help the victims of sex crimes and look at solution to prevent people becoming sex offenders in the first place. I don’t know what those program are, but I know t banning encrypted wireless connections isn’t one of them.