Map of Hybrid/Electric vehicle sales across the US

NPR is doing a series looking at automakers’ push to meet the new CAFE standards. Included is this map of hybrid/electric vehicle sales across the US by market:

http://api.tiles.mapbox.com/v2/npr.basemap-world,npr.hybrid-sales/mm/zoompan,tooltips,legend,share.html#4/36.65000000000001/-96.96999999999997

I thought it would be interesting to compare it to gasoline prices across the US. Here’s one from Gasbuddy.

I’m having trouble getting the frames to work, so you need to open two separate windows to view them side by side.

The correlation looks near perfect with the exception of the most rural parts of the mountain west and (MT, UT) and norther Great Plains (ND,SD). These states buy fewer hybrids than you would expect given their gas prices. My guess is that they see it as unmanly: at least that was the case with one of my sister’s ex-boyfriends, a farmer from Montana living in Wyoming.

The flip side is the desert southwest: Tucson and Albuquerque buy more hybrids than I would expect based solely on gas prices. Perhaps the fragile ecosystem makes them more environmentally conscious?

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Risk Aversion and Pricing Climate Risk

I felt the “Editor’s Corner” article in the most recent Financial Analysts Journal (Sept/Oct 2011) “Pricing Climate Change Risk Appropriately” does an excellent job explaining why the possibility of extreme climate scenarios justifies a considerably higher price for carbon than would be warranted under the most likely or average scenario: Humans are risk averse.

Equities… have low prices (and high expected returns) because their cash flows are discounted by society at high rates. The reason has to do with the anti-insurance aspect of equities: Their cash flows are highest in good states of nature whereby the value placed on the cash flows is low. In contrast, efforts to mitigate climate change by pricing carbon emissions will be most valuable to society if climate change turns out to have catastrophic consequences for society’s well-being. Because of this insurance aspect, society should be willing to pay higher prices for climate change mitigation.

FAJ Executive Editor Robert Litterman goes on to explain the mechanics behind carbon pricing models and their flaws, as well as why equity analysts are uniquely qualified to do these assessments.

I’ve long thought that financial market theory is uniquely applicable to understanding climate and the measures needed to mitigate climate change. what I don’t understand is why I hear so few analysts talking about it, so it was very refreshing to come across this article applying a deep understanding of economic pricing theory to what the greatest challenge the world will confront in the 21st century.

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Fuel Efficiency in the US

A nice graphic comparing various passenger cars and alternative fuels. Two quibbles:
– I don’t think the NASA crawler (used to transport the Space Shuttle) qualifies as a passenger car.
– Why not include natural gas vehicles?

Fuel Efficiency in the US

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Fossil Debt

An off-hand comment by Marc Gunther in an article on Solyndra about the started an email chain between the two of us on green jobs.

We agree that most of the debate is silly, but I see some interesting economics underlying green jobs. I explore those ideas in this article: The Microeconomics of Green Jobs.

The article also gave me the opportunity to explore a parallel between using fossil fuels and running up the deficit:

[I]f we spend too much borrowed money to create jobs today, the long-term drag on the economy caused by paying back the debt will leave everyone worse off.

Economic growth fueled by the extraction of non-renewable resources is very similar to economic growth fueled by debt. When we extract these resources and use them, we increase economic activity today, but their non-renewable nature means that we lose the opportunity to extract and use them tomorrow. Hence, the economic stimulus today comes at the cost of an economic drag tomorrow, and the future economic drag will generally be larger than today’s stimulus, since improving technology should allow us to get more benefit from each unit of resource in the future.

Using renewable resources to stimulate growth does not have this problem: Tapping the wind or the sun for energy today does nothing to diminish the wind or sun tomorrow.

In my mind, this is a deep contradiction in current Conservative politics: they don’t like debt (and I agree) but they do like fossil fuels.

I’d be a conservative, if being a conservative actually meant conserving things.

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Chaos Theory, Financial Markets, and Global Weirding

In my bio,
I usually state

My study of chaos theory led to my conviction that knowing the limits of our ability to predict is much more important than the predictions themselves, a lesson I apply to both climate science and the financial markets.

Despite having written about financial markets and clean energy stocks regularly since 2006, I have never before explained in print what I meant by that.  This summer’s heat wave and stock market turbulence illustrate how my intuition about chaos theory informs both my understanding of the climate and the stock market.

Chaotic Systems and Feedback

Poisson Saturne AttractorThe definition of a chaotic system I use is any system in which a tiny change in initial conditions can lead to a large change in results. 
Most chaotic systems are chaotic because they contain positive feedback.  Positive feedback tends to amplify trends over time, while negative feedback tends to reduce trends over time.  Complex systems such as climate and the financial markets have both positive and negative feedback. 

In the weather, we can see positive feedback when a series of hot, sunny days create a static high pressure system which keeps storms from moving in to cool things off.  When a storm does move in, you can get positive feedbacks cooling things off.  National Weather Service forecaster Daryl Williams said the following about a storm which broke the summer heat wave in Oklahoma: “It’s kind of feeding on itself, cloud cover and rainfall cools the air and the ground.” (italics mine.)

In stock markets, financial bubbles grow with the help of several types of positive feedback.  One such is “The specious association of money with intelligence,” as John Kenneth Galbraith described it in his short and very readable book on bubbles, A Short History of Financial Euphoria: Financial Genius is Before the Fall.  When we see others make money in a stock market rise, we tend to think they must have been smart to have known when to get in.  If we made money recently by buying stocks, we tend to think we are smart for having done so.  In both cases, we’re more likely to think that buying stocks is a smart thing to do, even if the profits were just dumb luck.  Collectively, this leads to more buying, which further raises prices.  Even if those price rises are justified in the beginning, the positive feedback can carry them up far beyond any level justifiable by the value of the underlying companies.  Many other positive feedbacks such as the wealth effect, relative valuation methods, and the increased ability to borrow against inflated asset prices operate in financial bubbles and bull markets.  In contrast, fundamental and value investors produce negative feedbacks by buying when prices have fallen and selling when prices have risen.

As with weather, external shocks to the system can reverse even these self-reinforcing trends, as we recently saw when the US’s political paralysis around the debt ceiling debate and Europe’s inability to effectively deal with their debt crisis recently ended the two year bull market in July.

Lorenz attractor 


Strange Attractors and Regime Change

Highly complex systems which have both positive and negative feedbacks tend not to be chaotic all the time, but rather exhibit chaotic behavior only some of the time.  The system will behave quite predictably in a deceptively regular fashion for a while, but then shift with little warning into another mode of behavior that is
also regular and predictable, but seems to follow a different set of rules.

Such behavior can be mapped with simple chaotic systems and often exhibits a pattern called a Strange Attractor, two of which are pictured with this article. 
As the system moves through such a strange attractor, it will often stay in one set of the rings curves shown for an extended period, before jumping to another set after an unpredictable period.

In the weather, we see this sort of behavior with extended heat waves, cold spells, or periods when it is hot in the morning followed by an afternoon thunderstorm.  Such patterns persist for days or weeks, but then quickly end to be replaced by a new pattern or a period of less predictable weather.

In the stock market, we have bull and bear markets.  In bull markets, good news is greeted with euphoria and strong stock buying, while bad news is discounted or ignored.  In bear markets, the opposite is true: good news is often ignored, while bad news leads to repeated bouts of selling.  In his excellent but somewhat
inaccessible book, The Alchemy of Finance, George Soros describes how he tries to spot such tipping points or regime changes as they happen.  Much theoretical work has been done to understand and model such changes, but the lesson I draw from chaos theory is that recognizing such changes in hindsight may be simple, but predicting them in advance is and will continue to be extremely difficult.  That’s probably why Soros did a much better job describing market regimes than explaining how to spot them. 

Nassim Taleb also addresses regime change in chaotic systems in his book The
Black Swan
.  His Black Swans are events which cannot be predicted solely by studying the past.  Such events occur, he says, because the rules we infer from the observation of events never contain the full range of possibilities.  He applies this lesson to societal events, personal experiences, and financial markets– all of which are chaotic systems.  There are also climatic Black Swans.

Global Weirding

If you accept that the world’s climate is a chaotic system
characterized by a strange attractor and a large number of climate regimes such as ice ages and warm periods, you should also accept that the relatively small changes we are making to the atmosphere have the potential to shift the world’s climate into a new regime where the weather patterns humanity is familiar with are replaced with a new set of patterns that we’ve never seen before in human
history. 

We are already aware of a few positive feedback mechanisms with the potential to amplify the effects of climate change, such as the ability of a release of methane from arctic permafrost and clathrates to rapidly accelerate global warming, or the disruption of the North Atlantic current due to melting polar glaciers.  Such scenarios are chilling enough, but the knowledge that climate and weather are a chaotic system raises the possibility of yet unknown mechanisms that might create rapid climactic shifts.  In a chaotic system, the past is not always a reliable guide to the future.  Climactic past performance is
no guarantee of future climactic results.

“Global Warming” can sound somewhat comforting.  “Climate Change” can sound clinical and distant.  A better description is “Global Weirding:” the climate is not becoming a warmer version of what we’re used to, it’s becoming an entirely new system, with a new set of patterns that will surprise anyone expecting a version of the old climate regime.

Conclusion

There is only one climate, while there are hundreds if not thousands of financial markets operating at any one time.  Financial markets also operate on a much more compressed time scale, with bubbles and busts compressed into a few short years or decades.  Ice Ages, on the other hand, last tens of millions of years. 

This difference financial markets and climate in number and scale means that we know much more about the chaos of financial markets than the chaos of climate.  We’ve probably already seen most possible financial market regimes in at least one of the thousands of financial markets, from tulip bulbs to CDOs, that have operated
over the course of human history.  Although the rules of markets change with new technology and communication, the basic rules of human psychology which govern these regimes have not.  To paraphrase Mark Twain, financial history may not repeat itself, but it does rhyme. 

Climactic history may also rhyme, but we’ve not yet read a full line of the poem: We don’t know what it will rhyme with.  Ice ages and warm periods often last tens of millions of years.  Given the infrequency of shifts between one climactic regime and another, it’s quite likely that the new climactic regime we are heading into will be unlike anything that has prevailed during human history, and possibly unlike anything in the geologic record.

The benefit of the slow pace of climactic history is that we do have a few years or decades during which we will be able to influence the path of global weirding. 

In a chaotic system, a tiny change today can lead to a large change in future outcomes. 

What tiny change are you making?

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A Flaw in Most Well-to-Wheel Studies of EVs and PHEVs

A post on 2GreenEnergy inspired me to talk about a flaw in Well to Wheel studies of vehicles that has been bothering me at a low level for years. Such studies attempt to quantify the emissions of vehicles based on the entire life-cycle of the fuel they use. For plug-in vehicles, this requires understanding the source of the electricity they use.

Put simply, every study I’ve read uses the average electricity generation mix. But all good economists think at the margins: The electricity going into EVs will be marginal generation: that which is built (or runs for additional hours) to meet the new source of demand. Since few new coal plants are being built in the US, and those that are here do not have much extra capacity, the marginal new electricity that will be used to power EVs will be mostly Gas, Wind, and Solar, since these dominate the mix of new generation being built, and among existing plants, only Gas has the ability to increase existing capacity factors substantially.

Since all these sources of electricity are cleaner than the average mix, studies that focus on the average utility mix understate the emissions reduction benefits of EVs. The answer may be different in China, where they are still building coal (as well as nuclear and renewable) generation at a breakneck pace.

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Predicting the Electric Vehicle Adoption Curve

Guest post by By Craig Shields, Editor, 2GreenEnergy.com

As I told the audience in my recent presentation at the Electric Vehicle Summit, I actually see this subject as one of very few bright spots happening in the world today. In particular, it appears that the divorce between Big Auto and Big Oil will be a messy and ugly affair, but one that will, in fact, culminate in the end of the Age of Oil. In this short piece, I’d like to provide my reasoning.

First, let us acknowledge the obvious: gas prices cannot go back up through the roof right now, as economic conditions would prohibit that. We also need to admit that politics and technology have conspired to create cars and trucks that are far more fuel-efficient than ever. While we’re at it, let’s throw in the concepts of range anxiety, and the inadequacy of the current charging infrastructure.

Yet I’m predicting a massive upheaval in transportation, in which EVs come to great prominence — not the slow and steady curve that the great industry analysts are calling for. At the risk of appearing rude, have you noticed that Deloitte, Bain, Accenture, Booz-Allen, etc. are almost never right in their long-term views? Who predicted there would be 5 billion cell phones? Was the Internet adoption smooth?

Here’s a laundry list of reasons that the EV sector will boom in the next 10 – 20 years, and that companies that have aggressive EV programs (e.g., Nissan) are better bets than those that don’t.

With very few exceptions, energy consumption is closely correlated to GDP, and, since we’re running out of cheap oil, we have no choice but to find a substitute; there are no other options. And there are no worthy competitors to electricity. Hydrogen, CNG, compressed air, etc. call for a fuel delivery infrastructure that does not – and will never – exist. Electricity, while not fully ubiquitous in the levels of power required today, is much closer than its would-be competitors.

Those honestly concerned about national security, with the strength to stand up to the oil industry, will eventually decouple the survival of the US from oil. The US Army is one such group; they’re deploying electric vehicles in Iraq and Afghanistan as quickly as possible. Why? Security. Lives are at stake.

As far as the importance of the other externalities of oil are concerned, I make no prediction. Will we eventually lose our appetite for shelling out $250 billion per year to deal with the asthma, lung cancer, etc. caused by the aromatics of oil and coal? Will we decide that we really do need to do something about global climate change and ocean acidification? In all honesty, I don’t know. But for the reasons discussed above, it doesn’t matter.

Once the EV industry has offered the consumer an effective value proposition, the game is over. And that can happen in two ways:

The first and most important is savings. Peak oil has assured us that the price of gas cannot come down. At the same time, the cost-effectiveness of batteries (the gating factor in all of this) is just about to blow the game wide open. A company called Eos Energy Systems, headquartered in New York City with manufacturing facilities in Easton, PA is soon to release its rechargeable zinc-air solution at $165 per kilowatt-hour – about one-quarter of the current price for lithium ion. That, IMO, is the end of the line for the internal combustion engine.

Here’s something else to consider. There is a scenario in which consumers are motivated by things outside of their wallets. I remind the reader of what happened to the mink industry in the 1960s. At one point it was fashionable for ladies to wear mink coats and stoles. Within about a year, you couldn’t find a mink coat. The sensibilities of a modern generation had changed hard and fast, and the people of the day simply refused to countenance a practice of raising and slaughtering innocent animals for their fur. Bang! The industry died – virtually overnight.

Could this happen here? You bet it could. I can’t say when it will happen, any more than I predicted 5 billion cell phones. But it’s perfectly possible that people are going to wake up one day and say: you know what? Green is cool. And what’s not cool? Rape our Earth, ruining our oceans and skies, and destroying any chance for future generations to have a decent life.

And there are a host of other reasons why this will happen that have nothing to do with either of the above:

  • By 2030, smart grid and energy storage will soon be very big industries. The fact that 200,000 EVs on the roads will provide 5 gigawatt-hours of storage for the grid will not go unnoticed.
  • The utilities, that, for some reason have shown astonishingly little interest in and involvement with EVs will change their approach when they realize that with electric transportation, “it’s all good.” The surge of EVs means steady, long-term growth, as electricity replaces oil, and the sales of massive amounts of off-peak power, which presently has very little value. EVs also mean a considerable change to the nature and shape of load peaks – again a considerable bonus.
  • There are 25 million multi-car households in single-family dwellings, with at least one car used for local commuting. That’s a lot of low-hanging fruit.

So here are my predictions:

From now until 2015, EVs will be consumed by early adopters, while sales to corporate fleets like FedEx, Verizon, and Frito Lay will show the rest of the world that EVs are ready to go.

In the five years that follow, you’ll see the pragmatists getting onboard, and hard-core evidence of a solid growth curve

From 2021 to 2030, we’ll experience rapid and smooth EV adoption, deployment of fast-charging, adequate range for virtually all driving needs, and features that consumers simply can’t live without – not unlike cool new apps for today’s smart phones.

A few years later, my grandkids will be asking me, “Grandpa, what’s a piston?”

In the spirit of offering a specific stock pick, readers may want to check out the Yulon Group out of Taiwan, traded on the Taiwan Stock Exchange. While Yulon is certainly not a pure-play EV company, I have friends at San Dimas, CA-based AC Propulsion who have been working on an EV project within Yulon’s LUXGEN brand for almost three years, and I believe the effort will become strategic to the company’s growth and profitability going forward. I’m not privy to the details of the project, but I consider it quite exciting.


— Craig Shields is editor of 2GreenEnergy.com, and author of Renewable Energy – Facts and Fantasies (Clean Energy Press, 2010)

Disclosure: The author owns no stock in any of the companies mentioned in this article.

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Savoring the Irony

I recently bought an e-Bike (Currie Technologies iZIP Hybrid Via Mezza), mainly for trips to the grocery store. There are some serious hills between me and the grocery store, and I’m not up to tackling them with a full load of groceries.

It may be a cheatercycle, but especially on hot days like today, it’s very nice to be able to take advantage of the cooling breeze you get while you’re pedaling without having to pedal so hard you’re overheated anyway. If an electric motor gets me to take the bike when I would have been tempted to get into the car, it’s a good thing.

I couldn’t resist riding it to the DMV today to register my car. How’s that for irony? Of course it would be better if I could get by without the car at all, but I live a bit to rural for that.

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Poster Boy For Unintended Consequences: Rewarding Green with Air Miles

Tyler Hamilton writes about the use of Air Miles to encourage green behavior in Canada. Although the AirMiles.ca website has a section where the miles can be redeemed for eco-friendly products, most people use Air Miles for free plane trips.

Does that strike anyone else as odd?

To me, it sounds like saying “If you recycle, buy green electricity, and change your lightbulbs, I’ll help you get a free plane flight, which could easily erase the gains from your green behavior change.”

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The Rebounding Rebound Effect & How to Dodge Jevons’ Paradox

There’s a new paper from the Victoria Transportation Policy Institute looking into the price elasticity of both miles driven and fuel use. The author, Todd Litman, has done an in-depth literature survey which will be of interest to readers who liked my recent look into Jevons’ Paradox.

Jevons’ Paradox, also known as the rebound effect, states that increasing efficiency can lead to increased use of a resource, because the resource is now cheaper. I pointed out that this is only true in elastic markets, where the use of a resource is sensitive to price. In inelastic markets, it makes sense to mandate efficiency, because efficiency will not greatly increase use. In elastic markets, the best policy avenue is to increase the marginal price of usage.

One great example of this is the potential benefits of smart metering. While the early results of smart metering trials were very positive, seeming to show that average people would reduce their energy use by 10-15% when given good data, more recent and broader trials have shown that the actual effect is much smaller. The difference is that the early trials tended to be focused on particularly price-sensitive populations, such as people who had trouble paying their electricity bills who reduced their energy use for Woodstock Hydro. More recent trials have shown much lower reductions in bills because they have been serving the general populace, not just a particularly price sensitive subgroup, like the poor or people who volunteer to have smart meters installed.

Litman’s survey of price sensitivities reaches several interesting conclusions:

1) While the price sensitivity of driving is quite elastic, the price sensitivity to fuel cost is much less elastic because fuel only accounts for about a quarter of the cost of driving.
2) Price sensitivities were temporarily depressed over the last 25 years due to various demographic changes, and now seem to be rebounding. As a result, many policies meant to reduce fuel use (such as higher CAFE standards) are likely to be less effective than expected due to the rebound effect. Better policies would work to increase the marginal cost of driving without increasing the total cost. Such policies include Pay as you drive car insurance and registration.

There’s much more. I highly recommend it or anyone interested in policies to reduce our dependence on foreign oil. Blurb follows:

Changing Vehicle Travel Price Sensitivities, The Rebounding Rebound Effect (www.vtpi.org/VMT_Elasticities.pdf ).

There is growing interest in various transportation pricing reforms to help reduce traffic congestion, accidents, energy consumption and pollution emissions. Their effectiveness is affected by the price sensitivity of transport, that is, the degree that travelers respond to price changes, measured as elasticities (the percentage change in vehicle travel caused by a percentage change in price). Lower elasticities (price changes have relatively little impact on vehicle travel) imply that pricing reforms are not very effective at achieving objectives; that higher prices significantly harm consumers; and rebound effects (additional vehicle travel that results from increased fuel efficiency) are small so strategies such as fuel economy mandates are relatively effective at conserving fuel and reducing emissions. Higher elasticities imply that price reforms are relatively effective, consumers are able to reduce vehicle travel, and rebound effects are relatively large. Some studies found that price elasticities declined during the last quarter of the Twentieth Century, but recent evidence described indicates that transport is becoming more price sensitive. This report discusses the concepts of price elasticities and rebound effects, reviews information on vehicle travel and fuel price elasticities, examines evidence of changes in price elasticity values, and discusses policy implications.

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Six more study tips for the CFA exam.

Although it was off-topic, probably my posting with the most long term staying-power was the 2008 article Six Tips For CFA Candidates

I just read another six study tips from the Finance Professional’s Post (published by NYSSA, the NY chapter of the CFA Institute), which focuses on study habits. Since I still have so much traffic even after 3 years, and the advice is good, I thought I’d share.

Here’s the link.

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A Greener Way to Shorten

I’ve been using bit.ly as a url shortened for a couple years now, and never stopped to wonder which country is “.ly”. It turns out it’s Libya. As in a Libyan firm whose chairman is Col. al-Qaddafi’s eldest son, Mohammed al-Qaddafi, not the rebels.

Sure I could just switch to one of several even shorter url shorteners, like r.im… except tha one seems to be down. Maybe goo.gl… at least they can keep a website up.

The same people who brought you JouleBug (of which I’m a fan, although I still don’t have a FaceBook account; I already spend too much time online as it is) have another option: gree.nr. I like a shortener that’s targeted at greens. And, since not many people are using it yet (they just launched), I now have a few short versions that make sense for my own websites:

http://gree.nr/AES
http://gree.nr/CEW
http://gree.nr/FGS
http://gree.nr/TK

I guess I’m a gree.nr cybersquatter.

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Do we really need a quick charging infrastructure for EVs?

A post at New Energy View on Electric Vehicle (EV) economics and charging stations got me thinking about public charging stations and range anxiety again.

I think public rapid charging stations are a wast of time. Like New Energy View, I think personal EVs will be charged up almost exclusively at night, and charging stations need only be there to add a little bit of range to combat range anxiety.

I’ve long thought the best option for public charging would be standard 120V/20A outlets at large retail/grocery stores. At 3.6-3.8 mi/kWh, that’s only enough for an additional mile of range for 7 minutes of charging, but the outlets would be cheap to install (probably no more than $100 each, and would be enough to help a lot with range anxiety.

Suppose you are considering an 80 mile trip in your EV that normally has 75 to 100 miles of range, depending on driving conditions. (This large a range variation is not unusual.) If there were no public charging option, you wouldn’t do it, fearing being stranded. But if you know that there were a few 120V charging stations available near your route, you probably would be willing, since you probably would not need them, but if it looked like you were using up energy faster than normal, you could go grocery shopping while your car was charging, and add the extra 5 miles of range you might need in the time it takes you to run your errand.

Hence five to ten 120V charging stations could do a lot more to combat range anxiety and increase the number of trips taken by EVs a lot more than one quick charge station.

Plus there is an added bonus: e-bikes and electric scooters (which I expect to have much more rapid market penetration than electric cars because of the vastly superior economics) could use these low voltage charging stations to add significantly to their range in relatively short periods of time. While an electric car might only get 3-4 miles per kWh, an e-Bike can get 40-60 miles per kWh, which means an e-Bike will charge at a rate of about 2 miles of range per minute of charging.

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Outdoor Advertising and LEDs: Jevons’ Paradox or Not?

I’ve blogged before about when Jevons’ Paradox applies, and when it does not. When energy consumers are price sensitive, they may respond to increasing efficiency by using more energy services. When they are not price-sensitive, they don’t.

But here is a new twist: increasing efficiency may come bundled with additional features. Those features may lead consumers to use more energy, even if the increasing efficiency alone would not.

In the case of outdoor billboards, the advent of inexpensive LED lighting may not be so much due to increased efficiency over traditional lighting technology, but the result of additional utility. LED bilboards can show animation, and also can show time-sensitive advertisements. These extra features are leading to an increased use of electricity in billboards, even as the technology is becoming more energy efficient… at least in terms of lumens per watt?

Perhaps I’m splitting hairs here, but I think the increased use of energy in outdoor signage using LEDs is due more to the additional services and interactivity that LEDs provide compared to traditional halide lighting (see this article in the Economist). Put simply, when something becomes more useful, people use more of it, not, as Jevon’s paradox would imply, that people use more outdoor signage lighting as it becomes cheaper.

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JouleBug

Competition may just be the key to getting normal people to adopt energy efficiency. Keeping up with the Joneses is a lot more important to most people than saving money (otherwise, we’d never buy an expensive car to impress the neighbors.)

That’s why I’m excited to hear about JouleBug, a social App/game for the iPhone (and soon Android) that turns saving energy into a reality-based friendly competition.

Players compete to earn badges from various energy-saving activities

JouleBug launched today at the South by Southwest Trade show. Press release follows. Read the rest of this entry »

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Another Cost Comparison For Renewable Electricity

I’m not a fan of nuclear power… I think it’s generally more expensive than solar, has very long lead times, and is simply playing with fire. Why would we invest in an expensive technology that, when it goes wrong, renders large geographic areas uninhabitable, as we saw with Chernobyl?

Everyone likes to be validated, so this study finding that nuclear loan guarantees are imprudent caught my attention.

In and of itself, I thought the included chart showing the levelized cost of various electricity generation technolgies accorging to three independent studies was very informative. Take a look at it here:

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The Morality of Shorting

“I’ve never advocated a short sale because I hate the idea of profiting from someone else’s misery.” So said regular AltenergyStocks author John Petersen, in an article where he broke his rule and advocated shorting Tesla Motors (TSLA)

I’ve heard variations on this phrase hundreds of times, and I’ve long disagreed. But this time the phrase was coming from the keyboard of colleague whose intelligence I greatly respect, so it got me thinking.

I questioned my previous stance… is shorting immoral because you are profiting from the misery of the long investors? But I had to conclude that there are many instances when shorting is essentially moral.

Consider, a company whose business is profiting from the misery of others. For instance, a tobacco company, such as Phillip Morris (MO), to take a fairly un-controversial example. Aren’t the investors who own MO stock profiting from the misery of others? Wouldn’t the most moral course be to short MO, rather than going long?

There is a current of belief on Wall Street that, in the immortal words of Gordon Gekko, “Greed is Good” and the pursuit of maximum gain brings benefits to society. If you subscribe to this beleif, then of course there is nothing wrong with shorting, so long as you make money.

Yet if you reject the “Greed is Good” premise, and feel that there should be some moral dimension to our investment choices, you cannot also reject shorting out of hand. To do so would be to assume that all public companies are working for society’s best interests, something I find more than a little hard to swallow.

I have to conclude that shorting in and of itself is neither good nor bad… just as buying stocks is neither good nor bad. To decide if shorting a stock is good or bad, you first have to decide on your opinion about the morality of the company you are shorting or investing in. Your stock purchases are only as good as the companies you are buying, and your stock shorts are only as bad as the companies you buy are good.

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New Light Rail Stations May Not Increase Transit Ridership

A report (pdf) by the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University found that new rail stations and transit-oriented development often fail to increase transit ridership.

New stations can sometimes lead to gentrification that prices out renters and low-income households. Since such households are core users of transit services, the new station may have the perverse effect of actually causing local ridership to decrease.

The study did not look at system-wide effects of such stations; I would expect new stations to lead to an increase in system-wide ridership over time, since the displaced renters and low-income households will most likely continue using transit in their new neighborhood, and many of the new higher-income residents will use transit for some trips that they would not have before they lived in a neighborhood with easily accessible transit.

Here are some highlights from the report compiled by Andrew Nusca at SmartPlanet:

* For 64 percent of the neighborhoods around the new rail stations in the study (that’s 27 of 42 total), population grew more quickly than the rest of the metro area.
* 55 percent of those neighborhoods showed a “dramatic” increase in housing production.
* 62 percent of those neighborhoods showed a faster increase in owner-occupied units than the rest of the metro area.
* 50 percent of those neighborhoods showed an increase in the proportion of non-Hispanic white households relative to the rest of the metro area. (The other half showed no change or a decrease.)
* 62 percent of those neighborhoods showed an increase in median household income; 60 percent showed a boost in the proportion of households with incomes of more than $100,000.
* Perhaps most tellingly, 74 percent of the neighborhoods showed rents that increased faster than the rest of the metro area. A full 88 percent had a relative boost in median housing values, too.
* In 40 percent of the new transit neighborhoods, public transit use declined relative to the rest of the metro area.
* In 71 percent of the neighborhoods, ownership of a vehicle increased; in 57 percent, ownership of two or more cars increased.

The report was published with a “Toolkit for Equitable Neighborhood Change in Transit Rich Neighborhoods” with several sensible suggestions for moderating the adverse effects (mainly on renters and low income households) of a new rail transit station, mostly related to planning and zoning.

Of course, a transit agency primarily concerned about increasing ridership and equity at the same time might simply consider adding more and better bus service in a neighborhood, something which can be done at much lower cost than adding a new rail station. In my mind, the ideal option would be to do some of both, with new rail stations complemented by frequent bus routes that bring riders to the station from surrounding areas.

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Net Benefits of CAFE stadards

I just frittered away an hour poking holes in a 2002 paper from the American Enterprise Institute and the Brooking Institution that purports to show a net cost to society from higher CAFE standards. Even using the paper’s questionable results, my calculation show an a posteriori net benefit had CAFE standards been raised at the time the paper was written.

Here are links to the original article on Knowledge Problem that spurred me to defend CAFE standards, a link to the AEI/Brookings paper, and my comments on the weaknesses in the paper’s analysis.

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Three Upcoming Public Appearances

Tuesday, Oct 19, 6pm-8pm, Springfield MA. Which Clean energy Investments are Right for You?

Thursday Nov 4, Making Plays in Alternative Energy, Panel at Inside Commodities Conference, The New York Stock Exchange, NYC.

Tuesday, March 8, 2pm-5pm. Half day workshop. Greening Your Portfolio: How to Select Clean Energy Mutual Funds, Exchange Traded Funds and Stocks

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