Archive for the ‘Environment’ Category
Externalities and biases
A while ago, the Insurance Institute for Highway Safety, (IIHS) published videos and results from crash tests they conducted using some compact cars crashing into mid-sized ones. The results appeared alarming, with the smaller vehicles apparently not fairly all that well. The upshot, as far as IIHS was concerned, was that small cars are bad for safety.
Well, that’s one, very simplistic interpretation. A conclusion laden with a barely hidden bias.
To begin with, the clear implication the IIHS is spreading is that small cars are just inherently unsafe. Period. If you pushed them on it, they would almost certainly deny that that is what they are saying, or even implying, but it is. And the reason they would deny it is because it’s not true.
The Smart car, as well as the Yaris, have been sold in Europe and other parts of the world for years before coming to the U.S. and they have a safety record that is generally no worse than other vehicles. And all three vehicles have performed well in most, if not all, standardised crash tests until the IIHS’s newly concocted demonstration. That doesn’t mean that they are the safest vehicles, or that they couldn’t be safer, but inherently unsafe they are not.
Are they likely to be less safe places to be in a crash against a hulking truck, than in the hulking truck? Yes. And the IIHS is correct in saying that is a simple matter of physics. The smaller vehicle, and its occupants, having less mass in the collision, will decelerate at a much faster rate (or even be pushed back). That means that the occupants of the smaller vehicle will experience more force in the impact. The smaller dimensions of the vehicle also mean there is less material and leeway for the force of the impact to be absorbed and dissipated by the vehicle structure.
The problem is the IIHS conclusion and recommendation, which is not the only possible response to such a dilemma, and displays a clear bias. It also arguably imposes much greater social costs than the alternatives.
The IIHS recommend that we keep larger vehicles, but spend more money on making them more fuel efficient. (They seem to ignore the irony in that larger vehicles will never be as efficient as smaller vehicles, as a matter of simple physics. I guess calling on physics wasn’t quite so convenient in this case.) So their solution is to keep “unsafe” smaller vehicles off the road.
But what about taking dangerous larger vehicles off the road instead?
As the second WSJ article cited points out, the “danger” of the smaller vehicles is primarily in the disparity of the size of vehicles on the road today. One way to reduce that is to take the larger ones off the road.
You can do that by discouraging the sale of new larger vehicles and encouraging the disposal of existing larger vehicles. You can do the former simply by raising fuel prices, or an even more sensible way would be to impose a carbon tax. This means that manufacturers can certainly make their vehicles more efficient by producing larger hybrids or diesel vehicles, and you leave the consumers the choice of purchasing such vehicles. But, it will always be cheaper to buy smaller vehicles. (That damned physics again.)
This would also have the effect of encouraging people to junk older, heavier (and larger) vehicles because it would be too expensive to run. The government could even add an extra incentive for junking those vehicles. (This would probably be most effectively, and most efficiently, used for providing an incentive for poorer owners of older vehicles, for whom the purchase price of newer and more efficient vehicles might be an insurmountable hurdle otherwise.)
As suggested by Mr. Wenzel in the article, the government could provide a certain amount of relief for people who really do need to use the larger vehicles for work, as opposed to just posing. Although, to be fair, any such subsidies should be put in place to be phased out over time. How is that fair, especially on businesses? Externalities.
Externalities are also the reason why its in some ways more “fair” to take the larger vehicles off the road. It’s the larger vehicles, or rather their drivers, who are imposing a cost on other people by their preference for larger vehicles. Drivers of smaller vehicles are only in more danger because the drivers of larger vehicles pose that danger. It seems to make sense to me to eliminate that externality by encouraging people not to drive larger vehicles.
Now there are businesses which do need larger vehicles to haul cargo, or people, or whatever. And in making an initial transition, it makes good policy sense for the government to ease the burden of change, both to encourage, and so that businesses can make the change. (It’s like helping the poor car owner; businesses might not be able to afford the new vehicles otherwise.)
After the transition, however, it doesn’t make sense for a continued subsidy. Fact of the matter is, even if the larger vehicles are necessary, they still continue to impose external costs on other drivers. So why shouldn’t they pay for that cost through higher prices? Will the businesses pass on those costs of consumers? Absolutely! But there’s no reason consumers who benefit from those businesses should not have to pay also for the external costs imposed on society for their consumption.
Such a policy will also have the benefit of encouraging manufacturer to work on more efficient larger vehicles, as long as they are cost effective, and encouraging businesses to buy smaller, more efficient, vehicles as they can use. I often wonder how many businesses really need the Titan V8 truck, as opposed to the smaller V6 version.
It’s not hard to imagine that this model of vehicle safety would ultimately be less costly to society than the one IIHS is pushing on us.
Heretic, the believer
This weekend, the NY Times Magazine had an interesting article on a rather interesting man.
To be perfectly honest, I didn’t really agree with what most of the article and Mr. Dyson had to say. But one particular point really caught my attention. And that was the point that if Mr. Dyson is wrong, any remedial action would be “too late”. It’s a point he never really addresses.
The point caught my attention because over 30 years ago while I was still in secondary school, one of my class projects was on the environment. (Since this is an issue which has only really gained prominence in the last decade or so, at least among the public, I am amazed, and rather pleased with myself, for being so prescient.)
Most of the class research argued that this was a desperately dire issue in need of action NOW! For my part, I was more cautious. Although I’ve always been interested in and cared about conservation issues, my research on the issue led me to believe that at the time there was insufficient evidence to warrant such alarmist notions. There was beginning to be gathered evidence supporting global warming, but it was sketchy at best, and certainly did not deserve the sort of drastic actions being advocated even back then, and which seem necessary now.
I made the sort of argument that Mr. Dyson is making, which is that the suspected (back then) causes of global warming, namely pollution, was the result of economic activity which did have concrete benefits, and it would be irresponsible to curtail those on the basis of flimsy (back then) evidence of environmental damage.
This brought howls of protest from my classmates who, rather than making reasoned arguments, basically insulted my supposed lack of intelligence. They, however, were ignoring one important point; my concluding point, which the teacher had to repeat (and shout to the class to be heard).
That was that almost all researchers were agreed that the reason the evidence for environmental damage was flimsy at the time was that the impact showed up as a slow-moving process. That is, the effects of pollution take years to show up to a measurably large degree. So it was feasible that we were causing damage, but we wouldn’t see for years if we were.
The flip-side of that observation was that if there was indeed man-made damage, it would take equally long, if not even longer, for the remedial effects of any action we took to counteract our past actions, if any means could be found to reverse the damage at all.
From that perspective, many scientists were agreed that we should at least try to curtail our level of pollution as a precaution since by the time concrete evidence of environmental damage was available, it would be “too late”. And that was my conclusion, which my teacher, if not my classmates, found to be a reasoned and reasonable conclusion.
This is the conundrum facing Freeman Dyson today, in reverse. There exists ample evidence that man is causing a change in the climate, and that this will have long-lasting, if not permanent, impact on our environment. Plenty of evidence exists to suggest that this will be bad for mankind.
Faced with this prospect and overwhelming consensus, it is silly for opponents of environmental action to argue we should blithely ignore the evidence and just carry on. They have to have some realistic contingency if they are wrong, but they don’t.
If the proponents of environmental control are wrong, we would have expended a lot of resources on something that was not necessary. But that activity will create some of the benefits which the critics argue we will fore go in “stalling” economic development. While it’s difficult to know if it will fully compensate, it is a certainty that it will compensate to some degree. So the worst case scenario if the environmentalists are wrong is not great, but not catastrophic.
But if the opponents are wrong, there is no “plan B” to counteract the potentially apocalyptic consequences. All Mr. Dyson has is a vague belief that man will somehow figure out a way to deal with it, because that what you have to call silly ideas about planting trillions of trees, or genetically modified trees.
Perhaps the difference is Mr. Dyson’s tendency to concentrate on only one problem at a time, rather than looking at the whole ecosystem, much the same way he compared himself to Feynman. But Mr. Dyson’s approach seems to be either thoughtless of the complexity of the whole problem, or blindly faithful of the notion that things will somehow work out OK for man.
That seems strange in a man so proud of being a heretic. More importantly, it is potentially disastrous for mankind if we blindly follow him.
Channeling Star Trek
This post about a proposed fleet of ships traveling the world’s oceans trying to cool the globe has more than a hint of the sci-fi about it. So it immediately reminded me of one particular episode of Star Trek: The Next Generation.
As I recall, the inhabitants of this particular planet used technology which caused terrible pollution, and set up devices which were designed to counteract their effects. It didn’t work out too well for those people either.
Not to appeal to the now hackneyed Occam’s razor, but is it just me, or is it crazy to spew out pollution and then create devices (which use energy and therefore also cause more pollution) to clear it up?
