The three central arguments used against plastic grocery bags are that plastic bags pollute the air and water, and pose a significant litter problem, clogging our lakes, rivers, and oceans.Claim: Plastic bags pollute the airAccording to most plastic bag critics, it takes roughly 12 million barrels of oil to produce the 100 billion plastic bags used in the US each year (Sierra Club, undated).Environmental activists note the production and decomposition of plastic bags emits greenhouse gases and other pollutants at every stage of a plastic bag’s life (New York Times, 2007). This, however, tells less than half of the story, as most analyses of bag impacts don’t consider the costs and benefits of plastic bags relative to alternatives.A study released in 2011 by the Environmental Agency of England helps put environmental impact claims in perspective. In Evidence: Life Cycle Assessment of Supermarket Carrier Bags, researchers offer a “cradle-to-grave” review of seven different types of grocery store bags: conventional lightweight plastic bags; plastic bags treated with a chemical to speed its degradation; a lightweight bag made from a biodegradable starch-polyester blend; a regular paper bag; a heavy-duty “bag for life” made from low-density polyethylene (LDPE); a heavier duty polypropylene bag; and a cotton bag (Edwards and Meyhoff Fry, 2011).
The researchers compared the environmental damage done by the bags using a number of indicators of environmental impact, including global warming potential, acidification, eutrophication, human toxicity, and others. They found that the conventional plastic bag had the lowest environmental impact of the lightweight bags in eight out of nine impact categories and that biodegradable plastic bags had even larger environmental impacts than the regular kind. Paper bags performed poorly on the environmental impact tests, and the study found that they must also be used four or more times to match the global warming potential of the plastic bags. In sum, cotton bags were found to have a greater environmental impact than the conventional bags in seven of nine categories, even when used 173 times—the number of times needed for its global warming potential to be on par with that of a plastic bagClaim: Plastic bags pollute the waterAnother frequently recited argument in favour of banning plastic is that we face a crisis of plastic-encrusted waterways. Environmental groups paint horrific pictures of plastic pollution like the Great Pacific Garbage Patch, which purportedly spans twice the size of Texas (Oceanic Defense, undated). Though it’s certainly true that plastic bags can be harmful to all things aquatic, it’s important, again, to put such claims in perspective. As assistant professor of Oceanography Angelicque White reports, the claims about the size of the Great Pacific Garbage Patch are simply wrong (2011). She explains, “The amount of plastic out there isn’t trivial, but using the highest concentrations ever reported by scientists produces a patch that is a small fraction of the state of Texas, not twice the size.” Moreover, “there is no doubt that the amount of plastics in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists. We have data that allow us to make reasonable estimates; we don’t need the hyperbole.” And the contribution of plastic grocery bags to ocean plastic pollution is relatively small: environmental group Grow NYC estimates that only “7.5% of our waste stream consists of plastic film such as supermarket bags” (2012).Dangers of alternativesAlternatives, such as trendy cloth bags, pose a danger. A closer look proves cloth bags are not only less environmentally safe as described above, but they pose their own risks to human health. In June 2010, Charles Gerba and colleagues at the University of Arizona and Loma Linda University released a study on contamination of reusable bags. As they explain in Assessment of the Potential for Cross Contamination of Food Products by Reusable Shopping Bags:“Large numbers of bacteria were found in almost all bags and coliform bacteria in half. Escherichia coli were identified in 12% of the bags and a wide range of enteric bacteria, including several opportunistic pathogens. When meat juices were added to bags and stored in the trunks of cars for two hours, the number of bacteria increased 10-fold indicating the potential for bacterial growth in the bags.”While some critics dismissed the study due to its partial funding by the American Chemistry Council, real world examples corroborate Gerbera’s results (Huffington Post, 2012). In October 2010, for example, a teenaged soccer player in Oregon fell mysteriously ill, kicking off a nasty strain of norovirus that quickly spread to her teammates and left scientists puzzled. Epidemiologists ultimately uncovered the bizarre yet treacherous culprit: a contaminated cloth grocery bag from the soccer player’s hotel room. An NBC report explains, “The girl had been very ill in the hotel bathroom, spreading an aerosol of norovirus that landed everywhere, including on the reusable grocery bag hanging in the room. When scientists checked the bag, it tested positive for the bug, even two weeks later” (Aleccia, 2012)To avoid such dangers, epidemiologist Kimberly K. Repp (whose report on the mystery above appears in the Journal of Infectious Diseases) rightly advises that, “we wash our clothes when they’re dirty; we should wash our bags too.” Unfortunately, however Gerbera et al found that “reusable bags are seldom if ever washed and often used for multiple purposes” (2012).Economic ImpactsFinally, many proponents of the plastic bag ban spend the majority of their time on environmental benefits, and offer little substantive analysis as to the economic impacts of a plastic bag ban or tax. As it turns out, the economic case for plastic bag bans and /or taxes is less than airtight. A report released in January 2011 by the Suffolk University’s Beacon Hill Institute conjectures that Washington, DC’s bag tax, by making purchases more inconvenient, will lead consumers to reduce how much they buy in the District, which “will eliminate a net of 101 local jobs. The job losses will cause annual wages to fall by $18 per worker and aggregate real disposable income to fall by $5.64 million. The wage and income losses will combine to lower income tax collections.” A recent study from the National Center for Policy Analysis also found that plastic bags cost jobs:“The NCPA surveyed store managers in Los Angeles County where a ban of thin-film bags took effect in July 2011, to determine the ban’s impact on revenues and employment. Over a one year period before and after the ban, stores that fell under the bag ban experienced a 10 percent reduction in employment, while employment in stores outside of the ban slightly increased (2012)."ConclusionThe panic surrounding plastic grocery bags is largely unfounded. Despite continued demonization of plastic bags, the evidence shows that they’re less likely to be contaminated, typically save more energy than paper or cloth alternatives, and are less hazardous to marine life than is commonly conjectured
The art of economics consists in looking not merely at the immediate hut at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups—Henry Hazlitt
Thursday, January 17, 2013
War on Plastic Bags: Debunking Three Popular Myths
Saturday, November 03, 2012
CFR: US President Obama’s Renewable Energy Jobs Comes at High Cost to Taxpayers
The Joint Committee on Taxation estimates that energy-related tax preferences will cost Americans $5.4 billion this year. Half of this, $2.7 billion, will benefit green sectors: $1 billion in nuclear subsidies, $1.3 billion in wind-energy credits for electricity production, and $400 million in solar-energy property credits.So-called “section 1603” renewable energy grants, part of the 2009 fiscal stimulus package, will cost taxpayers a further $5.8 billion. If we assume that the grants are awarded across sectors in the last five months of this year as they were in the first seven, then the nuclear, solar, and wind energy sectors will receive $4 billion of this, boosting total green-sector subsidies to $6.7 billion this year.Taxpayers will also provide $700 million in energy-efficient property credits. The credits apply mainly to solar, though we don’t know the precise allocation – so we leave it out of the figure, which therefore understates the cost of solar-backed jobs.Dividing the total wind, solar, and nuclear subsidies by the number of Americans employed in these sectors (252,000), they are currently generating jobs at an average annual cost to taxpayers of over $29,000. Wind jobs cost taxpayers nearly $47,000 per job per year.By way of comparison, the coal, oil, and gas sectors receive $2.7 billion in subsidies annually, and employ about 1.4 million Americans. The taxpayer-cost per job in these sectors is therefore just over $1,900.The bottom line is that green-energy jobs cost taxpayers, on average, 15 times more than oil, gas, and coal jobs. Wind-backed jobs cost 25 times more.
Friday, October 26, 2012
US President Obama’s Green Energy List of Failures
So far, 34 companies that were offered federal support from taxpayers are faltering — either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.The complete list of faltering or bankrupt green-energy companies:
Evergreen Solar ($25 million)* SpectraWatt ($500,000)* Solyndra ($535 million)* Beacon Power ($43 million)* Nevada Geothermal ($98.5 million) SunPower ($1.2 billion) First Solar ($1.46 billion) Babcock and Brown ($178 million) EnerDel’s subsidiary Ener1 ($118.5 million)* Amonix ($5.9 million) Fisker Automotive ($529 million) Abound Solar ($400 million)* A123 Systems ($279 million)* Willard and Kelsey Solar Group ($700,981)* Johnson Controls ($299 million) Schneider Electric ($86 million) Brightsource ($1.6 billion) ECOtality ($126.2 million) Raser Technologies ($33 million)* Energy Conversion Devices ($13.3 million)* Mountain Plaza, Inc. ($2 million)* Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)* Range Fuels ($80 million)* Thompson River Power ($6.5 million)* Stirling Energy Systems ($7 million)* Azure Dynamics ($5.4 million)* GreenVolts ($500,000) Vestas ($50 million) LG Chem’s subsidiary Compact Power ($151 million) Nordic Windpower ($16 million)* Navistar ($39 million) Satcon ($3 million)* Konarka Technologies Inc. ($20 million)* Mascoma Corp. ($100 million)*Denotes companies that have filed for bankruptcy.The problem begins with the issue of government picking winners and losers in the first place. Venture capitalist firms exist for this very reason, and they choose what to invest in by looking at companies’ business models and deciding if they are worthy. When the government plays venture capitalist, it tends to reward companies that are connected to the policymakers themselves or because it sounds nice to “invest” in green energy.
Tuesday, January 17, 2012
CBS News: US Taxpayers Taking a Hit on Green-Renewable Energy Firms
(hat tip: Mark Perry)
From CBS
It's been four months since the FBI raided bankrupt Solyndra. It received a half-billion in tax dollars and became a political lightning rod, with Republicans claiming it was a politically motivated investment.My comment:
CBS News counted 12 clean energy companies that are having trouble after collectively being approved for more than $6.5 billion in federal assistance. Five have filed for bankruptcy: The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES' subsidiary Eastern Energy and Solyndra.
Others are also struggling with potential problems. Nevada Geothermal -- a home state project personally endorsed by Senate Majority Leader Harry Reid -- warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.
SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. On its last financial statement, SunPower owed more than it was worth. SunPower's role is to design, build and initially operate and maintain the California Valley Solar Ranch Project that's the subject of the loan guarantee.
First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose - even as taxpayers were forced to back a whopping $3 billion in company loans.
Nobody from the Energy Department would agree to an interview. Last November at a hearing on Solyndra, Energy Secretary Steven Chu strongly defended the government's attempts to bolster America's clean energy prospects. "In the coming decades, the clean energy sector is expected to grow by hundreds of billions of dollars," Chu said. "We are in a fierce global race to capture this market."
Economist Morici says even somebody as smart as Secretary Chu -- an award-winning scientist -- shouldn't be playing "venture capitalist" with tax dollars. "Tasking a Nobel Prize mathematician to make investments for the U.S. government is like asking the manager of the New York Yankees to be general in charge of America's troops in Afghanistan," Morici said. "It's that absurd."
This represents the political economy of anthropomorphic climate change. Argue about the validity of global warming then divert taxpayers money on money losing projects that benefits only politically allied cronies and their political wards.
This is further proof that even with subsidized money, green or renewable energy can hardly take off simply because consumers don't see them as reliable alternatives (in spite of the global warming bugaboo).
This also proves that government picking out of 'winners' is no guarantee of success.
Even more, the issue of moral hazard applies as cronies are hardly motivated to see the success of these companies since they know government will absorb the losses on their behalf and even perhaps knew or anticipated that these companies would eventually fail, hence, became milking cows.
And corruption will signify another aspect here, since public-private partnerships naturally leads to the prioritization of the whims of the political masters rather than of consumers.
Also one can pretend to know about the future (as the energy secretary) when we really don't.
End of the day what is unsustainable won't last. What is a fraud or unnatural will be exposed for what they are. That's how events have been playing out as shown above.
Wednesday, November 16, 2011
Anatomy of Political Distribution: Solyndra Scandal
Below is an example of the anatomy of political distribution
From the Washington Post (hat tip Professor William Anderson)
The Obama administration urged officers of the struggling solar company Solyndra to postpone announcing planned layoffs until after the November 2010 midterm elections, newly released e-mails show.
Solyndra, the now-shuttered California company, had been a poster child of President Obama’s initiative to invest in clean energies and received the administration’s first energy loan of $535 million. But a year ago, in October 2010, the solar panel manufacturer was quickly running out of money and had warned the Energy Department it would need emergency cash to avoid having to shut down.
The natural drive in politics has been to either generate votes or to expand/maintain political control over a particular turf. And political mandates of picking winners and losers results to conflict of interests.
The above article shows all these at work: conflict of interest, policy failure and the desire to win votes by shielding the negative effects of applied policies
Yet in politics, since there is no economic calculation involved or no discipline from profit or losses, government failures hardly gets the retribution or reckoning required which largely makes policymakers unaccountable for their actions and incentivizes them to keep repeating similar mistakes.
The net effect is negative externality or that society suffers from these.
Saturday, October 08, 2011
Solyndragate: Emails Implicate the Obama Administration
More evidences of crony capitalism from President Obama’s ‘green jobs’ policies.
From the Business Insider (bold highlights mine)
The White House released a bunch of emails related to the Solyndra bankruptcy scandal to Congressional investigators today, in what has become a regular Friday evening email dump.
The emails, obtained by several news organizations, implicate the most senior levels of the Obama administration in scandal, which has tainted the White House since the solar company went bankrupt last month, leaving taxpayers on the hook for a $534 billion federal loan.
Here are the highlights:
One email, obtained by the Washington Post, suggests that Obama and/or his chief of staff Rahm Emanuel was actively involved in trying to get Solyndra's loan application approved in time for a September 2009 press conference.
“Ron said this morning that the POTUS definitely wants to do this (or Rahm definitely wants the POTUS to do this?),” one White House staffer told an Obama scheduler on Aug. 17, 2009, referring to Ron Klain, former chief of staff for Vice President Joe Biden.
Steve Spinner, an Obama fundraiser who worked in the DOE loan department, repeatedly pushed the chief loan officer to expedite approval of Solyndra's loan — despite the fact that his wife worked for the law firm representing Solyndra. The firm received at least $2.4 million in fees related to the loan, according to the AP. DOE officials have previously stated that Spinner did not "actively participate" in Solyndra's application.
“How [expletive] hard is this? What is he waiting for? Will we have it by the end of the day?” Spinner wrote on Aug. 28, 2009. “I have OVP [Office of Vice President] and WH [White House] breathing down my neck on this. They are getting itchy to get involved if needed. I don’t want that.”
Read more here
Political distribution of scarce resources extrapolates to favoritism, nepotism and cronyism which results to the gaming of the political economy that ultimately leads to corruption.
As Ludwig von Mises wrote,
Corruption is an evil inherent in every government not controlled by a watchful public opinion.
Saturday, September 17, 2011
Video: Jon Stewart on President Obama’s Solyndra Green Jobs Scandal
The true engines of economic growth will always be companies like Solyndra...…appears to collapsing into a scandal.
It's here that companies like Solyndra are leading the way towards a brighter and most prosperous future
Here is the Daily Show Jon Stewart’s comical take…