Personal Virtue + Sound Policy = Energy Action

Remember when Dick Cheney,back in 2001 (pre-9/11), grumbled that “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy”? Well, perhaps as conservatives always like to say, people need to take more personal responsibility (nothing wrong with re-assessing your consumption patterns and lifestyle choices or, for that matter, with putting grassroots pressure on “leaders”). But if you’re inclined to count on purely personal decision-making, all else equal, as what will get us out of the climate change conundrum, then good luck!

I recently leased a new car (and, on that occasion, figured that perhaps it’s time to move back to an area where public transit and walking and bicycling are real options instead of faint desires). I thought I would opt for a Prius, the most efficient passenger vehicle currently available in the US.

The local Toyota dealer kept pushing the latest Camry model. I marched over to the display, placed enticingly in a prime showroom spot. The EPA fuel economy sticker in the side window read: City 19 mpg, highway 28 mpg. I stumbled backwards, shocked at the low numbers.

I soon enough found out why the dealer kept mentioning the Camry despite my insistence that fuel efficiency was the most important criterion for me. He gently explained that the financing offered by Toyota made the Camry a real steal, while the Prius would cost me about TWICE as much in monthly lease payments, pricing it way out of reach for someone with a family of four and ballooning costs for housing, health care, and the kids’ college education.

So, while Toyota parades around as a green car company (it certainly does much better than the infamous Big Three out of Detroit), its day-to-day policy suggests a more complicated picture. It’s not just that Toyota also manufactures a monster truck like the Tundra or a line of Lexus cars on horsepower steroids, or sided with other carmakers in opposing higher U.S. mileage standards. Financing of car purchases is where the rubber hits the road, so-to-speak.

Clearly, Toyota and other automobile manufacturers will continue to put profits above planetary interests. So, let’s make a little alteration to Cheney’s dictum: “Conservation may be a sign of personal virtue, but it needs to be accompanied by a sound, comprehensive energy policy.”

The recently passed energy legislation that stipulates that car manufacturers increase the average mileage of new cars and light trucks to 35 miles per gallon by 2020 may seem like the right step. Compared with the absurdly out-of-date current CAFE standards, that’s certainly true. But as the International Council on Clean Transportation points out, in international comparison the United States lags badly behind Japan and Europe.

Another personal virtue—acting to press lawmakers to do the right thing—is another key ingredient in putting together a meaningful energy policy.

Third Anniversary of the Tsunami--Accomplishments and Problems

Pakistan, Iraq, Darfur... The world's hotspots are many, and it's all too easy to be swept along by the latest in the never-ending maelstrom of crises. So who has time to pause and consider what, in terms of the short-attention news cycle, is an ancient event. December 26 marked the third anniversary of the Indian Ocean tsunami. Much has happened since the catastrophe of three years ago, both good and bad. Rebuilding has progressed in fits and starts. Indonesia's Aceh province, ground zero, was able to use the post-disaster goodwill to terminate a long-running armed conflict. Sri Lanka, by contrast, lapsed back into fighting between the Sinhala majority and Tamil minority, even though some had hoped that an Aceh-style peace initiative might be possible.

Quoted by IRIN News, Sri Lanka's Information Minister Anura Priyadharshana Yapa extolled his country's accomplishments: "In contrast to other tsunami devastated countries, the Sri Lanka government has performed a tremendous job in its relief, rehabilitation and resettlement process with an overall 80 percent success.” But, as IRIN notes, it's a success shared by most, but not all. Some survivors continue to languish in welfare shelters, and others contend with new settlements that lack basic facilities, including access roads, water and sanitation, and electricity. An ILO study also found substantial problems relating to lack of public safety, infrastructure, and limited income generating opportunities.

Traveling along the country's southern coast in January 2007, I remember seeing many shacks in areas quite close to the capital Colombo (see the image above left, from my Flickr album). Some rebuilding projects have resulted in impressive new settlements. I visited one such village near Kalutara, an hour south of Colombo. Houses for 55 families of tsunami survivors were built by Sarvodaya Shramadana Society on a plot of land the government made available, about 4 kilometers from the coast. The houses are simple, but sport solar panels on the roof, rainwater harvesting, recycling. (See image at top on right.) Drinking water provision remains a problem, as does the lack of transportation to the coast--many of the inhabitants once made a living as fishermen.

The south is a region that, compared especially with the areas affected by the resumed civil war, has fared quite well. Sri Lanka’s north and east sustained 60 percent of the damage wrought by the tsunami. But about a year after the tsunami struck, in December 2005, reconstruction in the north and the east was already beginning to show signs of slowing and lagging behind--principally because there was a lack of land on which to build permanent housing for tsunami survivors. The resumption of violence between the Sri Lankan government and the Tamil Tiger rebels in 2006 added massive problems. The northeast, already saddled with weak public services and poor infrastructure, is increasingly difficult to access. Essentially reconstruction in the northeast came to a standstill.

According to the government's Reconstruction and Development Agency (RADA), by March 2007 more than 76,000 permanent houses had been built, with another 34,000 in progress. The southern districts of Galle, Matara, and Kalutara have fared very well, and in Hambantota (where President Rajapakse hails from), the number of houses constructed is far in excess of the estimated requirement. But districts in the east (with 59 percent of housing needed completed) and in the north (with just 28 percent) lag far behind.

RADA figures for December 2007, cited by IRIN News, indicate that almost 100,000 houses countrywide had been provided out of the initial requirement of 117,372 units in the 13 affected districts. The national average of 85 percent housing reconstruction is far higher than the 39 percent in the north, as of October.

Sri Lanka's post-tsunami reconstruction gap is as big a problem as its ongoing political-ethnic confrontation, and both issues are tightly related to one another.

Climate Change -- Beyond "the-market-will-fix-it" approaches

It's fashionable these days to replace sound government policy with "market-based tools." This is particularly true for the conundrum of our time--how to avert full-blown climate change. Sure, it appears more simple and workable to get people to act on their narrow self-interest than to engage in the difficult process of public policy formation. So, the argument usually goes, just impose a carbon tax or establish a "cap-and-trade" system, and voila, the market solves the problem in an efficient and elegant manner.

Well, not so fast! Experience with cap and trade suggests that we still need intelligent public policy after all--otherwise, the whole thing either doesn't work or ends up enriching those who know how to play the carbon markets. Carbon taxes are needed to ensure that environmental costs are properly accounted for in prices. But they also need to be accompanied by other measures, otherwise the whole exercise is one of Environmental Darwinism. If you are rich or reasonably well off, you can afford to buy goods and services no matter how pricey they become, but if you barely make ends meet, then you'll have to tighten the belt...

Another problem is highlighted by a recent Washington Post article ("Small-Scale Businesses Forestall a Green India") . The article explains how many such businesses cannot afford the steep upfront costs of more efficient production equipment.

A carbon tax wouldn't make the situation any easier, it would just simply kill off these businesses. So, other policies are needed. They might include assistance in having several businesses pool their investments. They might subsidize the purchase of more efficient equipment. Clearly the specifics of such policies depend strongly on the particular circumstances of different industries, companies, countries, and regions. But let's not fool ourselves that "the market" will resolve these problems. The challenge of climate change requires more (and more intelligent) government action, not less.