Quotulatiousness

March 28, 2014

Putting the WHO global pollution death figures into perspective

Filed under: Economics, Environment, Health — Tags: , , , — Nicholas @ 07:56

James Delingpole agrees that the most recent WHO report on deaths due to pollution is shocking, but points out where the press release does a sleight-of-hand move:

Even if you take the WHO’s estimates with a huge pinch of salt — and you probably should — that doesn’t mean the pollution problem in some parts of the world isn’t deadly serious. During the 20th century, around 260 million are reckoned to have died from indoor pollution in the developing world: that’s roughly twice as many as were killed in all the century’s wars.

Here, though, is the point where the WHO loses all credibility on the issue.

    “Excessive air pollution is often a by-product of unsustainable policies in sectors such as transport, energy, waste management and industry. In most cases, healthier strategies will also be more economical in the long term due to health-care cost savings as well as climate gains,” Carlos Dora, WHO Coordinator for Public Health, Environmental and Social Determinants of Health said.

    “WHO and health sectors have a unique role in translating scientific evidence on air pollution into policies that can deliver impact and improvements that will save lives,” Dr. Dora added.

See what Dora just did there? He used the shock value of the WHO’s pollution death figures to slip three Big Lies under the impressionable reader’s radar.

First, he’s trying to make out that outdoor pollution is as big a problem as indoor pollution. It isn’t: nowhere near. Many of the deaths the WHO links to the former are very likely the result of the latter (cooking and heating in poorly ventilated rooms using dung, wood, and coal) which, by nature, is much more intense.

Secondly, he’s implying that economic development is to blame. In fact, it’s economic development we have to thank for the fact that there are so many fewer pollution deaths than there used to be. As Bjorn Lomborg has noted, over the 20th century as poverty receded and clean fuels got cheaper, the risk of dying of pollution decreased eight-fold. In 1900, air pollution cost 23 per cent of global GDP; today it is 6 per cent, and by 2050 it will be 4 per cent.

But the third and by far the biggest of the lies is the implication that the UN’s policies on climate change are helping to alleviate the problem.

November 13, 2013

The environmental damage from “green” ethanol production

Filed under: Economics, Environment, Government, USA — Tags: , , , , — Nicholas @ 09:46

Ethanol was supposed to be an environmentally friendly substitute for gasoline, and it was renewable … but it’s not living up to promises:

With the Iowa political caucuses on the horizon in 2007, presidential candidate Barack Obama made homegrown corn a centerpiece of his plan to slow global warming. And when President George W. Bush signed a law that year requiring oil companies to add billions of gallons of ethanol to their gasoline each year, Bush predicted it would make the country “stronger, cleaner and more secure.”

But the ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.

As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies, an Associated Press investigation found.

Five million acres of land set aside for conservation — more than Yellowstone, Everglades and Yosemite National Parks combined — have vanished on Obama’s watch.

Landowners filled in wetlands. They plowed into pristine prairies, releasing carbon dioxide that had been locked in the soil.

Sprayers pumped out billions of pounds of fertilizer, some of which seeped into drinking water, contaminated rivers and worsened the huge dead zone in the Gulf of Mexico where marine life can’t survive.

The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact.

October 29, 2013

Even selling the USS Forrestal for $1 was a win for the US Navy

Filed under: Economics, Environment, Military, USA — Tags: , , , , — Nicholas @ 07:21

Several people have commented about the headlines proclaiming that the very first supercarrier had been sold for a princely sum of $1, but Strategy Page explains why even that token dollar was better than all the other options:

The U.S. Navy recently sold a decommissioned (in 1993) aircraft carrier (USS Forrestal) for scrap. The ship yard that will take the Forrestal apart (All Star Metals of Texas) paid the navy one cent ($.01) for the ship. That’s because this was the best deal the navy could get. That’s because it will cost many millions to take the ship apart in a legal fashion (being careful to avoid releasing any real or imagined harmful substances into the environment). The other alternative was to sink the Forrestal at sea. But this requires partial disassembly (to remove anything that could or might pollute the ocean), that would be even more expensive.

[…]

Since the 1990s, sending warships to the scrap yard has not been considered a viable alternative. It’s all about pollution, bad press, and cost. That was because of the experience with the largest warship to be scrapped to date, the 45,000 ton carrier USS Coral Sea. This ship took until 2000 (seven years) to be broken up. Thus, the new ecologically correct process was not only expensive but it took a long time. Then the navy discovered that the cost of scrapping a nuclear powered carrier like the USS Enterprise would be close to a billion dollars. This was largely the result of a lot more environmental and safety regulations. With so many navy ships (especially nuclear subs) being broken up in the 1990s, and all these new regulations arriving, the cost of disposing of these ships skyrocketed. This was especially true with carriers.

So for over a decade the navy just tied up retired ships and waited for some better solution to appear. That never happened. In fact, the situation has gotten worse. The navy only has one ship scrapping facility (Brownsville, Texas), so only one carrier at a time can be dismantled. Using official estimates of the time required to dismantle each of the biggest ships, it’ll take seven decades to get rid of the surviving conventionally powered carriers. Note also that the conventional carrier in the absolute worst shape, the USS John F Kennedy, is the one being officially retained in category B reserve (but only until Congress forgets all about her, of course). Name recognition really does count.

It gets worse. With the really vast number of single hull tankers being scrapped and large numbers of old, smaller-capacity container ships laid up and likely to be offered for scrap fairly soon, the market for difficult-to-scrap naval ships is going to shrivel and the price for scrap steel will drop. Efforts to get the navy to include the costs of disposal in the budget for lifetime costs has never caught on and now it’s obvious why not. The real nightmare begins with the first nuclear powered carrier (the 93,000 ton USS Enterprise), which began the decommissioning process in late 2012 (with the lengthy removal of all classified or reusable equipment). The cost of dismantling this ship (and disposing of radioactive components) may be close to $2 billion.

October 9, 2013

Reasons not to be fearful of “China’s economic threat”

Filed under: China, Economics, Government — Tags: , , , , — Nicholas @ 13:50

If you’ve been following the blog for a while, you’ll probably have picked up some of my disdain for the “OMG! China’s going to eat our (economic) lunch!” meme that is pretty much a copy-paste of the same worry over Japan in the 1980s. In Maclean’s, Colby Cosh explains why you shouldn’t put too much effort into worrying about the Chinese economic Colossus crushing us any time real soon:

What I always wonder when I encounter a China bull or a Chinaphobe — for they are two sides of the same coin — is this: Even if they think “socialism with Chinese characteristics” is economically superior to ordinary capitalism, where in China are the parallel cultural institutions to support prolonged capitalist-style growth? Maybe China doesn’t need reciprocal free trade to blow our doors off in the race to utopia. Maybe it doesn’t need untidy democratic quarrelling. One presumes it won’t need a high level of achievement in basic science, either, judging by the Nobels: It is well-documented that the Chinese civilian research establishment is awash in fraud and plagiarism, to say nothing of the destructive favouritism inherent to a one-party state.

Rowan Callick’s new book The Party Forever: Inside China’s Modern Communist Party makes a simple, compact judgment on the general state of Chinese higher education: Just look where the Party leadership sends its own children to university: the U.S. Another important leading indicator of cultural progress is press freedom, which, if history has anything to say on the matter at all, appears to be utterly integral to sustained prosperity. But Mainland China has no newspapers as we understand them; it is not even clear that the regimented, spoon-fed “reporters” there could assemble one, even if the Party would allow it.

The Diane Francises of the world would have us reject the relevance of the Soviet experience to China’s future, to the point of ignoring familiar Soviet themes that are increasingly apparent in China: the vast infrastructure projects standing unused in the middle of nowhere, the blind environmental despoliation, the dodgy economic statistics. Beyond mastery of trading, interior China has simply never possessed much of the cultural technique upon which the advanced stages of economic development would seem to depend. Hong Kong is the exception, but having taken it over, China shows little appetite so far for imitating its social openness and individuality — or for those of Taiwan or Japan or South Korea. It still requires a strange leap of faith to believe it possible for China to economically surpass these neighbours, and ourselves, without becoming a great deal more like us.

Regular visitors to the blog know that I’ve been rather skeptical about the official statistics reported by Chinese government and media sources.

August 17, 2013

Fracking and the environment

Filed under: Environment, Media, Technology — Tags: , , , , — Nicholas @ 09:03

Matt Ridley debunks five common myths about environmental issues with fracking:

The movie Gasland showed a case of entirely natural gas contamination of water and the director knew it, but he still pretended it might have been caused by fracking. Ernest Moniz, the US Energy Secretary, said earlier this month: “I still have not seen any evidence of fracking per se contaminating groundwater.” Tens of thousands of wells drilled, two million fracking operations completed and not a single proven case of groundwater contamination. Not one. It may happen one day, of course, but there’s few industries that can claim a pollution record that good.

Next comes the claim that shale gas production results in more methane release to the atmosphere and hence could be as bad for climate change as coal. (Methane is a more powerful greenhouse gas than carbon dioxide, but stays in the atmosphere for a shorter time and its concentration is not currently rising fast.) This claim originated with a Cornell biology professor with an axe to grind. Study after study has refuted it. As a team from Massachusetts Institute of Technology put it: “It is incorrect to suggest that shale gas-related hydraulic fracturing has substantially altered the overall [greenhouse gas] intensity of natural gas production.”

Third comes the claim that fracking uses too much water. The Guardian carried a report this week implying that a town in Texas is running dry because of the water used for fracking. Yet in Texas 1% of water use is for fracking, in the United States as a whole 0.3% — less than is used by golf courses. If parts of Texas run out of water, blame farming, by far the biggest user.

Fourth, the ever-so-neutral BBC in a background briefing this week described fracking as releasing “hundreds of chemicals” into the rock. Out by an order of magnitude, Auntie. Fracking fluid is 99.51% water and sand. In the remaining 0.49% there are just 13 chemicals, all of which can be found in your kitchen, garage or bathroom: citric acid (lemon juice), hydrochloric acid (swimming pools), glutaraldehyde (disinfectant), guar (ice cream), dimethylformamide (plastics), isopropanol (deodorant), borate (hand soap); ammonium persulphate (hair dye); potassium chloride (intravenous drips), sodium carbonate (detergent), ethylene glycol (de-icer), ammonium bisulphite (cosmetics), petroleum distillate (cosmetics).

As for earthquakes, Durham University’s definitive survey of all induced earthquakes over many decades concluded that “almost all of the resultant seismic activity [from fracking] was on such a small scale that only geoscientists would be able to detect it” and that mining, geothermal activity or reservoir water storage causes more and bigger tremors.

(more…)

July 11, 2013

Inane new “measurement” claims 1978 was the “best year ever”

Filed under: Economics, History — Tags: , , , , — Nicholas @ 08:39

An editorial in New Scientist (which I can’t quote from due to copyright concerns) claims that using a new “measurement” called the Genuine Progress Indicator (GPI), human progress peaked in 1978 and it’s all been downhill since then. Anyone who actually lived through 1978 might struggle to recall just what — if anything — was better about 1978 than following years, but the NS editors do point out that the GDP measurement generally used to compare national economies doesn’t capture all the relevant details, while GPI includes what they refer to as social factors and economic costs, making it a better measuring tool for certain comparisons.

I can only assume that most of the economists who believe that 1978 was a peak year for the environment hadn’t been born at that time: pollution was a much more visible issue in North America and western Europe than at almost any time afterwards (and eastern Europe was far worse). Industry and government were taking steps to cut back some of the worst pollutants, but that process was really only just in its early stages: it took several years for the effects to start to show.

In the late 1970s, the world was a much dirtier, poorer, less egalitarian place than even a decade later: China and India were both much more authoritarian and had still not mastered the art of ensuring that there was enough food to feed everyone. Behind the Iron Curtain, Soviets and citizens of their client states in Europe were falling further and further behind the material well-being of westerners (and becoming much more aware of the deficit).

No matter how much emphasis you put on nebulous “social factors”, the fact that the world poverty rate — regardless of how you measure it — has been cut in half over the last twenty years, lifting literally billions of people out of near-starvation makes an incredibly strong case that the world is doing better now than at any time since 1978. You can prattle on all you like about “rising inequality”, but for my money it’s a better world where the risk of people literally starving to death is that much closer to being eliminated. Give me an “unequal” world where even the poorest have enough food and clean water over an egalitarian world where billions starve, thanks very much.

June 27, 2013

How many “environmental” groups are actually harming the environment

Filed under: Economics, Environment, Media — Tags: , , , — Nicholas @ 00:01

Willis Eschenbach at Watts Up With That:

Now, given that poverty is the greatest threat to the global environment, the inescapable conclusion is that the only way the global environment stands a chance is if poor countries can develop economically.

And that is why the anti-development, pro-expensive energy stance of the large environmental NGOs is one of the great environmental tragedies of our times.

Here’s the chain of causality:

1. Climate alarmists, with the strong support of the major environmental NGOs like Greenpeace and WWF, declared war on CO2.

2. The method that they chose to fight CO2 was to discourage fossil fuel use by making energy more expensive, using a combination of taxation, legislation, international pressure, and expensive subsidies to achieve that end. Obama’s War on Coal, announced today, is just one of hundreds of examples of the wealthy NGOs and the rich governments working to increase the price of energy.

3. Since energy is development, expensive energy keeps poor countries in poverty. When the World Bank denies loans for coal fired plants in India, the poor suffer … but the environment suffers more. Until they can afford to use coal and gas, they’ll run the country on wood … I refer you back to Figure 1 for how well that works out.

4. Expensive energy slows a country’s economic development, and as President Obama pointed out, people worried about money don’t pay attention to the environment.

This ends up in a bizarre position—the actions of the major environmental NGOs are ensuring continued environmental destruction in the developing world.

June 22, 2013

Generating electricity from “biomass” – bad economics and bad for the environment

Filed under: Britain, Economics, Environment — Tags: , , , , — Nicholas @ 09:57

Matt Ridley explains why replacing natural gas (or even coal) electrical generation with biomass is an absurd “solution”:

Under the Government’s plan, biomass power stations will soon be burning much more wood than the country can possibly produce. There is a comforting myth out there that biomass imports are mainly waste that would otherwise decompose: peanut husks, olive pips, bark trimmings and the like. Actually, the bulk of the imports are already and will continue to be of wood pellets.

It is instructive to trace these back to their origin. Reporters for The Wall Street Journal recently found that the two pelleting plants established in the southern US specifically to supply Drax are not just taking waste or logs from thinned forest, but also taking logs from cleared forest, including swamp woodlands in North Carolina cleared by “shovel-logging” with giant bulldozers (running on diesel). Local environmentalists are up in arms.

The logs are taken to the pelleting plants where they are dried, chopped and pelleted, in an industrial process that emits lots of carbon dioxide and pollutants. They are then trucked (more diesel) to ports, loaded on ships (diesel again), offloaded at the Humber on to (yet more diesel) trains, 40 of which arrive at Drax each day.

[. . .]

Over 20 or 40 years, study after study shows that wood burning is far worse than gas, and worse even than coal, in terms of its greenhouse gas emissions. The effect on forest soil, especially if it is peaty, only exacerbates the disparity. The peat dries out and oxidises.

Yet the Government persists in regarding biomass burning as zero-carbon and therefore deserving of subsidy. It does so by the Orwellian feat of defining sustainability as a 60 per cent reduction in emissions from fossil fuels. As Calor Gas puts it: “This is a logical somersault too far, conveniently — for the sake of cherry-picking the technology — equating 40 per cent to 0 per cent.” (Calor Gas supplies rural gas and is understandably miffed at being punitively treated while a higher- carbon rival industry is subsidised. […]) Moreover, unlike gas or coal, you are pinching nature’s lunch when you cut down trees. Unfelled, the trees would feed beetles, woodpeckers, fungi and all sorts of other wildlife when they died, let alone when they lived. Nothing eats coal.

So, compared with gas, the biomass dash is bad for the climate, bad for energy security and dependence on imports, bad for human health, bad for wildlife and very bad for the economy. Apart from that, what’s not to like?

June 10, 2013

When recycling makes sense – and when it doesn’t

Filed under: Economics, Environment, Government — Tags: , , , — Nicholas @ 11:14

Michael Munger examines two of the most common myths about recycling:

Almost everything that’s said about recycling is wrong. At the very least, none of the conventional wisdom is completely true. Let me start with two of the most common claims, each quite false:

  1. Everything that can be recycled should be recycled. So that should be the goal of regulation: zero waste.
  2. If recycling made economic sense, the market system would take care of it. So no regulation is necessary, and in fact state action is harmful.

If either of those two claims were true, then the debate would be over. The truth is more complicated than almost anyone admits.

There are two general kinds of arguments in favor of recycling. The first is that “this stuff is too valuable to throw away!” In almost all cases, this argument is false, and when it is correct recycling will be voluntary; very little state action is necessary. The second is that recycling is cheaper than landfilling the waste. This argument may well be correct, but it is difficult to judge because officials need keep landfill prices artificially low to discourage illegal dumping and burning. Empirically, recycling is almost always substantially more expensive than disposing in the landfill.

Since we can’t use the price system, authorities resort to moralistic claims, trying to persuade people that recycling is just something that good citizens do. But if recycling is a moral imperative, and the goal is zero waste, not optimal waste, the result can be a net waste of the very resources that recycling was implemented to conserve. In what follows, I will illustrate the problems with each of the two central fallacies of mandatory and pure-market recycling, and then will turn to the problem of moral imperatives.

April 9, 2013

Psychic harm

Filed under: Law, Liberty — Tags: , , , , , — Nicholas @ 10:16

David Friedman comments on a controversial blog post by Steve Landsburg:

Steve Landsburg’s piece [link], responding in part to the Steubenville rape case, makes the same argument from the other side. We — at least Steve (and I) — don’t feel that the argument for banning pornography or contraception is a legitimate one. Our reason is that the “harm” in those cases is purely subjective — I haven’t actually done anything to you, so your unhappiness at my self-regarding behavior is your problem, not mine, and you have no right to use the legal system to make me conform to your wishes. And even if you argue that I have done something to you — acted in a way that resulted in your knowing what I was doing, knowledge that pained you — that doesn’t count, because “knowledge that pains you” isn’t injury in the same sense as causing you to get cancer is.

Which gets us to the part of Steve’s post that gives lots of people reason, or excuse, to attack him. Suppose an unconscious woman is raped in a way that results in no injury — in the Steubenville case, “rape” actually consisted of digital penetration. She only finds out it happened several days later, at which point the harm is purely subjective, consists of her being offended at the knowledge that it happened. Why is this different from the subjective harm suffered by the person offended at someone else reading pornography? It feels different — to me and obviously, from his post, to Steve. But is it different, and if so why?

That, it seems to me, is an interesting question, one relevant to both law and morality. It is ultimately the same question raised by Bork, although from the other side. Bork was arguing that the harm caused by the use of contraception and the harm caused by air pollution were ultimately of the same sort, that it was legitimate to ban pollution hence legitimate to ban contraception — his article was in part an attack on Griswold v. Connecticut, the Supreme Court case that legalized contraception, a fact I had forgotten when I started writing this post. Landsburg is arguing that rape that does only subjective harm is of the same sort as reading pornography that does only subjective harm (unlike Bork, it isn’t clear that he is thinks his argument is right, only that he thinks it interesting), that it is not legitimate to ban the reading of pornography hence not legitimate to ban that particular sort of rape.

I agree with both Bork and Landsburg that there is a real puzzle in our response to the legal (and moral) issues they raise. Hence I disagree with the various commenters whose response to the Landsburg piece was that it showed he was crazy, evil, or both.

February 18, 2013

Reason.tv: 3 reasons to build the Keystone XL pipeline

Filed under: Business, Cancon, Environment, Government, USA — Tags: , , , , — Nicholas @ 12:30

Few energy projects have inspired the level of vitriol surrounding the Keystone XL Pipeline, that would run 1,700 miles from Alberta, Canada through the United States to refineries on the Gulf of Mexico.

The oil sands of Alberta are estimated to hold 170 million 170 billon barrels of petroleum, the largest reservoir of black gold outside of Saudi Arabia.

Because the pipeline crosses an international boundary, President Barack Obama has the final say over whether to give the project a green light.

February 13, 2013

The imaginary trade-off between ecology and economics

Filed under: Economics, Environment, Food, Media, Technology — Tags: , , — Nicholas @ 09:37

Matt Ridley on the improvements in the environment in the western world:

Extrapolate global average GDP per capita into the future and it shows a rapid rise to the end of this century, when the average person on the planet would have an income at least twice as high as the typical American has today. If this were to happen, an economist would likely say that it’s a good thing, while an ecologist would likely say that it’s a bad thing because growth means using more resources. Therein lies a gap to be bridged between the two disciplines.

The environmental movement has always based its message on pessimism. Population growth was unstoppable; oil was running out; pesticides were causing a cancer epidemic; deserts were expanding; rainforests were shrinking; acid rain was killing trees; sperm counts were falling; and species extinction was rampant. For the green movement, generally, good news is no news. Many environmentalists are embarrassed even to admit that some trends are going in the right direction.

[. . .]

Why are environmental trends mainly positive? In short, the gains are due to “land sparing,” in which technological innovation allows humans to produce more from less land, leaving more land for forests and wildlife. The list of land sparing technologies is long: Tractors, unlike mules and horses, do not need to feed on hay. Advances in fertilizers and irrigation, as well as better storage, transport, and pest control, help boost yields. New genetic varieties of crops and livestock allow people to get more from less. Chickens now grow three times as fast in they did in the 1950s. The yield boosts from genetically modified crops is now saving from the plow an area equivalent to 24 percent of Brazil’s arable land.

What is really making a positive dent in the environmental arena is the unintended effects of technology rather than nature reserves or exhortations to love nature. Policy analyst Indur Goklany calculated that if we tried to support today’s population using the methods of the 1950s, we would need to farm 82 percent of all land, instead of the 38 percent we do now. The economist Julian Simon once pointed out that with cheap light, an urban, multi-story hydroponic warehouse the size of Delaware could feed the world, leaving the rest for wilderness.

It is not just food. In fiber and fuel too, we replace natural sources with synthetic, reducing the ecological footprint. Construction uses less and lighter materials. Even CO2 emissions enrich crop yields.

October 21, 2012

QotD: Environmental externalities

Filed under: Economics, Environment, Quotations — Tags: , , , , — Nicholas @ 11:12

That other people place different values upon the environment than I do worries me not in the slightest. It is precisely such differences of opinions about value that make a market. What does annoy me intensely is that almost all of the environmental problems that are currently being complained about have indeed been studied by economists. And they’ve found solutions to them as well. Just about any and every environmental problem is either about externalities or common access to a resource. In many ways these are just the flip side of exactly the same problem. But we do indeed know how to solve each of them and both of them. Hardin on ownership or regulation, Pigou on tax or regulation, both mediated through Coase on transactions costs (with a decent assit from Ostrom on communal ownership). There, that’s it: far from economics ignoring matters environmental economics has solved the damn problems.

So why won’t the environmentalists listen?

Tim Worstall, “Why won’t the environmentalists learn any economics?”, Adam Smith Institute blog, 2012-10-21.

October 20, 2012

Instead of electric cars, how about nitrogen-powered cars?

Filed under: Technology, USA — Tags: , , , , — Nicholas @ 00:03

The Economist looks at the performance of electric cars, fuel-cell cars, and nitrogen-powered cars:

As long as its storage container is well insulated, liquid air can be kept at atmospheric pressure for long periods. But on exposure to room temperature, it will instantly boil and revert back to its gaseous state. In the process, it expands 700-fold — providing the wherewithal to operate a piston engine or a turbine.

Liquid nitrogen does an even better job. Being considerably denser than liquid air, it can store more energy per unit volume, allowing cars to travel further on a tankful of the stuff. Weight for weight, liquid nitrogen packs much the same energy as the lithium-ion batteries used in laptops, mobile phones and electric cars. In terms of performance and range, then, a nitrogen vehicle is similar to an electric vehicle rather than a conventional one.

The big difference is that a liquid-nitrogen car is likely to be considerably cheaper to build than an electric vehicle. For one thing, its engine does not have to cope with high temperatures — and could therefore be fabricated out of cheap alloys or even plastics.

For another, because it needs no bulky traction batteries, it would be lighter and cheaper still than an electric vehicle. At present, lithium-ion battery packs for electric vehicles cost between $500 and $600 a kilowatt-hour. The Nissan Leaf has 24 kilowatt-hours of capacity. At around $13,200, the batteries account for more than a third of the car’s $35,200 basic price. A nitrogen car with comparable range and performance could therefore sell for little more than half the price of an electric car.

A third advantage is that liquid nitrogen is a by-product of the industrial process for making liquid oxygen. Because there is four times as much nitrogen as oxygen in air, there is inevitably a glut of the stuff — so much so, liquid nitrogen sells in America for a tenth of the price of milk.

August 13, 2012

Did China peak in 2008?

Filed under: China, Economics, Environment — Tags: , , , , , , — Nicholas @ 07:53

Walter Russell Mead wonders if the Chinese economy actually hit its peak in 2008 and will not be able to get back to that level of performance:

According to The Diplomat, the long term outlook is even more depressing. China will have to confront a series of structural challenges if it is to continue to achieve the kind of dynamic growth that lifted the country from economic backwater to emerging great power in just three decades.

The most obvious challenge is demographics. A RAND study observed that the proportion of the Chinese population of working age peaked in 2011 and began slowing this year. The share of the elderly population is rising. Healthcare and pension costs will soar as a result. So will labor costs. Investment and savings will diminish. In short, China may face the prospect, unknown in human history, of growing old before it gets rich.

The environment presents another dilemma. Like many rapidly industrializing economies, China sacrificed environmental protection at the altar of economic growth. But the effects of this approach have taken a toll: already, argues The Diplomat, ”Water and air pollution today cause 750,000 premature deaths and around 8 percent of GDP.” And as Via Meadia recently pointed out, the political costs of this approach are starting to mount as well. An outbreak of NIMBYism has forced many local officials to cancel major industrial projects as ordinary Chinese citizens demand an end to environmentally unsound development.

Of greater concern is that China has backed away from market reforms in the last decade and embraced a version of “state capitalism” that emphasizes the state far more than it does capitalism. But as state-run entities have become more powerful, their political backers — and financial beneficiaries — have an even greater stake in blocking attempts at reform.

H/T to Jon, my former virtual landlord, for the link.

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