Showing posts with label energy and natural resources. Show all posts
Showing posts with label energy and natural resources. Show all posts

Thursday, December 30, 2021

Facts, Figures, or Fiction: Unwarranted Criticisms of the Biden Administration's Failure to Target Methane Emissions from Livestock

Background

Methane has gotten a lot of attention recently in relation to fighting climate change:

"The oil, gas and coal industries are the largest source of human-caused methane emissions. An Environmental Defense Fund study found that cutting methane emissions now could slow the near-term rate of global warming by as much as 30%."

While these facts may be true, it takes theory to explain facts, and unfortunately bad theory leads to bad decisions even if we get the facts right. A recent article in Politico provides an example in it's criticism of the Biden administration's failure to target methane emissions from livestock to combat climate change:

"This creative accounting and the administration’s policies belittle the livestock industry’s role in the methane emergency. While Biden and other U.S. officials are preaching the importance of slashing methane emissions to prevent catastrophic warming and imposing tough new methane regulations on fossil fuel companies, they are allowing super-polluting meat and dairy corporations to continue to emit massive amounts of the same greenhouse gas with impunity."

Are all methane sources equal?

Accounting for methane is key, but there is a lot of nuance to understand about methane in order to account for it appropriately so that we take the right course of action when it comes to policy and food choices.

Let's start with a bigger picture looking at total GHG emissions by source:

Source: https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks 

When we drill into agriculture and focus on beef in the U.S. we find that it accounts for about 4% of total emissions. But on a global scale, which matters most to climate change, overall, total GHG emissions related to U.S. beef consumption accounts for less than 1/2 of 1% (i.e. .5%) of global GHG emissions (EPA GHG Emissions Inventory, Rotz et al, 2018). When we talk about methane emissions associated with eating U.S. sourced beef in the U.S., we are talking about a very thin slice of total global warming potential. 

When we zoom in on this slice of potential and focus on methane this is what we see according to the current administration's Methane Emissions Reduction Action Plan:

Source: https://www.whitehouse.gov/wp-content/uploads/2021/11/US-Methane-Emissions-Reduction-Action-Plan-1.pdf  

Enteric emissions account for all ruminant livestock emissions in the U.S. which would include both beef and dairy but that gives us a pretty good picture. Again, we have facts that are all true, but *how* should we interpret this? A naive interpretation would be to simply compare the pieces of the pie assuming that we can make apples to apples comparisons between each piece and choose a course of action based on the 'facts.'  But this would be misleading without understanding the underlying biology and data generating mechanisms giving rise to this data.

The crude infographic that I put together below sheds some light on this (See this video for a better illustration or Dr. Frank Mitloehner's more detailed explanation of the biogenic carbon cycle here; see also Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al., 2018). At the highest level, methane emissions produced by beef cattle are constantly recycled. The ultimate source of methane starts in plants and is consumed by livestock and later removed from the atmosphere in the form of CO2 by plants again to repeat. This can be visualized by a tank with water going in and eventually draining out. In this context methane is a 'flow' gas.

Methane sourced from natural gas and petroleum behaves differently. When we extract, refine, and burn fossil fuels the methane associated with this is released into the atmosphere, but absent any sort of mitigation it ultimately converts to CO2 where it remains to have a long lasting warming effect. This can be visualized by a tank with water going in but never draining out. 


In relation to the first tank representing enteric emissions from livestock, there are additional nuances. When we look at U.S. cattle inventories over the last 30 years what we see is that the rate of flow from the faucet has mostly been decreasing. We have not only been recycling the same methane in the atmosphere over and over the last few decades, but less of it. Thanks to advances in economic development, technological change, innovations in management, marketing, and pricing value in the beef industry (for just a few examples see here, here, here, here, and here), we've seen gains in beef production and quality. Additionally, in 2007 compared to 1977 we were able to produce the same amount of beef using roughly 30% fewer cattle and 30% less land. Feed and and water usage were down between 15-20% with a 16% lower carbon footprint (Capper, 2007). All of these factors have culminated in a healthier, more nutritious, higher quality product with a lower carbon footprint. We can't say the same about methane associated with fossil fuels and transportation which continues to flow at greater rates and doesn't get recycled. 


Source: https://www.nass.usda.gov/Newsroom/2021/01-29-2021.php 

So when you get in your car to go to your favorite restaurant, the associated methane and CO2 emissions that result represents new and long lasting emissions. For the most part the steak or burger on your plate doesn't directly add any new warming potential to the atmosphere that didn't already exist, nor has any steak or burger you may have eaten in the last 30 years based on this data! 

Are all sources of beef equal?

Why focus on U.S. beef production and consumption in this discussion? Because in the Politico article and in many conversations like this, the context is often subtly switched between consumers of U.S. beef and consumption of beef sourced in other parts of the world as if they are substitutes. This change in context ignores important differences between technological capabilities and production practices but also differences in incomes, tastes, and preferences. A lot of the criticism of U.S. beef may actually be true in relation to beef produced and consumed in other parts of the world. We are not burning down rain forests in the U.S. in order to produce and consume beef, and the indirect connection between U.S. beef production and consumption and deforestation in other parts of the world is very weak due to the way global beef markets function. However, there are opportunities to make beef greener in other parts of the world that should not be ignored and should be researched further (see Mrode et al., 2019; Silva et al., 2018; Gates, 2017).

Should we just ignore the very potent warming potential represented by methane emissions associated with U.S. beef consumption just because it represents a thin slice of the global pie that is relevant to climate change? No, but we should put it in the proper perspective, and think of the overall global portfolio of choices we make in our diets and daily lives and not get anchored on facts divorced from the proper context so we can actually make impactful decisions. 

Consumer fads and a climate friendly behavior change strategy

As discussed above, even if all U.S. consumers gave up beef tomorrow cold turkey, there is an upper limit on the impact we can have globally. Modest changes either reducing beef consumption or switching to alternative proteins would be even less impactful. However, we should still recognize that lots of small changes could add up to have a meaningful effect in the aggregate. Given the behavioral and nutritional challenges that make any meaningful reduction in beef consumption mostly impractical at a population level (and ignoring the elephant in the room that is transportation) it is an empirical question as to what other seemingly arbitrary lifestyle changes we could suggest to decrease our impact on climate - maybe that once a week trip to the grocer to buy in bulk instead of having the fleet of Amazon, UPS, and FedEx trucks down your street multiple times a week is one example. Other consumerist trends we've seen that could also be adding to our carbon footprint could involve the fads and infatuation with local, natural, and organic food consumption, and the notorious 'free-from' food marketing campaigns that tend to demonize climate saving technologies (see here, here, here, here, here, and here for related info). 

Putting the lens of behavioral science on this, we need to think about the problem we are trying to solve or outcome we are trying to achieve (climate change mitigation) and consider the behavioral map that relates all of the target actions we could take to achieve this outcome. What role does science literacy and misinformation and disinformation play in the trends and food fads noted above that could lead to hesitancy to adopt climate saving technologies? Which solutions are technically correct but also the most impactful at scale from a behavior change perspective? Is a reduction in modern U.S. beef production or consumption the target behavior we should be trying to change compared to other options? Maybe for some people but I'm not convinced it is a global solution. 

Getting the most nutritional bang for our climate buck

How do we know we are getting the most nutritional bang for our climate buck when thinking through this? In a 2010 Food and Nutrition Research article, authors introduce the Nutrient Density to Climate Impact (NDCI) index. Metrics like this could add some perspective. According to their work:

"the NDCI index was 0 for carbonated water, soft drink, and beer and below 0.1 for red wine and oat drink. The NDCI index was similar for orange juice (0.28) and soy drink  (0.25). Due to a very high-nutrient density, the NDCI index for milk was substantially higher (0.54) than for the other beverages. Future discussion on how changes in food consumption patterns might help avert climate change need to take both GHG emission and nutrient density of foods and beverages into account."

Authors Drewnowski, Adam et al. apply this more nuanced approach to 34 different food categories including meat and dairy:

"Efforts to decrease global GHGEs while maintaining nutritionally adequate, affordable, and acceptable diets need to be guided by considerations of the ND and environmental impact of different foods and food groups. In a series of recent studies, the principal sustainability measure was carbon cost expressed in terms of GHGEs (8, 14, 15). Testing the relation between nutrient profile of foods and their carbon footprint can help identify those food groups that provide both calories and optimal nutrition at a low carbon cost."


Just as combining trips and carpooling might be effective ways to reduce your carbon footprint getting the most out of every mile driven and gallon of gas used, to be truly impactful regarding climate change, we should be trying to get the most out of every bite we take and ounce we drink. 

Weighing efficiency and values

The previous discussion starts to sound a lot like a position related to optimization and efficiency which ultimately requires making value judgements that science and economics can't make.

As discussed in Heyne, Boettke, and Prychitco's text The Economic Way of Thinking:

"efficiency is essentially an evaluative term. It always has to do with the ratio fo the value of output to the value of input...in effect it depends on what people want done and how they value what they want done. It follows that the efficiency of any process can change with changes in valuations."

What I am getting at is that maybe people prefer to have sustenance from beef vs rice or other alternatives and we have to give weight to that in a policy framework. Physical and technical facts alone can never fully determine efficiency. That's what makes economics so powerful. Its the study of people's choices and how they are made compatible. It is way more than just the study of the technical allocation of resources because it forces us to consider each individual's preferences based on the knowledge of their specific circumstances of time and place.

Science and economics can't make value judgements for us, but we should strive get the facts right, and the stories we tell with the facts need to be true to the science behind them. 

Additional and Related References:

HJ. L. Capper, The environmental impact of beef production in the United States: 1977 compared with 2007, Journal of Animal Science, Volume 89, Issue 12, December 2011, Pages 4249–4261, https://doi.org/10.2527/jas.2010-3784

Rafael De Oliveira Silva, Luis Gustavo Barioni, Giampaolo Queiroz Pellegrino, Dominic Moran, The role of agricultural intensification in Brazil's Nationally Determined Contribution on emissions mitigation, Agricultural Systems, Volume 161, 2018, Pages 102-112, ISSN 0308-521X, https://doi.org/10.1016/j.agsy.2018.01.003.

Mrode, R., Ojango, J., Okeyo, A. M., & Mwacharo, J. M. (2019). Genomic Selection and Use of Molecular Tools in Breeding Programs for Indigenous and Crossbred Cattle in Developing Countries: Current Status and Future Prospects. Frontiers in genetics, 9, 694. https://doi.org/10.3389/fgene.2018.00694

C. Alan Rotz et al. Environmental footprints of beef cattle production in the United States, Agricultural Systems (2018). DOI: 10.1016/j.agsy.2018.11.005 

https://phys.org/news/2019-03-beef-resource-greenhouse-gas-emissions.html

What cowboys can teach us about feeding the world. Could a cattle ranch in Australia improve food security in Africa? Bill Gates. Gates Notes. July 18, 2017. https://www.gatesnotes.com/Development/What-Cowboys-Can-Teach-Us-About-Feeding-the-World?WT.mc_id=07_18_2017_10_AustralianCattle_BG-LI_&WT.tsrc=BGLI

Scarborough, P., & Rayner, M. (2010). Nutrient Density to Climate Impact index is an inappropriate system for ranking beverages in order of climate impact per nutritional value. Food & nutrition research, 54, 10.3402/fnr.v54i0.5681. https://doi.org/10.3402/fnr.v54i0.5681

Drewnowski, Adam et al. “Energy and nutrient density of foods in relation to their carbon footprint.” The American journal of clinical nutrition 101 1 (2015): 184-91 .

Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al. A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation. npj Clim Atmos Sci 1, 16 (2018) doi:10.1038/s41612-018-0026-8

Saturday, January 18, 2020

Addressing Gender Inequality in Developing Countries Through Crop Improvement

A lot of production related benefits of biotechnology have been discussed in the literature, for instance decreased greenhouse gas emissions (Brookes and Barfoot, 2017), reduction in exposure to toxic chemicals (Kouser & Qaim, 2011), and food safety(Munkvold et. al, 1999). However additional research indicates that there may also be social benefits related to gender equality as discussed in
Social and Economic Effects of Genetically Engineered Crops (National Academies of Science, 2016).

Below are some highlights from this research:


  • Women comprise a significant proportion of agricultural related labor in developing countries (~43%)
  • Women in developing countries face significant challenges related to access to education, information, credit, inputs, assets, extension services, and land 

The adoption of biotechnology in developing countries has had some mitigating effects:

  • In India biotechnology adoption (Bt cotton) resulted in increased work hours and income for women (Subramanian and Qaim, 2010)
  • Reduced exposure and freeing women from spraying toxic chemicals and related labor (Bennett et al., 2003; Zambrano et al., 2013; Zambrano et al., 2012; Smale et al., 2012)
  • Increased importance of women in decision making within households (Yorobe and Smale, 2012; Zambrano et al., 2013; Rickson et al., 2006


References:

National Academies of Sciences, Engineering, and Medicine; Division on Earth and Life Studies; Board on Agriculture and Natural Resources; Committee on Genetically Engineered Crops: Past Experience and Future Prospects. Genetically Engineered Crops: Experiences and Prospects. Washington (DC): National Academies Press (US); 2016 May 17. 6, Social and Economic Effects of Genetically Engineered Crops. Available from: https://www.ncbi.nlm.nih.gov/books/NBK424536/

Graham Brookes & Peter Barfoot (2017) Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions, GM Crops & Food, 8:2, 117-147, DOI: 10.1080/21645698.2017.1309490

Bennett R, Buthelezi TJ, Ismael Y, Morse S. Bt cotton, pesticides, labour and health: A case study of smallholder farmers in the Makhathini Flats, Republic of South Africa. Outlook on Agriculture. 2003;32:123–128.

Kouser, S., Qaim, M., Impact of Bt cotton on pesticide poisoning in smallholder agriculture: A panel data analysis,Ecol. Econ. (2011), doi:10.1016/j.ecolecon.2011.06.008

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

Rickson ST, Rickson RE, Burch D. Women and sustainable agriculture. In: Bock BB, Shortall S, editors. Rural Gender Relations: Issues and Case Studies. Wallingford, UK: CABI Publishing; 2006. pp. 119–135.

Smale M, Zambrano P, Paz-Ybarnegaray R, Fernández-Montaño W. A case of resistance: Herbicide-tolerant soybeans in Bolivia. AgBioForum. 2012;15:191–205.

Subramanian A, Qaim M. The impact of Bt cotton on poor households in rural India. Journal of Development Studies. 2010;46:295–311

Yorobe JM Jr, Smale M. Impacts of Bt maize on smallholder income in the Phillipines. AgBioForum. 2012;15:152–162

Zambrano P, Smale M, Maldonado JH, Mendoza SL. Unweaving the threads: The experiences of female farmers with biotech cotton in Colombia. AgBioForum. 2012;15:125–137.

Zambrano P, Lobnibe I, Cabanilla DB, Maldonado JH, Falck-Zepeda J. Hiding in the plain sight: Women and GM crop adoption. Paper presented at the 17th ICABR Conference: Innovation and Policy for the Bioeconomy, June 18–21. Ravello, Italy: 2013.





GWP* Better Captures the Impact of Methane's Warming Potential

Understanding the differences in the way CO2 vs methane behaves is fundamental to understanding their respective roles impacting climate change, and personal and policy decisions related to mitigating future warming. A practical example, properly accounting for these differences, the global impact of U.S. beef consumption (or other ruminant food sources) over time in terms of carbon footprint (related to enteric emissions) could be even less than previously understood. Understanding this can help direct attention to those areas where we can make the biggest difference in terms impacting climate change.

 From:

 Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al. A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation. npj Clim Atmos Sci 1, 16 (2018) doi:10.1038/s41612-018-0026-8


"While shorter-term goals for emission rates of individual gases and broader metrics encompassing emissions’ co-impacts2,6,31 remain potentially useful in defining how cumulative contributions will be achieved, summarising commitments using a metric that accurately reflects their contributions to future warming would provide greater transparency in the implications of global climate agreements as well as enabling fairer and more effective design of domestic policies and measures."

https://www.nature.com/articles/s41612-018-0026-8#Sec1

See also:

A Green New Deal for Agriculture?

Religiousity, Beef, and the Environment

EconTalk: Matt Ridley, Martin Weitzman, Climate Change and Fat Tails



Some Beef Related Posts From the Incidental Economist

I'm a big fan of the Incidental Economist blog where I have learned a lot about healthcare economics. Recently healthcare economist Austin Frakt has shared some video monologues discussing meat, fake meat, health and the environment.

In the first video he discusses some recent research related to meat consumption and health, mainly there is no evidence that red meat presents a major health concern. And the challenge of observational data and research related to this:



However, in this  next video, I think the facts being referenced are making some assumptions that need clarification. Mainly, there seems to be an assumption that beef produced and consumed in the U.S. is exchangeable with beef produced in developing countries or that land devoted to beef production is exchangeable for land that could be used for food production purposes. Reducing consumption of beef in the U.S. likely won't have the impacts on consumption in other countries in the simplified way this story is often told.  U.S. beef accounts for .5% or less of global greenhouse gas emissions accounting for fossil fuel and grain consumption, as well as land use alternatives. And most of the land used for beef production isn't suitable for any other type of food production. Ruminants are able to convert inedible plant and fiber on marginal lands to highly palatable nutrient dense food sources. Adding a little grain (accounting for ~ 7% of the U.S. corn crop) can shorten the time grazing and increase production actually decreasing lifecycle greenhouse gas emissions.



I
n this final video, Dr. Frakt discusses how alternative/fake meat products are in fact NOT a healthier alternative to real beef:


Sunday, October 15, 2017

Endogenous Growth Models and Stagnation in Agricultural Innovation

See also: Ideas and Research Productivity in Agriculture 

From: Big Ideas Are Getting Harder to Find - Stanford Business Insights:

"big ideas are getting harder and harder to find, and innovations have become increasingly massive and costly endeavors, according to new research from economists at the Stanford Institute for Economic Policy Research. As a result, tremendous continual increases in research and development will be needed to sustain even today’s low rate of economic growth." 

One of the key equations in the paper relates the number of researchers working in an area to the number of new ideas: research productivity = (A*/A)/S(t) = # new ideas / # researchers One particular area they looked at was with productivity in agriculture, measuring ideas as crop yields.

 “For instance, to measure productivity in agriculture, the study’s co-authors used crop yields of corn, soybeans, wheat and cotton and compared them against research expenditures directed at improving yields, including cross-breeding, bioengineering, crop protection and maintenance....On average, research productivity in agriculture fell by about 4% to 6% per year, the study found....Research productivity is simply the ratio of average yield growth divided by the number of researchers." 

They were careful to tease out research related to non-yield related traits. However, is 'yield' always the best way to measure productivity? Maybe it is a good proxy, but it looks like their data really starts in the 60's....about the time when corn seed was being transitioned away from double cross to single cross hybrids, which were more uniform and higher yielding. In terms of having a large marginal impact on yield, that seems like it could be a tough act to follow, even 40+ years later (its not like we will rediscover hybrid vigor or heterosis) no matter how many PhD's we throw at increasing yield. Other developments in crop improvement may in fact be inflating the denominator in the equation above. The convergence of big data and genomics has opened the door to numerous potential lines of research related to crop improvement, that although may only marginally impact yield provide other significant technological benefits to growers, consumers, and the environment. This would be important, even if yield were constant.

Advances in big data and genomics may have resulted in many more possible needles to search for in a much greater number of haystacks than before. Each crop has a different genome and a seemingly infinite number of biochemical pathways that could be of interest. Then there is the micro-biome and who knows what is next. We just need way more researchers than before.

 I'm not sure how much this applies in other fields, and in some ways this could be making the authors' point....look at all the lines and directions of research and scientists pursuing them vs. actual improvements in crop yields. But again, even if yield were constant, for every bushel of corn/soy produced today, how much have we improved with regard to CO2 reduction, energy use, erosion/leaching, reduction in toxic chemical exposure (thanks largely to roundup and Bt traits), and biodiversity (in terms of non-pest targets)?

Yield just seems to be one outcome among many of importance to creating sustainable development in the agriculture space (although it is important enough to sustainability that we certainly would not want to revert back to older technologies, genetics, and chemistries as some have argued). It would be interesting to see this modeled with traits or variety patents or total hybrids as a measure of new ideas.

References:

Are Ideas Getting Harder to Find? By Nicholas A. Bloom, Charles I. Jones, John Van Reenen, Michael Webb. September 2017Working Paper No. 3592

Modern Corn and Soybean Production. Rober G. Hoeft, Emerson D. Nafziger, Richard R. Johnson, and Samuel R. Aldrich. MCSP. First Edition. 2000.

Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions. Graham Brookes & Peter Barfoot. GM Crops & Food Vol. 8 Iss.2, 2017 Genetically Engineered Crops: Has Adoption Reduced Pesticide Use?

Agricultural Outlook ERS/USDA Aug 2000 Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057

Friday, September 25, 2015

EconTalk: Matt Ridley, Martin Weitzman, Climate Change and Fat Tails

In a recent EconTalk podcast with Russ Roberts, Matt Ridley comments on a previous discussion with Martin Weitzman regarding the tail risk associated with climate change:

"the fat tail on the distribution, the relatively significant even if small possibility of a really big warming has got a heck of a lot thinner in recent years. This is partly because there was a howling mistake in the 2007 IPCC Report, the AR4 Report (Fourth Assessment Report: Climate Change, 2007), where a graph was actually distorted. And a brilliant scientist named Nick Lewis pointed this out later. It's one of the great, shocking scandals of this, that a graph--and I'm literally talking about the shape of the tail of the graph--was distorted to make a fatter tail than is necessary. When you correct that, the number gets smaller. When you feed in all these 14 papers that I've been talking about, all the latest observational data, 42 scientists involved in publishing this stuff, most of the mainstream scientists--I'm not talking about skeptics here--when you feed all that in and you get the average probability density functions for climate sensitivity, they turn out to have much thinner tails than was portrayed in the 2007. And that Martin Weitzman is basing his argument on. So the 10% chance of 6 degrees of warming in 100 years becomes much less than 1% if you look at these charts now."

Very interesting, because I thought Weitzman's discussion of tail risk was compelling. Unlike Nassem Taleb's characterization of tail risk and GMOs. I think a key to policy analysis must  revolve around getting the distribution correct, particularly the tails of the distribution, then getting the discount rate correct as well. Will there ever truly be a consensus in relation to climate change policy?


EconTalk: Matt Ridly on Climate Change Consensus

In a fairly recent EconTalk podcast with Russ Roberts, Matt Ridley discusses the consensus about climate change:

"if it's true that 97% of scientists are all of a particular view about climate, then let's go and ask what that view is. And if you go and look at the origin of that figure, it was that a certain poll--of 79 scientists, by the way, an extraordinarily small sample--said that, 97% of them agreed that human beings had influenced climate and that carbon dioxide was greenhouse gas....it's not referring to a consensus about dangerous climate change. It's referring to a consensus about humans' ability to affect the climate."

This is similar to what I wrote before back in 2008  after actually reading the IPCC 4th Assessment report. And more recently I have commented on how difficult it may be to solve the knowledge problem and actually attempt to price carbon (for which there is no consensus), and given this consensus view, from a policy perspective, the science just might not support doing anything drastic to try to stop climate change (i.e. carbon taxes, CAFE standards, other regulations).

So I continue to think that you don't  necessarily have to be a climate change skeptic or 'denier' to be a denier on climate policy (or at least push back a little)

Saturday, June 14, 2014

Antarctic Melt And Calls For Action | On Point with Tom Ashbrook

http://onpoint.wbur.org/2014/05/20/antarctic-melt-carbon-tax

Ashbrook asks, if the market were the answer and not a carbon tax, then why aren't we seeing anything from the market? And that is the issue, we could have said the same thing about mail and parcel delivery before email and UPS, and who saw google, Wikipedia, and Netflix on the horizon? The hybrid cars, wind farms, and solar seem like obvious solutions that the government has poured lots of money into. But the market's solution will not be so blatant and obvious as a government tax or subsidy, and Ashbrook's question will never have an obvious answer. Modern hybrid corn with no subsidy or tax for instance has done more to combat climate change than hybrid cars in the US.

Sunday, May 06, 2012

Hybrid Corn vs. Hybrid Cars

Which is better for the environment, hybrid corn (with biotech traits) or hybrid cars? Which is most easily adaptable and consumable on a scale large enough to have any meaningful impact on the environment? Which can be achieved most easily through social cooperation vs. manipulation and coercion?  I’ll answer these questions and more below. 

According to research from PG Economics, in 2009 alone,  greenhouse gas reductions associated with biotechnology were equivalent to removing 7.8 million cars from the road. I like to contrast this with the stats related to the much beloved hybrid car. Worldwide there have been only about 1.6 million hybrid cars sold as of 2009.  As far as cars on the road, the US and Japan have about 600,000.  And, I understand that the Obama Administration is calling for  1 million plug in hybrids on the highway by 2015. 

 So with hybrids we are talking a few million cars at most, that  are still on the road, and still one way or another require electricity, coal, or gasoline, which still creates pollution.  And there is all of this hype and interest in government setting mandates or creating subsidies to coerce consumers into buying hybrids. 

 Of course, if we all drove hybrids the impact might dwarf the 7.8 million figure above, but we would still have to net out the effects of driving hybrids.  It would take more than 7.8 million hybrids to match the green impact of biotech!  And it might take a lot of coercion and incentivization by government. We don't have to make a huge change in our lifestyle to consume biotech foods! 

That's not counting the positive impact of biotech and pharmaceutical technologies in beef and dairy  production.

" the carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. Improved efficiency has enabled the U.S. dairy industry to produce 186 billion pounds of milk from 9.2 million cows in 2007, compared to only 117 billion pounds of milk from 25.6 million cows in 1944. This has resulted in a 41 percent decrease in the total carbon footprint for U.S. milk production." 

And

“Grain feeding combined with growth promotants also results in a nearly 40 percent reduction in greenhouse gases (GHGs) per pound of beef compared to grass feeding (excluding nitrous oxides), with growth promotants accounting for fully 25 percent of the emissions reductions”


References:

GM crops: global socio-economicand environmental impacts 1996-2009. Brookes and Barfoot.



The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production. By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues.

Organic, Natural and Grass-Fed Beef: Profitability and constraints to Production in the Midwestern U.S. Nicolas Acevedo John D. Lawrence Margaret Smith August, 2006. Leopold Center for Sustainable Agriculture)
The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science,Capper, J. L., Cady, R. A., Bauman, D. E. 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781

Wednesday, March 28, 2012

PINK SLIME: WHAT IS SEEN AND WHAT IS UNSEEN

"But you don't want to have public opinion against you. Public opinion, you know, it can mean a lot."
"...I saw the whole industrial establishment of the world...all of it was run, not by bankers and boards of directors...all of it was run by any unshaved humanitarian in any basement beer joint, by any face pudgy with malice, who preached that virtue must be penalized for being virtue." - Atlas Shrugged.
"Cargill cuts 'pink slime' output, sees hamburger price rise' (Reuters)

http://www.reuters.com/article/2012/03/28/us-food-slime-idUSBRE82R1LP20120328
 
Consumers say they want healthy sustainable food. They want it to be safe. They want it to be affordable. The market delivered with finely textured lean beef. Now in a classic illustration of group think, lead by celebrities, anti-farm activists, and advocates of big government, these same producers are being punished for catering to the expressed desires of their harshest critics. Some extremists are even peddling petitions and calling for government bans and regulations to 'label' or remove this product from stores and schools. Companies are shutting down operations and laying people off. Beef prices are taking a hit.

This summer, many of these same people will go to their Farmer's Market and feel good about themselves for doing their part to support local farmers, their community, and perhaps even bettering the environment. Certainly a laudable gesture. Others will just go to the nearest big box retailer and feel more comfortable that this product may have been taken off of the shelf or out of their school.  That is what is seen.

What remains unseen is the negative impact that this self-righteous orthorexic food fetish condeming so called pink slime will have on the rest of us. Particularly what is unseen is the loss of value that thousands of family farmers and local producers will have to absorb, while continiung to strive to feed the rest of us in a manner that modern agriculture makes efficient and sustainable.

Tuesday, June 28, 2011

Have Ethanol Subsidies Impacted Food Prices?

"Using the 2004 corn price of $2.06 per bushel as a reference, actual corn prices increased by an average of $1.65 per bushel from 2006 to 2009. Only 14 cents (8%) of this increase was due to ethanol subsidies. Another 45 cents of the increase was due to market-based expansion of the corn ethanol industry. Together, expansion of corn ethanol from subsidies and market forces accounted for 36% of the average increase that we saw in corn prices from 2006 to 2009. All other market factors accounted for 64% of the corn price increase."  Read more here.


The Impact of Ethanol and Ethanol Subsidies on Corn Prices: Revisiting History
by Bruce A. Babcock and Jacinto F. Fabiosa. Center for Agricultural and Rural Development. Iowa State University.

Do we get more energy out of ethanol than it takes to make it?

"Overall then, ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s, to a substantial net energy gain in the present."


2008 Energy Balance for the Corn-Ethanol Industry. USDA

Friday, May 06, 2011

Gas Prices, Long Lines, Parachutes & Profits

Recently, from the New York Times:

"The crisis rolled on through the summer. Irrationality set in. All over the country, people wasted gallons of gas waiting in line for the gas they were afraid wouldn’t be there the next week. The crisis was the only news story anyone cared about. A protest outside Philadelphia turned violent. People stood guard beside their cars at night against thieves who siphoned out fuel."

From Atlas Shrugged:

“Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them….when money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips,and guns; or dollars.”

Recently, some clever bureucrats have gotten together to form a group known as the 'Oil and Gas Price Fraud Working Group.'

As quoted at the Knowledge Problem blog:

"And I would also note that one of the things the Attorney General task force will be looking at is coordinating with state attorneys general to make sure that we don’t have a what I’ve heard described as a “rockets-and-parachutes phenomenon,” where prices at the pump rocket up when oil prices rocket up, and yet they come down in a parachute fashion when oil prices go down. So we want to make sure that a drop in oil prices is appropriately reflected in a drop in gas prices at the pump."

Based on what I just read in the NYT above, I hope these guys don't take themselves too seriously. Of course, many people get upset about things like Exxon's recent profits reports, but as economist Mark Perry point's out at Carpe Diem, revenue from gas taxes (based on recent numbers) is almost 7 times Exxon's profit on a per gallon basis. (and we still have budget deficits).
It turns out, that consumer behavior in a competitive market (not greedy gas station owners, speculators, or oil companies) explains the "rockets and parachutes" phenomonon.

 'Rockets and Parachutes (or feathers) and research here:

ASYMMETRIC PRICE ADJUSTMENT AND CONSUMER SEARCH:
AN EXAMINATION OF THE RETAIL GASOLINE MARKET
MATTHEW LEWIS
Department of Economics
The Ohio State University
(forthcoming Summer 2011 Journal of Economics and Management Strategy)
"The model predicts that consumers search less when prices are falling. This reduced search results in higher profit margins and a slower price response to cost changes than when margins are low and prices are increasing."

and here:

"Contrary to public opinion and previous work suggesting that collusive behavior was the cause behind asymmetric pricing, this paper shows that it can well be the outcome of a competitive market"

Rockets and Feathers
Understanding Asymmetric Pricing
[Job Market Paper]
Mariano Tappata
UCLA
January 2006
 
Other references:
That ’70s Energy Crisis

By SUSAN STRAIGHT
Published: April 30, 2011
The New York Times

Thursday, April 21, 2011

Constrained Capitalism? Not

From the Guardian and you can find an article entitled "Arguments for Constrained Capitalism in Asia."

And we wonder where people get ideas, like ending our addiction to economic growth.

The article is very thought provoking, but I'm not sure the author truly understands economics, prices, or capitalism, or they are confusing their terms.

They advocate "constrained capitalism – which limits the use of natural resources and inhibits the behavior of consumers" and state that  "Governments need to tell their people that they can't have everything"

Prices, interest rates, profits, property rights, torts- all the things that make up a system of capitalism, by definition, work to limit the use of natural resources and constrain the behavior of consumers. They serve as reminders that we can't have everything and that our choices always involve trade offs. Often times, it is the intent of government policy to override these constraints, sending the false signal that yes you can have everything. (i.e. socially planned interest rates  and the excess that lead up to the financial crisis that reminded us, no you can't have everything and prices matter).  Prices reflect information related to scarcity and the knowledge and preferences of multitudes (billions) of individuals, and force each of us (consumers and businesses), with nearly every decision we make, to consider the impacts of our choices on others and the environment.  There are of course instances when we think that prices don't capture the full impact of our behavior  (externalities- see Hardin, Coase, Demsetz) but many times over the answer isn't less reliance on market forces, but more.  Paul Ehrlich and Jared Diamond have tried to make similar arguments related  to 'constrained capitalism'  and economic growth, but technological change and economic growth have undermined their claims time and time again. 

"investment in rural areas to improve sustainable farming methods and raise farming incomes."

This is one area, perhaps, where I agree, but modern agriculture in general (with GM foods, the application of genomics, proteomics, and pharmaceutical technologies in livestock production, GPS, modern intricate supply chains) is an example of an industry that has drastically reduced its environmental impact, mostly as a result of voluntary decisions by farmers on a global scale to adopt these practices.  Investment in these green technologies has paid off. How much of it is due to government sponsored R&D I'm not sure.

"He uses a telling fact: 2.2 billion Asians now have mobile phones, but far fewer have access to drinking water or toilets."

Access to potable water is perhaps one of the areas where increased reliance on markets and the price mechanism could offer the greatest improvement.

"The problem is not about needing more technology but about restructuring an economic system to meet human needs."

Economics and capitalism are all about meeting human needs. There are cases, where according to the article, it may seem that capitalism has not favored nations or peoples that are less than well off, but take the case of Egypt for example, or the many countries in Latin American.  As Hernando DeSoto has pointed out, they suffer from a lack of markets and capitalism as opposed to suffering from markets and capitalism. In a market system, if needs are not met, then competition drives profits down. If needs are met with great difficulty or under constraints of scarcity (as the article in the Guardian implies), then prices and profits will reflect that.

"There is no future unless we constrain human behaviour, how you do that is the question of our time"

That is the question of all time, and the subject of economics, which is the study of people's choices and how they are made compatible. Understanding economics and the nature of the price mechanism and spontaneous order provides the analytical framework for addressing so many of the concerns of this article.
 
References:

Science 13 December 1968:
Vol. 162 no. 3859 pp. 1243-1248
DOI: 10.1126/science.162.3859.1243
The Tragedy of the Commons
Garrett Hardin

The Problem of Social Cost
R. H. Coase
Journal of Law and Economics
Vol. 3, (Oct., 1960), pp. 1-44
Published by: The University of Chicago Press

Toward a Theory of Property Rights
Harold Demsetz
The American Economic Review, Vol. 57, No. 2, Papers and Proceedings of the Seventy-ninth
Annual Meeting of the American Economic Association. (May, 1967), pp. 347-359.




Thursday, January 20, 2011

Editorial: The Only Way to Go Green

The only way to truly go green is to efficiently allocate our resources. The economic definition of efficiency is getting the most out of our scarce resources. Sustainability is essentially dynamic efficeincy, getting the most our of our scarce resources over time. Decisions about allocating scarce resources must be based on the best information we have, using the best technology available. Market prices serve this role in information coordination and resource allocation. However, as we see in the editorial below, our ability to sustainably feed the world is often limited by institutional constraints on market forces:
 

From: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=560009&p=2

 

"Warnings of a global food shortage are cropping up in the news. This should not be happening in 2011. But while our technologies have advanced, our politics are still prehistoric....Man cannot control the weather. But famine today is as much man-made as it is a force of nature."

 

"Zimbabwe, for instance, was once considered the breadbasket of Africa. It exported wheat, corn and sugar cane across the continent and beyond. But the country's agriculture industry has been destroyed by a Marxist government that has seized privately owned farms in the name of "land reform."

 

"Friends of the Earth publicly asked governments in the hungry African countries of Ghana and Sierra Leone to recall U.S. food aid that contained genetically modified rice. Zambian President Levy Mwanawasa set the wrong tone in 2002 when he called the food offered to his famished nation "poison" and "intrinsically dangerous."

 

"Given that we have the technology to grow larger crops on smaller parcels and fly fresh food around the world to where it's needed in a matter of hours, the obstructionism is inexcusable. We need policymakers who are as advanced as today's technology."

Sunday, January 16, 2011

Feeding the 9 Billion: Rational Optimism

From 'The Rational Optimist: How Prosperity Evolves'

"Bad harvests in Russia and Australia, combined with rising oil prices, have begun to cause shortages, export bans and even riots. Does starvation loom?No"



"A few years ago environmentalists argued that fertiliser would soon run short, because it is made using natural gas, a fossil fuel. But the discovery of how to extract abundant shale gas has turned that argument on its head: there are probably many decades' worth of natural gas now available to make fertilizer."


"There are high-tech changes afoot too. Maize and rice that have been genetically modified to resist pests and use less water, soybeans with better amino acid balance for pig food, wheat that can resist rust - all these are coming. Benighted Europe may reject these GM crops for superstitious reasons but surely not for long. The environmental benefits alone are now stark: GM crops can be pest resistant without the use of sprays that kill harmless insect bystanders."

"For all these reasons food production will probably continue to rise faster than population in the decades ahead...so long as trade is free and innovation flourishes, by 2050 it is easily possible that we can feed nine billion people with more and better food from less land."

There Will Be Fuel or Drill Baby Drill?

In a basic principles of economics class, students will learn that as resources become scarce, their prices rise to reflect this scarcity.(absent government intervention and price manipulation). In response to these incentives, efforts are made to find alternatives or to economize on those scarce resources. Often times, technological change augments the process. (as a result of these price incentives, profit signals, and incentivised R&D investments). As a result, the prices of most natural resources over time have either declined or stayed about the same. What we can take from this is that natural resource constraints have not been a limiting factor to sustainable economic growth. These recent articles form the New York Times are a reflection of that finding, as it relates to fossil fuels.

There Will Be Fuel: NYT

"The same high prices that inspired dire fear in the first place helped to resolve them. High oil and gas prices produced a wave of investment and drilling, and technological innovation has unlocked oceans of new resources. Oil and gas from ocean bottoms, the Arctic and shale rock fields are quickly replacing tired fields in places like Mexico, Alaska and the North Sea...."The technology producing these resources has absolutely made the difference," Mr. Odum said. "It's the same with the Arctic, with the shale oil, all over the world. Technology is the key...."When you add it up," Mr. Morse noted, "you get something that very closely approximates energy independence."


Economic Optimism: NYT

"It's true that the real price of oil is slightly higher now than it was in 2005, and it's always possible that oil prices will spike again in the future. But the overall energy situation today looks a lot like a Cornucopian feast, as my colleagues Matt Wald and Cliff Krauss have recently reported. Giant new oil fields have been discovered off the coasts of Africa and Brazil. The new oil sandsprojects in Canada now supply more oil to the United States than Saudi Arabia does. Oil production in the United States increased last year, and the Department of Energy projects further increases over the next two decades.........You can always make news with doomsday predictions, but you can usually make money betting against them. "

The Energy Future Ain't What it Used to Be: NYT

"The price of natural gas and electricity will be low over the next quarter-century, and crude oil will become more expensive but not radically so, the Energy Department predicted on Thursday, in a report that contradicts widely held notions. And even without a national global warming law, American carbon dioxide emissions will not inexorably set new records; they will stay below the rate of 2005 for the next 15 years because of economic forces, the forecast said. "

Saturday, July 10, 2010

Is GMO Free the Next Ford Pinto?

Does corporate greed put our lives at risk? Some believe so, and as this naïve college student in the 1970’s points out, (see video via YouTube) the Ford Pinto is a prime example. However, as Milton keenly corrects him, risk is just one more tradeoff that we make in our everyday lives. Sometimes it is between risk vs. convenience (an easier to use product that comes with more risk) or risk vs. value ( a riskier but more affordable product). Profit maximizing companies try to produce goods and services that match as closely as possible consumer preferences, including preferences related to risk. Now it is true that if a firm is grossly negligent, they should be liable. But as Friedman points out, producing a product that simply factors in consumer’s risk preferences is not the same thing as negligence.




In agriculture we see that many people voluntarily take risks that may seem absurd to others- for example consuming medium or rare ground beef, raw milk (where legal) , or even organic vegetables where it has been found that ‘the use of animal wastes for fertilization of produce plants increased the risk of E. coli contamination in and semi-organic produce significantly.’ (organic produce was found to make E.coli contamination 13 times more likely with a 95% confidence interval) It’s not just organic, but conventional non-GMO foods also have increased health risks. Foods made with GMO-free corn have been shown to have increased levels of fusarium infestation and higher levels of the toxin fumonisin.

Besides personal risks, there are also environmental risks related to food choices. When Kroger (and other retailers) decided to remove all milk containing Monsanto’s green technology rbST ( recombinant bovine somatotropin) they immediately increased their carbon footprint in their dairy supply chain, noting that the use of rbST in the dairy industry has resulted in the equivalent of removing ‘400,000 family cars from the road or planting 300 million trees.’ Biotech (GMO) crops in general have lead to reduced fossil fuel use, reduced carbon footprint, and reduced use of toxic chemicals. In general, the decision to buy GMO free or organic has attached with it, environmental risks.

Of course consumers should be given choices. At least with the Ford Pinto, to my knowledge, it was not marketed as the word’s safest and most environmentally friendly car. But, unlike the Pinto, many food products, especially non-GMO lines, are marketed as or at least give many the impression of having reduced personal and environmental risk. This could be misleading.

As Conko, Miller and Kersh point out:

‘Companies that insist upon farmers’ using production techniques that involve foreseeable harms to the environment and humans may be held legally accountable for that decision. If agricultural processors and food companies manage to avoid legal liability for their insistence on nonbiotech crops, they will be ‘guilty’ at least of externalizing their environmental costs onto the farmers, the environment and society at large.’

Which leads me to ask, is GMO free going to be the next Ford Pinto?

References:

The environmental impact of recombinant bovine
somatotropin (rbST) use in dairy production

Judith L. Capper*, Euridice Castan˜ eda-Gutie´ rrez*†, Roger A. Cady‡, and Dale E. Bauman*§ 9668–9673 PNAS July 15, 2008 vol. 105 no. 28

Avik Mukherjeea, Dorinda Spehb and Francisco Diez-Gonzaleza. Association of farm management practices with risk of Escherichia coli contamination in pre-harvest produce grown in Minnesota and Wisconsin. International Journal of Food Microbiology. Volume 120, Issue 3, 15 December 2007, Pages 296-302

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids.
Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

“Why Spurning Biotech Food Has Become a Liability.’ Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.

Milton Friedman on Self-Interest and the Profit Motive
2of2. Posted by 'sidewinder'. YouTube.

GM crops: global socio-economic and environmental impacts 1996-
2007.
Brookes & Barfoot PG Economics

Genetically Engineered Crops: Has Adoption Reduced Pesticide Use?Agricultural Outlook ERS/USDA Aug 2000