gaming the system in Arizona

Arizona water managers are being accused of finding a way to gain the system as climate change takes hold and there may not be enough water to fill both Lake Powell and Lake Mead.

Under a formula set by the state and the U.S. Interior Department, Lake Powell will send 9 million acre-feet to Lake Mead this year to prevent shortage, rather than the 8.23 million acre-feet it would send under normal river conditions. Each acre-foot is about 326,000 gallons and is enough to serve about two households for a year.

Conserving enough to prevent a shortage but not so much as to slow the flow from Lake Powell represents a “sweet spot,” CAP argued, in language that has now alarmed upstream water officials…

CAP’s “manipulation of demands in order to take advantage of the supposed ‘sweet spot’ in Lake Powell water releases undermines (regional conservation), and is unacceptable,” Denver Water CEO James Lochhead wrote.

dematerialization and decoupling

This paper is called Dematerialization, Decoupling, and Productivity Change. These are all buzzwords that will catch my eye. It makes a distinction between relative (ecological footprint is growing slower than the economy) and absolute (ecological footprint is not growing or is shrinking) decoupling. If you accept the concept that ecological footprint cannot grow forever, the distinction is important! This paper seems to cast doubt on the idea that there is any soft landing where absolute decoupling occurs automatically or by choice without significant pain.

The prospects for long-term sustainability depend on whether, and how much, we can absolutely decouple economic output from total energy and material throughput. While relative decoupling has occurred – that is, resource use has grown less quickly than the economy – absolute decoupling has not, raising the question whether it is possible. This paper proposes a novel explanation for why decoupling has not happened historically, drawing on a recent theory of cost-share induced productivity change and an extension of post-Keynesian pricing theory to natural resources. Cost-share induced productivity change and pricing behavior set up two halves of a dynamic, which we explore from a post-Keynesian perspective. In this dynamic, resource costs as a share of GDP move toward a stable level, at which the growth rate of resource productivity is typically less than the growth rate of GDP. This provides a parsimonious explanation of the prevalence of relative over absolute decoupling. The paper then presents some illustrative applications of the theory.

psychedelics, the cure for…everything?

Serious research suggests psychedelics may be an effective cure for depression, anxiety, post-traumatic stress, and addiction, among other things. This article also compares reported experiences under psychedelics to meditation, which I found interesting.

What is happening when a person meditates? If you meditate in a dedicated way, for long enough, most people say that they start to experience a spiritual change. Why did meditation make people feel they were being changed in a way that was mystical — and what did that even mean? He stumbled across the psychedelics studies from the 1960s, and it seemed to him that the way people described feeling when they took psychedelics was very similar to the way people described when they were in a state of deep meditation. He began to wonder if they were, in some strange sense, two different ways of approaching the same insight. Could investigating one unlock the secrets of the other? …

When you take a psychedelic, most people will have a spiritual experience – you get a sense that your ego-walls have been lowered, and you are deeply connected to the people around you, to our whole species, to the natural world, to existence. But it turns out the intensity of the spiritual experience varies from person to person. For some people, it will be incredibly intense; for some people, mild; and some people have no spiritual experience at all. At Johns Hopkins, the team discovered that many of the positive effects correlate very closely with the intensity of the spiritual experience. So if you had a super-charged spiritual experience, you got the benefits very heavily; and if you had no spiritual experience, you didn’t have many positive effects.

Okay, I don’t usually go here, but let’s say just for the sake of argument that religion is not objectively true. Then these spiritual experiences people tend to have while under the effects of drugs, meditation, and prayer actually come from inside us, are baked into our minds in some way. And maybe people who have more of them really are happier and better off, which would seem to be a good thing maybe even if they are not objectively true.

plastic risk

The bond rating agencies might go after companies that produce plastic packaging next. After taxing pollution like carbon emissions and other air and water pollutants, taxing waste products could make sense. These materials could be designed for easier recycling and reuse, and they are not because neither the manufacturer nor the retailer of the product inside them has to pay the cost. Homeowners, business owners, and municipalies pay the costs of waste collection and disposal, and natural ecosystems pay the price for plastic waste that is not being disposed of responsibly. Shifting these costs onto the manufacturers and/or retailers could raise funds to help deal with the problem while providing an incentive to innovate and produce better packaging and close the loop on materials.

Plastic packaging makers may be less credit-worthy in the future as governments try to curb marine litter, Moody’s Corp. said in a report…

Packaging consumes about 40 percent of plastics worldwide and accounts for about 60 percent of the material that ends up as waste. Governments worldwide are concerned that plastics take decades or even centuries to degrade and that they’ve been working their way into the food chain as they seep into rivers and oceans. By 2050, there will be more plastic than fish in the oceans, according to the Ellen MacArthur Foundation…

The issue has garnered attention from one of the world’s biggest oil companies. Earlier this year, BP Plc cut its forecast for oil demand from petrochemicals by 2 million barrels a day, citing the risk that regulations tighten on plastic products and shopping bags. Packaging makes up about 3 percent of global oil use, according to the company’s chief economist, Spencer Dale.

Closing the loop might start to seem less crazy. My Amazon Fresh delivery person will pick up my used cooler – why not take back the plastic packaging for recycling, or develop other types of reusable containers? As more of this gets automated, hopefully the “ick” factor will be reduced.

I wish people would stop hating on plastic straws though. They are so tiny, and so useful to help children drink without spilling things. And have you ever tried to wash a “reusable” straw? Busy working people trying to raise the aforementioned children do not have time for that. So I say either invent a straw washing machine or give these tiny pieces of useful plastic a pass and focus on the mountains of plastic wrap and food containers that are actually filling our garbage cans, trucks and landfills.

climate-friendly investing as a stag hunt

No, the idea is not that killing and eating stags has a lower carbon footprint than beef (although it might, but if everyone did it would there be enough stags to go around?). The stag hunt is a game studied by game theorists similar to the prisoner’s dilemma. Players can maximize their outcome by cooperating, but there is a risk in assuming other players will also cooperate, and therefore an incentive to make choices that are low-risk for individuals but sub-optimal for everyone.

Green Investment and Coordination Failure: An Investors’ Perspective

To achieve the goal of keeping global warming well below 2 °C, private investors have to shift capital from brown to green infrastructures and technologies and provide additional green investment. In this paper, we present a game-theoretic perspective on the challenge of triggering such investments. The question of climate change mitigation is often related to the prisoner’s dilemma, a game with one Nash equilibrium. However, the authors perceive investment for mitigation and adaptation as a coordination problem of selecting among multiple equilibria. To illustrate this, we model a non-cooperative coordination game, related to the stag hunt, with a brown equilibrium with lower payoffs that can be achieved single-handedly and a green equilibrium with higher payoffs that requires coordination. As multiple experiments show, in such games actors often fail to coordinate on a payoff dominant equilibrium due to uncertainty. Thus, we discuss how uncertainty could be reduced along two options: one that concerns a change in the payoff structure of the game and another that concerns subjective probabilities.

Boulder vs. Exxon

Boulder, Colorado is suing Exxon.

The politically liberal town known as the gateway to the Rocky Mountains and two counties in the same neck of the woods said Colorado’s economy depends on snow, water and cool weather when they accused Exxon Mobil Corp. and Suncor Energy Inc. of “causing and exacerbating climate change” in a state-court lawsuit filed Tuesday…

The Colorado communities said they’re facing expenses and costs related to earlier snow melt, which has increased the risk of forest fires, dried-out soil, beetle outbreaks and drought.

The lawsuit joins others against fossil fuel companies filed by California and New York communities, but this is the first brought by an interior state. “Colorado is one of the fastest-warming states in the nation,” Elise Jones, Boulder County Commissioner said in a statement. “Climate change is not just about sea level rise. It affects all of us in the middle of the country as well.”

sustainability risk

HSBC publishes its “sustainability risk policies” (a public version of them anyway). They are fairly general, but what I find interesting is that they follow various international conventions from the UN, World Bank, and others in making lending decisions. Examples include the Paris convention and the Ramsar wetland convention. So even if politicians in certain countries deride these international bodies and conventions as being a lot of hot air, they can in fact have a large impact when adopted widely by public and private actors around the world.

big banks divesting from dirtiest fossil fuels

A number of banks have stopped funding new coal and tar sand projects due to climate risk, including HSBC.

Europe’s largest bank HSBC said on Friday it would mostly stop funding new coal power plants, oil sands and arctic drilling, becoming the latest in a long line of investors to shun the fossil fuels.

Other large banks such as ING and BNP Paribas have made similar pledges in recent months as investors have mounted pressure to make sure bank’s actions align with the Paris Agreement, a global pact to limit greenhouse gas emissions and curb rising temperatures.

I might like to believe that the finance industry has become socially responsible, but I don’t. It is completely amoral. Still, that means that when it thinks there is a significant risk to investment returns and takes action as a result, we can assume the risk is real.