Sunday, December 30, 2007

Recession and the American Public

A quick item of note, and sort of an update to the CPI bit a couple of posts below.

Yesterday morning I was watching Your $$$$$ on CNN and there was a guest on talking about differences in inflation measurements and where the economy is sitting, relative to a recession. A few months ago less than half the population thought the US was in a recession. In a recent poll that number climbed over 50%. Quite a disconnect if you think about it. Stated/reported GDP growth rates are still positive (we can't know we've entered a recession for 6 months, by definition). The economy is still growing, technically, but a majority doesn't...feel that that is necessarily the case, economists be damned.

One of the guests on the program was also making a point similar to one below regarding inflation. Looking at core and non-core inflation and whether how it is measured is the best way; it is another disconnect between the American Public and economists. From what I could tell his point was that public perception of prices is that they are rising a lot faster than the stated CPI saying our grocery and gasoline bills are a lot higher than any previous moment.
Is it best (or right?) that we continue to use core and non core inflation rates to determine whether the economy is growing or not?

NB: Are declining housing prices keeping inflation numbers artificially low?

Wednesday, December 12, 2007

Climate Change Adaptation at the Bali Talks

While the greenhouse-gas-emitting colossus that is the United States -- now alone among industrialized countries in its spurning of the Kyoto Protocol after new Australian Prime Minister Kevin Rudd made ratifying it his government's first official act -- continues to fuss and whine about binding emissions targets at the UN Climate Conference in Bali (well, the Bush administration at least, if not other American officials), poor and vulnerable countries -- who will be the first victims of our inaction -- are already planning for adaptation to the changing climate, and pleading for rich countries' help in doing so. As the International Herald Tribune reports,
The haves — which pump the lion's share of pollutants into the atmosphere — are arguing about emission targets and high-tech solutions. The have-nots — which contribute little to global warming but are disproportionately among the victims — need tens of billions of dollars to save their sinking islands, to help farmers adapt and to relocate those in the path of destruction.

"The issue of equity is crucial. Climate affects us all, but does not affect us all equally," U.N. Secretary-General Ban Ki-moon told delegates. "Those who are least able to cope are being hit hardest. Those who have done the least to cause the problem bear the gravest consequences."

The United Nations Development Program says 98 percent of the 262 million people hit by disasters from 2000 to 2004 came from impoverished countries, while the money to prevent disasters in the United Kingdom alone was six times what was spent in all poor countries.

[...]

The U.N. predicts that about 1.8 billion of the most vulnerable people across the globe will be hit by water shortages, 600 million more will go hungry and 32 million will be displaced by droughts and floods.
Right now, we are failing at the most widespread environmental justice issue in human history. Instead of trying to solve it, we are playing a farcical game of chicken with China over emissions, unwilling to give up the excesses we mistakenly think will bring us better quality of life and slow to invest in the energy efficiency that might put a dent in our beloved short-term profit.

Sunday, December 09, 2007

ELM Entering MSM?

When it comes to oil supply, global production totals tend to be the numbers analysed, along with various inventory levels. Recently, a new model has come about regarding oil supply. As far as I know, the Export Land Model was developed by Jeff Brown aka Westexas over at The Oil Drum. Without getting into the specifics too much, it basically changes the way we look at oil supplies: not as an overall number, but as availability of exports. This morning I stumbled across this article in the New York Times. Without mentioning the ELM specifically, it pointed out the realities happening in many countries as laid out by the model. The model was presented earlier this year, about 8 months ago. It has just now started creeping into the Mainstream Media, but not by name or recognition.

I did this somewhat backwards. I had wanted to post on the importance of this new model, especially as there is empirical evidence it is actually happening. Having it show up in the NYT should warrant some chatter in the blogosphere in the coming days. There is a short, easy to understand Wikipedia entry on the ELM, which I recommend.

EDIT: 12/17/2007
Here is an article that does a much better job of making the point I was attempting to above! Click me.

Wednesday, December 05, 2007

A Small Break for the Atmosphere?

(Update: There is usually some bad news to temper any good news, and cgb mentioned an instance of the former in the comments section. It was discovered that in November British Airways was flying empty jets from the UK to US, about one per day, due to cabin crew coordination problems. This is quite disturbing, since a jet uses 357,750 Btu/mile of energy [US Department of Energy, Transportation Energy Data Book, edition 26-2007, Table 2.12]. That's about 1.25 billion Btu to get from London to New York.)

The unavoidable vulnerability of airlines to high oil prices is causing them to cut back on domestic flights that threaten to become unprofitable in the face of $110.10/barrel jet fuel (as of 11/30).
Airlines cut U.S. schedules despite strong demand
By Barbara De Lollis and Barbara Hansen, USA TODAY

Responding largely to high fuel costs, the USA's six big network airlines continue to trim their U.S. schedules despite strong travel demand.

The six carriers...have scheduled 4.4% fewer seats for January than a year earlier.

[...]

The airlines, which handle about two-thirds of domestic flying, are reacting to this autumn's run-up in fuel prices, which can make some flights unprofitable, says William Swelbar, a research engineer at MIT's International Center for Air Transportation.

"With $90 oil, (airlines) have to really look in the mirror … to see whether the economics still make sense," he says.
While this is bad news for frequent air travelers who will have lesser options, could it be good news for the climate considering jets' staggering greenhouse gas emissions?

If this drop in domestic flights is counteracted by a proportionate rise in international flights, then the answer is no. As the USA TODAY article mentions, "[t]he airlines in recent years have been shifting more toward international routes, which, in general, are more lucrative." As I understand it, longer flights are also more fuel efficient. In other words, one 1,000-mile flight is more efficient than two 500-mile flights using the same origin and final destination, because fuel use is most intensive during take off. I would guess that the domestic cuts won't be counteracted by equal increases in international flights, but even that would burn less fuel due to the efficiency factor.

Cutting domestic flights is a sign that shorter flights will become rarer and rarer as they become more unprofitable. This will be good news for the climate, especially if they are replaced by more efficient means of transportation, such as trains, or not replaced at all. It would be hard to cut our emissions to levels necessary to mitigate the worst effects of climate change without significantly cutting airline flights.