Archives for california



Good Intentions and Recycling Fraud

A recent Freakonomics radio podcast focused on the unintended consequences of bounties. Here’s another great example: California’s recycling redemption program no doubt seemed like a great idea when it was initiated, but an L.A. Times article suggests the system is being gamed. Last year, it appears that nearly 100 percent of recyclable cans sold in California were returned, and 104 percent (!) of plastic containers:

Crafty entrepreneurs are driving semi-trailers full of cans from Nevada or Arizona, which don’t have deposit laws, across the border and transforming their cargo into truckfuls of nickels. In addition, recyclers inside the state are claiming redemptions for the same containers several times over, or for containers that never existed.

Read More »



How California’s GMO Labeling Law Could Limit Your Food Choices and Hurt the Poor

The American Medical Association resolved this week that “there is no scientific justification for special labeling of bioengineered foods.”

The association has long-held that nothing about the process of recombinant DNA makes genetically engineered (GE) crop plants inherently more dangerous to the environment or to human health than the traditional crop plants that have been deliberately but slowly bred for human purposes for millennia. It is a view shared by the National Academy of Sciences, the World Health Organization, the Food and Agriculture Organization of the U.N., the European Commission, and countless other national science academies and non-governmental organizations. Read More »



Is There a Rooftop Solar Bubble? And Is It About to Burst?

Government efforts to boost affordability and expectations of unsustainably high investment returns generated a booming market destined to crash.

I’m talking, of course, about the market for rooftop solar, which has grown exponentially in recent years.

Most people are aware of the government subsidies that offset 30 percent or more of the installation cost of commercial and residential rooftop solar—more than $10,000 for a typical solar home in California. Less known is that those up-front savings, as big as they are, still aren’t enough to generate the double-digit investment returns that solar promoters promise. In fact, for residential solar panels to pay for themselves over their 20-25-year lifespans, households and businesses must receive a second, hidden subsidy for their solar electricity generation that is far too high to be justified by economic fundamentals, and that cannot be sustained in the long run. In California, some residential solar electricity fetches a price nearly four times its energy value. Read More »



Artist Profit-Sharing: Another Example of How California Is Like Europe

How is California more like Europe than the United States? We can think of a few ways, but one of the most interesting involves the rights of artists. As this recent story in the New York Times points out, in 1976 California passed a law that guarantees artists 5 percent of the profits in a later sale of their artwork. In doing so, California copied France and a number of other nations, in which such profit-sharing with artists is required by law. In the rest of the United States, by contrast, artists have no right to the profits a collector might make when they resell their artwork.

From an economic point of view, the California rule is a little strange. As we discussed in a previous post, if I sell my house and in five years it rises substantially in value (an anachronistic example these days, we recognize), I don’t get a cut of the windfall. A deal is a deal. Read More »



Another U.S. Solar Firm Goes Bust

Two weeks ago, Steve Sexton wrote about the bankruptcy of Evergreen Solar in Massachusetts. Today it’s California’s Solyndra that’s shutting down.

From the Washington Post:

The unexpected announcement raised questions about whether taxpayers would be responsible for the entire $535 million in loans that the company used to build a Silicon Valley factory. The wisdom of loan guarantees granted to the company by the Obama administration had already been questioned by government auditors and been the target of a subpoena from House Republicans.

The start-up venture has long been an administration favorite, and its Fremont, Calif., factory received visits from both the president and Energy Secretary Steve Chu. Both used their visits to praise the company for creating jobs and leading the way into a new economy fueled by green energy businesses.

Read More »



Carbon Taxes in Canada, Solar Shutdown in Massachusetts: Climate Lessons For California

Recent news delivered two different verdicts on two different climate policy experiments, both of which carry lessons for California and its delayed carbon reduction plan. The first, a revenue-neutral carbon tax in British Columbia is “a winner.” So says The Economist. But the second, the Massachusetts front of President Obama’s green jobs initiative, is a failure. What else to conclude from this week’s bankruptcy filing by Evergreen Solar, a recipient of millions in federal stimulus dollars and state subsidies?

There are lessons in both stories for lawmakers in the U.S., especially our environmental policy frontiersmen in California, who in 2013 will impose the only carbon policy outside Europe to rival that of our northern neighbor in its seriousness and aggressiveness. Read More »



Why California’s Push for Rooftop Solar is a Foggy Idea

Would you trust your neighbors with billions of dollars of public money to invest in a clean energy future? If you live in California, this isn’t a hypothetical question.

California Gov. Jerry Brown last month announced his intention to rely on “tens of thousands of little decisions” by Californians to develop a 12 giga-watt renewable energy infrastructure by 2020. In remarks at a UCLA clean energy conference, Brown embraced distributed solar generation in order to avoid the pitfalls that often encumber large-scale renewable energy projects, including the capital costs of transmitting energy from far-flung deserts and hilltops. Furthermore, rooftop solar panels and Cameron-esque windmills also pose little threat to desert tortoises or sacred Native American sites, so they are less apt to be caught up in the kind of litigation that has delayed major renewable projects.

But energy policy that relies on distributed generation has its drawbacks. Perhaps most notably, it forsakes economies of scale. It also places infrastructure investment decisions in the hands of homeowners, who, as this space has suggested, may not make socially optimal—or even individually rational—choices. Read More »



The “Solar Panel” Effect on Home Sales

Our recent podcast on “conspicuous conservation” looked at the “Prius Effect” — that is, how valuable it is for green-leaning consumers to signal their devotion to the environment by driving an obviously-hybrid Toyota Prius. (BTW, you can also fake it with an “instant hybrid conversion kit.”) The episode was based on an interesting paper by Alison and Steve Sexton called “Conspicuous Conservation: The Prius Effect and Willingness to Pay for Environmental Bona Fides.” It included some talk about solar panels as well, and how some people mount them on the street-facing side of their homes even though the sun shines more strongly on the rear. Read More »