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OpenMarket: January 2007

  • Risky Academic Business

    January 26, 2007
    The management of risk has long been an area of interest at CEI, so we will be watching with interest the development of a new position at the University of Cambridge: professor of risk.
    What are the odds of being poisoned or marrying the wrong person? How dangerous is it to catch a plane? Is it worth taking a punt on the stock market? Whether it's health or wealth, we're expected to weigh up the risks of everyday living. But even though we might be given the statistics, it's not always easy to put such numbers into a meaningful perspective.
    So in an attempt to help people and institutions make sense of statistics, the University of Cambridge is creating a new professorship, the Winton Professor of the Public Understanding of...
  • More fuel on the "food or fuel" issue

    January 26, 2007
    “If the country is going to meet the ethanol industry's corn needs, we're going to have to cut back on feed, cut back on food.” So said an agricultural economist in another news article today about the soaring price of corn because of the ethanol frenzy. Back in September 2006 Dennis Avery was predicting that very dilemma in his CEI monograph, “Biofuels, Food, or Wildlife? The Massive Land Costs of U.S. Ethanol.” Read the whole report for more insights like these:
    There are significant trade-offs, however, involved in the massive expansion of the production of corn and other crops for fuel. Chief among these would be a shift of major amounts of the world's food supply to fuel use when significant elements of the human population remains...
  • Will Bush repeal ethanol tariff? Don't bet on it.

    January 26, 2007
    From a free-market perspective, the only redeeming social value in the Bush Administration's biofuels initiative is the proposal to lift the 54-cents-a-gallon tariff and 2.5 percent ad valorem duty on imported ethanol. Think about it for a moment. If the goal is to lower gasoline prices and increase the diversity of fuels available to American consumers, then ending the virtual ban on Brazilian ethanol -- which comes from sugarcane and is less expensive than the Iowa-corn-fed variety -- is a no-brainer. Ditto if the goal is to damp the flow of petrodollars to Middle East governments suspected of funding terrorists. But Republican Sen. Chuck Grassley of Iowa takes strong exception to the Administration's proposal. Given Washington's addiction to pork and the prominence of the Iowa Caucuses in the upcoming presidential...
  • Kyoto = blackouts

    January 26, 2007
    I recently debated a Natural Resources Defense Council (NRDC) activist on global warming and the future of the U.S. electricity supply. The activist made the "negawatts" argument that conservation should be our leading source of power. Utilities, she said, should not plan to build new capacity until they have exhausted every option to improve their energy efficiency and that of their customers. The debate took place in the conference center of a hotel in St. Petersburg Beach, Fla. In the Q&A segment, a representative from the local utility noted that the population in their service area was projected to grow by 1 million people in the next three years. "Efficiency enhancements may help us manage demand in our existing customer base," he said, "but there's no way we can serve a million new customers without new capacity" (or words to that effect). Moreover, he noted, what was...
  • North v South 2.0

    January 26, 2007
    We often hear that global warming is a global problem that requires a global solution. The developing world, on the other hand, wants none of that:
    At a gathering of 2,400 of the world's most powerful people at Davos, a ski resort in the Swiss Alps, leaders from emerging nations said they wanted the United States, European Union and others in the West to be more accountable for the heat-trapping emissions their cars and factories produce. They also asserted their right to stoke their own economies, even if greenhouse gas levels rise as a result.
    While this smacks of having their cake and eating it, the developing countries are right in the latter assertion....
  • Dependent on whom?

    January 26, 2007
    Senator Inhofe makes some very pertinent and often ignored points in his Human Events article today:
    The fact of the matter is that the country is over 70% self-sufficient when we consider total energy (coal, nuclear, hydro, renewables, gas, etc). Although much of that dependence relates to oil, the U.S. does not import nearly as much from the Middle East as some suggest. As energy expert Daniel Yergin recently pointed out in the Wall Street Journal, “[s]ome 81% of oil imports do not come from that region. Thus, only 19% of imports -- and 12% of total petroleum consumption -- originates in the Middle East.” It may surprise many readers that the U.S. imports most of its oil not from Arab Sheiks but from our friends in Canada.
    We must always remember that, if we reduce our and the world's...
  • Stern vs Science

    January 26, 2007
    Some revealing quotations in an excellent BBC Radio investigation into the Stern Report:
    The IPCC is not going to talk about tipping points; it's not going to talk about 5m rises in sea level; it's not going to talk about the next ice age because the Gulf Stream collapses; and it's going to have none of the economics of the Stern Review. It's almost as if a credibility gap has emerged between what the British public thinks and what the international science community think. --Mike Hulme, Director of the Tyndall Centre for Climate Change Research Nick Stern: "We've drawn on the basic science. We have not tried to do new scientific research. We're not scientists." Simon Cox (BBC): "I just wonder why your figures are differrent if you've just drawn from the existing literature, why your figures would be...
  • "Fast track" trade authority -- will carry some baggage

    January 25, 2007
    According to news reports, President George Bush will ask Congress to renew fast-track trade authority — perhaps as soon as next week. The Trade Promotion Act of 2002 expires at the end of June 2007. TPA gives the president the authority to negotiate trade deals and have them voted up or down by Congress without amendments. However, Democratic Congressional leaders have said that to renew fast-track, the Administration would have to agree to include even more labor and environmental mandates in trade agreements. Already, TPA includes stringent mandates that have been used to impose U.S.-style environmental and labor “regulations” on developing countries with which the U.S. has negotiated...
  • Renewable energy -- burn dead cows!

    January 25, 2007
    There's even more talk now about alternative energy sources — spurred by President Bush's State of the Union address where he said:
    We must increase the supply of alternative fuels, by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target. (Applause.)
    While most of the talk in the U.S. focuses on ethanol (with its huge subsidies and more to come), some countries, such as Scotland, are trying a different path to alternative energy sources: Burning dead cows. The BBC reported that a new 24 million-pound project in Aberdeenshire will “turn dead cows into an energy source.” They're going to get the dead...
  • "Tricks and traps" with Senate Banking

    January 25, 2007
    “Tricks and traps.” Those were the terms used to describe credit card industry practices to snare vulnerable and lower-income people into a vicious cycle of credit card interest payment and fees. Sound familiar? Sounds like the credit card issuers are likely to get similar treatment to those “predatory lenders” — i.e., lenders who provide credit to higher risk consumers at higher interest rates. Today, at Senate Finance Committee hearings titled “Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers,” Committee Chairman Christopher Dodd (D-CT) put the industry on notice that policymakers are examining their...


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