Saturday, January 30, 2010

Obama's "master class"

Maybe Dave Burris is getting soft (he seems to have taken an interest in sustainable development), but he seems mightily impressed by the way Barack Obama handled himself on live television with the House Republicans:
"First, it was an absolute master class in politics by the President. Ideology aside, he masterfully handled even the toughest questions..."
I agree that this kind of exchange "should be a regular occurrence between the President and all four caucuses." Though, after yesterday's performance, I wonder whether either GOP caucus would be eager to schedule a followup.
Dave may overstate the significance of the event, when he called it "maybe the most important political development of my adulthood." You can see the exchange here on C-SPAN.

Thursday, January 28, 2010

Obama and the Deficit

I have posted some quick thoughts on the State of the Union speech over at the Guardian, in which Barack Obama spoke about deficits, past and future. Apparently some Republicans didn't like his reference to past policies that led to the current budget shortfall. I make it clear that I think criticism of his proposed freeze on discretionary spending is misplaced:
When it came to the deficit, Obama was blunt. He stated that eight years of tax cuts, unfunded wars and recession drove the deficit past a trillion dollars, "before I walked in the door". His proposed freeze on some discretionary spending starting in 2011 is not in itself exceptional; funding will go down for some programmes and up for others. But it has generated considerable opposition from liberals afraid that spending controls will prematurely snuff out the recovery. These critics fail to distinguish between temporary stimulative spending and permanent government spending, which cannot be sustained if it isn't in line with revenue.
The stimulus package has boosted the economy for now, but the federal government will have to start cutting the deficit as the economy recovers and the threat of inflation re-emerges. It's a question of timing. Obama's freeze would not take hold until next the next fiscal year, which hopefully won't be too soon.
The president will get a few points for bipartisanship by announcing his own budget commission, a day after the
Senate failed to establish one. Of course bipartisanship doesn't get you very far in Washington these days, but at least Obama will be able to say he's working on it – with or without the Republicans.
Those who argued that the stimulus spending adopted last year reflected particular circumstances (an argument I agree with) should recognize that those circumstances will not last forever. There should never be one fixed economic policy, established in perpetuity, now and ever, amen.

Wednesday, January 27, 2010

Frank Luntz on Energy and the Environment

I never imagined I would be writing favorably about anything produced by pollster Frank Luntz, whose work for Newt Gingrich helped shape the Contract with America. But this presentation on energy and the environment that I noted yesterday includes a number of interesting findings.
For instance, 43 percent believe the environment has worsened over the last decade, compared to 32 percent who believe it has improved.
The phrase "carbon neutral" falls flat compared to positive phrases like promoting "greater energy efficiency" and "a healthier environment."
Most compelling to me is this slide from his presentation his "words to use" on cap and trade:
I don't know who engaged Luntz to do a study on the subject. But his findings on language suggests there may be an opportunity to make progress on climate change, even in this polarized political atmosphere.

Monday, January 25, 2010

Polling Shows Voters Support Action on Climate Change

Climate Progress notes that two very different pollsters have found strong support for action on clean energy. Democratic pollster Joel Benenson, who worked for Barack Obama in the 2008 campaign, found that most voters favor a climate change bill that includes a cap and trade provision, and would consider the issue in deciding how to vote in November:
56% would be more likely to re-elect their Senator if he or she voted in favor of the bill (just 35% would be less likely to re-elect). 50% would be less likely to re-elect their Senator if he or she voted against the bill (just 39% would be more likely).
And if Congress doesn’t pass legislation, voters want the EPA to act:
59% of voters agree and just 39% disagree that “if Congress doesn't pass this energy bill, the Environmental Protection Agency should take action to regulate carbon polluters.” Among Independents, support for EPA action is even stronger: 61% agree and only 37% disagree.
More surprisingly, Frank Luntz, the pollster who helped shape the message for Newt Gingrich’s Contract with America, found strong support for action on climate change, and offered some useful advice on how to make the case for action.
When asked whether "Global Warming is caused at least in part by humans," 42 percent said definitely and 22 percent said probably. That’s a total of 62 percent.
Luntz message tested three arguments for acting, and found this statement was received favorably by 57 percent of those polled:
It doesn’t matter if there is or isn’t climate change. It is still in America’s best interest to develop new sources of energy that are clean reliable, efficient and safe.
One might consider this to be a kind of Pascal's wager on the environment:
If we do it right, we get cleaner air.
We get less dependence on fossil fuels and enhanced national security.
We get more innovation in our economy.
More jobs, and more sustainable jobs.
And that’s if the scientists are wrong.
If the scientists are right, we get all of those things, and begin to solve what could be the most catastrophic environmental problem that any of us have ever faced.
Frank Luntz doesn’t have any new insights. It’s no accident that the Waxman-Markey bill is called the "American Clean Energy and Security Act of 2009" and the Kerry-Boxer bill is called the "Clean Energy Jobs and American Power Act." What is notable is such a prominent GOP pollster making the case for action on global warming. Environmental advocates should read what he has to say on this and take heed.

Friday, January 22, 2010

Could the Senate Block the EPA on Climate Change?

Last year, the EPA adopted a finding that greenhouse gas emissions pose a danger, and proposed regulations to limit emissions from the country's biggest polluters. As the AP reports, Senator Lisa Murkowski of Alaska has introduced a resolution to block the EPA from enforcing the new rule. Three Democrats, Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, have signed on to her resolution. The measure, called a “Resolution of Disapproval,” is not likely to pass, and if it does, would probably be vetoed.
Senate Joint Resolution 26 has been assigned to the Environment & Public Works Committee. All twelve Democratic members of the committee (Boxer, Baucus Carper, Lautenberg, Cardin, Sanders, Klobuchar, Whitehouse, Udall of NM, Merkley, Gillibrand, and Specter) have signed a letter opposing Murkowski’s resolution.

This in itself will not be enough to keep the resolution from reaching the Senate floor. Under the arcane procedures for considering disapproval of regulations, 30 senators can petition to have the resolution automatically discharged from the committee and placed on the Senate agenda.
While a letter from the Democratic members of the committee will not block the resolution, it does convey a strong message that the majority of senators do not support Murkowski. Tom Carper last night offered his reasons for opposing the effort to block the EPA finding:

Sen. Murkowski's resolution would overturn science that the Supreme Court, states and our leading scientists agree is sound.
Now is not the time to question these findings. Now is not the time to delay. Now is the time for productive debate on how the United States can lead the clean energy revolution.
Furthermore, if Congress does not like the tools the EPA has to regulate greenhouse gases under the Clean Air Act, then it is time for us to roll up our sleeves and pass meaningful climate change legislation this year.

The EPA finding is a tremendous motivator for Congress. The EPA is forcing Congress to either acquiesce or pass legislation to control greenhouse gas emissions, which will not be easy. But while Congress struggles to meet its obligations to act, it should not prevent the EPA from doing what is required under the law to protect us from the deleterious effects of climate change.

Thursday, January 21, 2010

Obama's First Year on Energy and the Environment

While President Obama has been stymied on health care for much of his first year in office, he has been quietly forging ahead on environmental policy. Carl Pope, the outgoing executive director of the Sierra Club, says most of Obama's progress has escaped media notice:
Perhaps the greatest untold story of the past year is the reversal of George Bush's eight years of environmental counterrevolution. When Bush and Cheney stopped a century-long tradition of environmental progress, the media was flabbergasted by the unrelenting intensity of the assault. But the Obama reversal has been largely unheralded (in fact, virtually unnoticed), even though it has arguably been even more intense.
Daniel Weiss of the Center for America Progress, writing in Climate Progress, likes the way Obama is forging ahead on clean energy:
During President-Elect Barack Obama’s transition, the Center for American Progress proposed a 10-point clean-energy agenda for the president and Congress that would speed the economic transformation to a clean energy economy. A review of these items today finds that all were adopted or are working their way through the process. This is a startling achievement amidst the worst economy in 70 years, two wars, and an opposition party disinterested in cooperation. President Obama did much of what he promised, and he can do more in 2010 by cajoling Congress to do its part.
Progress in Congress may be more difficult now that Republicans have enough votes to filibuster. But Obama has shown that he is willing to use his authority to move ahead on energy and the environment.

Wednesday, January 20, 2010

Holding Out for Top Dollar

It was Joseph Kennedy, father of Jack, Bobby and Ted, who said, "Only a fool holds out for top dollar." At some point, you have to do the deal even if it falls short of the best possible outcome.
A few years ago, I was working on a business plan for a client I came to regret working with. He turned out to be a disorganized micro-manager, and insisted on endless improvements, even in the face of looming deadlines. At one point I had to tell him that the marginal improvements he thought were so important would mean little if he missed the deadline. Eventually I stopped working for him, and he is still trying to get his business off the ground.
I wish I could have given this advice to the disorganized micro-managers in Congress who somehow couldn't get health care reform done. Deadlines kept being pushed back, from August to November to January, and now we don't know if we'll get anything at all.
It seems that everyone was holding out for top dollar: the centrists, the unions, the insurers, big pharma. All stood to gain, and all kept pushing for a bit more as if health care was a zero sum game. Now it looks like we could be left with less than zero.
I'm not arguing for incrementalism. Eliminating pre-existing conditions and insuring an additional 30 million Americans can hardly be called incremental improvements. But everyone kept wanting to make it just a little bit better, without agreeing as to what that means. And now we face the real prospect of getting 100 percent of nothing. Those who argued we should just go back to the drawing board may well get their way, along with those who fought the idea of reform itself through endless obstruction and outright lies about "death panels" and the like.
If health care reform dies, those hard nosed negotiators holding out for top dollar can look forward to getting their way eight or sixteen years from now.
Could things get worse? Yes, the Democrats in Congress could fail to pass anything. Could things get better? Yes, if the Democrats get a bill passed and campaign in the fall on having delivered actual benefits for voters.

Monday, January 18, 2010

The Arc of the Moral Universe

Perhaps my favorite speech by the Rev. Martin Luther King, Jr. was delivered at the end of the march from Selma to Montgomery on March 25, 1965. The speech (the full text is available here) was delivered on the steps of the Alabama state capitol building:
I come to say to you this afternoon, however difficult the moment, however frustrating the hour, it will not be long, because "truth crushed to earth will rise again."
How long? Not long, because "no lie can live forever."
How long? Not long, because "you shall reap what you sow."
How long? Not long:
Truth forever on the scaffold,
Wrong forever on the throne,
Yet that scaffold sways the future,
And, behind the dim unknown,
Standeth God within the shadow,
Keeping watch above his own.
How long? Not long, because the arc of the moral universe is long, but it bends toward justice.
Stanford has a collection of King's most notable speeches. The definitive collection of King's speeches and writings is A Testament of Hope, published by HarperCollins. has new and used copies for sale. If you want to know what he thought, read what he had to say.
One reader has traced the saying to the Rev. Theodore Parker, a 19th century Unitarian minister in Massachusetts.
Barack Obama has referred to the phrase several times, including his election night speech in 2008 and this statement on the protests in Iran.

Friday, January 15, 2010

The Banking Crisis Responsibility Fee and Inefficient Markets

I have a piece up at the Guardian on Obama's proposed financial crisis responsibility fee, which "wouldn't directly affect compensation, but would rein in the risky behaviour that bonuses encourage and reward." It's a good proposal which should rein in risky behavior and help deflect some of the criticism Obama has taken for bailing out the banks, an unpleasant but necessary task, despite the critics:
The more doctrinaire conservatives still argue that the banking system didn't need government help. This point of view isn't confined to a few Tea Party activists and cable news pundits, but can be found among leading academics. Eugene Fama, a leading theorist of modern finance, remarkably argues that the banking system would have crashed for no more than a week or two back in 2008, and then recovered.
Finance theory aside, Obama's proposal makes policy and political sense:
This time, however, smart policy equals smart politics. The financial crisis responsibility fee would pay down the deficit, stick it to the bankers, and actually place some controls on their thirst for ever greater leverage. What's not to like?
Obama came out sharply, saying that bankers were "locking arms with the opposition party to stand in the way of reforms to prevent another crisis."

Jeremy Firestone and the IRP

Professor Jeremy Firestone also presented comments on the IRP to the Public Service Commission Tuesday night. His comments are brief and very much to the point:
It is imperative that the IRP recognize the fundamental way in which the law of the state of Delaware has changed in the past year. Delmarva’s IRP needs to be written in acknowledgement that the existing, planned load of its 2006 IRP is the load of the past; it is not the load of the future.
First, Delmarva must craft an IRP that is consistent with new section 1020(b) of Title 26, which requires that in preparing the IRP, Delmarva:
1. Shall first consider demand response and demand-side management strategies.
2. Shall preferentially obtain electricity through demand response, demand-side management, weatherization, and cost-effective renewable energy resources before
considering traditional fossil fuel-based electric supplies.
Second, Delmarva must write an IRP that accounts to the extent possible scientific studies that estimate environmental externalities. Importantly, the National Academy of Science recently released a review of health externalities of fossil fuel generation. It found that on average, US coal plants cause health externalities equivalent to 3.2 cents/kWh and the dirtiest coal plants, 12 cents/kWh. These costs have to be added to the cost that Delmarva can procure these energy sources. It does not stop there however; Delmarva must also account for the environmental externalities such as direct wildlife impacts of the air emissions associated with fossil fuels and the discharge of cooling water, not to mention climate change. As it also must account for these on a life-cycle basis, it must account for mountain-top mining of coal as well.
In light of these developments, the reference case should not be status quo ante—one that assumes a 20% RPS by 2019, which is where Delmarva already effectively will be given the land and offshore wind contracts it has signed. Rather, the reference case, should conservatively assume that Delmarva has contracts for 30% renewable by 2020. Delmarva could still analyze the existing, outdated case, but it should be viewed as a step back, not a reference.
In addition, the IRP should include scenarios with aggressive renewable targets such as 40% and 50%.
Delmarva should run variations on these, including a price based on additional purchases from BWW at the BWW-Delmarva price. All scenarios should use 2012 as the start date for national carbon price. They should base natural gas on NYMEX. They should also run with PTC and separately assuming the ITC is extended to 2016 for offshore wind.
A sensitivity analysis also could be run with a slightly lower “effective price” effect (that is, the differential between the wind price and local nodel price) which would show how selecting out-of-state land-based wind rather than offshore wind would affect ratepayer bills.
But Delmarva also must be cognizant that it is now much more difficult to site a land-based wind project in Maryland, Pennsylvania, Virginia and West Virginia given the endangered Indiana Bat and the recent case out of Maryland, Animal Welfare Institute v. Beech Ridge Energy.
Finally, the IRP must account for the new realities. Delmarva must provide a No MAPP scenario as the reference rather than assuming MAPP and only somewhat reluctantly undertaking an analysis of a delayed MAPP. Delmarva must also account for New Jersey
efforts to require a new cooling water tower for the Nuclear plant at Oyster Creek, including what it might mean for the Salem Nuclear Power Plant.
National Academy of Science, Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use, Committee on Health, Environmental, and Other External Costs and Benefits of Energy Production and Consumption; National Research Council, ISBN: 0-309-14641-0, 466 pages, 6 x 9, (2009)
Animal Welfare Institute v. Beech Ridge Energy, LLC, RWT 09cv1519 (D. MD Dec. 8, 2009)

Wednesday, January 13, 2010

Comments on Delmarva Power's 2010 IRP

The Public Service Commission is holding hearings this week on Delmarva Power's Integrated Resource Plan or IRP. The PSC has closed Docket No. 07-20 and is opening a new docket. A great deal has happened since the old docket was opened, and it makes policy sense to start over, whatever the legal or technical reasons may be to open a new docket. But for now there is no draft IRP on the table; hence my comments are focused on what should be included in the new plan:

When debating the question of wind power in Delaware nearly three years ago, I told this Commission that we needed to rethink the connection between our environmental and economic interests:
The conventional wisdom is that the public’s environmental interest is in conflict with the public’s economic interest. But my review of the record leads me to conclude that the conventional wisdom has been turned on its head in this case; burning more fossil fuels doesn’t make economic or environmental sense for Delaware. Simply put, 19th century technology is not suited to meet the environmental and economic needs of the 21st century.
The docket before us is different, but the principle hasn’t changed. I argue that an economically rigorous Integrated Resource Plan (IRP) requires that we reorient our energy policy away from fossil fuels, and invest in renewable energy and energy efficiency.
The IRP must account for the full range of costs and benefits to customers from the generation and transmission of energy, which is why the PSC should adopt DNREC’s view that the IRP account for externalities such as health and environmental costs.
The traditional charge of the PSC is to protect the economic interests of ratepayer, but what’s a few cents per Kilowatt hour to those who suffer from the chronic health effects of pollution? These externalities may not show up in Delmarva Power’s financial statements, but can be all too real for its customers. According to the Delaware Division of Public Health, 1,731 Delawareans died of chronic obstructive pulmonary disease (COPD) in the five years from 2002 to 2006.
Accounting for the public and private costs of respiratory illness and other environmentally caused diseases should preclude the expansion of coal facilities in Delaware, and place further protections on air emissions and the accumulation of hazardous fly ash, which threatens both air and water quality.
If we properly account for health costs, we should also take an interest in out of state energy extraction and generation, including the importation of coal power from west of Delaware and the extraction of natural gas north of us. A DNREC study concludes that a significant portion of the PM 2.5 particulate matter in Sussex County air comes from the Ohio River Valley. If the prevailing winds blow particulate matter (and other contaminants) in from west, then we have an interest in reducing our dependence on coal burning plants from the region.
Natural gas, considered a cleaner source of energy than coal, still has potential hazards to Delaware. The Delaware River Basin Commission has voiced serious concerns about the extraction of natural gas from the Marcellus Shale formation on both sides of the Delaware River upstream from us.
However, these new extraction methods require large amounts of fresh water to fracture the formation to release the natural gas. A significant amount of water used in the extraction process is recovered, but this "frac water" includes natural gas and chemicals added to facilitate the extraction process, as well as brine and other contaminants released from the formation.
While regulation of out of state coal plants and natural gas extraction is outside the direct jurisdiction of this Commission, the IRP can and should determine Delaware’s dependence on these present and potential sources of pollution by placing greater focus on cost effective renewable energy closer to home and energy conservation.
The Bluewater Wind project will not exhaust the east coast’s large offshore wind resource. Even the recent announced sale of 55 megawatts (MW) of power to customers in Maryland leaves Bluewater well short of the 450 MW capacity already approved by PJM Interconnection.
Over the last three years, the PSC and the public have gained a clear understanding of the economic benefits of wind power in the form of price stability over the 25 year life of the power purchase agreement. No other source of energy can provide similar price protection over such a long period—except perhaps energy efficiency.
The IRP should reflect Delaware’s newly adopted statutory requirement for meeting energy needs through greater efficiency. The IRP was filed before the Sustainable Energy Utility opened for business and before the adoption of SB 106, which calls for a 15 percent reduction in electricity consumption and peak demand by 2015.
A study by the American Council for an Energy-Efficient Economy concludes that efficiency is a cost effective way to provide for our energy needs:
On the costs of "saving" kilowatt-hours (kWh) through utility ratepayer-funded energy efficiency programs, the reported utility costs of saved energy (CSE) ranged from $0.023 to $0.044 per kWh (with a median value of 3.0 cents/kWh).
If we are to reduce our dependence on out of state sources and make use of the full potential of renewable energy and energy efficiency resources, we will have to reorient the grid. Regulatory proceedings on the Potomac-Appalachian Transmission Highway (PATH) and the Mid Atlantic Power Pathway (MAPP) have been suspended due to reduced demand cited by Delmarva Power and PJM Interconnection.
It is time to revisit the architecture of the grid to support greater energy efficiency and better manage large- and small-scale renewable energy. The IRP should support Governor Jack Markell’s proposal to develop an offshore transmission backbone to accommodate the enormous untapped wind resource that lies off the east coast.
In conclusion, the IRP should reflect a full consideration of the economic costs and benefits of meeting our energy needs. The health costs of burning fossil fuels cannot be ignored. The economic benefits of renewable energy and energy efficiency are becoming increasingly clear. The PSC has a compelling interest in requiring that the IRP take all of these costs and benefits into account.

Monday, January 11, 2010

Intergrated Resource Plan Hearings this Week

Do you care how Delaware provides for its energy needs?
The Public Service Commission (PSC) is holding hearings on Delmarva Power's Integrated Resource Plan (IRP) this week. The IRP is the plan that Delmarva presents to the PSC to provide energy to its Delaware customers.
If you care how much coal is burned to provide our electricity; if you care how much we turn to wind power and energy efficiency; if you care about the externalities such as health and environmental costs being considered in the energy equation, then your voice needs to be heard.
So, if you care about this stuff, and can handle an arcane trip into the lost world of acronyms, please head out to one of the hearings:
Tuesday, January 12 at 7 PM, Carvel State Office Bldg., Auditorium on the Mezzanine Level, 820 North French Street in Wilmington
Wednesday, January 13 at 7 PM, Del Tech Theater, Delaware Technical & Community College, Rt. 18 & Seashore Highway (Rt. 113) in Georgetown
Thursday, January 14 at 7 PM, Public Service Commission, 861 Silver Lake Blvd. in Dover
There are heaps of documents to be found at the IRP webpage. In particular, I find the comments from DNREC and Jeremy Firestone are worth reading.
We learned during the fight over wind power that the public can make a difference. So come on out and make your voice heard. Tell 'em TommyWonk sent you.

Friday, January 08, 2010

Jean Biden's Influence on her Son

As the News Journal reports, Catherine Eugenia Biden, mother of Vice President Joe Biden has died.
All politicians talk about the importance of family values, but Joe Biden sounds like really means it. H
e wears his devotion to his family on his sleeve. He spoke of her influence on his life in his speech to the Democratic National Convention in 2008:
I wish that my dad was here tonight, but I am so grateful that my mom, Catherine Eugenia Finnegan Biden, is here. You know, she taught her children — all the children who flocked to our house — that you are defined by your sense of honor, and you are redeemed by your loyalty. She believes bravery lives in every heart, and her expectation is that it will be summoned.
Failure at some point in everyone's life is inevitable, but giving up is unforgivable. As a child I stuttered, and she lovingly told me it was because I was so bright I couldn't get the thoughts out quickly enough. When I was not as well-dressed as others, she told me how handsome she thought I was. When I got knocked down by guys bigger than me, she sent me back out and demanded that I bloody their nose so I could walk down that street the next day.
After the accident, she told me, "Joey, God sends no cross you cannot bear." And when I triumphed, she was quick to remind me it was because of others.
My mother's creed is the American creed: No one is better than you. You are everyone's equal, and everyone is equal to you.
My parents taught us to live our faith, and treasure our family. We learned the dignity of work, and we were told that anyone can make it if they try.
Transcript via NPR.

Thursday, January 07, 2010

Financing Energy Efficiency in State Buildings

Jack Markell yesterday announced plans to use the Sustainable Energy Utility to finance energy upgrades to state buildings.
What I find interesting about the program is not that there is economic value in improving energy efficiency—we've known that for a while—but the financing. The SEU will put together $25 million to $35 million for energy efficiency projects, without having to tap the state's capital budget.
Aaron Nathans describes the financing in the News Journal:
The projects will be done under "energy performance contracts," a practice in use elsewhere but new to Delaware. Each contract guarantees there will be savings on electricity, heating and water usage. The owner of the building pays nothing up front. When the savings are realized, the owner pays the SEU a portion of them -- perhaps a third per year -- until the cost of the retrofit is paid off.
Citibank will float bonds on behalf of the SEU, which the SEU will use to pay the contractors for their work. The payments from the building owners will be used to repay the borrowing.
This kind of financing for energy efficiency projects is used in industry, to fund large waste heat recovery installations for instance, and promises to be a cost effective way to create local jobs and long term savings for state government.

Wednesday, January 06, 2010

Jack Markell Proposes Universal Recycling for Delaware

Governor Jack Markell yesterday presented a plan for universal recycling that would put a recycling container in front of every household in Delaware. The proposal looks promising, economically and politically.
First, the economics: Landfills are not renewable resources, which means the cost of simply burying our trash has nowhere to go but up. The Delaware Solid Waste Authority's tipping fees (the price per ton to dump) are due to go up sharply to cover current fixed and operating costs.

But if you think the current landfill is expensive, consider the next one. The cost of replacing Cherry Island landfill was estimated in 2006 to be $109 million. The eventual cost is likely to be several hundred million dollars—if a site can be found anywhere in New Castle County. Using a quick back of the envelope calculation, I estimate that we would save several million in today's dollars for every year we postpone replacing Cherry Island.
The problem is that these savings aren't sitting in a fund somewhere. We have to find the means to create them by investing in recycling infrastructure today. This is where the Un-bottle Bill comes in. Bottlers, distributors and retailer want it repealed. Markell vetoed HB 201 last year, saying, "I believe we need to review this issue in a larger context that takes into consideration the environment, the industry and Delaware taxpayers."
Under Markell's proposal, the 5 cent deposit would be replaced by a 5 cent container fee (eventually dropping to 2 cents) that would be used to fund the upfront and ongoing costs of providing statewide recycling. Bottlers, distributors and retailers would no longer be burdened with the onerous chore of collecting, stockpiling and recycling bottles. This most inefficient method of recycling, which requires handling every step of the way, would be replaced by promoting single stream collection, which requires much less handling.
By making it easy for households to recycle, we should reduce their net landfilling cost by about a third, which is Wilmington's diversion rate after two years of curbside collection. At the end of the day, households should not see any net increase in costs above the anticipated increase in tipping fees.
Markell's proposal looks promising politically as well. Sen. David McBride and Rep. Michael Mulrooney, the relevant committee chairs, are on board. Rep. John Viola, who sponsored HB 201, voiced his support yesterday. I know other legislators are ready to sign on.
As the News Journal reports, there is still resistance from the Maryland-Delaware-District of Columbia Beverage Association:
Ellen Valentino, the group's vice president, said state recognition of the deposit law's problems are encouraging, but "we are disappointed to learn that he is proposing a container tax as an alternative funding source."
Fine, perhaps you would like your bottles back. If you want those empties out of the back of your store, this is the way to get it done. I don't think the 5 cent fee will affect buying habits much. The deposit has been in place for roughly three decades, and most consumers hardly notice it at the checkout line.
Waste haulers are solidly on board:
"I think all the waste haulers together are very strongly behind this proposal. It provides us all with an opportunity to compete and provide a service on an equal basis," said Tom Houska, senior district manager for Waste Management of Delaware, the state's and nation's largest waste company. "It has the best chance of anything I've seen in a long, long time."
Representatives of the locally owned waste hauling industry have willing, even eager, participants in efforts to create a statewide recycling program over the last year. They want to find a way to do this.
This is a big proposal that deserves much more economic and political analysis. Stay tuned.

Monday, January 04, 2010

Jack Markell to Propose Comprehensive Recycling

Governor Jack Markell is scheduled to propose a new, comprehensive statewide recycling plan tomorrow at 11:30 in Wilmington. Markell said he would review the larger issue of recycling when he vetoed HB 201, what I and others called the "Un-Bottle Bill," last year.
From what I have learned, his proposal will try to correct the skewed economics that favor landfilling over recycling. Assertions that recycling is too expensive fail to account for the enormous costs of siting and building a new landfill in New Castle County, a cost I first tried to calculate in 2006. Markell made this point in a speech in April:
Expanding recycling: despite the short-term economics of recycled materials, it will be much more cost-effective in the long-term to prioritize recycling instead of the purchase of another landfill site (assuming we could even identify one).
Governor Markell will present his proposal from the balcony of his Wilmington office, "from which you can see the growing Cherry Island landfill," according to the press announcement.

Saturday, January 02, 2010

Zero Net Job Creation

Now that we have seen all of the pointless top ten lists, we can get down to assessing the wasteland that was the last decade — what Paul Krugman calls the Big Zero.
Over at Delaware Liberal, Unstable Isotope points to this analysis from the Washington Post on just how bad the last ten years have been in terms of job creation:
It actually worse than the chart illustrates; Krugman says that over the last ten years "private-sector employment has actually declined — the first decade on record in which that happened."
It is an article of faith among free market fundamentalists that tax cuts and deregulation lead inevitably to economic growth. How then do they explain the last decade? Economics may be the dismal science, but it is still subject to empirical verification.