You´d be hard put to find a better illustration of the old chestnut about the EMH economist whose friend tells him there´s a banknote lying in the road:
Can't be. If there was a bill on the ground, somebody would have already picked it up.
Where to begin? Most normal people would say: that´s another nail in the already well-sealed coffin of the EMH. But faced with indisputable facts about solar market prices and installation quantities, Cowen´s response is: where´s the solar boom or fossil bust in asset prices? He can´t see one, so the facts must be wrong, or more politely epiphenomenal noise. Note that the objection is not based on any falsifiable hypothesis about solar PV, such as: Germany will have to cancel its solar PV feed-in tariff as unaffordable, silicon feedstock supply will hit a new bottleneck like the one that kept prices from falling in 2004-2008, solar PV will turn out to cause cancer, impotence and obesity or at least will be thought to do so. (Now there´s a hot tip to the oil industry PR men: work up some scares.) For the record, while Germany did reduce its feed-in tariff, China has announced one.
You know, even after two years at Chicago, where like every professor tells you that same joke at least three times every semester, it never gets old, does it?
It's of course perfectly possible that markets are simply not recognizing the danger to fossil fuel stocks, and we are in for a very exciting disruption in the next ten years. (In which case, I am wrong about a carbon tax and other emissions controls; we should just wait eight years.)
On the other hand, it's also possible that people who trade those stocks for a living--some of whom may even be as smart as James Wimberly, have considered this possibility, and don't find it very likely. What might those reasons be?
1) Mindless trend extrapolation is hours of fun for the entire family, but it is incorrect at least as often as it is correct, and possibly more often.
Wimberly uses this graph:
And very possibly prices will keep falling, the way that microchips have. On the other hand, maybe they'll plateau. Wimberly points out that solar panels are fundamentally a manfuacturing business, not a resource business, which is certainly promising . . . but the prices of other manufactured goods that experienced steep declines did not necessarily keep plummeting to zero.
2) Solar panel costs are not the only cost of a solar installation. According to the Energy Bible (which comports roughly with other figures I've seen online), about half the cost, or a little more, of putting in solar panels comes from the cells. The rest comes from the other stuff you need: batteries, transformers, wiring, and labor. As far as I know, the cost of these things is not falling as fast as the cost of solar panels.
Assume that these costs have held relatively steady, with the labor component being the most unstable. Ten years ago, most of the cost of an installation would have been the solar panels. But as those prices decline, the installed cost (without tax incentives) will be increasingly dominated by labor and other materials. Assuming that that graph says what I think it does, that implies that even if cells become free, we'd plateau slightly north of the average electricity price.
3) There's a storage problem. Yes, intriguing things are being done with hot salt and so forth. But how attractive are the costs compared to home installations? What percentage of their total generation costs represent solar cells, versus labor and other things whose prices aren't falling so fast?
Putting the pieces together, our national battery occupies a volume of 4.4 billion cubic meters, equivalent to a cube 1.6 km (one mile) on a side. The size in itself is not a problem: we'd naturally break up the battery and distribute it around the country. This battery would demand 5 trillion kg (5 billion tons) of lead.
A USGS report from 2011 reports 80 million tons (Mt) of lead in known reserves worldwide, with 7 Mt in the U.S. A note in the report indicates that the recent demonstration of lead associated with zinc, silver, and copper deposits places the estimated (undiscovered) lead resources of the world at 1.5 billion tons. That's still not enough to build the battery for the U.S. alone. We could chose to be optimistic and assume that more lead will be identified over time. But let's not ignore completely the fact that at this moment in time time, no one can point to a map of the world and tell you where even 2% of the necessary lead would come from to build a lead-acid battery big enough for the U.S. And even the undiscovered, but suspected lead falls short.
What about cost? At today's price for lead, $2.50/kg, the national battery would cost $13 trillion in lead alone, and perhaps double this to fashion the raw materials into a battery (today's deep cycle batteries retail for four times the cost of the lead within them). But I guarantee that if we really want to use more lead than we presently estimate to exist in deposits, we're not dealing with today's prices. Leaving this caveat aside, the naïve $25 trillion price tag is more than the annual U.S. GDP. Recall that lead-acid is currently the cheapest battery technology. Even if we sacrificed 5% of our GDP to build this battery (would be viewed as a huge sacrifice; nearly a trillion bucks a year), the project would take decades to complete.
But even then, we aren't done: batteries are good for only so many cycles (roughly 1000, depending on depth of discharge), so the national battery would require a rotating service schedule to recycle each part once every 5 years or so. This servicing would be a massive, expensive, and never-ending undertaking.
Moreover, while some sort of battery-replacement would help deal with the base-load problem (solar and wind are more variable than conventional sources, which means they have limited applications), they don't fix the transportation problem. Batteries are heavy and expensive, and as I understand it, absent some fairly radical breakthrough, they won't work at all in aviation; the energy density isn't high enough to permit the plane to take off. They're better for autos, but people don't want the limited range those vehicles currently offer.
4) To really take the market by storm, solar (plus storage) doesn't need to beat the average cost of electricity; it needs to beat the individual cost of each fuel type. DOE seems to think that by 2016 solar is still going to be a lot more expensive per kilowatt hour than other sources:
It's a pretty long haul before they overtake new coal--much less already-existing coal plants, or advanced natural gas.
The most obvious use for solar is as a replacement for expensive peak-load natural gas power (as I understand it, air conditioning causes most of the demand for these plants, so solar would be a nice complement.) But unless it gets massive subsidies, solar (including any storage mechanism you come up with) is going to have to individually defeat each type of electricity plant on price and/or availability, not "the average retail price of electricity"--which already includes some expensive solar and wind power.
Maybe that's possible--though that would still leave transportation to worry about. But that graph doesn't show it.
I'd close by restating Tyler's question in a slightly different way: if the price of solar is really likely to keep falling until it's cheaper than coal, why don't we see this revealed in the behavior of global warming activists? Where are Greens saying "We've decided to move on to more pressing issues, because clearly, the carbon emissions problem is just about solved."
If solar panels really become cheap enough to replace most electric generation, that will be extraordinarily disruptive, in ways that will be both good and bad for the environment. But I'm not seeing a shift away from climate change in order to focus more on, say, sustainable water-use or species conservation. Everyone seems just as worried about climate change as they've ever been, even though such cheap solar panels would render the issue mostly moot.
Revealed preference and market prices certainly can't tell you everything about the future. But they can tell you a lot about what people believe about the future.
In the United States, when an unmarried man has a baby, his partner can give it up without his consent—unless he happens to know about an obscure system called the responsible father registry.
Christopher Emanuel first met his girlfriend in the fall of 2012, when they were both driving forklifts at a warehouse in Trenton, South Carolina. She was one of a handful of women on the job; she was white and he was black. She ignored him at first, and Emanuel saw it as a challenge. It took multiple attempts to get her phone number. He says he “wasn’t lonely, but everybody wants somebody. Nothing wrong with being friends.”
Emanuel, who is now 25, describes himself as a non-discriminatory flirt. He was popular in high school and a state track champion. According to the Aiken High School 2008 yearbook, he was voted “Most Attractive” and “Best Dressed.” Even his former English teacher Francesca Pataro describes him as a “ray of sunshine.” Emanuel says he’s “talked”—euphemistically speaking—with a lot of women: “Black, Puerto Rican, Egyptian, and Vietnamese.” But before he met this girlfriend, he says, he had never seriously dated a white girl.
“Here is what I would like for you to know: In America, it is traditional to destroy the black body—it is heritage.”
Last Sunday the host of a popular news show asked me what it meant to lose my body. The host was broadcasting from Washington, D.C., and I was seated in a remote studio on the Far West Side of Manhattan. A satellite closed the miles between us, but no machinery could close the gap between her world and the world for which I had been summoned to speak. When the host asked me about my body, her face faded from the screen, and was replaced by a scroll of words, written by me earlier that week.
As the Vermont senator gains momentum, Claire McCaskill rushes to the frontrunner’s defense.
Obscured by the recent avalanche of momentous news is this intriguing development from the campaign trail: The Hillary Clinton campaign now considers Bernie Sanders threatening enough to attack. Fresh off news that Sanders is now virtually tied with Hillary in New Hampshire, Claire McCaskill went on Morning Joe on June 25 to declare that “the media is giving Bernie a pass … they’re not giving the same scrutiny to Bernie that they’re certainly giving to Hillary.”
The irony here is thick. In 2006, McCaskill said on Meet the Press that while Bill Clinton was a great president, “I don’t want my daughter near him.” Upon hearing the news, according to John Heilemann and Mark Halperin’s book Game Change, Hillary exclaimed, “Fuck her,” and cancelled a fundraiser for the Missouri senator. McCaskill later apologized to Bill Clinton, and was wooed intensely by Hillary during the 2008 primaries. But she infuriated the Clintons again by endorsing Barack Obama. In their book HRC, Aimee Parnes and Jonathan Allen write that, “‘Hate’ is too weak a word to describe the feelings that Hillary’s core loyalists still have for McCaskill.”
The banking industry needs more than regulation. It needs a new culture.
The call came from another trader near midnight one night in ‘95. I assumed it was about a crisis in the financial markets, something bad happening in Asia. No, it was about a strip club. “Dude, turn on the TV news. Giuliani is raiding the Harmony Theater.”
The Harmony Theater was a two-level dive club in lower Manhattan, popular among Wall Streeters because it bent rules. It was a place where almost anything, including drugs and sex, could be bought in the open.
When I turned on the TV I saw a swarm of close to a hundred police, many in riot gear, escorting handcuffed strippers and sad-looking clients into waiting police vans. No traders, or at least none that my friends or I knew, were arrested that night.
Most adults can’t remember much of what happened to them before age 3 or so. What happens to the memories formed in those earliest years?
My first memory is of the day my brother was born: November 14, 1991. I can remember my father driving my grandparents and me over to the hospital in Highland Park, Illinois, that night to see my newborn brother. I can remember being taken to my mother’s hospital room, and going to gaze upon my only sibling in his bedside cot. But mostly, I remember what was on the television. It was the final two minutes of a Thomas the Tank Engine episode. I can even remember the precise story: “Percy Takes the Plunge,” which feels appropriate, given that I too was about to recklessly throw myself into the adventure of being a big brother.
In sentimental moments, I’m tempted to say my brother’s birth is my first memory because it was the first thing in my life worth remembering. There could be a sliver of truth to that: Research into the formation and retention of our earliest memories suggests that people’s memories often begin with significant personal events, and the birth of a sibling is a textbook example. But it was also good timing. Most people’s first memories date to when they were about 3.5 years old, and that was my age, almost to the day, when my brother was born.
New data shows that students whose parents make less money pursue more “useful” subjects, such as math or physics.
In 1780, John Adams wrote a letter to his wife, Abigail, in which he laid out his plans for what his children and grandchildren would devote their lives to. Having himself taken the time to master “Politicks and War,” two revolutionary necessities, Adams hoped his children would go into disciplines that promoted nation-building, such as “mathematicks,” “navigation,” and “commerce.” His plan was that in turn, those practical subjects would give his children’s children room “to study painting, poetry, musick, architecture, statuary, tapestry, and porcelaine.”
Two-hundred and thirty-five years later, this progression—“from warriors to dilettantes,” in the words of the literary scholar Geoffrey Galt Harpham—plays out much as Adams hoped it would: Once financial concerns have been covered by their parents, children have more latitude to study less pragmatic things in school. Kim Weeden, a sociologist at Cornell, looked at National Center for Education Statistics data for me after I asked her about this phenomenon, and her analysis revealed that, yes, the amount of money a college student’s parents make does correlate with what that person studies. Kids from lower-income families tend toward “useful” majors, such as computer science, math, and physics. Those whose parents make more money flock to history, English, and performing arts.
In 1992, the neuroscientist Richard Davidson got a challenge from the Dalai Lama. By that point, he’d spent his career asking why people respond to, in his words, “life’s slings and arrows” in different ways. Why are some people more resilient than others in the face of tragedy? And is resilience something you can gain through practice?
The Dalai Lama had a different question for Davidson when he visited the Tibetan Buddhist spiritual leader at his residence in Dharamsala, India. “He said: ‘You’ve been using the tools of modern neuroscience to study depression, and anxiety, and fear. Why can’t you use those same tools to study kindness and compassion?’ … I did not have a very good answer. I said it was hard.”
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Gentrification is pushing long-term residents out of urban neighborhoods. Can collective land ownership keep prices down permanently?
AUSTIN, Tex.—Not long ago, inner cities were riddled with crime and blight and affluent white residents high-tailed it to the suburbs, seeking better schools, safer streets, and, in some cases, fewer minority neighbors.
But today, as affluent white residents return to center cities, people who have lived there for years are finding they can’t afford to stay.
Take the case of the capital city of Texas, where parts of East Austin, right next to downtown, are in the process of becoming whiter, and hip restaurants, coffee shops, and even a barcatering to bicyclists are opening. Much of Austin’s minority population, meanwhile, is priced out, and so they’re moving to far-out suburbs such as Pflugerville and Round Rock, where rents are affordable and commutes are long.