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.
The Fox host’s insistence that black laborers building the White House were “well-fed and had decent lodgings” fits in a long history of insisting the “peculiar institution” wasn’t so bad.
In her widely lauded speech at the Democratic National Convention on Monday, Michelle Obama reflected on the remarkable fact of her African American family living in the executive mansion. “I wake up every morning in a house that was built by slaves. And I watch my daughters, two beautiful, intelligent, black young women, playing with their dogs on the White House lawn,” she said.
On Tuesday, Fox News host Bill O’Reilly discussed the moment in his Tip of the Day. In a moment first noticed by the liberal press-tracking group Media Matters, O’Reilly said this:
As we mentioned, Talking Points Memo, Michelle Obama referenced slaves building the White House in referring to the evolution of America in a positive way. It was a positive comment. The history behind her remark is fascinating. George Washington selected the site in 1791, and as president laid the cornerstone in 1792. Washington was then running the country out of Philadelphia.
Slaves did participate in the construction of the White House. Records show about 400 payments made to slave masters between 1795 and 1801. In addition, free blacks, whites, and immigrants also worked on the massive building. There were no illegal immigrants at that time. If you could make it here, you could stay here.
In 1800, President John Adams took up residence in what was then called the Executive Mansion. It was only later on they named it the White House. But Adams was in there with Abigail, and they were still hammering nails, the construction was still going on.
Slaves that worked there were well-fed and had decent lodgings provided by the government, which stopped hiring slave labor in 1802. However, the feds did not forbid subcontractors from using slave labor. So, Michelle Obama is essentially correct in citing slaves as builders of the White House, but there were others working as well. Got it all? There will be a quiz.
The billionaire former New York mayor denounced the Republican nominee as a “dangerous demagogue” and a “risky, reckless, and radical choice.”
Michael Bloomberg, a brand-name billionaire far wealthier than Donald Trump, a famously independent voter who derides both the Democratic and Republican parties, endorsed Hillary Clinton on Wednesday and called Trump a “risky, radical and reckless choice” for president.
“Let’s elect a sane, competent person,” he said.
The normally soft-spoken owner of Bloomberg financial-news service excoriated his fellow New Yorker, labeling him a “dangerous demagogue,” a hypocrite, a con, and—slashing at the core of Trump’s self-worth—a horrible businessman.
“Throughout his career,” Bloomberg said in his prime-time address. “Trump has left behind a well-documented record of bankruptcies and thousands of lawsuits and angry shareholders and contractors who feel cheated and disillusioned customers who feel ripped off. Trump says he wants to run the nation like he’s run his business. God help us!”
His call on a foreign government to hack Hillary Clinton’s email account is a complete subversion of GOP ideals.
The first excuse for Donald Trump’s amazing press conference on Wednesday, in which he called on the Russians to hack and publish the 30,000 emails wiped from Hillary Clinton’s home server, was: He was only joking.
That excuse almost immediately dissolved. When Trump was asked by CNN’s Jim Acosta whether he would call on Vladimir Putin to stay out of U.S. elections, the presidential nominee answered that he would not tell Putin what to do. After the conference ended, Trump tweeted out a slightly tidied up request to the Russians to find Clinton’s emails—but to hand them over to the FBI rather than publish them.
The second excuse, produced on Twitter minutes later by Newt Gingrich, is that Trump’s remark, while possibly unfortunate, mattered less than Clinton’s careless handling of classified material on her server. That defense seems likely to have more staying power than the first—about which, more in a minute.
The Republican presidential nominee appeared to suggest he’d recognize Russia’s annexation of the Ukrainian territory in 2014.
Donald Trump’s call on Russia to hack Hillary Clinton’s emails Wednesday resulted in widespread criticism. But his comments on Crimea, coupled with ones he made last week on NATO, are likely to have greater significance if he is elected president in November.
The question came from Mareike Aden, a German reporter, who asked him whether a President Trump would recognize Crimea as Russian and lift sanctions on Moscow imposed after its 2014 annexation of the Ukrainian territory. The candidate’s reply: “Yes. We would be looking at that.”
That response is likely to spread much cheer through Russia—already buoyant about the prospect of a Trump victory in November. But it could spread at least an equal amount of dread in the former Soviet republics. In a matter of two weeks, the man who could become the next American president has not only questioned the utility of NATO, thereby repudiating the post-World War II security consensus, he also has seemingly removed whatever fig leaf of protection from Russia the U.S. offered the post-Soviet republics and Moscow’s former allies in the Eastern bloc.
His first Q&A on the site seemed free-wheeling and open to all, but it was actually obsessively controlled.
Cruising the skies above Ohio (and perhaps looking to take more attention away from the Democratic National Convention), Donald Trump tried a new publicity tactic Wednesday night. Instead of his typical podium-and-flag setup, he opened his MacBook and invited users of Reddit to ask him anything.
AMAs—that’s the popular abbreviation—are a staple of the free-wheeling forum site, which has hosted hundreds of celebrities and slightly less famous people who are willing put out a shingle and take questions from strangers on the internet. Reddit—part old-school forum, part meme-machine, part possible-future-of-human-society—prides itself on its community, which moderates itself and (in theory) highlights the best the internet has to offer. Barack Obama hosted his own AMA back in 2012; so have Bill Gates, Patrick Stewart, and a guy who fought off a bear.
A former NATO general imagines a frightening scenario.
In 2014, shortly after Russia forcefully intervened in Ukraine and admitted Crimea into the Russian Federation, Richard Shirreff stepped down as NATO’s deputy supreme allied commander Europe, one of the highest-ranking positions in the military alliance. The British general proceeded to do something highly unusual. He criticized the government he once served, arguing that Britain’s cuts to defense spending were “one hell of a risk” at a time of renewed Russian aggression. Next, he wrote a startling account of what might follow from the failure of the United Kingdom and many of its NATO allies to, in his view, sufficiently invest in countering the Kremlin militarily. He describes the account as a “work of fiction,” but also a “realistic” and “urgent” warning.
The president took the DNC stage on Wednesday, showing why he will be his one-time rival's best advocate this fall.
Barack Obama needed to bring Democrats together tonight at the DNC. Tim Kaine had a far more difficult task: Hillary Clinton’s vice-presidential pick needed to prove he can be trusted, has the capacity to inspire, and can effectively take on Donald Trump.
In the end, Obama and Kaine both won raucous cheers and applause. At one point during the president’s speech, someone in the crowd cried out: “Four more years!” Another screamed: “I love you!” And despite earlier threats of revolt from Bernie Sanders supporters, Kaine made it through his speech without major incident. He came across as dedicated to the cause, and ready to fight, hitting high notes along the way. In all, the evening showed a party that seemed far more willing to come together than it did when the convention began.
We can all agree that Millennials are the worst. But what is a Millennial? A fight between The New York Times and Slate inspired us to try and figure that out.
We can all agree that Millennials are the worst. But what is a Millennial? A fight between The New York Times and Slate inspired us to try and figure that out.
After the Times ran a column giving employers tips on how to deal with Millennials (for example, they need regular naps) (I didn't read the article; that's from my experience), Slate's Amanda Hess pointed out that the examples the Times used to demonstrate their points weren't actually Millennials. Some of the people quoted in the article were as old as 37, which was considered elderly only 5,000 short years ago.
The age of employees of The Wire, the humble website you are currently reading, varies widely, meaning that we too have in the past wondered where the boundaries for the various generations were drawn. Is a 37-year-old who gets text-message condolences from her friends a Millennial by virtue of her behavior? Or is she some other generation, because she was born super long ago? (Sorry, 37-year-old Rebecca Soffer who is a friend of a friend of mine and who I met once! You're not actually that old!) Since The Wire is committed to Broadening Human Understanding™, I decided to find out where generational boundaries are drawn.
This week, the co-author of Donald Trump’s autobiography said in The New Yorker that if he were writing The Art of the Deal today, it would be a very different book with a very different title: The Sociopath.
To title a person’s life story with that label is a serious accusation, and one worth considering. The stakes are high. Tony Schwartz, the writer of the best-selling book, said that he “genuinely believe[s] that if Trump wins and gets the nuclear codes, there is an excellent possibility it will lead to the end of civilization.” In that light, Schwartz said he feels “deep remorse” at having “put lipstick on a pig.”
That seemed to me to be something of a contradiction to the charge of sociopathy, as pigs have been found to show signs of empathy. If you call a pig by name, it will come and play with you, reciprocating affection like a dog. So which is it, pig or sociopath?
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.