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 number of American teens who excel at advanced math has surged. Why?
On a sultry evening last July, a tall, soft-spoken 17-year-old named David Stoner and nearly 600 other math whizzes from all over the world sat huddled in small groups around wicker bistro tables, talking in low voices and obsessively refreshing the browsers on their laptops. The air in the cavernous lobby of the Lotus Hotel Pang Suan Kaew in Chiang Mai, Thailand, was humid, recalls Stoner, whose light South Carolina accent warms his carefully chosen words. The tension in the room made it seem especially heavy, like the atmosphere at a high-stakes poker tournament.
Stoner and five teammates were representing the United States in the 56th International Mathematical Olympiad. They figured they’d done pretty well over the two days of competition. God knows, they’d trained hard. Stoner, like his teammates, had endured a grueling regime for more than a year—practicing tricky problems over breakfast before school and taking on more problems late into the evening after he completed the homework for his college-level math classes. Sometimes, he sketched out proofs on the large dry-erase board his dad had installed in his bedroom. Most nights, he put himself to sleep reading books like New Problems in Euclidean Geometry and An Introduction to Diophantine Equations.
After a pair of poor showings in New Hampshire, Chris Christie and Carly Fiorina drop out of the race.
The Republican race is headed to South Carolina with two fewer candidates. The day after finishing sixth and seventh in the New Hampshire primaries, New Jersey Governor Chris Christie and former Hewlett-Packard CEO Carly Fiorina announced on Wednesday that they were suspending their campaigns.
Fiorina was always a long shot—she was practically a political newcomer, having only run one unsuccessful Senate campaign. And while her record at HP was vulnerable to attack, Republican figures saw in her both private-sector experience and a woman who could counter Hillary Clinton’s monopoly on a “historic” woman’s candidacy. While many political professionals sniffed at Fiorina’s candidacy, remembering that 2010 Senate race, she broke out after a commanding performance in the undercard to the first Republican debate. That earned her a promotion to the main stage at the next debate, where she scored another victory. But it was all downhill from there. Dogged by questions of honesty and unable to earn media attention, her campaign faded quickly.
Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole.
And if thy brother, a Hebrew man, or a Hebrew woman, be sold unto thee, and serve thee six years; then in the seventh year thou shalt let him go free from thee. And when thou sendest him out free from thee, thou shalt not let him go away empty: thou shalt furnish him liberally out of thy flock, and out of thy floor, and out of thy winepress: of that wherewith the LORD thy God hath blessed thee thou shalt give unto him. And thou shalt remember that thou wast a bondman in the land of Egypt, and the LORD thy God redeemed thee: therefore I command thee this thing today.
— Deuteronomy 15: 12–15
Besides the crime which consists in violating the law, and varying from the right rule of reason, whereby a man so far becomes degenerate, and declares himself to quit the principles of human nature, and to be a noxious creature, there is commonly injury done to some person or other, and some other man receives damage by his transgression: in which case he who hath received any damage, has, besides the right of punishment common to him with other men, a particular right to seek reparation.
The Warriors star is the embodiment of basketball’s analytics revolution.
The Golden State Warriors are now some 15 months in to their turn as one of the best teams in basketball history. Last season, they won 67 games, the most in the NBA in eight years, and secured a championship in June against LeBron James and the Cleveland Cavaliers. This season’s Warriors make last season’s Warriors look like a team that hadn’t yet gotten loose. They started the year winning their first 24 games in a row, a record opening, and as of now have won 46 of 50.
Golden State’s brilliance is more than just statistical. The Warriors are a basketball idyll, a paradise of skill and collaboration. Their offense runs on nifty ballhandling, willing passing, and sublime shooting, with their point guard and reigning NBA Most Valuable Player acting as ringleader. A slim 6’3” and 185 pounds, with a bouncy jog and a barely post-pubescent tuft of beard at his chin, Stephen Curry dribbles with the intentional abandon of a card hustler, flings one-handed passes to all sectors of the court, and shoots better than anyone ever has.
For decades, some psychologists have claimed that bilinguals have better mental control. Their work is now being called into question.
In one of his sketches, comedian Eddie Izzard talks about how English speakers see bilingualism: “Two languages in one head? No one can live at that speed! Good lord, man. You’re asking the impossible,” he says. This satirical view used to be a serious one. People believed that if children grew up with two languages rattling around their heads, they would become so confused that their “intellectual and spiritual growth would not thereby be doubled, but halved,” wrote one professor in 1890. “The use of a foreign language in the home is one of the chief factors in producing mental retardation,” said another in 1926.
A century on, things are very different. Since the 1960s, several studies have shown that bilingualism leads to many advantages, beyond the obvious social benefits of being able to speak to more people. It also supposedly improves executive function—a catch-all term for advanced mental abilities that allow us to control our thoughts and behavior, such as focusing on a goal, ignoring distractions, switching attention, and planning for the future.
Issued last summer, the rules are the centerpiece of the White House’s climate-change-fighting agenda, and they play a big part in the recent, tepid optimism about global warming. Without the proposal of the plan, the United States couldn’t have secured the Paris Agreement, the first international treaty to mitigate greenhouse-gas emissions, last December. And without the adoption of the plan, the United States almost certainly won’t be able to comply with that document. If the world were to lose the Paris Agreement—which was not a total solution to the climate crisis, but meant to be a first, provisional step—years could be lost in the diplomatic fight to reduce climate-change’s dangers.
The ancient civilization may have tracked Jupiter using sophisticated methods, but their reasons for stargazing were very different than ours.
We’ve never escaped the influence of the Babylonians. That there are 60 seconds in a minute, 60 minutes in an hour, and 360 degrees in a full circle, are all echoes of the Babylonian preference for counting in base 60. An affinity for base 12 (inches in a foot, pence in an old British shilling) is also an offshoot, 12 being a factor of 60.
All this suggests that the Babylonians had a mathematics worth copying, which was why the Greeks did copy it and thereby rooted these number systems in Western tradition. The latest indication of Babylonian mathematical sophistication is the discovery that their astronomers knew that, in effect, the distance traveled by a moving object is equal to the area under the graph of velocity plotted against time. Previously it had been thought that this relationship wasn’t recognized until the fourteenth century in Europe. But since historian Mathieu Ossendrijver of the Humboldt University in Berlin found the calculation described in a series of clay tablets inscribed with cuneiform writing in Babylonia during the fourth to the first centuries B.C.E., where it was used to figure out the distance traveled across the sky by the planet Jupiter.
Most people in the U.S. believe their country is going to hell. But they’re wrong. What a three-year journey by single-engine plane reveals about reinvention and renewal.
When news broke late last year of a mass shooting in San Bernardino, California, most people in the rest of the country, and even the state, probably had to search a map to figure out where the city was. I knew exactly, having grown up in the next-door town of Redlands (where the two killers lived) and having, by chance, spent a long period earlier in the year meeting and interviewing people in the unglamorous “Inland Empire” of Southern California as part of an ongoing project of reporting across America.
Some of what my wife, Deb, and I heard in San Bernardino before the shootings closely matched the picture that the nonstop news coverage presented afterward: San Bernardino as a poor, troubled town that sadly managed to combine nearly every destructive economic, political, and social trend of the country as a whole. San Bernardino went into bankruptcy in 2012 and was only beginning to emerge at the time of the shootings. Crime is high, household income is low, the downtown is nearly abandoned in the daytime and dangerous at night, and unemployment and welfare rates are persistently the worst in the state.
Everything that was supposed to be silenced is suddenly being said.
The tight grip of oligarchy upon the American political system slipped a little last night in New Hampshire.
On the Democratic side, voters cast their ballots for one of the most implausible candidates in modern presidential history—less because his rhetoric was so mesmerizing or his program so inspiring than as a protest against an expected winner perceived as a lavishly compensated servitor of organized wealth.
In her concession speech, Hillary Clinton boasted of her small donors. More than 70 percent had given less than $100, she claimed: “I know that doesn’t fit with the narrative.” As Ken Vogel of Politico immediately tweeted, the claim also distorts the facts. Clinton may have a lot of donors, but the bulk of the value of her donations—85 percent—has come from the biggest givers. And her family’s personal wealth, and its foundation’s assets, can also be seen as built on the largesse of banks, corporations, and foreign governments.
From Flint to New Hampshire, an angry American public is determined to challenge the status quo.
The first politician punished for the poisoning of Flint, Michigan, was Dayne Walling, the 42-year-old Democratic mayor who lost reelection in November by fewer than 2,000 votes. When he dug into the numbers, Walling discovered what he considers the source of his demise: 3,000 new voters.
In a predominately African American city, 3,000 Flint residents who did not vote for the nation’s first black president in 2008 or 2012 cast ballots in last year’s mayoral election. What motivated them? The water crisis, of course, but Walling offers another explanation—one deeply embedded in the American body politic and yet related to the lead poisoning.
“Angry, frustrated citizens raised their voice,” he said. “Trump-type voters came out of the woodwork.”