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.
When President Obama left, I stayed on at the National Security Council in order to serve my country. I lasted eight days.
In 2011, I was hired, straight out of college, to work at the White House and eventually the National Security Council. My job there was to promote and protect the best of what my country stands for. I am a hijab-wearing Muslim woman––I was the only hijabi in the West Wing––and the Obama administration always made me feel welcome and included.
Like most of my fellow American Muslims, I spent much of 2016 watching with consternation as Donald Trump vilified our community. Despite this––or because of it––I thought I should try to stay on the NSC staff during the Trump Administration, in order to give the new president and his aides a more nuanced view of Islam, and of America's Muslim citizens.
Meet the protesters who tricked conference attendees into waving Russian flags.
Two men made trouble—and stirred up a social-media frenzy—on the third day of the Conservative Political Action Conference by conducting a literal false-flag operation.
Jason Charter, 22, and Ryan Clayton, 36, passed out roughly 1,000 red, white, and blue flags, each bearing a gold-emblazoned “TRUMP” in the center, to an auditorium full of attendees waiting for President Trump to address the conference. Audience members waved the pennants—and took pictures with them—until CPAC staffers realized the trick: They were Russian flags.
The stunt made waves on social media, as journalists covering CPAC noticed the scramble to confiscate the insignia.
Long after research contradicts common medical practices, patients continue to demand them and physicians continue to deliver. The result is an epidemic of unnecessary and unhelpful treatments.
First, listen to the story with the happy ending: At 61, the executive was in excellent health. His blood pressure was a bit high, but everything else looked good, and he exercised regularly. Then he had a scare. He went for a brisk post-lunch walk on a cool winter day, and his chest began to hurt. Back inside his office, he sat down, and the pain disappeared as quickly as it had come.
That night, he thought more about it: middle-aged man, high blood pressure, stressful job, chest discomfort. The next day, he went to a local emergency department. Doctors determined that the man had not suffered a heart attack and that the electrical activity of his heart was completely normal. All signs suggested that the executive had stable angina—chest pain that occurs when the heart muscle is getting less blood-borne oxygen than it needs, often because an artery is partially blocked.
Millions of Americans are worried that Donald Trump is an ominous figure. Investors have another theory: maybe not.
Donald Trump so permeates the collective consciousness of the country that it is hard to imagine now living in a world without him. But there is one place where the president seems to be relatively invisible—the U.S. stock market.
The Dow, S&P, and Nasdaq have set record highs in the months after Trump’s election. On Thursday, the Dow has its tenth consecutive record closing in a row, at 20,810. This is happening, despite the fact that investors seemed terrified of a Trump presidency in the general election campaign. Trump came into office promising to antagonize America’s allies and economic partners while crushing the international establishment. None of this is particularly favorable to multinational corporations. Even worse, Trump’s first few weeks in office were a maelstrom of hasty lawmaking and furious backtracking, exactly the sort of behavior one might consider a threat to the all-important “certainty” that markets ostensibly crave. What’s more, mainstream economists are nearly united in their certainty that Trump’s core policies, like scrapping free trade agreements while severely limiting immigration, would be bad for the country.
The administration admits to asking the bureau’s deputy director to help it knock down a damaging story about the Trump campaign’s Russia contacts.
The White House’s admission that it asked the Federal Bureau of Investigation to publicly dispute stories in the New York Times describing contacts between the Trump campaign and Russian officials raises serious ethical questions, according to former Justice Department officials.
"It's quite inappropriate for anyone from the White House to have a contact with the FBI about a pending criminal investigation, that has been an established rule of the road, probably since Watergate," said Michael Bromwich, a former Department of Justice inspector general and director of the Bureau of Ocean Energy Management under Obama. "When I was in the Department in the ‘90s, that was well understood to be an inviolable rule."
“No… it’s a magic potty,” my daughter used to lament, age 3 or so, before refusing to use a public restroom stall with an automatic-flush toilet. As a small person, she was accustomed to the infrared sensor detecting erratic motion at the top of her head and violently flushing beneath her. Better, in her mind, just to delay relief than to subject herself to the magic potty’s dark dealings.
It’s hardly just a problem for small people. What adult hasn’t suffered the pneumatic public toilet’s whirlwind underneath them? Or again when attempting to exit the stall? So many ordinary objects and experiences have become technologized—made dependent on computers, sensors, and other apparatuses meant to improve them—that they have also ceased to work in their usual manner. It’s common to think of such defects as matters of bad design. That’s true, in part. But technology is also more precarious than it once was. Unstable, and unpredictable. At least from the perspective of human users. From the vantage point of technology, if it can be said to have a vantage point, it's evolving separately from human use.
The state legislature nearly reversed Governor Sam Brownback’s signature policy after a voter rebellion. His economic legacy, one GOP lawmaker says, “is going down in flames.”
It was only two months ago that Governor Sam Brownback was offering up the steep tax cuts he enacted in Kansas as a model for President Trump to follow. Yet by the time Republicans in Congress get around to tax reform, Brownback’s fiscal plan could be history—and it’ll be his own party that kills it.
The GOP-controlled legislature in Kansas nearly reversed the conservative governor’s tax cuts on Tuesday, as a coalition of Democrats and newly-elected centrist Republicans came within a few votes of overriding Brownback’s veto of legislation to raise income-tax rates and eliminate an exemption for small businesses that blew an enormous hole in the state’s budget. Brownback’s tax cuts survive for now, but lawmakers and political observers view the surprising votes in the state House and Senate as a strong sign that the five-year-old policy will be substantially erased in a final budget deal this spring. Kansas legislators must close a $346 million deficit by June, and years of borrowing and quick fixes have left them with few remaining options aside from tax hikes or deep spending cuts to education that could be challenged in court. The tax bill would have raised revenues by more than $1 billion over two years.
The preconditions are present in the U.S. today. Here’s the playbook Donald Trump could use to set the country down a path toward illiberalism.
It’s 2021, and President Donald Trump will shortly be sworn in for his second term. The 45th president has visibly aged over the past four years. He rests heavily on his daughter Ivanka’s arm during his infrequent public appearances.
Fortunately for him, he did not need to campaign hard for reelection. His has been a popular presidency: Big tax cuts, big spending, and big deficits have worked their familiar expansive magic. Wages have grown strongly in the Trump years, especially for men without a college degree, even if rising inflation is beginning to bite into the gains. The president’s supporters credit his restrictive immigration policies and his TrumpWorks infrastructure program.
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His death has punctured the myth of the Kims' holy bloodline.
As the first son of Kim Jong Il, the late leader of the Democratic People’s Republic of Korea, Kim Jong Nam always posed a threat to Kim Jong Un, his half brother and North Korea’s current leader. Before falling out of favor with his father and going into exile soon after, paving the way for Kim Jong Un’s ascent, Kim Jong Nam was the heir apparent. With the execution in 2013 of Jang Sung Tak, the second in command and the eldest son’s staunchest supporter, Kim Jong Nam was unprotected, with little hope of ever returning home.
On February 13, Kim Jong Nam was murdered in Kuala Lumpur airport by two hired killers. The fascination surrounding the killing has centered on its sensational circumstances: that one ofthe killers smeared a poisonous toxin, reportedly VX gas, across Kim’s face; that one of them wore a T-shirt with the acronym “LOL” printed across the front; that the other reportedly mistookthe hit for a comedy stunt. Malaysian police have detained five people allegedly connected to the killing, and remain on the hunt for others—including several North Koreans—linked to it.
Tucker Carlson’s latest reinvention is guided by a simple principle—a staunch aversion to whatever his right-minded neighbors believe.
Tucker Carlson is selling me hard on the swamp. It is an unseasonably warm afternoon in late January, and we are seated at a corner table in Monocle, an upscale Capitol Hill restaurant frequented by the Fox News star. (Carlson, who typically skips breakfast and spends dinnertime on the air, is a fan of the long, luxurious, multi-course lunch, and when I requested an interview he proposed we do it here.) As we scan the menus, I mention that I’ll be moving soon to the Washington area, and he promptly launches into an enthusiastic recitation of the district’s many virtues and amenities.
“I’m so pathetically eager for people to love D.C.,” he admits. “It’s so sad. It’s like I work for the chamber of commerce or something.”