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Post 01 May 2011, 1:45 pm

I believe I had mentioned this in passing some time ago on old Redscape and was reminded of it again after a weekend's discussion of environmental/energy issues with a number of friends in 'Portland'.

A lot of Portland types seem extremely concerned with carbon footprints, sustainability, ethical consumption, and localized economy, but I find that much of the solutions seemed based on good feelings measure rather than solid reasoning.

While not perfect it seems to me that capital is the most common denominator in judging consumption/energy impact.

For instance when judging between various cars and their impacts it seems like cost is the most important factor in determining impact rather than mpg of the vehicle. You have to take the initial cost of the vehicle and all it's subsequent maintenance, insurance, and fuel to really know how much energy and resources are consumed. Because money either pays for energy directly in the form of gas or indirectly in case of manufacturing and maintaining the vehicle.

The other problem is that if you make 100k a year it makes little difference what car you have or how little you drive, because when you spend the 100k or give it to others to spend, 100k of energy and resources are going to be exploited. You can devote resources for a cleaner or healthier environment, but there's really little you can to do to stop the energy/consumption equation.

For example you might be able to buy a Yoplait yogurt for $0.50 on sale at the store. Or you can buy a locally made organic yogurt for $1.50 at a farmer's market. Now some will say the commercial version is bad because it was shipped 500 miles where as the local yogurt came from within 15 miles. But the fact is the cost reflects the efficiency of the product. It might sound terrible that yogurt is shipped 500 miles, but it uses much less resources to ship 100,000 units 500 miles than to ship 50 units 15 miles, not to mention all the other factors at play. Therefore the only benefit to paying x3 as much for yogurt is because you can afford it and you appreciate the quality difference.

Basically the only way to contract the energy/consumption equation is to have an ongoing sustained economic recession. So then sustainability seems like the most important consideration as the vast majority of the population don't want to go the anarcho-primitivist route.

A high earner 150k/yr is going to necessarily have a larger impact than a 50k/yr earner, and no Prius, solar panels, or farmer's market is going to change that.

I'd appreciate feedback and input on this topic.
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Post 02 May 2011, 1:47 am

For instance when judging between various cars and their impacts it seems like cost is the most important factor in determining impact rather than mpg of the vehicle. You have to take the initial cost of the vehicle and all it's subsequent maintenance, insurance, and fuel to really know how much energy and resources are consumed. Because money either pays for energy directly in the form of gas or indirectly in case of manufacturing and maintaining the vehicle.


I see what you're getting at with this, but ultimately the argument falls down fairly quickly. You get a Hummer H3 for roughly the same price as a Toyota Prius. One of them does 75mpg and the other does 13 mpg. Now obviously this would mean that the hummer ends up having a much higher overall cost since you're burning far more fuel over the lifetime of the vehicle, but unless I'm missing something your argument was that the initial capital cost is the best indicator of the energy impact, and that clearly isn't the case here.
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Post 02 May 2011, 3:00 am

So the cost of labour is not relevant?
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Post 03 May 2011, 3:48 pm

The cost of labor is relevant, anything involving capital. If I buy bread from the store it might cost $1, if I buy it homemade from you $5, then maybe $4.25 for labor. The labor is still energy and resources in the end (your overhead to deliver the product).

Yes Sass in what I said I indicated that total costs over the long run including fuel costs had to be factored into the equation.

In fact I'd suggest that once you earn 'x' dollars the die have been rolled in terms of your impact. If you save tons not having a car and using a bike/public transport instead, it makes little to no difference as the money saved will just be spent elsewhere.
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Post 05 May 2011, 5:26 am

Sorry, but you are over-generalising. In relatively free markets, price is not directly related to cost, as vendors will seek to maximise any excess. So two products of identical energy cost could easily have differing prices based on demand.

In addition to the cost of wages being a factor, there is also the cost of land. Owing or renting land doesn't in itself cost much in terms of energy (maintaining it or pursuing an activity on it might, but those are additional and accountably so). But land values vary greatly, and this is part of the cost of providing a good or service (and will be a factor in wage demand). These resources are not necessarily linked to energy costs.

So, you are right that energy (and in the original context, it seemed to be in terms of mass energy generation rather than in human physical effort you were talking) is a factor. But it is not the only one, and it need not be the case that we need more electrical energy or heat energy to economically expand. As I keep pointing out (and as some of the guys on hear seem to have a tin ear about), a great way for a business to increase its margins is to decrease its energy costs. A lot is can be said about the benefits of greater labour efficiency (fewer man-hours to produce a widget means lower costs), but the same is the case with energy efficiency - and this could be more important if we do hit peak oil and/or demand from overseas shoots up as China and India develop.

And, of course, while I may earn 'x' dollars, that doesn't mean I spend 'x' dollars. I might spend more and borrow, causing more economic impact. I might hoard my money and save it up.

The labour may not be energy-based, and it could well be different types of energy even then. A hand-turned piece of wood will take longer to produce than a machine-tooled one. But it will use less energy to do so. chances are that the hand-turned wood will be more expensive, especially from an artisan.
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Post 05 May 2011, 10:17 am

danivon wrote:The labour may not be energy-based, and it could well be different types of energy even then. A hand-turned piece of wood will take longer to produce than a machine-tooled one. But it will use less energy to do so. chances are that the hand-turned wood will be more expensive, especially from an artisan.

Overall I think capital does account for impact better than any alternative metric. In a broad market there will be certain inefficiencies, but those naturally get arbitraged over the long run. You and I can't make and sell blue jeans because we couldn't possibly compete with the large corporations already doing it. However if we were super fashion conscious we could alter them in some sort of way and make money on a value added activity.

I think capital is a good measure in regards to your artisan example as well. I'm not sure whether it matters as to how much energy is used in hand or machine based production. If the artisan is slower in turning out product than he is providing something in quality or perception that people are willing to spend a lot more money for. Assuming that he makes a living at this, the money you pay for his specialty work is paying to support his lifestyle. He'll turn around and fly to Italy, buy a larger house, a new boat. And so that's how I'm suggesting capital is the best metric.

If some guy is doing chainsaw art on the side of the road and living in a tent because he has such meager margins than again capital measures impact, what you are spending goes to many indirect energy and resource impacts.

If you spend $100 to talk to a counselor you might be tempted to say that almost no energy was used or expended. But really the $100 supports that person's lifestyle, their house, car, education that it took to become a counselor. If the going counselor rate was $5/hr you could expect that the counselor might have to be living in a tent as well with such a meager income, and would therefore be having less of an energy/resource impact than a counselor making $100/hr
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Post 05 May 2011, 9:18 pm

It seems to me the argument being made here is that GNP is correlated with energy use. But if we have more fuel efficient cars, if people live closer to work, if there is more mass transit, if food was grown more locally (and required less transportation costs), if we ate less meat and substituted grains or vegetables, if we eliminated petroleum based fertilizers etc. then wouldn't energy required per dollar of GNP go down? It seems awfully pessimistic to say that we need a lower standard of living to reduce energy use. Someone with 100K may have that capital expended in one way or another but it certainly could be on things that require less energy expenditure.

What about the fact that the reason some companies are able to charge low prices is that they do not have to pay for pollution costs? . Factory farms allow for low prices for meat but that is due to the fact that the companies don't have to pay for damage these farms due to the environment (not to mention the damage they due to our health).

We need to be energy efficient in how we use energy. We also need to hold sellers responsible for hidden costs they inflict on the rest of us. Then real organic, sustainable producers of food could compete with factory farms. Yes, food prices would go up. But one way or another we're already paying for those costs anyway, we're just not acknowledging the costs.
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Post 06 May 2011, 12:50 am

Neal Anderth wrote:Assuming that he makes a living at this, the money you pay for his specialty work is paying to support his lifestyle. He'll turn around and fly to Italy, buy a larger house, a new boat. And so that's how I'm suggesting capital is the best metric.
Will he? Maybe he doesn't sell hundreds a year, but enough to get by. Per unit, the cost is high but the impact not that high. Again, you are assuming that the money will go on fuel. The largest part of a domestic budget is usually housing, followed by food.

Your srgument is actually becoming circular - have you realised that?