Incentives: Environmental Surprises
Talking to a group of us in Nantucket last night, New Yorker writer David Owen referred to the environmentally friendly community where he first lived after college. His home was a 750 square foot dwelling, so close to his neighbors that they could share heating and cooling equipment. With 77% of the households in his community not even owning an auto, per person energy use was the lowest in the US.
His community? Manhattan.
High density urban areas have much less of an environmental impact than low density municipalities. Harvard economist Edward Glaeser points out that “a single family detached house uses on average 83% more electricity than urban apartments within the United States.” Correspondingly, when Owen moved to his second home, a big 18th century house that was 100 miles from the city, near dirt roads and a nature preserve, his electricity and gasoline consumption skyrocketed.
In his talk, Mr. Owen also shared insight about bullet resistant apparel, Augusta golf history, Florida’s sink holes and panda fertility. Then, he returned to the environment.
Explaining that because of a recent plane flight to Australia his carbon footprint had ballooned, he blamed efficiency. More efficiency makes it much easier to reach faraway places. Board a plane, watch a movie, eat a few meals and in 13 hours you are there. By contrast, decades ago, with 4 or more stops along the way, the time and the effort it took to reach Australia meant he would not have gone there merely to give a talk. Multiply that by thousands of people deciding not to fly half way around the world. As a result, while those earlier planes spewed many more emissions, they flew much less.
Here, I recalled the “rebound” effect. Described by William Jevons in an 1865 book called The Coal Question, the “rebound” effect surfaced when the energy efficiency created by the steam engine encouraged more energy use rather than less. Jevons said, “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is truth.”
My bottom line: Great reads, David Owen’s book, Conundrum and his New Yorker articles on sink holes and Purell convey the most fascinating information that might come in handy. Also, they provide perfect examples of how new incentives can create unintended environmental consequences.
Sources and resources: I recommend this Econtalk podcast with David Owen on the “conundrums” of being green and this econlife post on the unintended impact of wind farms and locavores. For more on smaller carbon footprints in cities, Harvard economist Edward Glaeser explains his ideas in this article.
Please note that several sentences above are excerpts from a past econlife post.