Tag Archives: methane

06.21.2012 | Should We Buy Local?

I just finished an omelette with eggs and spinach from a nearby farm. It tasted good, I supported local business and I helped the environment. You could say that I had my cake (but it was spinach) and ate it too.

But, here is the surprise.

If you care about your carbon footprint, then eating local is not the answer. Yes, food miles do create greenhouse gases. But a Carnegie Mellon study has concluded that the environmental impact of transporting food is relatively minimal. Instead, it’s all about dietary shift. For less than one day a week, we just have to switch from meat and dairy to chicken, fish, eggs, or a vegetable-based diet to achieve the environmental benefit of buying 100% local.

In addition, economist Steve Landsburg says that even if we wanted to use cost/benefit analysis to prove the total impact of local sourcing, it would be impossible. How can we judge whether land should have been used for tomatoes or grapes, or if local farmers would have been better off transporting their produce elsewhere or even if it was best to buy Chilean grapes because Chile is the most efficient place to grow them? Then also, there are workers, a ripple of energy use, equipment and countless other considerations.

Instead he says just to look at price.

Using a tomato as an example, Landsburg explains that the price conveys all we need to know. Assume, for example, that the local tomato laborers would have been more efficient growing grapes. As a result, the tomato supply curve would shift up and to the left because of lower yielding fields, and the price of tomatoes would increase. You don’t have to ask specifically about cost and benefit because a high or low price provides the answer.

So, did my omelette help the planet more than steak? I am not so sure.

A thanks to the Freakonomics people who suggested that “We Eat What We Are” and reminded me of locavore dilemmas. And here, economist Steven Landsburg disagrees with environmental locavores while this paper and this paper provide more information about the carbon footprint of our diet.

Posted by: adminEcon
Tags: carbon footprint, comparative advantage, cost/benefit analysis, David Ricardo, environment, food miles, locavores, methane, opportunity cost, price
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12.18.2011 | A Happy Story From Greece

Greece is helping to solve the unemployment problem in upstate New York.

When you see a small white container of Fage Greek yogurt (pronounced fa-yeh), instead try to picture a 220,000 square foot U.S. production facility, close to 200 jobs and lots of busy cows (every pound of yogurt uses 3 times as much milk). In addition, yogurt waste creates methane gas that creates electricity and reduces local taxes.

Fage is an Athens based multinational that started in 1926 as a small dairy store. After expanding in Greece, they started exporting to Europe during the 1980s and to the U.S. in 1998. Their first U.S. plant opened in Johnstown, N.Y. in 2008. Chobani, #1 in Greek-style yogurt sales, is also located in the area.

All of these yogurt facts were in the news recently because Fage’s proposal to build a new multi-million dollar whey treatment plant was blocked by local bureaucracy until New York’s Governor Cuomo intervened.

Our bottom line: Fage Yogurt is a good example of foreign direct investment.

The Economic Lesson

So often true with the market system, people respond to the profit motive with behavior that is not readily evident but amazingly productive. The Fage story involves jobs, innovation, the environment, international trade and a ripple of industrial development.

An economic question: Specifically, how does Fage add to the U.S. GDP?

Posted by: adminEcon
Tags: Fage yogurt, foreign direct investment, GDP, methane, unemployment, upstate New York
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07.15.2010 | Animal Emissions

As most of us know, cow burps add to global warming. According to the NY Times, animal methane emissions account for 10% of Australia’s contribution to greenhouse gasses. The solution? The kangaroo. Like cows, kangaroos are “foregut fermenters”. However, because their digestive system uses a different microbe, they produce harmless acetic acids instead of methane. If researchers could discover how to give cows the kangaroo microbe, then bovine emissions would be less harmful.

IPCC researchers predict that global warming will result in temperature increases that might average 4 degrees Celsius during the next century. As a result, warmer temperatures would diminish economic growth by 1% to 5%. In other words, the world economy will continue growing but just not as much. (You might want to look at a good debate on the topic at The New Republic.)

Enter Congress. Pending legislation includes proposals for electricity producers using qualifying fuels, creating cap and trade programs and carbon taxes, studying carbon capture, subsidizing auto makers’ efforts to create more fuel efficient cars, providing loans for clean energy projects, and nuclear power incentives. They have also suggested a big battery contest.

The Economic Lesson

Using CBA (cost/benefit analysis), economists would compare marginal (extra) cost and marginal (extra) benefit. Next, they would conclude that as long as the extra cost does not exceed the extra benefit that results, the policy should be implemented. Here though, I wonder whether it is possible to assess the marginal cost and marginal benefit of congressional initiatives. Even for animal emissions, because the entire Australian beef industry would be affected by diminishing cattle methane, can we accurately assess the impact?

And therein lies our dilemma. Will the current cost of diminishing greenhouse emissions which may be incalculable be worth a potentially indefinite future benefit?

Posted by: adminEcon
Tags: animal emissions, global warming, greenhouse gasses, methane
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06.25.2010 | Environmental Emissions

A letter in “The Mail” section of a recent New Yorker tells us about a funny error on the cover of the May 17, 2010 issue. Mainly portraying emissions from vehicles, factories, and cows, the cover focuses on our environmental problems. According to the letter writer, though, the illustrator, “..has the ‘ends’ mixed up.” The cow “releases only trace amounts of gas through its rectum [as drawn]…; the hundreds of quarts of methane it contributes to the atmosphere each day are belched.”

Thinking about the cover, I recalled pending Congressional legislation that concerns emissions. Through the “Electric Vehicle Deployment Act of 2010,” the Congress proposes that we minimize auto emissions and oil consumption. The 77 page (pending) law includes a $10 million prize for creating a 500 mile battery and a process for establishing between 5 and 15 “deployment communities”.

I wonder whether government R & D support should be so specific. Should federal dollars go to institutions rather than a precisely described result? Aren’t the best ideas generated when we encourage a more open ended approach?

The Economic Lesson

Through an opportunity cost chart, we could determine the benefits of targeting one technology and the benefits of an attractive alternative approach. Knowing that choosing is refusing, hopefully our legislators use cost/benefit analysis.

Posted by: adminEcon
Tags: auto emissions, cows, electric vehicles, environment, methane, New Yorker magazine, tragedy of the commons
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