Your Garbage, My Money

While many of my regular readers may think that I am opposed to all things green, allow me to disabuse you of that notion. I believe in doing things that are cost efficient and effective, like green roofs. You can read my blog, Clean Air through Green Roofs .

I am a big fan of recycling, particularly those things that make sense to recycle, like steel and aluminum. However, when it takes more resources to recycle than it takes to make the product from scratch, I am skeptical.

In the July 24th edition of Business Week, there is an article titled, "Cash for Trash." It discusses how not only are traditional waste management companies making money from recyclying, but venture capital money is going to firms, "...which includes everything from materials recovery to sewage biotechnology..."

There is a simple "why" to the question of increased recycling.

"The calculus is simple: As the prices of oil and other raw materials rise, recycled products become more attractive. Consider that 8% of global oil production is siphoned off to make plastic each year. Recycled plastic, however, requires 80% less energy to produce. Recycled aluminum burns up 95% less energy. Recycled iron and steel use 74% less, while paper requires 64% less."

So there you have it. Recycling now is worth it! Is anybody surprised? They shouldn't be. In a world of ever shifting commodity prices and consumer tastes, new markets show up to take advantage of any disequilibrium. When the cost of oil and metals goes down, don't be surprised to see recycling businesses fade away, just like in 2002, when "Mayor Michael Bloomberg, ...suspended the city's glass- and plastic-recycling services in 2002..." Things change, markets change, tastes change and generally that's good, because that's how markets are made.

Nuclear, India Style

India is not only one of the world's largest countries by population, it is also on of the largest consumers of electricity. However, India suffers insufficient power generation and distribution networks, making stable and continuous power a very hard target.

In the July 24 issue of Business Week, titled "All Eyes on India's Nuclear Prize," the article, while focused on who is getting business to build 30+ reactors, also spells out India' commitment to clean, nuclear energy.

When it comes to spending about $100 billion of government money, one can bet on controversy. Additionally, when that money is to spent on building safe, reliable, clean, nuclear plants, one can count on the leftists to scream the loudest.

So, should one be suprised when the article states, "Communist members of Singh's coalition opposed it and walked away from the government, forcing a confidence vote on July 22." If one followed the news, they would see that Singh survived the confidence vote.

Lest anyone question the need India has for power, consider this quotation:

"And as the economy expands, New Delhi hopes to quintuple nuclear energy production. "Demand for electricity is so large," says R.B. Grover, India's chief negotiator for the nuclear deal, "that we can accommodate all countries" willing to help build capacity.

All the best to India and its nuclear power expansion. If they are successful, perhaps the can reduce the number of coal and oil plants and really reap the fruits of clean, safe, and reliable, nuclear power.

Green Losers

The purpose of this blog has been to use rational thinking and basic economic principles to evaluate the more popular solutions to the "green crisis." While I promote conservation, new technology, and a clean environment, they all have to be approached with an understanding of costs. When the need to evaluate a position no longer requires empirical data, it is going to be a bad decision.

Business Week reported in the June 30 print edition that companies who signed up for the US EPA's Climate Leaders Initiative lost, on average, 0.9% of its share price in two days, "...more than it would have from normal market factors." This was the result of research done by two Dartmouth College professors, Karen Fisher-Vanden and Karin Thorburn.

The studies goes on to point out that:

Companies in carbon-heavy industries such as utilities, though, don't take as much of a hit. In those cases, ...investors view participation as a preemptive move against all but certain regulations."

What this article points out is that the market doesn't view cutting greenhouse gases as good way to spend the shareholders' money, at least in some industries. Rational investors seem to have figured this out, change when necessary, but not before.

Adding Up the Cost of Ethanol

***Be sure to read the follow up article, "Common Sense vs. Ethanol." ***

While many believe that ethanol is reducing our dependence on foreign oil, many forget the real costs involved in creating ethanol from corn. It is energy intensive. Indoor gardens

In an article in Human Events titled, "Alternative Fuels are not an Alternative," A.W.R. Hawkins lays out the true costs of ethanol. From the article:

"...it takes 1.3 gallons of gasoline to produce one gallon of ethanol. Moreover, that one gallon of ethanol that is produced through the burning of 1.3 gallons of gasoline contains one third less energy than a gallon of gasoline, according to Iain Murray, senior fellow at the Competitive Enterprise Institute. This means that by the time you burn 1.3 gallons of ethanol, which is what it takes to equal the energy of a gallon of gasoline, you have actually already burned 1.73 gallons of gasoline simply to produce the cleaner burning 1.3 gallons of ethanol that “replaced” it.

Something that the article also mentions is the water requirement to produce ethanol. Water? That's right, "According to David Olive of the Toronto Star, ethanol requires us to pour 10,000 liters of water on a field of corn in order to receive 5 liters of fuel in return." According to Business Week, "By 2030 nearly half of the world's population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development." Water Barrels and Storage

Not only does ethanol production destroy a food crop, consume vast amounts of precious water, it also requires the burning of more fossil fuels than it generates. In a world of "feel good" solutions to real problems, ethanol continues not to make economic sense, nor is it economically efficient. Here is possible resource for fuel economy better than ethanol.