Green Policies Mean Less Green in Our Wallets
Restrictions and regulations intended to save the planet have us starving in a sea of plenty.
The holiday season is upon us, and Americans everywhere are complaining about the high prices they are encountering at the supermarket and the retail outlets. Many have the notion that they are somehow being treated unfairly by greedy corporate America, and I suspect a majority of people have no idea of how public policy is hurting their pocket books. The public may have been upset with $4-a-gallon gasoline, but most go along blissfully ignorant of how much they pay for the Gordian knot of regulations and restrictions that their faithful servants have imposed on the American economy.
At first glance, one wouldn’t see a connection between a rash of stolen copper pipes from vacant buildings and sky-high prices for food items — say the $70 that a local St. Louis grocer was charging for a single holiday goose — but those connections are there, and they ultimately stem from environmentalist-driven land use policy imposed by the government. It’s difficult to imagine that restrictions in ANWR may be responsible for copper theft, but responsible it is! Ditto food; why would we pay more for our holiday feast because the price of natural gas has risen?
Food prices have been inflating for some time because of the ethanol requirement that George W. Bush mandated and that fans of alternative fuels — and corn growers in the Midwest — love so dearly, but there is another aspect to all of this that is going unnoticed; we have a shortage of ammonia, a critical ingredient in many types of fertilizer.
Ammonia cometh from natural gas.
According to this piece from the USDA Economic Research Service:
Outlook Report No. (WRS-0702) 19 pp, August 2007
The volatile and upward trend in U.S. natural gas prices from 2000-06 has led to a 17-percent decline in the nation’s annual aggregate supply of ammonia. During the period, U.S. ammonia production declined 44 percent, while U.S. ammonia imports increased 115 percent. Also, the share of U.S.-produced ammonia in the U.S. aggregate supply of ammonia dropped from 80 to 55 percent, while the share from imports increased from 15 percent to 42 percent. Meanwhile, ammonia prices paid by farmers increased from $227 per ton in 2000 to $521 per ton in 2006, an increase of 130 percent. Natural gas is the main input used to produce ammonia. Additional increases in U.S. natural gas prices could lead to a further decline in domestic ammonia production and an even greater rise in ammonia imports.
According to this piece at Spero News:
Historically, a ton of ammonia equaled the cost of about eighty bushels of wheat, that is, $2.25 for a wheat bushel against $200 for a ton of ammonia. This ratio held for forty years. Two years ago that long-standing relationship broke down. Today wheat is $4.50 and ammonia is $1,000; over two hundred bushels of wheat are required to purchase a ton of ammonia.
So this dearth of ammonia is putting serious inflationary pressure on grain production, which means that meat production — and ethanol, for that matter — becomes more expensive.
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Timothy Birdnow is a writer and real estate man in St. Louis. He blogs at www.timothybirdnow.com.
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22 Comments
1. Jonesy55:You’re right that people want environmental regulations but are unwilling to pay the higher prices they cause. But equally it would be true the other way round, repeal all these regulations and people would be happy at the lower prices but unwilling to bear the environmental cost.
Whilst this may be a case of the public wanting to have its cake and eat it, I don’t see any great desire for an environmental free-for-all.
One thing I would contest though is that regulation has meant less of everything. Less compared to what? less consumption compared to a theoretical society with no regulation maybe but less compared to 20 or 40 years ago, of course not, regulation has not meant less on the table, just slowed the rate of growth of what’s on the table.
Until and unless capitalism and the free market comes up with a way of dealing with externalities, governments are going to continue to be the only option when it comes to protecting third-parties from the costs of other people’s transactions. This is going to cause somewhat less growth in material consumption than would otherwise be the case but if that’s what the public wants then that’s democracy for you, there is no law stating that material consumption must be prioritised over all other goals..
Dec 2, 2008 - 2:34 am 2. syn:“people want environmental regulations but are unwilling to pay the higher prices”
Pollution is one thing however nothing compares to the force and power of the Sun; silly little humans do not seem to get this in their egotistical minds.
Get real man, Earth’s natural cycle is doing her own thing and doesn’t care about your scientific research. The Sun spots are going dormant which means shorter growing season which means less food available which means global stravation. Respect Mothernature becasue she can destroy you in an instant, without remorse or compassion.
If the concern is about materialism then go after Gore, Winfrey, Scharzenzennegger, Kennedy Klan and all of Hollywood first before lecturing about consumption.
Show me you’re serious about Saving the Earth…shut down the entire Hollywood industry, the icon of materialism then environmentalism may be taken with some grain of belief.
Ban all movie-making
Dec 2, 2008 - 4:06 am 3. Craig:Ban all pop-rock concerts
Ban tv blowhards
Ban blowhard’s private jets
Ban the Green channel
Ban Queens of Materialism, Oprah and Madonna
“Too many in this nation believe that they can have something for nothing.”
Now there’s a mouthful. Yes ‘too many’ do. And those ‘many’ have a name. They go by the name: Obama Voter.
Dec 2, 2008 - 4:09 am 4. Gore's shadow:Mr. Gore this has been the coldest weather we have had in the South since 1880 when records were first started.
I am freezing my ass off,
and you are telling me I should be enjoying global warming?
And while I am griping!
Why do all your ‘Global Warming Meetings’ get snowed out?
/Al is a good friend of mine-
Dec 2, 2008 - 4:45 am 5. Wearyman:but I wouldn’t buy a used car from him.
Jonesey55:
The problem is not that Capitalism cannot handle Enviro concerns, it’s that it was never given the chance to. Green issues have really only come to the fore in the last 20 years or so. Unfortunately, since many Enviro’s are “Watermelons” (Enviro Green on the outside, Commie red on the inside) Capitalism was never ALLOWED to handle green concerns. Instead, the watermelons have foisted burdensome regulation on us without any real discussion about the true effects of said regulation.
It is my opinion that Capitalism would do a far BETTER job of preserving the planet than Communism ever could. Indeed, when we look at some of the most polluted places on earth, they are, to the last one, places where Communism had or has taken root.
Big Government cannot solve Green concerns. It can only make us all miserable while it fails to solve anything.
Dec 2, 2008 - 4:51 am 6. Gore's shadow:Sorry,
I put that Gore post in the wrong place?
/sorry, please don’t post.
Dec 2, 2008 - 4:53 am 7. Austin:If we can drill responsibly for gas on school grounds and urban neighborhoods in Fort Worth, we can do so anywhere else.
The discussion is not about regulation, but the outright ban on exploration and drilling, which is what the Feds and many state governments have pursued the last few decades.
From an eco perpective, its better to allow exploration within the legal framework of the US rather than ban it, and have it go overseas, where there is no framework and the resulting exploration can become exploitation. This externality is not mentioned when anti-industrial environmentalists take the stage, but it is real.
Slow rate of growth has a human dimension in poorer nations that has severe negative externality for local environmental quality. Again, this is something that is ignored.
For those who like to talk about how we are all connected and know how energy flows in ecosystems, they are woefully ignorant about the connections between the human economy and the effects of their policies.
Dec 2, 2008 - 6:27 am 8. Jonesy55:Wearyman,
Yes, the communist regimes of Eastern Europe and Asia did a terrible job of protecting the environment but that’s not really relevant I don’t think as nobody is suggesting government regulation and control of industry along the lines of Albania or North Korea.
There are plenty of other choices in between ‘full communist control’ and ‘don’t bother with any laws, the market will always produce the perfect solution’.
Government passing a law which says that factories cannot spew carcinogens into drinking water or pump radioactive gases onto school playing fields does not equal communism, far from it, capitalism also needs regulations and laws or else it can’t work.
Dec 2, 2008 - 7:15 am 9. Thinking Person:Of course it should be understood that when Obama’s plans to “green” up the economy and American in general fail, it surely can be traced back to Bush somehow right? I’m waiting for vivo and his comrades to come explain it all for us. Gore and Michael Moore and all of the other global warming numnuts should be held to task in future years for starting all of this hysteria. It will take generations to deprogram our youth from all of the misinformation.
Dec 2, 2008 - 7:16 am 10. Jonesy55:Austin, yes a total drilling and exploration ban seems bizarre, at the very least each case should be looked at individually to see whether possible gains will likely outweigh objections.
I guess the capitalist solution might be to not regulate at all but to make it easy for people whose land, property or health has been negatively affected in any way by the activities of third parties to claim compensation costs to negate those damaging effects and for government to rigorously enforce that system.
Your factory fumes make my washing black, pay for my detergent and new clothes, my house has halved in value since you built your sawmill next to it, you pay me the difference. That way producers would account for probable externalities when planning investments.
Of course this system would also mean more costs for producers and thus higher prices for products in the stores just like the regulatory system does.
Other problems would be though that just like regulation it would also be a very expensive system to manage with all the exhorbitant legal costs and so on and because corporations have limited liability and can just go bankrupt to escape their responsibilities, some might be tempted to make the short term profits and later wriggle out of the problems it causes leaving individuals and the taxpayer to clean up the problem.
Dec 2, 2008 - 7:32 am 11. njcommuter:By “inaccessible” do you mean that the land can’t be reached with drilling gear, or do you mean that the government has put it out of reach?
Parents, teach your kids that costs get passed on. Please!
Dec 2, 2008 - 9:33 am 12. BackwardsBoy:Articles like this one should be read aloud every day in classrooms across the country. Everyone should be made aware of the unnecessary costs and shortages the greenies want to foist on us in the name of halting “climate change”, AGW, or whatever foolishness they concoct in their empty little heads. The reality is that the Earth’s climate has always been changing and will coninue to change, all on its own.
Dec 2, 2008 - 10:15 am 13. keithacita:It takes a truly sick and devious mind to turn a perfectly natural occurence into an excuse to control others and cause needless suffering.
i’m testing the gore personal methane sequestration nanofactory as i recite his new mantra – feta cheese the new oil.
Dec 2, 2008 - 10:48 am 14. Jeff Perren:“You’re right that people want environmental regulations but are unwilling to pay the higher prices they cause. But equally it would be true the other way round, repeal all these regulations and people would be happy at the lower prices but unwilling to bear the environmental cost.” Jonesy55
Remove 95% of the environmental regulations and the environment for humans would actually be healthier. There is no tradeoff. All that are needed are (very minimal) downstream laws that protect property rights.
Dec 2, 2008 - 12:04 pm 15. Riprake:“Just be thankful you haven’t had your pipes stolen.”
Yet.
Dec 2, 2008 - 1:46 pm 16. Timothy Birdnow » Hidden Costs of Environmentalism at Pajamas Media:[...] have a post at PJ`s about the hidden costs of environmentalist policies entitled Green Policies Mean Less Green in our Wallets. If you never knew there was a connection between higher bread prices and a rash of copper thefts, [...]
Dec 2, 2008 - 3:13 pm 17. Cybergeezer:Ah, yes; More hot air from the bloviated media. They were able to sell the American people on an unknown entity (Barack Hussein Obama), and now they set their sights on selling this global warming crap. And the “Grey Lady” is one of the biggest proliferators of this barf.
Dec 2, 2008 - 3:44 pm 18. Beth:Nice to see that they have to lay off employees and staff and their revenue is falling. But they will pump out as much barf as possible until they finally expire. With Al Jezeera and U.K. diagnosis of the U.S.’s problems, who needs to pay big bucks for the New York Times. The lowest rating on the New York Times Best Seller List is the NYT itself. Hooray!!
When the New York Times expires, the U.S. will be much greener for it, in both senses of the word.
This “green” thing is killing the middle class. But I think that’s the idea…
Dec 2, 2008 - 4:31 pm 19. Liberty:Carbon dioxide is not causing global warming. Al Gore’s premise is based on incompetent computer modeling. The “hockey stick” graph is not accurate. The “scientists” cooked the books. The peer review process has been subverted. CO2 follows warming, it does not lead it. The polar bear pictures were not the truth, they are fine; the Maldives are not sinking. It’s the sun.
Dec 2, 2008 - 9:07 pm 20. David W. Lincoln:This does not mean we should abandon efforts to control real pollutants, it does mean that EPA regulations of CO2 emissions from buildings, cows and chickens as well as cap and trade rules for industry are futile wastes of taxpayer money which will devastate our economy. This does not mean we should cease
our efforts to curtail our dependency on foreign oil and make efforts to find other forms of energy. It does however remove the necessity for any undue haste or urgent action.
It is dismaying to see to what extent citizens of this Republic are held in contempt by our elected officials. We are not exhorted as equals to meet and overcome challenges with courage and resolve. Instead we are
threatened like children by lies to enforce compliance with rules and regulations promulgated by our leaders for us lesser beings.
Of course a lot of them are making a lot of money on the deal, too.
As Paul Watson, co-founder of Greenpeace, said: “It doesn’t matter what is true, it only matters what people believe is true.”
What the difference between political correctness and selective vision. None.
Dec 3, 2008 - 10:36 am 21. Paying for the Color | Constant Conservative:[...] Timothy Birdnow understands what I’m talking about: At first glance, one wouldn’t see a connection between a rash of stolen copper pipes from vacant buildings and sky-high prices for food items — say the $70 that a local St. Louis grocer was charging for a single holiday goose — but those connections are there, and they ultimately stem from environmentalist-driven land use policy imposed by the government. It’s difficult to imagine that restrictions in ANWR may be responsible for copper theft, but responsible it is! Ditto food; why would we pay more for our holiday feast because the price of natural gas has risen? [...]
Dec 4, 2008 - 9:52 am 22. deguello:Draft the greenies,and force them to pull rickshaws on a diet of tofu and distilled water;let ‘em suffer for their beliefs!
Dec 5, 2008 - 10:44 am