The economics of climate change, sustainablity, veganism, health and then some

"There is, however, a moral basis for the vegetarian diet for which the indeterminate value of an animal’s life takes on irrelevance. And that moral basis is a concern for the environment, a value as absolute as the value we all place on human life, since humanity will not long survive on a poisoned planet. To be an environmentalist who happens to eat meat is like being a philanthropist who doesn’t happen to give to charity."  (Mad Cowboy: Plain Truth from the Cattle Rancher Who Won't Eat Meat" by Howard F. Lyman, Glen Merzer")

Rational capital allocation is not our forte as a society. Indulging human foibles is more like it. The dialog about climate change is a case in point. If 51% of GHG-emissions is due to animal husbandry and the self-destructive habit of eating meat, and moreover the our nastiest health problems (heart disease, osteoporosis, cancer, CJD, antibiotic resistant bacteria et al.) are partially or wholly attributable to the same self-destructive habit, then why is it not on the agenda for serious discussion?

For me, there is a personal side to the story, I was raised vegetarian, as in lacto-vegetarian, and though I realized a long time ago that milk was for baby cows and not for human consumption, I loved cheese. From my late teens to my early twenties I became more of an omnivore, but after age forty, I simply noticed a tendency to vegetarianism, ever so slowly, but without any particularly strong commitment. I simply drifted towards a more vegetarian lifestyle. In the last ten years health issues made me gradually more and more interested, and I got briefly interested in the Esselstyn diet that was made famous when former President Bill Clinton switched from Mickey D's to veganism. The first time I read the Esselstyn book, I was half-hearted about it. An old friend and I were both experimenting with this diet for a while, and kept some ideas from it, without necessarily going through with it, but the drift continued, aided by the growing realization that even if I did not have any symptoms of hearth disease, why wait till I did? In the last two years all dairy was permanently phased out. For Christmas a giant apple-pie came along, and while I enjoyed it, I also informed Santa Claus that this would be my last apple-pie until after my funeral. Who needs all that white flour and sugar? Most importantly the last year especially, I found myself enjoying food more as I discovered more and more vegan recipes that I really liked.

Meanwhile I am into planning the energy economics for some real-estate developments, and looking into vertical agriculture options in an urban setting, while at the same time I am listening to feedback from my community, Community Board #9 in the Bronx, where a young mother of two stated0 in a recent planning session that she did not want another fast food restaurant in our district, and a young man in the same session was polling people on the idea of establishing a food co-op in our area. But a local supermarket just lost their lease, and that neighborhood is screaming for a half-way decent supermarket to fill the vacuum.

Against that personal backdrop, I have been reading Howard Lyman's Mad Cowboy book, and watching some documentaries on YouTube, including:

• Cowspiracy, a brilliant documentary of our collective economical and environmental and nutritional insanity from 2014, which included an appearance by Howard Lyman, the Mad Cowboy.
• Then came Earthlings, another brilliant piece on the gruesome realities of  the animal husbandry system.
• Next was Gary Yourovsky, who verbalizes it all brilliantly, here, including the most viewed speech in Israeli history here.
• And finally, I had to revisit the whole Howard Lyman story, which I was only vaguely aware of when Oprah and he got sued in 1996, but now it was time to refresh that experience, and this documentary about the Mad Cowboy just his the spot.
• Since I first wrote this post, it got even better, see the story of the Rowdy Girl Sanctuary, yet another rancher to vegan story.

And at the final end it is the economist in me who basically realizes that economics will prevail in the end, and we are well on our way to veganism. It will take a few generations, but choices are multiplying now, with more and more vegan food choices, and now even fast food restaurants, it is clear that change is on the agenda. The group of people who turn vegan and get off their meds is growing - the perfect answer to our out of control healthcare system, so not only can the planet not afford animal husbandry, we cannot afford the health consequences of eating all that meat and dairy. I had a home visit from a nurse practitioner from my health insurance provider, and the guy fell of his chair, for just the week before the doctor had taken me off all meds, or rather confirmed that I was doing great without them - not that I was taking that many but still... On top of that, I know I feel more stamina at the gym.

One of the big things I am realizing about net-zero development is that moving combustion out of residential spaces is one of the biggest things we can do for indoor air quality, and this in turn adds to real estate values. Insights like that are pretty potent if you live in the asthma capital of the world, the Bronx. So there is a straightforward connection between economics, environment and health. 

The same goes for vertical agriculture: it is now economical to grow fresh vegetables in an urban setting, and eliminate chemical agriculture, and thousands of miles of transportation, to get better, fresher, healthier vegetables, as you can see in this little video from Terrashpere. 

And the transition to more and more vegan living will eliminate the most obvious food safety problems, a vast array of health problems, as well as unsustainable agriculture in the service of animal husbandry. Again, economics, environment and health all go hand in hand. And the forces that drives us towards a more sustainable economy are absolutely inexorable. Veganism is a new idea today, or so it seems to many, but it is unavoidable economically. We are literally at the point of realizing that we are feeding the pigs at the expense of human beings, and wiping out the rain forests to raise cattle, which is the most insane misuse of land that ever was. It is that inexorable force of economics and sustainability, that is driving us towards a more sustainable, and therefore increasingly vegan, lifestyle.

Since I originally wrote this post, I have also started a blog on vegan living in my hood.

Solar PV and the Metastasis of GHG-emissions

Today, solar PV is all the rage. We're at it again, jumping on a technology before we have figured out the right way to use it. Wall street is loving it, but we are getting way ahead of ourselves... just remind me, how do we spell bubble again? As a society, it seems we keep looking for a silver bullet to fix our problem, and this is not realistic.

It does not matter that solar PV is "cheaper" in terms of component pricing. Solar thermal produces about five times the amount of energy for the same square area, so unless the cost of real estate is zero, solar thermal should be the winner in that battle. Granted, solar PV tends to be easier to integrate, but there is an obvious issue here, particularly in areas large urban areas, where you don't have one square inch to waste.

To use an analogy, if one year our government provides a tax incentive to sell more two-seater vehicles, and a father of five comes home with a two-seater instead of a family car, arguing that it was so cheap, most of us would side with the wife, if she divorced him. The five kids would have to take the bus from then on. Evidently, this would be a case of false economy, for it cannot solve your problem. How come we understand the fallacy of this proposition, yet in solar PV marketing, this is what is routinely done - selling people a solution that does not fit because it is "cheap." If in doubt, refer to the tax incentives.

Just like the two-seater cannot solve the transportation problem of a family of seven, solar PV panels cannot solve the energy problems of most homes and buildings in northern climes. In the south, it may work fine if your home is all electric, and you have enough roof space to economically generate adequate electricity, but in the north your energy bills are likely to be 70% oil and 30% electric, and yet the solar companies want you to jump up and down because they can save you 10% on your electric bills. That's the assumption anyway. It does not amount to the proverbial hill of beans, because 10% of your electric bill is 3% of your overall energy bills.

It actually gets worse, because the implicit assumption is that your roof space is valueless, which is likely not the case. If nothing else, that same roof space could be used for solar thermal equipment, which produces 4 to 5 times as much energy per square foot as does solar PV. Alternatively, one or more wind-turbines might be possible, and in all of these situations, it is one or the other, so you have to figure out what gives you the most bang for the buck.

Entropy and Climate Change

One of the first few things to realize about the whole climate change conundrum is that it is not solvable. The best we may be able to do is produce less entropy, and decelerate the decline of our physical universe. But in the end it's a lost cause, or, as Keynes would have it: "In the long run, we're all dead." The case in point is the Toyota Prius, which has a lifecycle environemental impact that is worse than a Hummer. So dream on.

For those who want to get into the final nitty-gritty of the issues, there is no better introduction that Alex Marchand's new book, The Universe is Virtual. Unless and until someone comes up with a better alternative to the second law of thermodynamics, the choices are limited, but right at the moment, the process is outright irrational, and we may be able to do better than we are. Again, the only thing we can do on the physical level, is to moderate the impact we are having, the problem is not solvable in any meaningful way as long as the laws of physics hold. If you want to stick to lighter fare, Jeremy Rifkin's, Entropy, is still always a fun read, although a bit dated.

The solar PV fallacy, oh to be green and foolish

These days the FTC has taken on greenwashing, and hopefully may be curbing some of the most egregious abuses, but if they got serious, very little of environmental business or products would be left standing, and certainly solar PV in its current form would have to be heavily restricted for the deceptive claims it makes.

What needs to be understood is that if we define the problem haphazardly, we are unlikely to solve the problem that we are presumably seeking to solve, in this case, reducing green house gases (GHG-emissions). To the promoters of solar PV, the problems is how much money can we make on selling solar PV installations (very little), or on financing solar PV (maybe something more), time will tell if it can be done profitably, but the current model of solar PPAs, solar leases, or even innovative lending like SolarCity's new MyPower program, will likely not be enough to make solar PV really viable in the long run.

At single family scale - Solar PV disappoints

The exception is if you live down south and you have enough roof real estate to generate close to all the electricity you really want, perhaps solar PV makes sense. But up north the problem remains that electricity is 20-30% of the energy budget, and tying up all your money and roof real estate for a project that saves you a few percentage points on your overall energy bills, and locks you out of solving the whole problem categorically is not a smart decision.

The current sales paradigm for solar PV mistakes a marginal cost savings for the basis of a capital improvement to the property, and a permanent alteration of its energy infrastructure. The result is an impairment of the physical asset (property) and the balance sheet (liability), and the simple most obvious problem is that if the next buyer does not want to assume the remaining liability, it can depress the value of a property, as reported by Bloomberg here. Typically the risks include:

• The lease or PPA may be under water at the time of the sale.
• Newer solar technology may be more efficient.
• Other technological alternatives offer superior economics.

If you are still in doubt, look at alternatives that are about to hit the market, like the Archimedes wind-turbine, and the Zonbak solar thermal solution, as well as a long-since proven solution of Geothermal Heat Pumps, which allows you to do complete central HVAC, heat your pool, and put a snowmelt in your driveway, while eliminating your oil bills.

One of the issues is that solar PV is still early in its developments, while Solar Thermal (85-95% efficiency), and geothermal (3-600% efficiency) are much higher, and mature, and wind turbines, in the right locations produce more energy per square area than solar PV does. Solar PV is now going from 15-18% efficiency and jumping by about 30% to 21-24% efficincies, while new technologies in the 30% and 40% efficiency ranges are in the pipeline for commercialization in the future.

Worse yet, as net-zero construction is growing and consistently profitable already for decades, just imagine selling your home 7 years from now when there is a new development of net-zero homes going up nearby. If those new homes offer $0 energy bills, and you are saving 3 or 5, or even 10% off your 2015 bill, what do you think that will do for the value of your property? The correct answer is: it will sell at a discount. Your investment in PV under those conditions is likely to produce a liability. You will be looking for ways to take those panels down in order not to depress the price of the house, and then you have a waste disposal problem on your hands.

At societal scale - Solar PV disappoints again

New York State has an ambitious energy plan, but it sadly lacks realism. The top-line goals are 50% reductions in GHG-emissions by 2030, and 80% by 2050, but there is very little detail on how to get there. Too many line items in the plan achieve 15-25% reductions in GHG-emissions, and are financially burdensome like solar PV. To tie up a lot of capital, and assume unnecessary 20-30 year liabilities to save 3% on your energy bills, and lock yourself permanently out of better alternatives is counter productive. We are throwing good money after bad, and mostly it is consumers who are on the hook, deceived by government incentive programs.

This first round of Solar PV-madness will prove to be regressive for climate change in the long run, because it locks properties into 25% reduction of GHG-emissions, instead of pursuing the 75%, which would make a difference. So, not only are these owners locking themselves out of the real solution, the collective effect is that we are averaging down, and ensuring we will never achieve anything like 50% GHG-reductions by 2030 or 80% by 2050.

With the current approach GHG emission reduction will be limited to something in the 20-30% range with solar PV and some energy efficiency, and GHG-emissions will metastasize into an unsolvable problem, so present programs guarantee we will never make those glorious goals of 50by30 and 80by50. It sounded good while it lasted.

It's not those batteries either - thermal batteries are free

Remember the jokes about the Fisher ballpoint that could write upside down, and cost a million dollars to develop? Presumably the Russians used pencils instead. The truth is the Russians switched to Space-pens also. The point is clear however. We humans have a terrible tendency to reinvent the wheel.

In energy solutions for buildings, thermal solutions come in the form of passive design as well as active generating technologies such as solar thermal and geothermal. Batteries are cheap: it is also known as Domestic Hot Water, or depending on the application you can have some high temperature water storage. Overall, this is far cheaper and safer than the chemical batteries that are the norm for Solar PV.

Conclusion: time for method over myth

We have had the Internet bubble, and the subprime mortgage bubble, but now we have the budding distributed solar PV bubble. Some of the same people are promoting it, for the securitization machine was looking for work after the bust of subprime. Once rational analysis gains the upper hand--which may take a long time--this bubble of solar subprime will also burst, and it won't be pretty.

Having said that, there are plenty of good applications for Solar PV, but the mass market that is currently forecast will dry up sooner than later. Serious GHG emission reduction will have to wait until the Solar PV-mania gives way to a more methodical approach using Solar thermal, and other solutions, providing a whole-house solution, not a 3% savings on your bills.