28 Apr 2017

Friday party!

I've been paying more attention as China moves from "fast follower" to "fast innovator." This video fits that theme.

25 Apr 2017

My piece on water rights versus duties

I wrote this piece on the request of Learn Liberty. It's certainly worth a read if you're interested in how California -- and other places in the world with "rigid institutions" -- is vulnerable to paralysis in the face of changing political, social and environmental conditions.
Blame outdated rights for California’s water woes.

Most water policies reflect some balance of rights and duties. Farmers have right to use water but a duty to leave remaining waters intact for their neighbors. Urban dwellers have the right to receive drinking and wastewater services but a duty to pay for them.


We can apply these ideas to water, where the right to use it coexists with the duty to avoid harm; and government plays a role in giving rights and enforcing duties. Although some people assume that “the government” will manage the process in the public interest, there are many ways that this process can go wrong.
Continue reading here
Addendum: Here's a recent paper discussing reform of water rights LAWS

24 Apr 2017

Monday funnies

If this productivity was normal (it's an excerpt from a commercial) then the Japanese wouldn't work so many hours!

Dayum Japan, work it.

20 Apr 2017

Happy 4/20 from the Netherlands

Where it's legal to grow some flowers but illegal to grow the ones you smoke.

A view from my commute (train between Amsterdam and Den Haag)

How badly will I flood?

I always tell visitors that our Amsterdam flat is safe from floods if the dikes should break because we are on the second floor. Luckily the ministry managing water levels has a slightly more scientific approach on the "Overstroom ik" site.

The site (the name translates as "Will I be flooded?") is in Dutch but take a look. The message on the bottom translates (roughly) as "you have less than a 1% chance of facing this 0.5m flood in your life, but it might happen tomorrow." On the right side, it says I'd lose water, internet, etc., but says stay in the house for a few days, as the roads would be a mess.

Does your government provide such information on an ongoing -- and climate-change-changed -- basis?

18 Apr 2017

How Airbnb can help communities

I got a few ideas on how to address Airbnb's main problem of disrupting communities while talking to a reporter* about my post ("Airbnb is harming Amsterdam's communities").

First, Airbnb should require that any owner get the permission of their neighbors before they can list their apartment or condominium on Airbnb. In most cases, this will happen via a home-owners association (it's verenigingen van eigenaren or VVE in Dutch, meaning "association of owners"). The requirement for permission will force neighbors to agree on who, how and when Airbnb should be used.

Second, Airbnb should allow the neighbors to see who is staying in a place at any given time, to reduce (our normal) fear of strangers. In most cases, neighbors and guests will not interact, but the knowledge that they can see each others' profiles and have each others' contact information will make it easier to say "hi" (or "hola") and harder to be mean.

Airbnb can connect each host with neighbors' Airbnb accounts or new "neighbor" accounts. The neighbors would then check the "I-approve-my-neighbor's-participation" box to let the flat appear. Those neighbours would then see who is coming and when.

Neighbors who have bad experiences with guests (or their neighbor/host) could withdraw their permission at any time, for any reason. Is this too much power to give neighbors? I think not if Airbnb actually wants to strengthen communities. This system would also help Airbnb avoid lawsuits, bad press and bans by various city governments upset by Airbnb's impact on communities.

Bottom Line A neighborhood is made of connections, rights and duties among its neighbors. Airbnb can protect neighbors and preserve neighborhoods with a few simple changes to its platform and contracts. If Airbnb prefers instead to make profits by damaging communities, then it should be banned as an anti-social vandal.
*Addendum: Here's the article (in Dutch). The title is "Why drug dealers run their business better than Airbnb."

13 Apr 2017

Getting a job is like dating

I spoke on "Career opportunities after a Bachelor's degree" yesterday [39 min MP3].*

In the talk, I made a lot of analogies between finding a job/working and finding a date/relationships.

Most important: You'll survive. Your first job like your first date (or relationship) is unlikely to be your last. Don't worry about mistakes. This is not marriage. Take a job that looks good, learn from it and move on if it's not working for you or you have a better offer. You're unlikely to marry the first person you date, so don't marry your first job either.

Your value in your eyes is not the same as your value in the eyes of others (for better or for worse), so it takes times to find the right "match."

When supply and demand are unbalanced, it takes even longer to make a match. One girl choosing between 10 guys is like one employer choosing among 10 candidates. Those are "buyer's markets." When it's a seller's market, then that girl may be competing with lots of other girls to get a guy's attention or that firm may be competing with other firms to get employees. In the last 10 years or so, it's been a buyer's market but that's changing recently. That said, you can't just assume you'll get a date. Put in the time to show your value.

Dating is a multi-dimensional pairing process that takes time and luck. Keep you options open, look for deal breakers, and give it some time. Some people are not as good or bad as they might immediately appear. Tinder is terrible for finding a good match in the same way as the CV/resume is a terrible summary of who you are as a worker and colleague.

Don't forget that you may be fooling yourself in terms of your value or looking for matches in the wrong place. University graduates who refuse jobs that are "below them" lose out on experiences and opportunities. That's often why "get 'er done" graduates from polytechnical schools (HBO's in the Netherlands) get jobs faster, make more money and advance more quickly in their careers. Don't be a wall-flower. Get into the mix! Use your creativity.

Not all dates work out but some are fun and others are "learning experiences." Make sure that each time you switch partners you do better for yourself

When you're older you will see younger people making lots of dating mistakes. They won't understand what your trying to tell them half the time because they need to learn for themselves. Your experience might help them get over their immediate panic if you can show them how their dating setbacks are not exactly unique innovations. We've all been there.

By the way: Dating is about mutual exchange. Prostitution is buying affection. If you're in the job market, you're dating. If you're in a masters program you're paying. Make sure you get your money's worth because many masters programs only see you as a revenue source.

Bottom Line It's really great to have a nice romantic relationship like it's really nice to have a fun and interesting job, but neither just appear on demand. You need to be patient, take risks, and communicate well if you are going to succeed in either.

*I started the recording late, so it's missing a few minutes.

11 Apr 2017

Economics terms everyone should know

This piece on "5 economic terms we should all use" got me thinking on what I think people should know. Here are a few to get started.

Opportunity cost: The cost of doing something in terms of time and money.

Examples: If you watch one movie, you cannot watch another. If you date one person, you cannot date another. If you go to one school, you cannot attend another. If you spend money today, you don't have it tomorrow (and may need to work more to get it!)

Risk versus uncertainty: Risk can be described in probabilities. Uncertainty cannot.

Examples: Life or car insurance fit risk models, so it's easy to find "fair" prices that reflect your risk and therefore insure you against premature death or accident. When it comes to climate change (or going on a blind date!), there are possibilities rather than probability, so you need to prepare for the worst and hope for the best. That's why there's no insurance for bad dates -- or climate change!

Average fixed cost: The upfront cost of a good or service divided across its useful life.

Examples: My phone costs $600, but that's less than $1/day if I use it for 2 years. If I spend 10 hours learning how to do my taxes when I am 25, I can use that knowledge for the rest of my life to save on accountant fees (as well as having a much better idea of how the government "thinks" and how to track my finances).

Value vs price: The value is what it's worth to me. If that's greater than the price cost to me in time, money, etc., then I should buy it -- assuming there are no better things to buy (opportunity cost!)

Examples: This bike is worth $400 to me but it's priced $200. The seller may only value it at $100. We bargain and agree on $150. Both of us are better off. The bike cost me $150 but I value it at $400, so that's how sad I'd be if it was stolen.

What do you think of these words, definitions and examples? Got any more to discuss?

6 Apr 2017

Fracked natural gas is dirtier than coal? Yes.

Jan, a student in my environmental economics class, expanded on his blog post in his class paper [pdf] on the costs and benefits of hydraulic fracking of shale to free natural gas (aka, methane). The main issue is leakage of natural gas during the production and transportation of gas. This result is driven by the far stronger impact of unburned (compared to burned) methane on climate change and the high cost of trying to control leaks in the many steps between the well and final user.

This figure tells the story:

CO2 emissions in yellow; methane in red.

Cornelia used to work for Alberta's oil/gas regulator so she was familiar with this situation (she told me about it years ago). In these guidelines [pdf backup], you can read how industry is only required to control leaks etc. when they are "losing" more than C$55,000 per year in value based on the market price of the gas and cost of capturing it.

Given that 1,000 cubic feet (MCF) of natural gas weighs 62 pounds and 1 MCF sells for about US$4 (C$5 or so), the simplest rule would be to, for example, close an open valve (cost = $0) that's leaking more than 11,000 MCF per year as that's worth about C$55,000.

That decision makes sense from a company perspective, but it doesn't from a social perspective, as the GHG impact of 1 MCF is the same as 0.7 tons of CO2, which has the equivalent "social cost" of about 0.7 tons * $36/ton, or $25.

Going back to that "open valve", we're talking about a leak that would have a social cost of $277,000 (C$370,000), which is nearly 7 times higher than its market (lost opportunity to sell) cost. Alberta's regulator, in other words, is allowing far more leakage and venting based on private costs and benefits than it would if it used social actual costs and benefits.

This result doesn't surprise me, since the regulator works for industry, but it should help you see how mismanaged the natural gas industry is. (Don't even get me started about "voluntary data reporting" etc.!)

Bottom line: Years ago I suggested that the natural gas/fracking industry should "take the high road" to setting tough regulatory and performance standards as that would allow them to make greater profits and keep the public on their side. They have failed to do this in a rush to make profits... and hasten climate change.

Addendum (23 April): Dutch methane emissions have not fallen by as much as the government claims [in Dutch]. The difference is explained by the government's use of models of emissions that are too optimistic compared to (far more expensive to conduct) physical measurements of emissions.

4 Apr 2017

Sorry burger flippers, the bots are taking your jobs

Even a Fox News host can understand why this technology is displacing workers.*

  • Time to upgrade your skills or downgrade your future plans?
  • FYI, a basic income is certainly a better "solution" than a minimum (or "living") wage when it comes to helping poorer people or younger people get by financially. That's because wages are based on productivity, not someone's target lifestyle.

* The old joke is that even someone with no skills can go flip burgers for a living. No more.

3 Apr 2017

Who's the real April Fool?

Via MV (NOT The Onion):
H&M, IKEA, Filippa K and 20 other Nordic brands saved more than 6.7 billion liters of water, or the daily water supply for 134 million people, in less than seven years. Under the guidance of the Sweden Textile Water Initiative (STWI), a programme driving global change towards sustainable textile and leather production, the factories have reduced water consumption and pollution while also improving their profits. Since joining the programme, participating factories have seen a return on investment of more than 240 percent over three years.
Let's, as they say, unpack this.
  1. They "saved" water by not using it as if they had some right to use it. This is not just false but stupid, as these companies sell products to consumers who probably have plenty of clothes. The disappearance of those companies (and a permanent reduction in consumption) would not go noticed. Additional water supplies would.
  2. Let's call it 1 billion liters per year and convert that amount into per year per person instead of per day (using their 50 liters/capita/day). Now we have "enough water" for 54,975 people for a year.
  3. Let's remember that people usually lack not water but access to clean drinking water. Thus, the entire press release is rubbish, as it's not as if 55,000 people suddenly got 50 liters per day delivered to their door. Water services take money and good management.
  4. Their 240 percent return on investment shows that this project is not about helping people get access to drinking water but saving money. I agree that's a good goal, but they tack it on the end.
Bottom line: H&M et al. saved money by using less water. People without drinking water are still without drinking water. Anyone who thinks otherwise must be joking.