A Free-Market Energy Blog

Are California Municipal Water Rates Too Low to Spur Conservation?

By -- September 17, 2014

“The popular explanation for the water crisis –- lack of rain -– is clearly inadequate…. But why do Californian’s use so much water? An underappreciated explanation is simple: Water prices have been held down below cost by political forces and by past water infrastructure subsidies covered by taxpayers across the country….“A better solution than water policing? Raise water prices until they hurt (or at least go high enough that Californians notice) – and spur conservation.”

— Kathryn Shelton and Richard B. McKenzie, “The California Water Crisis: Policing or Pricing?”, September 1, 2014.

Water economists from both sides of the political spectrum are claiming that one reason California water use has actually increased one percent in a drought this year is that municipal water rates are too low. Free-market think-tank scribes and water economists, joining with those who advocate government solutions to drought, have called for higher water prices not by market but by government coercion.

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Motor Trends: More Cars, More Miles, Less Usage per Mile (Jevons Paradox at work)

By -- September 16, 2014

 “We cannot ignore the possibility that what we are experiencing is the Jevons paradox at work as more fuel-efficient new cars are encouraging drivers to use their vehicles more. The Jevons paradox means that as technology progresses, the increase in efficiency with which a resource is used tends to increase the rate of consumption of that resource.”

My post yesterday at MasterResource documented the boom in auto sales and the reasons why, both market and political (artificially low interest rates). Growing population, more cars. But what is happening with average fuel efficiency and with average miles driven per vehicle?

In its latest monthly Traffic Volume Trend report, the Federal Highway Administration documented an increase in vehicle miles traveled (VMT). The amount of car usage in June 2014 (the last available month) shows VMT at its highest level since 2007. 

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Auto Bubble? Easy Credit Might Be Bad Credit (politically low interest rates at work)

By -- September 15, 2014

“While many analysts and investors were very happy with the August sales figures, some commented that they were growing concerned that the automakers were beginning to repeat the mistakes of the pre-financial crisis years that contributed to the companies’ financial collapse. Those mistakes included utilizing aggressive financial incentives to spur sales and relying on loans to lower credit-worthy borrowers in order to enable buyers to stretch their monthly payments to afford new car purchases.”

August 2014 sales by U.S. automakers increased 6% from the same month last year, equating to a seasonally adjusted annualized rate (SAAR) of 17.5 million, according to an analysis by Automotive News. For the eight months through August, auto/light vehicle sales are 5% higher than for the same period in 2013.

August’s red-hot pace is a reversal of 2009’s crisis low of 10.4 million, after which the rebound has been a million units annually.…

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Houston Climate Conference Sept. 25/26: Unsettled Science Trending Optimistically

By Robert Bradley Jr. -- September 12, 2014
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Demythologizing California’s Drought ‘Demythologizers’

By -- September 11, 2014
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30-Year Eagle Kill Permits: Comment to the U.S. Fish & Wildlife Service on Windpower

By Sherri Lange -- September 10, 2014
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AWED Energy & Environmental Newsletter: September 8, 2014


By -- September 9, 2014
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“Population: The Ultimate Resource” (2000): Introduction by Barun Mitra

By Robert Bradley Jr. -- September 8, 2014
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HumanProgress.org (Julian Simon Lives! at the Cato Institute)

By Robert Bradley Jr. -- September 5, 2014
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EPA’s Powerplant Rules: Serfdom for the States

By -- September 4, 2014
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