Monthly Archives: June 2008

Bacon’s Rebellion: Special Session Edition

As the special session convenes today, the General Assembly has got transportation on the brain, and so do we at Bacon’s Rebellion. Indeed, it’s pretty much transportation and land use from start to finish for the June 23, 2008, edition of Virginia’s preeminent public policy e-zine — with a dash of other topics to keep things from getting monotonous.

(Don’t miss a single issue of the e-zine. Subscribe for free — just click here — and have it delivered to your in-box.)

The War on Sprawl
Andrew Jackson had his “kitchen” cabinet. Tim Kaine has his “sub” cabinet: five secretaries whose job is to marshal state resources to promote smart growth.
by James A. Bacon

Finding Common Ground
There is no other way to conduct the public business successfully. Let us hope that the lawmakers convening in Richmond today take heed.
by Doug Koelemay

Shaping a Functional and Sustainable Future in Greater Warrenton-Fauquier
by EM Risse

Another One Bites the Dust
Another toll-road myth — that governments can access cheaper infrastructure financing than the private sector — has been demolished. The proof? Transurban’s experience in Northern Virginia.
by Leonard Gilroy

A Transportation Reform Agenda
A comprehensive solution to transportation in Virginia requires a lot more than raising taxes and spending money. We have to change the way we fund and administer roads and rail.
by Michael Thompson

On the Eve of Battle
Republicans are bracing for a confrontation this week over transportation taxes and spending. Here are the thoughts, extracted from the first Tertium Quids podcast, of some GOP leading lights.
by Norman Leahy

Richmond vs. Charlotte: an Update
Charlotte, N.C., snarfed up Richmond‘s big commercial banks in the early ’90s, a coup at the time. Fifteen years later, the sub-prime fiasco is pinching Richmond, but it’s putting the Tarheels in a world of hurt.
by Peter Galuszka

Audit Time
Before jacking up taxes and throwing money around, let’s audit the plethora of Virginia transportation-related agencies and authorities, define clear goals and set priorities for spending.
by Ron Utt

Power Surge
Big increases in electric rates are all but inevitable in Virginia. Consumers need to be educated about their options before they get shocked by their electric bills.
by Barbara Kessinger

Nice & Curious Questions
Finding Felons in Virginia: Bounty Hunters in the Commonwealth
by Edwin S. Clay III and Patricia Bangs

What the MSM Neglected to Tell You About the Governor’s Transportation Bill

Any Virginian who reads the newspapers knows that Gov. Timothy M. Kaine’s transportation bill will raise roughly $1 billion a year in new taxes because that’s what the newspapers have reported. The Mainstream Media narrative about the transportation debate is all about taxes and spending.

It startled me to actually read the governor’s press release. Not only does the legislation provide for tax increases, lo and behold, it contains a number of noteworthy tweaks to HB 3202, last year’s omnibus transportation finance and reform bill that overhauled the way state and local government planned for and administered transportation and land use.

It’s not as if the Kaniacs buried these elements of the proposed legislation in the press release. As the governor is quoted as saying in the second paragraph:

Since January of 2006, I have worked closely with the General Assembly to improve the coordination of transportation and land use, to provide needed funding and budget reforms to how we spend transportation dollars, and to improve accountability and efficiency at VDOT and the other transportation agencies. The legislation I am introducing will continue those reforms. …”

How so? As the press release elucidates, the bill:

  • Incentivizes more efficient land use patterns by providing dedicated funding for transportation improvements in urban development areas;
  • Provides start-up grant funding to increase passenger rail service through the Transportation Change Fund;
  • Clarifies local government flexibility to use secondary and urban road funding for transit projects;
  • Provides incentives for cities and towns to take responsibility for their road construction programs; and
  • Provides funds for innovative public-private technology projects to improve traffic flow and reduce congestion on existing roads.

Each of these measures is significant. While I remain totally opposed to the tax aspects of the governor’s bill, which ignore user-pays set of principles, I am compelled to acknowledge that Gov. Kaine accompanies his revenue-raising measures with reforms to ensure that the money is better spent.

Let us hope that Senate Democrats, who have tax ideas of their own, don’t lose sight of these measures. Moreover, let us hope that House Republicans, who were the architects of the legislation that the governor seeks to improve, also take up these issues. Too bad the public doesn’t have a clue. The only voices heard in this debate, it appears likely, will be those of the professional lobbyists.

More on VCU and the Evil Weed

My last post generated considerable e-mail traffic from members of the VCU community and I learned of a faculty meeting on June 19 to discuss it. Uninvited, I went to it and was allowed to stay if I respected the participants’ desire for confidentiality. Here are excerpts from a post I did for R’Biz on richmond.com:

Virginia Commonwealth University could risk its national reputation among scientific researchers, its ability to win research grant money and its credibility in the local community if it continues with secretive research agreements with Philip Morris USA, a group of VCU faculty discussed at an on-campus meeting yesterday.

Eighteen faculty and researchers came to the meeting at the Student Commons building to discuss concerns stemming from a “research service agreement” that VCU entered into in 2006 with the locally-based tobacco firm. The terms of the agreements forbid discussion about the contracts and require VCU to immediately alert Philip Morris if the news media asks about them.

The existence of the research contracts was revealed in a front page article in the New York Times last month, touching off a controversy about the manner in which VCU conducts research. Since then, VCU has been castigated by experts from other research institutions across the country and among informal blogs linking the VCU community with other scientists. VCU President Eugene Trani says that the agreements are not basic research but are commonly-used consulting agreements. According to Trani, the secrecy and special conditions involved with the contracts are necessary because of proprietary material involved.

At the meeting, the faculty discussed rumors and fears that seem to be abounding at VCU. It was said that faculty and administrators are so fearful of retribution if they question the tobacco contracts that they have been using their cell phones instead of the university phone system to talk about the matter and have been considering trying to file documents to protect themselves with the university human resources department.

A source of frustration for the faculty, they said, is that they cannot get information clarifying Philip Morris’s relationship or future relationship with several major VCU health projects, including the Massey Cancer Center, the Women’s Health Center and the proposed School of Public Health.

Some faculty involved in community outreach noted that if VCU specialists try to promote health in inner cities or other neighborhoods, their credibility could be compromised. It was pointed out, for example, that if VCU workers try to encourage children at Boys and Girls Clubs not to start smoking, they might have a difficult time if it is known that VCU encourages tobacco funding of its research.

Trani has appointed an internal task force to review VCU’s corporate-sponsored research and prepare a report by Oct. 1. The report will later be sent to the school’s Board of Visitors.

One possible point of conflict involves Dr. Francis Macrina, VCU’s vice president for research, who is heading the investigative committee into corporate funding. Faculty members raised questions about possible conflicts of interest within the review committee. They noted that Macrina is head of the review committee although he oversaw the negotiations of the contracts that touched off the corporate funding controversy.

The research service contracts with Philip Morris involve a total of about $284,000 and involve studies of pulmonary disease and wastewater pollution. VCU provided this reporter with copies of the Master Service Agreement under the Virginia Freedom of Information Act, but refused to provide specific “task orders” that give details about the actual work to be done.

For more details, see R’Biz in richmond.com.

— Peter Galuszka

Football Analogies Run Amok

When ideas and arguments fail, politicians resort to sports analogies. And most of the time, regrettably, the sport they pick is football. Witness the Governor’s press conference yesterday regarding his tax hike plan. Close your eyes, and you can almost hear the crashing pads:

“I’m a good fourth-quarter player,” [Kaine] said of the measure, introduced yesterday at a news briefing at the Capitol, which at times resembled an anemic pep rally.

“Anemic pep rally.” Were Craig and Arianna in the back of the room?

In spite of that, the football lingo kept flowing:

“The time for kicking the can down the road is over,” he said at the Patrick Henry Building. “Adult leadership means taking adult responsibility.”

Kick the can. Maybe this was really just a dress rehearsal for a new “Our Gang” series.

As for the adult leadership thing, well… the less said about politicians and adult behavior the better (particularly on a family blog).

But right when it seems as though the football imagery was spent and we were consigned to another Hal Roach short, Ward Armstrong boldly leaps into the gap:

“I’m ready to carry the ball, coach.”

Just like Roy “Wrong Way” Riegels.

Malthus, Singularities and Chins-up

The NY Time’s Jay Tierney has a good post that is also a useful tonic for what seems to be a creeping Malthusian trend on the Rebellion of late.

He discusses an article by George Mason University economist Robin Hanson that focuses on “singularities,” the stunning advances that have completely transformed the way we do just about everything (think the creation of agriculture and the industrial revolution). Hanson believes we’re due for another such event, perhaps within our lifetimes. What might it be? Hanson thinks it could be intelligent machines (no, not Terminators) that will increase growth 60 to 250 fold over current levels.

It’s all a big guess, of course. But I think it’s a far more likely outcome than the ashen forebodings that are both easy and fashionable to embrace.

In other words: Chins-up, people!

Dominion to Invest $600 Million in Smart Grid

Dominion Virginia Power has unveiled a plan to invest $600 million in “smart grid” technology plus a slew of energy conservation programs that it estimates will save electric consumers $1 billion over 15 years and reduce greenhouse gas emissions by 12 million tons.

“This plan will provide a jump start toward meeting the 10 percent conservation goal enacted last year by the Virginia General Assembly and the governor, getting the Commonwealth more than one-third of the way there within five years,” said David A. Heacock, president of Dominion Virginia Power. “It will provide significant environmental benefits in a cost-effective manner that translates into very real financial savings to customers.”

If the plan is approved by the State Corporation Commission, Dominion said in a press release issued this afternoon, it will begin executing it next year.

The centerpiece of the plan is the installation of “smart grid” technologies that enhances the performance of the electric distribution system. The grid will allow energy to be delivered more efficiently, resulting in substantial energy savings and permitting more precise control of the energy flow.

Under the smart grid program, Dominion would replace all of its existing electric meters with Advanced Metering Infrastructure, capable of two-way communications, as well as equipment to monitor and control electric distribution. The resulting fuel savings will more than offset the cost of the capital investment. As a bonus the technology should lead to improvements in service reliability and the ability of customers to monitor and control their own electricity usage.

The plan has many other elements, including:

  • Incentives for constructing energy-efficient homes that meet EnergyStar standards, whcih are 15 percent more efficient than homes built to regular standards.
  • Incentives to install energy-efficient light.
  • Energy audits and improvements for homes of low-income customers.
  • Incentives for residential customers who allow the company to cycle their air conditioners and heat pumps during periods of peak demand.
  • Power cost monitors that display how much electricity customers are using and what it’s costing them.
  • Incentives for residential customers to upgrade heat pumps to more efficient units.
  • Incentives for commercial customers to improve the energy efficiency of their HVAC units and to reduce consumption during periods of peak demand.
  • Incentives to turn in refrigerators that are 20 years old or more.

Electricity savings could reach 2.6 million megawatt-hours annually by 2013 , the company said. That’s enough to power 216,000 typical homes — but the savings will not be big enough or kick in soon enough to mitigate the need to add enough new generating capacity to meet demand expected to grow by 4,000 megawatts over the next decade.

This is just the first wave in the overhaul of the DVP electric system. The company continues investigate other energy-conservation and demand-reduction initiatives, including rate structures that would send better pricing signals to customers and emerging technologies that would leverage the smart grid to help customers manage the cost of individual appliances. “These technologies,” states the company, “will support the integration of on-site customer generation and future plug-in hybrid vehicles.”

Bacon’s commentary: Plug-in hybrids? Hoo-ah! See comments for details.

MORE HEADLINES

WaPo had an interesting front page “analysis” by Neil Irwin this morning:

“Why We’re Gloomier Than The Economy: Consumer Anxiety Outstrips the Data.”

Earth to Neil: Citizens can Read.

They can read the headlines we noted in the recent post “HEADLINES, HEADLINES.”

They can read the other headlines on today’s front page of WaPo and every other MainStream Media Outlet:

“Iowa Flooding Could Be An Act of Man, Experts Say” and citizens know the era of Corps of Engineer ‘flood control’ providing ‘protection’ is past. They can shoot all the pigs on levies they want but the water will keep rising because the there is no storage area.

“Bush Calls for Offshore Oil Drilling, President Joins McCain in Seeking to Lift Long-Standing Ban” and citizens know Bush, McCain and Car Tax Gilmore all would like to barrow from the great grand children to buy a new belt instead of the addressing the consumption / obesity problem.

Citizens also know the economic data is cooked to make a ‘growth is good’ stew. All the economists MainStream Media quotes are paid directly or indirectly by the Business-As-Usual advocates who thrive on ever-expanding levels of consumption.

Finally, more and more citizens are coming to realize that MainStream Media is also an Enterprise that lives on advertising by those same Business-As-Usual advocates. See THE ESTATES MATRIX

EMR

Climate Change Commission a Waste of Effort?

Patrick Michaels, Global Warming skeptic, has weighed in on the Virginia Commission on Climate Change — and this time there’s no question that it’s him and not one of his colleagues (as was unclear in another recent communique discussed in “Low Hanging Fruit vs. Deep Green.”) This time, he has written a column in the Times-Dispatch under his own name.

In a nutshell, Michaels’ point is that nothing the Commission can do will have a discernible impact on climate change. One of the Commission’s goals is to cut greenhouse gas emissions by 30 percent by 2025, a goal which, if accomplished, would set Virginia emissions back to the level they were back in 2000. That’s way less ambitious, he notes, than the goals of the Kyoto protocols, which aspire to cut global emissions to about 5 percent below 1990 levels for the years 2008-2012.

And even the draconian Kyoto protocols would barely impact climate change. Citing scientists at the U.S. National Center for Atmospheric Research in Boulder, Colo., Michaels says that Kyoto would reduce global temperatures by 0.07 degrees C in the next half-century. “That’s right: not 7 degrees or even seven-tenths of a degree, but seven hundredths of a degree.”

Adopting the Virginia plan across all Kyoto nations would result in about 72 percent of the emissions reductions of Kyoto itself by 2050, again according to data from the Energy Information Agency. That translates into five hundredths of a degree of warming by then, and 0.13 degrees by 2100. “The 2050 figure is about 20 times less than the mean annual temperature difference between downtown Richmond and suburban Short Pump.”

(In one sense, Michaels is being generous to the Commission. His figures assume that commission goals could be applied to all Kyoto nations, which they clearly cannot. Virginia accounts for only a tiny sliver of global economic output. The impact of Virginia actions on global climate will be so infinitesimal as to be unmeasurable.)

Michaels concludes: “It’s hard to believe that any member of Virginia’s commission really thinks he’s doing much about global warming. … People need to know that the proposed goal of the Governor’s Commission on Climate Change will simply have no detectable effect on global warming. So what’s the point?

Bacon’s bottom line: Michaels is missing the point. As I see it, the Commission has at least two valid missions. First, Virginia needs to understand the risks posed by climate change. Regardless of whether our actions can affect climate change, climate change can affect us. As we’ve discussed on this blog, there is a significant risk that rising global temperatures and sea levels could inundate large parts of Virginia’s low-lying coastline. How do we prepare for that possibility? I’d like to see that issue aired.

Secondly, there are sound reasons for reducing the energy intensity of Virginia’s economy that have nothing to do with climate change. You can be an agnostic on global warming (as I am) and still see value in cutting carbon dioxide emissions, which are a good metric of fossil-fuel energy intensity. The prices of oil, natural gas and coal are soaring. Because Virginia institutions are geared to a cheap-energy era, we are suffering needlessly as the world economy transitions to an dear-energy era. Rising energy prices are sucking billions of dollars out of our economy, crimping living standards and reducing the competitiveness of our businesses.

If the Commission on Climate Change can identify strategies for going “deep green” — changing transportation systems and human settlement patterns that keep Virginians stuck in an energy-intensive mode — we can all benefit. If reducing energy dependence and cutting CO2 emissions also happens to reduce global temperatures by .00007 of a degree, then so much the better!

Electronic Health Records Coming to a Doctor Near You

The Kaine administration has been doing some useful things behind the scenes, but because of my monomaniacal fixation on transportation, land use, energy and the environment, I have not had time to highlight the more positive initiatives. With this post, I hope to make up for that deficit to some small degree.

One of Gov. Timothy M. Kaine’s priorities has been to increase the efficiency of Virginia’s health care system by encouraging physicians and hospitals to adopt electronic health records. Until this week, none of these endeavors had resulted in anything terribly newsworthy. But on June 12, U.S. Secretary of Health and Human Services Michael Leavitt visited Richmond to announce Virginia’s participation in a Medicare initiative to promote the use of certified electronic health records (EHRs).


Leavitt thanked Kaine, legislators, members of his cabinet, and Michael Mathews (CEO of MedVirginia), and others for developing a winning application. The project, one of 12 in the country, will provide financial incentives to as many as 100 primary care physician practices in Virginia to use certified EHRs.


If there’s anything close to a silver bullet for out-of-control health care expenditures, it’s probably EHRs. Let me rephrase that. There are no silver bullets. But of all the remedies discussed, getting physicians, hospitals and other health care providers to adopt electronic records would do more than any other single thing anyone can do to cut costs and improve patient outcomes.


The U.S. health care industry has been notoriously slow to adopt electronic records. A majority of physicians still make hand-written notes, which are sometimes illegible and lead to transcription errors. Paper records also are far more difficult to share, resulting in redundant and unnecessary procedures when a patient moves to a new setting. Although systems with computerized provider order entry have existed for more than 30 years, fewer than 10 percent of hospitals as of 2006 have a fully integrated system, according to Wikipedia.

According to one 2004 estimate, one in seven hospitalizations occurred when medical records were not available. Additionally, one in five lab tests were repeated because results were not available at the point of care. “The evidence is too compelling and the stakes are too high to maintain [the] status quo,” said Mathews, the MedVirginia CEO.

MedVirginia, Virginia’s Regional Health Information Organization, is the logical group to take the lead in the Medicare initiative. Since its inception in 2001, the organization’s vision has been to create “the most electronically connected medical community in the United States.” In 2005, MedVirginia developed the capability to collect patients’ hospital, lab and pharmacy data and organize it into one single electronic chart. The key now is to get all players to use electronic records.

Medicare will begin working with Virginia in the summer of 2009 to build partnerships and develop strategies to recruit Virginia physicians into the program. It’s a shame we have to wait a full year just to start work on this important project. More.

Left and Right Converge on Basic Economics

Mr. Peter Galuszka took one for the team when he bought, read and reported on Thomas Sowell’s “Basic Economics.” I was unable to respond to his post in a timely fashion, so I’m posting here to show where our political perspectives from the Right and the Left blend on the basics of basic economics. Because, I theorize, we are both children of the Enlightenment and agree that rational empiricism is the foundation of good science.

Likewise, we might posit, jointly if I may presume so, that good governance for policy issues that involve issues with scientifically-based alternatives should rack and stack alternatives with clear links to rational empiricism. Analysis. Good analysis.

Here are my comments on Mr. Galuszka’s (PG) findings.

I would grade him with an A-. And I was a tough grader at the Department of Social Sciences, USMA. The minus comes from his last comment which is addressed at the end of this list.

I, too, used Paul Samuelson’s text on econ as an undergrad and went took economics at Keynesian grad schools.

But, what jumped out at me in Herman K. Bator’s bedsheet model of the macroeconomy was how little government spending did and how much productivity did. Nothing beat improvements in productivity as a single variable change in the olde GNP.

Since then I read Milton Friedman on the role of capital growth. But, even in grad school I got the idea that the way to cut the American pie for the American People better is, first, to grow the pie. Bigger slices for all are possible.

I agree with PG that unions are important. Unions and shareholders are the only checks and balances on corporate bad behavior. When the legislatures try to fix the corporate barn doors after the horses have run, they pretty much muck it all up for everyone – creating a new set of winners and losers in the business/government mixed economy.

I argue that unions and shareholders have vital roles in the future to provide the moral suasion needed on organizations run by sinful men (as we all are) and to protect the employees. My political issue with unions is ideological – and not pertinent here.

I agree that CEO compensation is out of whack. But, it isn’t an issue for government. It’s an issue for the unions, shareholders and the public marketplace of ideas.

The impacts of free trade are tough to live with. But, economic risk has always been brutal. The long range study I led (back in 90-92 for the period 2005-2015) pointed to the biggest single driver of change would be – domestically and internationally – political understandings (reactions) to economic changes. Whole regions can lose industries in no time. But, there are counters that can mitigate such events – to a degree – like Commonwealth Trust Accounts and SS that are individually owned. Producing more capital can offset the loss of an industry. New industries will be created.

I don’t see the problem with foreign corporations given our laws and shareholders – what is different now that is so scary?

My only complaint with PG’s findings is his comment about not seeing the application specifically for Virginia.

We need a Macro-Economic model of the Commonwealth. The GA could put together a consortium of our universities for a couple of million and get a first class model for tax policies. And the economic effects of transportation and land policies, as well as environmental policies.

We may still break Right and Left on issues, but where possible, lets do so from the same common economic analysis.

Wagner Plays the Offshore Drilling Wildcard

So far, the special General Assembly session on transportation has been shaping up as a flounderfest: no one agreeing on anything, everyone just flopping around. But Sen. Frank Wagner, R-Virginia Beach, has thrown a wild card into the game.

In a news conference today, Wagner linked offshore drilling for natural gas with Virginia transportation. He called for Gov. Timothy M. Kaine to use his “considerable influence in national Democratic politics” to urge his fellow party members to lift the federal ban on off-shore drilling. And he promised to introduce legislation next week that would devote much of the state royalties from such drilling to transportation, Chesapeake Bay clean up and energy-related uses.

Wagner, who reminds readers in his press release that he was the chief patron of the bill calling for the Virginia Energy Plan, would establish the Offshore Energy Revenue Fund. Proceeds would be distributed as follows:

40% to the Transportation Trust Fund
40% for Chesapeake Bay cleanup efforts
10% to the Renewable Electricity Production Grant Fund
10% to the Virginia Coastal Energy Research Consortium

Now, some might accuse Wagner of cheap political grandstanding. After all, what can Gov. Kaine really do to influence the federal ban on offshire drilling? Further, what are the chances that a Democratic Congress, which looks forward to aligning itself within half a year with a Democratic president, will make a move that would anger its environmentalist base? Pretty low, I’d say.

Moreover, there is absolutely no logical nexus between offshore drilling and transportation. I can see a tangential connection to the Chesapeake Bay: If people are worried about the environmental impact of drilling, it sorta makes sense to dedicate some of the royalties to environmental clean-up. Drilling offshore would take place in the water… The Chesapeake Bay has lots of water… What more could you ask for?

Other than the fact that the Business As Usual interests are desperate for a new source of revenues to perpetuate Virginia’s failed transportation model, however, why should the revenues be dedicated to transportation as opposed to any other need? None that I can think of.

But the gambit is sure to generate a lot of headlines and absorb a lot of discussion. A special session that was shaping up as snooza-palooza just might be fun to follow after all.

Deep Green in Blacksburg

Yesterday I blogged about the need to take a “deep green” approach to energy conservation. It’s one thing to snap up low-hanging fruit, but Virginia needs to enact fundamental institutional changes — to transportation and land use especially — if we are to achieve meaningful reductions in energy consumption. As it happened, at least three speakers at the Governor’s Commission on Climate Change meeting in Blacksburg yesterday brushed up against those topics.

I wasn’t there, so I don’t know what exactly what they said. But the Commission has posted PDFs of their presentations online, and you can get a flavor of what they had to say.

Providing Transportation Choices to Reduce Greenhouse Gas Emissions, Petra Mollet, American Public Transportation Association

Urban Development and Climate Change, John V. Thomas, Ph.D., Development Community and Environment Division, U.S. Environmental Protection Agency

Climate Change and Development Patterns, Eric J. Walberg, Principal Planner, Hampton Roads Planning District Commission

HEADLINES, HEADLINES

There has been a lot of loose talk on this Blog about Fundamental Transformation not being an urgent need, especially in the Commonwealth of Virgina.

Our friends the Tiger Riders may have not been reading the headlines.

Last Saturday the Business section of WaPo was headlined by: “Flying Is Going to Get Even Less Fun.” You may recall our column 21 April column “The End of Flight as We Knew It.”

Early this week AOL Money featured an analysis of recent stock trends and suggested 17 large Enterprises that, based on stock market performance, may not be with us for long. Number one on the list and four of the top 5 were airline Enterprises – American, United, Northwest and Delta. Five of the top 8 were airline Enterprises.

Add the cost of aircraft impact on the upper atmosphere to the price of a ticket and the US of A will be back to one flag carrier, airport overcapacity and very few who can afford to travel. Deregulation and cheap fuel sure did improve air travel.

Think of all those Households (formerly known as “families”) who believed it was fine to disaggregate and scatter across the globe because they could always fly “home” for the holidays and when there was an emergency…

On the AOL list were three were major financial institutions and the two biggest Autonomobile manufactures – Chrysler already having been towed away after a fire sale. They also believed their own ads and the chant that demand for Large, Private Vehicles was inelastic.

On 13 June WaPo had a headline “Medical Fraud a Growing Problem” and in the same issue the Business section headlined “The Economy’s Steady Pulse: Health-Care Sector Is Poised to Keep Growing, But so Are Its Costs.”

Not likely any Tiger Riders are going to try to track down fraud or cut costs if medical services is the only sector of the economy – other that flood damage repair and ad revenue from the Internet – that are expanding. The health and welfare of other nation-states is better with a different system but this one makes some more profit in the short term.

On Monday the 16th WaPo had a full page ad by HybridTechnologies touting the value of lithium battery powered vehicles. The ad was not there to sell cars, it was selling stock in a company that will sell the cars. Small, efficient vehicles are good, but are not a good investment without fundamental change in settlement patterns. See “Aptera and the Tiger Riders.”

On the 17th one of the above-the-fold front page stories was headlined “McCain Seeks to End Offshore Drilling Ban.” WaPo commentators had a field day with the flip-flop from prior positions but the real story was that the flip side of the jump page was that overexposed crying baby ad paid for by ‘The people of America’s Oil and Natural Gas Industry’ that asks “who really pays when congress taxes oil companies?” The children of well paid energy CEOs?

A society that has seven parking places for every Autonomobile and five bed places for every body needs to reconsider where the current trajectory is taking everyone, including those at the top of the Ziggurat.

Perhaps citizenS need to come up with a new metric for well being.

It is enough to make one want to add some paragraphs to THE ESTATES MATRIX.

EMR

“Low Hanging Fruit” vs. “Deep Green”

The Governor’s task force on climate change is meeting in Blacksburg today. One of the voices that will not be heard is that of Patrick Michaels, former state climatologist and one of the nation’s leading Global Warming skeptics. Despite his extensive knowledge on climate change issues, Michaels was conspicuously not asked to serve on the commission. That’s no surprise, of course, given the fact that the commission was predicated on the key assumption, which Michaels questions, that human-caused increases in carbon dioxide will cause calamitously higher temperatures and sea levels. Under the circumstances, inviting Michaels to participate arguably would not lead to a productive exchange of ideas.

To my knowledge, Michaels has never commented on Virginia’s climate change task force… until now. In a post on the World Climate Report blog either Michaels or one of his co-bloggers takes on the subject of “The Virginia Climate Change Commission and the Mirage of Low Hanging Fruit.” (Authorship of the blog post is not attributed to any one of the blog’s three contributing editors, so it’s not clear who wrote the post. But if the author wasn’t Michaels, it seems likely that he shares the author’s views.)

Rather than revisit the familiar global-warming controversies, the author focuses on the commission’s stated goal of cutting greenhouse gas emissions by 30 percent by the year 2025 in order to restore emissions to 2000 levels. The goal, contends the author, who apparently has attended one or more of the commission hearings, will be harder than it looks.

The Commission [is] seeking potential ways to meet this goal through conservation, energy efficiency improvements, encouragement of renewable energies, etc. Oftentimes the discussion turned to identifying the “low hanging fruit” that was available to achieve the agreed upon goal — that is finding the easiest and most straightforward way of attempting to reduce emissions.

But there is no low-hanging fruit, the author contends. Obvious changes are already spoken for. Recommending changes that business and government are likely to make even in the absence of any action by the commission will amount to double counting and won’t get Virginia any closer to the commission’s goals. The argument is a bit arcane but worthy of consideration. Here’s the logic:

Virginia’s gross state product has been growing over the last 10 years at an average rate of about 3.5 percent yearly (2000 constant dollars). Virginia’s energy usage as well as its CO2 emissions have grown at a slower rate: slightly more than two percent yearly. In other words, Virginia’s economy is getting more energy efficient per unit of economic output.

Forecasts of Virginia’s economic output, energy consumption and CO2 emissions through 2025 take that improving energy efficiency into account. According to the “Greenhouse Gas Reduction Goal Update,” the Kaine administration is already assuming “continuing improvement in energy efficiency/energy intensity” for its “Business As Usual” energy scenario.

“Virginians have found ways to produce more per unit energy usage year-over-year through innovation and hard work,” writes the World Climate Report author. Motivated by higher energy prices, Virginians are projected to increase energy efficiency by 25 percent without any action on the part of the commission. The commission needs to find an extra 30 percent in CO2 reduction.

Writes the author:

What all of this means, is that the Commission cannot suggest things that would otherwise occur in their absence — for as we have seen, these things are implicit in the business-as-usual extrapolations. Thus, the Commission cannot recommend actions that are somewhat obvious (i.e. the low hanging fruit) and that are ongoing or will occur on their own in response to higher fuel costs, introduction of new technologies, price saving measures, etc.

Such actions include a constant push towards improving manufacturing efficiencies, the trend towards cars with higher gas mileage, the gradual switchover to compact florescent light bulbs, and any other initiatives that are already on the books or would otherwise be thought up. … Again, business-as-usual implies innovation.

Bacon’s bottom line: I concur with this appraisal. Now, to follow the World Climate Report author’s logic to its logical conclusion: Achieving the Commission’s goals will require Fundamental Change to Virginia’s institutions. In other words, we need to go “deep green.”

“Green Lite” — relatively easy-to-implement conservation measures from CFL light bulbs to building-automation systems, from higher gas-mileage vehicles to more efficient industrial processes — is already happening. Implementation of these solutions will be driven by the soaring price of gasoline, coal, natural gas and electricity. Households and businesses are amply motivated to seek them out.

But there’s a deeper level of energy conservation that’s not so easily achieved because it entails changes not just to individual or corporate behavior but changes to intractably energy-intensive transportation systems and human settlement patterns. Reaching the Kaine administration’s goal of cutting CO2 by 30 percent (on top of the Business-As-Usual reduction of 25 percent) will require more than increasing the average fuel efficiency of Virginia’s automobile fleet by three or four miles per gallon. It will require cutting vehicle miles driven by 20 percent (or some enormous percentage). Likewise, reaching the goal will require more than installing more efficient HVAC systems and stuffing insulation in the cracks of single family dwellings. It may require a 20 percent reduction in the cubic footage of residential, retail, office or industrial space to be heated and cooled.

While necessary for a prosperous and sustainable society, embracing “deep green” and achieving Fundamental Change will be neither easy nor popular.

Today is the Climate Change commission’s last day for the presentation of facts and ideas by experts. It will be interesting to see if any of the materials posted online include any discussion of the need for changes that go beyond “Business As Usual” scenarios.

UVa Increases Endowment Payout

The University of Virginia will tap more of its $3.2 billion endowment to strengthen university programs and help hold the line on tuition increases, reports the Daily Progress. The Board of Visitors voted Friday to increase the payout rate to 5 percent of the fund’s market value on June 30, a move that should generate $16 million more for university academics and UVa Health System patients.

The board also approved a new formula for determining how much of its endowment is spent each year: After fiscal 2009, the university will increase its endowment spending by the rate of inflation, as long as the resulting payout is within four percent to six percent of the fund’s market value.

The $2.24 billion operating budget for 2008-2009 provides $1.22 billion for academics, $980 million for the medical center, and $34 million for the College at Wise — a 5.4 spending percent increase. The budget allows for 159 new full-time workers, up from 12,170, a new student data system, more student financial aid, and more.

Bacon’s bottom line: Good. This move is long overdue. I’ve long criticized UVa, my alma mater, and other public Virginia universities for piling up bigger and bigger endowments for the seemingly sole purpose of claiming, “Mine’s bigger than your’s” — even as they aggressively jacked up tuitions year after year. The increased payout and future indexing for inflation helps ensure that the endowment is used for the purposes of improving the quality of education and keeping tuitions affordable.

The BoV’s actions are not necessarily the end of the story. Alumni and other stakeholders must continue to scrutinize where the money goes. But Friday’s actions signal that the Board clearly understands that the endowment does not exist for its own sake — it needs to be used.