New Geography

Tag: Environment

  • The Limits Of The Green Machine

    Environmentalism is strangely detached from the public’s economic goals.

    The awful oil spill in the Gulf–as well as the recent coal mine disaster in West Virginia–has added spring to the step of America’s hugely influential environmental lobby. After years of hand-wringing over global warming (aka climate change), the greens now have an issue that will play to legitimate public concerns for weeks and months ahead.

    This is as it should be. Strong support for environmental regulation–starting particularly under our original “green president,” Richard Nixon–has been based on the protection of public health and safety, as well as the preservation of America’s wild spaces. In this respect, environmentalists enjoy widespread support from the public and even more so from the emerging millennial generation.

    Conservatives who fail to address this concern will pay a price, even more so in the future. The Bush administration’s apparent clubbiness with conventional energy interests has undermined the GOP’s once-proud legacy on environmental causes. The oil spill could prove a great campaign issue for Democrats assigning blame for the disaster on lax Republican regulators and their oil company chums.

    But there’s also a danger for Democrats who tilt uncritically toward “green” policies. Instead of following the environmentalists’ party line, they should adopt a balanced approach adding both economic and social needs to their concept of “sustainability.”

    Sadly, many in the administration seem anxious to extend environmental regulation into virtually every aspect of life. Legitimate concerns over pollution and open space preservation, for example, have now been conflated with a renewed drive to strangle suburbia in favor of forced densification.

    The administration’s “livability” agenda, as suggested by Transportation Secretary Ray LaHood, for example, proposes policies that favor dense urban development over the dispersed living preferred by most Americans. This, notes analyst Ken Orski, represents an unprecedented federal intrusion over traditional local zoning and local decisions.

    This centralizing tendency supports a wide array of interests, notably big city mayors and urban land speculators, and also is eagerly promoted by many architects, the media and planning professors. Not surprisingly, less intrusive ways to reduce energy use, such as telecommuting or the dispersion of worksites closer to people’s homes, have elicited very little administration support.

    Herein lies the Achilles heel of environmentalism–its profound disconnect from public preferences and aspirations. By embracing such a radical social engineering agenda, the greens may end up undermining their own long-term effectiveness.

    The first sign of this pushback, notes analyst Walter Russell Mead, can be seen in growing skepticism about climate change policies both here and in Europe. At a time of severe economic challenges, greens and their political allies need to consider how specific environmental costs threaten an already beleaguered middle and working class.

    Voters, for example, may support strong penalties and stricter controls of energy giants such as British Petroleum or Massey Energy, but roughly six in 10, according to a post-spill NBC/Wall Street Journal poll, continue to back the idea of expanded offshore oil drilling. Voters may embrace new environmental improvements but they also want to keep their jobs.

    This conflict will be on display in the coming struggle over the “cap and trade” proposals in the Senate. Strongest opposition comes from those states and regions most adversely impacted by strict limits on carbon, clustered in the south and Midwest.

    Mitch Daniels, governor of coal-dependent Indiana, even has denounced such proposals as Washington “imperialism.” But Daniels’ opposition also is shared by many Democrats from fossil-fuel-rich states such as North Dakota, West Virginia and Louisiana. Cap and trade even manages to offend many on the left, who see it as yet another opportunity for Wall Street to profit from complex federal regulation.

    On the state level, more draconian mandates on shifting to renewable fuels, such as those in place in California, could also cause future power shortages, as the state auditor warned recently. Such concerns are routinely brushed aside by environmentalist and their prodigious PR machines who prattle on about our coming economic salvation through the creation of “green jobs.”

    In reality, given their dependence on massive subsidies from both taxpayers and rate-payer, it’s unlikely that renewables, as opposed to relatively clean alternatives such as plentiful natural gas, will produce a net positive impact on the economy for years or even decades. Certainly highly aggressive subsidies for wind and solar have not proved any kind of elixir in countries like Spain, where such policies have been long in place but now are being scaled back due to their drain on both the economy and the public budget.

    To some extent, the hype over “green jobs” sometimes appears as something of a PR smokescreen. Prominent greens have long been opposed to the very idea of economic growth and wealth creation, particularly in advanced industrial countries. For decades John Holdren, President Obama’s science advisor, has favored what he calls “de-development” of Western countries in order to preserve natural resources and reduce pollution.

    This approach appears to be gaining support even as the pain of economic dislocation has devastated the advanced countries of the West. Boston University sociologist Juliet Schor, writing in the influential left-leaning The Nation, even attacks “progressive economists”- such as those calling for a second New Deal- for focusing on “climate destabilizing growth” as a way to create new jobs and raise middle class incomes.

    In the Huffington Post one-time investment banker Ann Lee, now an economics professor at NYU, has called for “a new economic ideology” that focuses on “human dignity, creative and degrees of freedom” instead of following traditional measurements of material well-being. This “new” economy, she argues, would provide greater returns to favored groups like artists and, of course, teachers, who she considers severely underpaid.

    This kind of low-carbon academic “esteem” economy appeals to people who already enjoy considerable material wealth and can count on the support of the state. It is not so promising on the West’s aspirational middle and working classes, particularly those employed in the private sector, whose individual strivings would now be compensated by a deadly combination of high taxes and slow growth.

    Until the issues of growth are tackled honestly, the green movement will continue to depend on tragic events such as the Gulf oil spill to maintain its public support. But in the long run, environmentalism will not remain politically “sustainable” if it fails to balance a green future with the economic aspirations of current and future generations.

    This article originally appeared in Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by just.Luc

  • Jobs, Environmental Regulation, and Dead French Economists

    The debate over the repeal of California’s global-warming regulation, AB32, has degenerated into a shouting match, each side claiming economic ruin if the other side wins. A couple of long-dead French economists can help us think about the debate.

    The great French economist Leon Walras (1834-1910) showed that perfect markets result in an allocation of goods and services that can’t be improved on, in the sense that no one could be made better off without someone else being made worse off.

    Of course, we don’t have completely unfettered markets. In fact, they have never existed. They will never exist. In particular, we economists like to talk about what we call negative externalities. These occur when I do something, but an unintended consequence is that it hurts you, and you have no recourse.

    An example may make things clearer. Suppose I have a factory that spews out a deadly chemical, one that destroys all life downwind for ten miles. Obviously I’ve reduced the property values for the downwind property owners. (We’re simplifying here. There are many other issues.) There is no market for the damage I’ve done, and downwind landowners may not be able to afford to sue me, and there was a time when they would have likely lost such a case.

    Society’s solution to the problem of negative externalities has been regulation. Until recently, the concept of negative externalities has been the rationale for most environmental regulation. Negative externalities’ victims have also been extended to include non-humans: flora, fauna, and “mother earth.”

    Climate change regulation, though, is a bit different. In the first place, we don’t know how much of its justification, the claim of manmade global warming with long-term negative economic impacts, is accurate. Some, the “non-believers” completely deny the possibility of man-caused global warming. Others, “the believers” believe in man-caused global warming with a fervor that matches that of any religious zealot. Another group, me included, believes that manmade global warming is a possibility that should be considered as a factor in making long-term economic policy.

    If manmade global warming was a certainty, you could reasonably argue that negative externalities justify regulation, the parties being hurt are just not yet born. That’s essentially what the believers are trying to say when they point to the imminent destruction of all life on earth.

    However, once the existence of manmade global warming becomes a probability, it becomes an insurance question. This dramatically increases the level of complexity of the problem, and it dramatically complicates the political problem of reaching consensus about what to do.

    So, proponents of climate-change regulation have tried to simplify the issue. One approach has been to turn everyone into believers, either by attempting to convince the skeptical—as it turns out by using gross exaggeration if necessary—or, failing conversion, excommunicating even the mildest skeptics from civil society.

    Climate-change regulation proponents have also tried, with success, to use the novel argument that climate-change regulation is not only costless but will generate economic growth. The most enthusiastic proponents of this argument, California’s Governor Schwarzenegger among them, describe a utopian future of happy people enjoying previously-unknown prosperity in a pristine earthly heaven.

    Sadly, this better-than-a-free-lunch deal is not likely to materialize. It is true that clever economists have constructed models where such an outcome is possible—models having to do with large-scale inefficiencies existing because of historical accident—but large-scale unrecognized opportunities are unlikely in today’s economy.

    It is also true that some economists have found some evidence of small un-captured gains. I’ve participated in this literature. However, those gains are also unlikely to be of the scale necessary to achieve the promised new economic age. Indeed, most economists doubt their existence, arguing, reasonably, that the researchers failed to measure all of the relevant costs. Economists have a hard time believing that markets are so bad that unrecognized profitable opportunities exist in abundance.

    Today, California is considering the repeal or postponement of its landmark global-warming regulation, AB32. Oddly, both sides are using the same argument. The forces arguing against the repeal of AB32 argue that the repeal will cost jobs. Those arguing for the repeal argue that failure to repeal will cost jobs.

    They are both correct, and they can both prove it with their warring models, which brings us to our second great dead French economist.

    Frederick Bastiat (1801-1850), not long before his death, wrote a piece What is Seen and What is Not Seen. In the essay, Bastiat gives the example of jobs created by breaking windows. The broken window creates work for the glazier, a multiplier is attached to that work, and it looks as if economic activity has increased. However, society is not better off. The problem is that we see, and account for, the work, but we do not see or count the costs associated with the initial destruction of capital.

    So it is with California’s regulation. Proponents of the regulation have research to support their claim of job creation. The “green jobs” created by the regulation are seen and counted. The jobs lost to the regulation are not seen and are not counted.

    The opponents of California’s regulation have estimated the jobs lost to the regulation, mostly a consequence of higher energy costs, but that research—the portion I’m aware of at least—has been criticized for ignoring the jobs created by the regulation. More importantly, they do not see the jobs that might be lost if global warming kills jobs. They only see, and show, the jobs lost to failure to repeal the regulation.

    Creating jobs is easy; creating real economic growth is harder. Banning the use of any productivity-enhancing technology will create jobs, but this could occur at the cost of societal well being. We could achieve full employment by banning all agricultural technology created after the 17th century. There is no unemployment in a Malthusian economy. We’d all have “idyllic” jobs on the farm, yet this would in reality be back-breaking work. Many people would live on the edge of starvation. I don’t think anyone really wants that outcome. It is also easy to create subsidized jobs, even if those jobs add nothing to, or worse detract from, society’s well being.

    Instead of jobs, the argument should focus on such things well being, consumption, income, probabilities, and the like. It is complicated by the uncertainty surrounding the theory of manmade global warming, and the uncertainty surrounding the economic impacts of any warming. But, the stakes are high. People’s lives will be changed. The debate deserves a higher-level of discourse than we’ve seen. Frenetic predictions of job losses or overly optimistic projections of employment created by a green economy will not do. Instead, let’s recognize the complexity of the issue and have a reasoned discussion.

    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.

    Photo by Diogo Martins.

  • The New E.D. — Environmental Density

    Developers often have an E.D. problem and are not even aware of it. No, not the type of E.D. temporarily cured with Viagra. Environmental Density — E.D. — is the measurement of the impact of man made construction on a site. In simple terms, E.D. is the average per acre volume of impervious surface due to land development construction. It has two very important impacts, one environmental, and one financial. One acre of land is 43,560 square feet. The lower the E.D. — square foot of impervious surface area divided by 43,560 — the lower the surface area of manmade structures that divert rain run-off, and the less environmental damage.

    Some municipalities have impervious surface limitations in their regulations. These limitations can be counter to human benefits. For example, a developer faced with the limits of allowed impervious surface area would rather not propose a walking system; the regulations could mean a choice between walkways and homes. E.D., on the other hand, is not an imposed limit, but a way to measure the efficiency of the neighborhood design.

    Don’t bother searching the internet for opposing articles on E.D., because we invented the term’s use in relationship to modern land development right here at www.newgeography.com.

    From a financial perspective, the lower the volume of manmade stuff, the lower the development cost. The savings translate into more money that can be spent on higher quality development and/or a drop in the cost of housing and commercial construction. In other words higher quality development at more affordable prices. This affects everyone, worldwide.

    It doesn’t matter if the site is a New Urban “Smart Growth” design, a subdivision in “Garage Grove Acres”, or a Prefurbia neighborhood. E.D. is the number that can easily indicate the direct environmental impact of land development. The E.D. is essentially the Efficiency of Development.

    Assuming that New Geography readers are not all engineers, I’ll use some simple examples of E.D.:

    If the design is wasteful (eliminating waste in design is NOT a subject taught in land planning schools – but it should be), then costs and environmental impacts increase. Nobody but the paving and earthwork contractors being paid to build excessive infrastructure gain from wasteful development. The developer’s profit decreases and the city’s maintenance cost escalates from having to maintain excessive infrastructure… forever. We all pay for this!

    In an urban high density development which has a very large ratio of hard surface area to organic ground (sometimes the E.D. reaches 100%), there are often opportunities to lower the inorganic percentage. Green roofs (landscaped rooftops) have an impact on E.D. because, in theory, the rainfall is held in soils that water landscaping. However, this assumes existing building structures can handle the additional weight and can be modified to properly maintain an organic area. Organic space on ground level benefits 100% of the population, as opposed to a green roof many stories above the pedestrian ways. So for the purposes of this article we will define all rooftops (urban or suburban) as negative impact square footage. Walks, streets, and driveways are all hard surface areas that divert rain. Organic areas absorb rain. Run-off from hard surface area negatively affects the environment.

    Velocity is another problem. Run-off travels on hard surfaces at a much higher rate than it does on landscaped ground. The worst rates are found where there are long runs of straight street with rain traveling along gutters; curved design slows it a bit . Velocity builds momentum as more rain collects in gutters, inlets and sewer pipes. Eventually this wall of water reaches the end of developed land and spills into a natural system, carrying pollutants into major bodies of water. That oil slick on your driveway can be carried to environmentally sensitive areas hundreds or thousands of miles away in a heavy downpour.

    Lower the E.D. ratio and some magnificent things happen.

    A gain in organic space can reduce the disruption of the earth — the moving of dirt — which can significantly lower development costs, as well as provide surface run-off conduits which cost much less than sewer pipe. The designer must learn how to identify waste, and then take the steps to reduce it. This adds an additional element in the initial planning stages, but an extra day or two in design could reduce development costs by hundreds of thousands of dollars.
    Rooftop surface can be reduced by building up, not out. The trend to build single level housing for the empty-nester market results in sprawling homes with terrible E.D. ratios, and it adds to the costs of the structures; roofs and foundations certainly are not cheap. Sprawling homes require longer streets to be reached, another increase in costs and environmental damage. A residential elevator is about $14,000 (installed) for a two story home, and $22,000 for three floors . By using them, builders can construct compact structures and plummet the E.D. ratio.

    Paved areas can be reduced by changing regulations to allow vast, commercial parking areas, shared. by users that have different peak times. Some cities use progressive thinking, and allow this simple technique to lower the E.D. ratio of a region. Paved areas built to municipal standards are incredibly expensive, making the E.D. ratio even more critical.

    When we developed Performance Planning Systems we wanted to create the tools to easily determine E.D. while still in the initial design phases, as well as to provide the education to recognize waste and teach how it can be reduced. E.D. relies on this new technology; tracing accurate space for the calculations would have been too tedious and time consuming in the past. Environmental Density, unlike impervious surface limits, does not impede efforts to create great neighborhoods. It’s not a restriction on what can be built, but a measure of a design’s efficiency that can benefit builders, developers, and environmentalists.

    Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

  • A Carbon Added Tax, Not Cap and Trade

    Paul Krugman devoted a recent lengthy New York Times Magazine article to the promotion of a disastrous “cap and trade” regime for reducing carbon emissions. Though he doesn’t outright endorse it, he strongly suggests that the Waxman-Markey bill that passed the House would be acceptable to him. Krugman then proceeds to pooh-pooh the carbon tax idea, one that I believe has far more merit.

    Cap and trade would be a debacle for a slew of reasons. The most important is that it won’t even reduce carbon emissions. Two of the EPA’s own San Francisco attorneys dismissed the Waxman-Markey cap and trade regime as a “mirage” that would not reduce carbon because of the ability of polluters to obtain fictitious carbon offsets, among other problems.

    Even if cap and trade would require American producers to reduce carbon emissions, it would do nothing about overseas polluters. An American manufacturer could escape cap and trade simply by moving production to China. Given China’s massive coal-based electricity infrastructure and other notoriously polluting practices, carbon emissions would likely only get worse as a result, in addition to the US jobs lost.

    Krugman suggests this can be fixed with a carbon tariff, but that’s dangerously naïve. There’s no guarantee a carbon tariff would be put in place after cap and trade passed. In effect, it requires two completely separate policy mechanisms be put in place and kept synchronized over time, which seems dubious. Our trading partners would surely chafe at any carbon tariff, which would be vulnerable to challenge under international trade treaties.

    Cap and trade also has huge distortive impacts within the United States. The Brookings Institution crunched the numbers and found that cap and trade costs vary widely across the country. Compliance costs would be minimal in California and rest of the West and Northeast, while the Midwest, Mid-Atlantic, and the South get pummeled. It should come as no surprise that it is California Rep. Henry Waxman who’s pushing the bill. One can’t help but suspect these regional disparities are the real implicit goal of the bill. Indiana Gov. Mitch Daniels denounced cap and trade as “imperialism”.

    Perhaps the most diabolical part of cap and trade is in its very name. The operative word is “trade”. Who do you think will be doing the trading? Why, none other than the very people who got us into the economic mess we’re in today. Cap and trade is a gigantic giveaway to Goldman; it’s yet another instrument for speculation; it’s another way for the profiteers on Wall Street to line their pockets at our expense.

    So in a sense it’s also another way that, perhaps unintentionally, the richest sectors, the upper classes, and the financial centers like New York, Boston and San Francisco are being favored over the poor Main Street rubes who have taken it on the chin during this recession without a bailout. If you think things are bad now, just wait until CDS stands for “carbon default swap”. It’s pouring fuel on the fire of inequality between the haves and have nots.

    Cap and trade is nothing more than another tranche in the never-ending merry-go-round of bailouts for the financiers. And didn’t we learn anything from Enron’s electricity trading shenanigans? When an Iowa farmer opens up in his electric bill that’s suddenly spiked, or has to pay double to fuel his farm equipment, it’s not too much to ask that it be in the service of actual carbon reduction, not houses in the Hamptons, owned by people to whom the added cost is not material given their wealth.

    There is a better way, and that’s the Carbon Added Tax. Similar to a European-style Value Added Tax, a CAT tax would directly tax the quantity of carbon emissions added to the atmosphere in each stage of the production cycle. The tax could be set at a level that would provide certainty of price such that investments in lower carbon technologies are financially feasible right now, not decades from now.

    Also, similar to the US income tax system, the CAT would apply to the carbon emitted globally, not just in the United States. A deduction would be permitted for any bona fide carbon taxes paid in a foreign jurisdiction, up to the level of the US tax. A true-up on the carbon tax due would be paid at the point of import into the United States. That is, an importer would have to pay the CAT on products brought into the country, less any deductions for foreign carbon taxes paid, at the port of entry.

    While this global approach is a widely, and correctly, maligned feature of the US income tax code, it has important benefits from a carbon reduction perspective. First, it is location neutral. Since the tax is the same whether the carbon is emitted in China or the United States, it doesn’t encourage business to move offshore. But it also doesn’t discriminate against foreign producers. (Like any anti-carbon regime, it would raise costs in the US, affecting both domestic consumers and the competitiveness of exports).

    The CAT is also functionally equivalent to a carbon tariff, but is a unitary regime. That is, you don’t have to figure out how to bundle in or pass a separate carbon tariff as part of implementing a domestic cap and trade system. You simply pass a CAT on global carbon emissions and you are done.

    And this system allows each country to decide on its own level of carbon taxation. If countries like China want to have no tax, that’s their choice. Or, European countries could decide to have a higher tax. The complexity would come in figuring out the allowed deductions for emissions in countries that adopted other schemes like cap and trade, but this should be a readily solvable technical issue.

    There will still be divergent regional domestic impacts under a CAT. This is unavoidable in a nation where carbon emissions are unevenly distributed. But by preventing the financiers from skimming off the top, the total burden is reduced, and a CAT is a more location neutral, transparent mechanism for carbon reductions.

    A Carbon Added Tax is a far superior way to reduce carbon emissions than a cap and trade system only a Wall Street trader could love.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo by Gilbert R.

  • Power in Los Angeles: The High Price of Going Green

    Greece and Los Angeles are up against a financial wall. Los Angeles had its bond rating cut on April 7. Greece managed to hold out until April 9. Greece has endured public employee strikes as it has attempted to reign in bloated public payrolls. Los Angeles Mayor Antonio Villaraigosa drew the ire of the city’s unions and city council opposition in proposing two-day a week furloughs for city employees.

    A Bankrupt Los Angeles?

    Most recently, the context of discussions has been an expected $73 million payment to the city from the Los Angeles Department of Water and Power (DWP). Mayor Villaraigosa raised the possibility of a city bankruptcy if the payment was not received.

    The Mayor attempted to encourage the city council to approve an electricity rate increase, which was sought by DWP. In support of the rate increase, Villaraigosa submitted a report to the city council saying that “Council rejection of the DWP board’s action [to increase rates] would be the most immediate and direct route to bankruptcy the city could pursue.”

    DWP Interim General Manager S. David Freeman added such action would lead the “utility would think twice about sending” the money o to the city. Despite these warning, the city council then rejected the proposed rate increase.

    The Price of Renewable Energy

    For its part, DWP says that that the rate increase is necessary to cover the costs of investing in renewable energy sources, as required by state and federal regulations. They cited a Mayoral directive to increase generation from renewable sources (solar and wind). Right now the bulk of Los Angeles’ power comes from fossil fuels, much of it from coal-fired plants outside the state.

    Switching from this relatively inexpensive energy is proving very expensive. Indeed, the rejected rate increase is just the first of four planned hikes. The result, if all four increases are ultimately granted by the city council, would be to increase residential electricity bills up to 28% and commercial electricity bills up to 22%.

    How Much Will the People Pay?

    There is a much larger story here than the immediate financial difficulties faced by the city of Los Angeles. It is clear that council members are concerned about the impact of rate increases on their constituents. It is a particularly challenging for consumers in the city of Los Angeles. Unemployment is high, with Los Angeles County consistently above the national average The city, with its higher concentration of poverty, is likely to be somewhat higher. Many households are having difficulty paying their inflated mortgages and hardly in the position less more for electricity. The city has more than its share of poverty. And, finally, the city’s lack of business competitiveness is so legendary that it repeatedly ranks near or in the Kosmont “cost of doing business” surveys.

    This larger story is likely to be played out in communities around the nation, as politicians, such as the President, who expect and perhaps even would favor that electricity bills “skyrocket.” One would think rising expenses in any critical sector are a “non-starter” in the presently hobbled economy. It will be interesting to see what eventually gives in Los Angeles those who advocate for consumers (including some on the city council) , or those, including the DWP and its unions, who wish to add additional costs to the budgets of those already in distress. In the longer run, this will not be sustainable, in Los Angeles or anywhere else, because the public appetite for higher prices is not unlimited.

    But the behavior of DWP is a matter of curiosity, regardless of how or why the city of Los Angeles reached its present financial embarrassment.

    What if it Were Southern California Edison?

    As is indicated from its name, DWP is a publicly owned utility, owned by the city of Los Angeles. Its rate increases are subject to approval by the city council. DWP appears intent on withholding payment from the city because its proposed rate increase have not been approved. Imagine, if instead, the city of Los Angeles were served by a private but publicly regulated electricity utility, such as Southern California Edison (SCE). Imagine further that the California Public Utilities Commission denied a rate increase and that, in response, SCE announced that it “would think twice” about sending some or all of its taxes to the state in response. When DWP officials undertake such a strategy, there is apparently no legal sanction. The legal sanctions against SCE would be manifold. It is a paradox that a publicly owned utility can be less subject to restraint than one that is, in essence, owned by the taxpayers.

    Who is in Charge?

    But there is an even more curious situation. The Los Angeles Department of Water and Power is, in fact, an agency completely under the control of the city of Los Angeles. The Mayor and the city council represent the sum total of the policy authority over the city of Los Angeles and all of its commissions, departments and other instrumentalities. The DWP board of directors is appointed by the Mayor and must be confirmed by the city council.

    Regardless of the Mayor’s authority to remove DWP board members, he has considerable persuasive political power, which could be used to encourage a more cooperative attitude on the part of the DWP. This was proven in 1984, when predecessor Mayor Tom Bradley asked for (Note 1), and received, the resignations of all 150 city commissioners, as well as his two appointees to the Southern California Rapid Transit District.

    Mayor Bradley then announced a practice that required new appointees to submit an undated letter of resignation upon appointment, to ease removal should it be necessary. This became a bi-partisan practice, also followed by Bradley’s successor, Mayor Richard Riordan (Note 2).

    The Crisis Passes

    Within the last couple of days, the immediate crisis appears to have passed, but the fundamental problems wil continue to fester. The city has found $30 million, the result of higher property tax collections. The Mayor is now asking DWP to pay $20 million, instead of $73 million. However, as Mayor Bradley showed, the Mayor can do much more than “ask.”

    The Mayor’s two-day furlough plan for city workers now has been shelved. Ray Ciranna, the city’s Acting Administrative Officer told the Los Angeles Times that: “We are still in a budget crisis, but we will end the year paying all of our bills.” Things, however, may not be so rosy for residents facing stiff electricity rate hikes tied to the inordinate costs of renewable energy. Many of them already face financial distress every bit as serious as the city’s was just a few days ago. This is one Hollywood movie that, sad to say, we may see repeated in other locations around the country as cities, localities and citizens try to cope with the high costs of draconian “green” energy policies.

    Note 1: The author was, at the time, a Tom Bradley appointee to the Los Angeles County Transportation Commission. He was not included in the Mayor’s call for resignations.

    Note 2: While elective offices in the city of Los Angeles are non-partisan, Bradley was a Democrat and Riordan was a Republican.

    Photo: John Ferraro Department of Water & Power Building (City Council President Ferraro was the first chairman of the Los Angeles County Transportation Commission, whose meetings were normally held in the DWP board room).

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

  • Jobs Will Rule November

    Health care lays behind him, financial reform and climate change ahead, but for President Barack Obama–and his opponents–there is only one real issue: jobs. The recent employment reports signal some small gains, yet the widespread prognosis for a slow, near-jobless recovery threatens the president and his party more than any major domestic challenge.

    Tea party activists and conservative ideologues often link the president’s dwindling popularity to an overreach on health care, but it all boils down to the old Clintonian adage: It’s the economy, stupid. Health care reform is simply too complex and its long-term effects too unknowable to be a winning issue for either side.

    The jobs deficit, on other the hand, is immediate and affects tens of millions of families. You can start with the highest-ever percentage of long-term unemployed on record. In recent months there have been roughly five to six applicants for every open position. Youth unemployment reaches near 20% for workers in their 20s–more than 25% for teenagers and over 43% for black teens. Even if the economy improves, according to the administration predictions, unemployment could remain close to double digits by the mid-term elections and over 8% by 2012.

    The prospect of long-term unemployment, and underemployment, is clearly damaging the “hope” brand once associated with the president. Recent CBS poll data show that 84% of Americans are worried about the economy.

    Over a third of those polled were concerned that someone in their household might lose their job. Some 52% identify the economy as the most important issue, while health care registered only 13%. Given the administration’s focus on health care and other issues–such as climate change–it’s not surprising that barely two in five of those polled approve of the president’s handling of the economy.

    Those inside the Washington bubble are too absorbed with political maneuverings to focus on the basic. The primary domestic challenges for the country lie not in addressing climate change, suburban sprawl or gay marriage, but spurring employment and generating new wealth.

    Part of our problem is that the two main parties are committed primarily to serving the interest of aligned constituencies .Republican dogmatism and canine-like obedience to short-term corporate profits contributed mightily to the economic meltdown. In its period in power , the GOP failed to either restrain Wall Street or address the nation’s indebtedness. No surprise then that many even moderate, middle-class voters opted for the Democrats over the past two elections.

    The question now is whether the Democrats are squandering their advantage. After almost 15 months in office, Democratic dogmatism–a mixture of faith in all forms of federal spending, “green jobs” and ever more regulation–has not exactly turbo-charged the economy. As a result, middle-class voters–those making $50,000 to $75,000 annually, have been slipping from the Democrats, according to a recent Wall Street Journal poll. These are precisely the voters who also put Scott Brown into the Senate.

    Yet the president’s situation is far from hopeless. Manufacturing payrolls are slowly beginning to grow, and industrial production is on the upswing. Survivor sectors such as health care continue to create new jobs. The bleeding may have finally stopped in construction, where the recession has been particularly devastating. Although the generally high-wage finance and information sectors continue to shrink, rapid growth in temporary business services could presage a new wave of permanent hires.

    These improvements suggest new opportunities for Obama. It allows him to point to a relatively stronger economy–particularly compared with Japan and the E.U.–as proof both of his policy acumen and our country’s overall vitality.

    This is when we really find out whether Obama is a thoughtful moderate of the campaign trail who embodies American exceptionalism or the hard-edged tool of the Democratic constituency groups. So far he has been a man of the left more comfortable with expanding the public sector than finding ways to boost private sector payrolls.

    The stimulus, crafted by old-dog Democrats like Nancy Pelosi and Harry Reid, with its emphasis on government workers and the university-industrial complex, solidified this notion. A public-sector-oriented approach has proved to have limited popular appeal, particularly at a time when many in the private sector regard the public workforce as an oppressive and overcompensated privileged class.

    Administration fiscal policy also erred in its focus on Wall Street. Obama, described during the 2008 campaign as the “hedge fund” candidate, has indeed done very well for this privileged class. Yet Democrats are hard-pressed to make the case that what’s good for George Soros is good for the USA.

    Now the question is whether the president can refocus on jobs. This will take, among other things, backing off the economically ruinous climate change agenda. Even the most gullible economic development officials are beginning to realize that “green jobs” are no panacea.

    In fact, as evident in Spain, Germany and even Denmark, over-tough green legislation can destroy the productive capacity of the most enlightened industries. Similarly in green strongholds like California and Oregon, the mounting climate change jihad could slow and even explode the incipient recovery by imposing ever more draconian regulation on businesses that can choose to migrate to less onerous locales.

    There are some hopeful signs of Obama’s repositioning. His recent moves embracing nuclear power and off-shore oil drilling, however inadequate, show that he’s at least trying to triangulate between the green purists and the unreconstructed despoilers. Some sort of moderated energy legislation–there’s no way to get the more radical House version through the Senate–would reassure businesses and the public that the president has jobs as his No. 1 priority.

    The well-funded, politically connected environmental lobby, no doubt, will try to head off any dissent from its agenda. But the same hard-boiled pol who threw his own pastor under the bus–remember Rev. Jeremiah Wright?–would seemingly be willing to diss pesky affluent white greens who, after all, have nowhere else to go politically.

    An equally good opportunity lies in the push for financial reform. As in the case of health care, the Republicans have a miserable record to defend. After all, the GOP dominated Congress and White House did little to rein in the out-of-control financial sector. Sure, there’s blame to go around for folks like Barney Frank but the buck was definitely with the Republicans, and they failed.

    Main Street businesses that felt ignored by the stimulus might look favorably on tough administration polices against big banks. Republicans could yet score points by opposing “too big to fail” provisions, as Mike Barone suggests, but one has to wonder if Republicans possess the moxie to stand up to large corporate interests, even detested ones.

    But right now the burden is on the president. Building on what is still a weak recovery, he must make clear that jobs and growth are his top domestic priorities. If he fails to communicate that message adequately, the voters, however leery of the Republicans, will rebuke him.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

  • EPA Joins the Green Building Party

    By Richard Reep

    Well into the last decade, green design and smart growth operated as two separate and distinct reform movements. Both were widely celebrated in media, academic and planning circles, seeing themselves as noble causes albeit underdogs in the struggle against the mighty capitalistic enterprise of real estate development. Starting in 2009, the frozen credit market has kept private development moribund, and these two movements are somewhat moot as development takes a cease-fire.

    Yet now the two movements appear to be joined at the hip, a move encouraged by a federal bureaucracy and an Administration that embraces both groups’ agenda. In the process, what was once seen as an alternative to conventional development appears to be well on the way to becoming federally-mandated regulatory policy. The EPA, DOT, and HUD recently signed a memorandum of understanding to start making policy around green design and smart growth, turning these choices into federal standards.

    The standard bearer for green building, LEED certification, is the U. S. Green Building Council’s definition of energy efficiency and green design. A reform-focused movement, LEED established criteria by which a building’s energy and water use could be measured against a baseline, and the USGBC awards credits to the building when energy efficiency measures are achieved. LEED increases a building’s construction cost but reduces the building’s life cycle cost – monthly electric bills – and real estate developers, who gain nothing from lower energy costs, were slow to become interested in this choice. LEED was the domain of owner-operators like governments, who have a vested interest in keeping their future costs as low as possible, and was adopted as a criterion for capital expenditures by the GSA as well as many cities and counties by the close of the last millennium.

    Smart growth’s official champion is the Congress of the New Urbanism, which offers a design style choice for real estate developers. Developers, being profit oriented, historically have been loathe to tinker with what sells, and thus only in a few areas has New Urbanism gained a foothold. At its best, new urbanism represents a choice for homeowners who prefer dense, mixed-use communities that resemble traditional American towns, accentuating walkability and reducing residents’ dependence upon the car. In this key feature, Smart Growth advocates lobbied the U. S. Green Building Council to create a special category of LEED for Neighborhoods.

    Both movements promised reform. Both movements increased cost. Neither program was particularly effective at penetrating the real estate development market as long as the investment community favored large, formula-driven, profit-oriented real estate developers, and innovation consisted of product cost-cutting. The cost premium associated with each movement left them largely the playthings of boutique, niche-oriented developers aspiring to nobility while protecting their bottom line.

    Changes afoot in the last several months, however, are combining these two movements into one powerful force that turns these laudable movements away from choice and towards a prescriptive, and ultimately restrictive policy. Beginning in 2006, the Environmental Protection Agency encouraged communities to build walkable, energy-efficient growth within their boundaries, rather than continue spreading out – a surprising focus for an agency created to reduce pollution. Little else happened until late 2009, when suddenly the EPA began linking Energy Star (a Department of Energy program) to New Urbanist values such as walkability and mixed-use development. The EPA, which regulates pollution, has suddenly moved front-and-center into regulating growth, as if it were another type of pollution.

    At the same time, the U. S. Green Building Council yielded to heavy lobbying by the New Urbanist movement to create a new criterion, LEED Neighborhood Development. A developer may now submit a new land plan for certification to this LEED standard, and “smart growth” is being codified and standardized into a checklist and formula to be measured against a baseline. Like LEED for New Construction, these standards will also increase the cost for the developer desiring to build to these standards.

    Investors and developers may, on the surface, appear to have lost these dramatic battles. In the bigger picture, however, while the economy retools itself, it is not unusual to see regulation increase. If anyone remembers the S&L crisis of 1990-92, one of the biggest regulatory acts to affect real estate in modern times hit developers right between the eyes: The Americans with Disabilities Act. This reform removed physical barriers for all citizens with disabilities, but as a cost burden to developers it pales in comparison to the premiums that will be paid to meet the smart/green regulations currently being formulated by the Feds.

    Banks – hardly institutions with widely popular standing – stand to gain the most, because a developer who borrowed $10 million for a project in 2006 will probably need to borrow $11 or $12 million for the same project by the time bankers get around to discussing credit again. Developers also stand to gain, because as the cost goes up, so does the price. Coming out of the Millenial Depression, new construction will be faced with higher energy performance requirements, the higher costs associated with urban development, and a longer regulatory review process than ever before seen.

    The losers, of course, will be the vast majority of Americans who work hard and earn modest incomes. New home prices will increase, and renters will have to pay their landlords more to cover the increased costs of politically sanctioned development. While the affluent will be able to enjoy the benefits of a green, urbane lifestyle, the grocery store cashiers, dry cleaner clerks, housekeepers and artists who make up so much of our community will be forced out by the sheer cost of this movement – out to the suburbs, out to the exurbs, and out to the trailer parks beyond them. No green for you: your commute time just got much longer.

    Technology, of course, will eventually decrease in price and become more affordable; like VCRs and DVD players, the early adopters pay the freight until the appliance becomes a commodity. The same is likely true for exotic solutions like photovoltaics or low-voltage lighting as the marketplace sorts out what works from what doesn’t. So the impetus to go green will impose a crushing cost burden on new construction, which may gradually, over time, be absorbed into the mix.

    An affordable starter home in a low-cost subdivision, however, may be as doomed as leaded gasoline, and the American Dream will likely shift away from the landowner-based society once vaunted by Thomas Jefferson. The walkable lifestyle, now being exercised by free will, is well on its way to becoming federal government policy in a grand effort to incorporate reform and regulation into our lives from above.

    Whether or not this achieves the EPA’s mission to reduce pollution will only be discovered in the decades ahead as we incorporate the next hundred million Americans into the urban boundaries we have already set upon the land. It may be entirely possible to reach some of these goals without prescriptive overly burdensome regulation, yet this may only occur if political realities begin to reign in the current regulatory onslaught.

    Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

    Photo by eng1ne

  • Freeing Energy Policy From The Climate Change Debate

    The 20-year effort by environmentalists to establish climate science as the primary basis for far-reaching action to decarbonize the global energy economy today lies in ruins. Backlash in reaction to “Climategate” and recent controversies involving the Intergovernmental Panel on Climate Change (IPCC)’s 2007 assessment report are but the latest evidence that such efforts have evidently failed.

    While the urge to blame fossil-fuel-funded skeptics for this recent bad turn of events has proven irresistible for most environmental leaders and pundits, forward-looking greens wishing to ascertain what might be salvaged from the wreckage would be well advised to look closer to home. Climate science, even at its most uncontroversial, could never motivate the remaking of the entire global energy economy. Efforts to use climate science to threaten an apocalyptic future should we fail to embrace green proposals, and to characterize present-day natural disasters as terrifying previews of an impending day of reckoning, have only served to undermine the credibility of both climate science and progressive energy policy.

    The Endless Weather Wars

    The habit of overstating the current state of climate science knowledge, and in particular our understanding of the relationship between global warming and present-day weather events, has been difficult for environmentalists to give up because, on one level, it has worked so well for them.

    Global warming first exploded into mass public consciousness in the summer of 1988, when droughts, fires in the Amazon, and heat waves in the United States were widely attributed as warning signs of an eco-apocalypse to come. Former U.S. Senator Tim Wirth held the first widely covered congressional hearing on the subject that summer and admits having targeted the hearing for the hottest day of the year and turned off the air conditioning in the room to ensure that the conditions would be sweltering for the assembled media.

    Such tactics have only intensified over the past two decades. In the run-up to U.N. climate talks in Kyoto in 1997, the Clinton Administration recruited Al Roker and other weathermen to explain global warming to the public. In 2006, Al Gore used his “Inconvenient Truth” slide show to link Hurricane Katrina, droughts, and floods to warming. And some environmental groups have routinely implied that present-day extreme weather and natural disasters are evidence of anthropogenic warming.

    But it turned out that both sides could play the weather game. Skeptics also started pointing to weather events like snowstorms as evidence of no warming. While environmental advocates frequently criticize opponents such as Sen. James Inhofe for conflating weather with climate, the reality is that both sides abuse the science in the service of their political agendas. Climate change models, created in an effort to understand the potential long-term effect of global warming on regional weather trends, can no more tell us anything useful about today’s extreme weather events than last month’s snow storms can inform us as to whether global warming is occurring.

    Climate Science Disasters

    For more than 20 years, advocates have simultaneously overestimated the certainty with which climate science could predict the future and underestimated the economic and technological challenges associated with rapidly decarbonizing the energy economy. The oft-heard mantra that “All we lack is political will” assumes that the solutions to global warming are close at hand and that the primary obstacle to implementing them is public ignorance fed by fossil-fuel-funded skeptics.

    Environmental advocates — with help from pollsters, psychologists, and cognitive scientists — have long understood that global warming represented a particularly problematic threat around which to mobilize public opinion. The threat is distant, abstract, and difficult to visualize. Faced with a public that has seemed largely indifferent to the possibility of severe climactic disruptions resulting from global warming, some environmentalists have tried to characterize the threat as more immediate, mostly by suggesting that global warming was already adversely impacting human societies, primarily in the form of increasingly deadly natural disasters.

    The result has been an ever-escalating set of demands on climate science, with greens and their allies often attempting to represent climate science as apocalyptic, imminent, and certain, in no small part so that they could characterize all resistance as corrupt, anti-scientific, short-sighted, or ignorant. Greens pushed climate scientists to become outspoken advocates of action to address global warming. Captivated by the notion that their voices and expertise were singularly necessary to save the world, some climate scientists attempted to oblige. The result is that the use, and misuse, of climate science by advocates began to wash back into the science itself.

    Little surprise then, that most of the recent controversies besetting climate science involve efforts to move the proximity of the global warming threat closer to the present. The most
    explosive revelations of Climategate involved disputed methodological techniques to merge multiple data sets (e.g., ice cores, tree rings, 20th century weather station readings) into a single global temperature trend line, the “hockey stick” graph. Whatever one thinks of the quality of the data sets, the methods used to combine them, or the efforts by some to shield the underlying data from critics, it is difficult to avoid the conclusion that those involved were trying to fit the data to a trend that they already expected to see – namely that the spike in global carbon emissions in recent decades tracked virtually in lockstep with a concomitant spike in present-day global temperatures.

    Other faulty or sloppy claims in the IPCC’s voluminous reports — such as the contention that global warming could melt Himalayan glaciers by 2035 — followed the same pattern.

    Perhaps most problematic of all, with some environmentalists convinced that connecting global warming to natural disasters was the key to climate policy progress, researchers felt enormous pressure to demonstrate a link. But multiple studies using different methodologies and data sets show no statistically significant relationship between the rising cost of natural disasters and global warming. And according to a review sponsored by the U.S. National Science Foundation and Munich Re, researchers are unlikely to be able to unequivocally link storm or flood losses to anthropogenic warming for several decades, if even then. This is not because there is no evidence of increasing extreme weather, but rather because the rising costs of natural disasters have been driven so overwhelmingly by social and economic factors — more people with more wealth living in harm’s way.

    Yet prominent environmental advocates, including Al Gore, have continued to make claims linking global warming to natural disasters. And in its 2007 report, the IPCC — ignoring evidence to the contrary — misrepresented disaster-loss science when it published a graph linking global temperature increases with rising financial losses from natural disasters.

    Action in the Face of Uncertainty

    It was only a matter of time before such claims would begin to undermine public confidence in climate science. Weather is not climate and linguistic subterfuges, such as the oft-repeated assertion that extreme weather events and natural disasters are “consistent with” climate change, do not change the reality that advocates and scientists who make such assertions are conflating short-term weather events with long-term climactic trends in a way that simply cannot be supported by the science.

    For 20 years, greens and many scientists have overstated the certainty of climate disaster out of the belief that governments could not be motivated to act if they viewed the science as highly uncertain. And yet governments routinely take strong action in the face of highly uncertainty events. California requires strict building codes and has invested billions to protect against earthquakes even as earthquake science has shifted its focus from prediction to preparedness. Recently, the federal government mobilized impressively and effectively to prevent an avian flu epidemic whose severity was unknown.

    In the end, there is no avoiding the enormous uncertainties inherent to our understanding of climate change. Whether 350 parts per million of CO2 in the atmosphere, or 450 or 550, is the right number in terms of atmospheric stabilization, any prudent strategy to minimize future risks associated with catastrophic climate change involves decarbonizing our economy as rapidly as possible. Stronger evidence of climate change from scientists was never going to drive Americans to demand economically painful limits on carbon emissions or energy use. And uncertainty about climate science will not deter Americans from embracing energy and other policies that they perceive to be in the nation’s economic, national security, and environmental interest. This was the case in 1988 and is still largely the case today.

    But the danger now is that having spent two decades demanding that the public and policy-makers obey climate science, and having established certainty and scientific consensus as the standard by which climate action should be judged, environmentalists risk undermining the case for building a clean-energy economy. Having allowed the demands of advocacy efforts to wash back into the production of climate science, the danger today is that the discrediting of the science will wash back into the larger effort to transform our energy policy.

    Now is the time to free energy policy from climate science. In recent years, bipartisan agreement has grown on the need to decarbonize our energy supply through the expansion of renewables, nuclear power, and natural gas, as well as increased funding of research and development of new energy technologies. Carbon caps may remain as aspirational targets, but the primary role for carbon pricing, whether through auctioning pollution permits or a carbon tax, should be to fund low-carbon energy research, development, and deployment.

    No longer conscripted to justify and rationalize binding carbon caps or the modernization and decarbonization of our energy systems, climate science can get back to being primarily a scientific enterprise. The truth is that once climate science becomes detached from the expectation that it will establish a standard for allowable global carbon emissions that every nation on earth will heed, no one will much care about the hockey stick or the disaster-loss record, save those whose business, as scientists, is to attend to such matters.

    Climate science can still usefully inform us about the possible trajectories of the global climate and help us prepare for extreme weather and natural disasters, whether climate change ultimately results in their intensification or not. And understood in its proper role, as one of many reasons why we should decarbonize the global economy, climate science can even help contribute to the case for taking such action. But so long as environmentalists continue to demand that climate science drive the transformation of the global energy economy, neither the science, nor efforts to address climate change, will be well served.

    Ted Nordhaus and Michael Shellenberger are the authors of Break Through: From the Death of Environmentalism to the Politics of Possibility and a recent collection of energy and climate writings, The Emerging Climate Consensus, with a preface by Ross Gelbspan, available for download at www.TheBreakthrough.org. In previous articles for Yale Environment 360, they have written about what they consider flaws in the cap-and-trade debate and why public concern in the U.S. about global warming has declined.

    Photo by ItzaFineDay

  • The Not-So-Lucky Country

    President Obama’s last-minute decision to postpone his homecoming to Indonesia and a trip to Australia expands the list of friendly countries–which include France, the U.K. and most of Eastern Europe–that have received a presidential snub. Yet in putting off his Australia trip, Obama will also miss an opportunity to commune with the politician whom he most closely resembles.

    Prime Minister Kevin Rudd, like Obama, symbolizes a distinct shift in his country’s politics. Replacing the rough-hewn but long-serving Liberal Party leader John Howard, Rudd offered sophisticated Australians a better reflection of their own savoir faire, much as Obama restored the self-image of America’s Bush-wracked educated classes. Like Obama, Rudd is widely seen as smart and worldly as well as perhaps a bit rude and arrogant.

    On a more serious note, Rudd reflects a shift from the country’s foreign policy orientation, which historically focused on British and, later, American ties. Like Obama, Rudd has little patience for the old ties to the English-speaking world. A confirmed sinophile, Rudd clearly sees the sun rising in the east–or in his case, the north. He has made no bones of his post-European perspective and his interest of aligning his country closer to Beijing.

    Indeed the affection of Rudd, a former diplomat fluent in Mandarin, for things Chinese worries some Australians, given the Middle Kingdom’s increasingly assertive authoritarianism.. His coziness with the Communist Party bosses has provided fodder for clever comic videos from down under.

    Also like President Obama, Rudd epitomizes the ascendancy of a new “progressive” educated class in Australia that has little allegiance to the traditional notions of what constitutes “the good life” for the vast majority of citizens. Down under–even more than in America–the “good life” generally means a suburban home with a backyard.

    In contrast, Rudd’s core supporters are disgusted by what they see as a wasteful, anti-social suburban sprawl. Like their counterparts here in North America, they have embraced a climate change agenda that, as part of its dogma, seeks to densify Australia’s cities.

    Although the Labour Party’s roots lay with the working class and private sector unions, New City co-editor John Muscat contends that the Rudd Labour Party has transformed into an instrument of the bureaucracy and “progressive” gentry. The latter includes academics, green activists, media stars and some prominent business interests well-positioned to flourish in a hyper-regulated state.

    The losers, Muscat notes, are the traditional middle- and working-class constituencies of the party. Where the Labour government has in the past sought to help people fulfill their quest for the “Australian dream,” the current leadership plans to make it difficult for them to achieve it. “Green planners,” Muscat says, “engage in a form of class discrimination. The costs of climate change are heaped on outer-suburban working people, who lose jobs, mobility and housing amenity, while the affluent emerge unscathed.”

    Such a result would seem to be unnecessary in a vast country with a population that in 2050 will be smaller than California’s today. Australia has often been called “the lucky country” since its prodigious natural resources and fertile agriculture have long afforded an astonishingly high quality of life for its citizens. This position has been made even stronger as demand for commodities has skyrocketed in recent years, paced largely by demand from China, India and other developing countries.

    Yet now, at precisely the time that the Australian “dream” would appear, if anything, more supportable, the administration and local state governments seem determined to wage war against the aspirations of its own citizens. Strict limits on developing land on the periphery–something supported both by oligopolistic property interests and greens–have been turning Australia from highly affordable to one of the least affordable places to buy a home in the English-speaking world.

    These changes are evident in Sydney, a city that 20 years ago was filled with charming tree-lined, relatively low-density neighborhoods. Strict land regulation has made homes more expensive by restricting new subdivisions further in the periphery; indeed the city is now the second most expensive major housing market, based on income, in the English-speaking world, behind only Vancouver.

    At the same time that suburban housing has been limited, Sydney has allowed the spread of high-rise apartments into formerly bucolic neighborhoods. To many natives it seems less like the very livable old Australia and more like the overcrowded, frenzied new China. Similar policies are infecting other Australian cities, including Melbourne and Perth. As the New City bloggers warn, “Enjoy your country while it still exists.”

    Not surprisingly, the agenda embraced by Rudd, like that of Obama, also has had negative political consequences. Rudd’s attempt to force a “cap and trade” system on his country is problematic given the country’s dependence on fossil fuel and mineral production as well as greenhouse-gas-gushing big agriculture. In December Rudd’s cap and trade proposal was blocked by opposition in the Australian Senate, much as Obama’s cap and trade legislation has been stymied by malcontents, including some in his own party, in the American Senate.

    When they do finally get together, Obama and Rudd could also commiserate on their falling poll numbers. Rudd’s 74% support last year has declined to a new low of 48%. He now runs neck and neck in surveys with the opposition leader, Tony Abbott. Rudd wants to run largely on the issue of climate change, a course that one suspects Barack Obama may not be so deluded as to pursue.

    Of course, Rudd’s gentry liberal politics still play well among Sydney’s media mavens and pundits, just as Obama’s does in similar circles here. But they both are running into strong opposition from voters, with whom their appeal is clearly weakening.

    Ultimately, these two very modern leaders will have to face the consequences of their own worldviews, which are shaped primarily by a belief in the superiority of the prescriptions favored by the highly educated classes .This defines their approaches in everything from foreign policy and climate change to governing how people should live.

    The problem with this philosophy is that neither the U.S. nor Australia functions along the lines of Plato’s Republic, where the enlightened get to rule unhindered by the hoi polloi. Despite the preferences of their betters, citizens in both countries still have a say over what happens to them. This is something that may not bother Rudd’s Chinese Communist allies, but it can prove troublesome for those politicians wishing to take their people places they may not want to go.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by London Summit

  • Ruining our Cities to Save Them

    Latching onto Kevin Rudd’s call for “a big Australia” and forecasts that our population will grow by 60 per cent to 35 million in 2050, urban planners are ramping up their war against suburbia. In paper after paper, academics across the country have been pushing the same line. Climate change, peak oil and the financial crisis mean we can’t go on driving and borrowing for low-density housing. Choices must be narrowed to buying or renting compact homes in high-density, multi-unit developments along public transport corridors, preferably rail lines.

    Underlying it all is a radical vision of suburban doom. “That is one of my themes”, said Professor Peter Newman, anti-car activist and head of Curtin University‘s Sustainable Policy Institute, “that we stop cities developing into eco enclaves surrounded byMad Max suburbs”.

    The alarming truth is that planners are blasé about prosperity, living standards and choice because they see them as second-rate issues. The point is to save us from eco-apocalypse.

    And their voice grows louder by the day. The mantra of green urbanism has long been heard on ABC radio programs like Background Briefing and Future Tense, but matters reached a crescendo in January when ABC TV’s 7:30 Report rounded up the usual suspects for a four-part series on preparing our cities for the population boom. Framed by scary graphics and a menacing soundtrack, the series delivered a stream of breathless dialogue from talking heads like Newman, who declared that “if we just roll out those suburbs one after the other, making a more and more carbon intensive world in our cities, then we’re stuffed.”

    This current of thought has always lurked beneath the Rudd Government’s “nation building” agenda. But last October it burst open when the prime minister announced his plans to wrest control of urban policy from the states.

    Rattling off tenets of the planning ideology, Mr Rudd said “we must ensure that communities are not separated from jobs and services”, that “increasing density in cities is part of the solution to urban growth”, that “forms of development need to be fully integrated with current and future transport networks”, that “climate change requires a whole of government response”, and that “we must make long-term investments in transport networks that minimise carbon emissions.” It’s all a question of government action, if he is to be believed.

    That too was the message from infrastructure minister Anthony Albanese at the recent launch of State of Australian Cities 2010. Little wonder that he appointed Newman to the board of Infrastructure Australia.

    Defying urban laws of gravity

    “Cities are an immense laboratory of trial and error, failure and success” said the great urbanist Jane Jacobs, but today’s planners seem to think they’re as pliable as dough. Just tweak a couple of variables, say transport modes and population densities, and everything falls into place.

    As a discipline, urban planning never emerged from behind Berlin Wall of command economics, albeit with a green face. Early hopes that the financial crisis would shift public sentiment in this direction have faded, and climate change hasn’t registered as an issue for commuters and home buyers.

    Despite this, planners show no sign of losing confidence in their power to abolish fundamental laws of supply and demand. They’re still apt to dream up grand schemes for zoning, development and infrastructure controls with barely a thought about the impact on land values and bid-rents, two price inputs with far-reaching implications for urban commerce.

    Nor have they managed to repeal the law of unintended consequences. Year after year, the Demographia housing affordability survey confirms the link between “more prescriptive land use regulation” and high median house prices. This is elementary economics. Restricting the supply of land for development, a starting point for all green planning, combined with rising demand from population growth, will ratchet up values, with knock-on effects for the whole economy. The survey continues to rank all of our capital cities, and some of our regional centres, in the “severely unaffordable” category. No amount of “cutting-edge design” or “more imaginative” planning can counter this effect.

    The claim that concentrating development in dense “activity centres”, “urban villages” or “transport corridors” will ease the problem is a sham. Development controls will always drive up the price of land. When planners talk about affordability in this context, they really mean inferior housing in terms of space, amenity and title, even if it’s dressed-up as “design innovation” or “green rated building”.

    But inferior quality may not be enough to compensate for escalating land values, so consumers get less housing for higher prices. And more are stuck renting instead of buying. Large numbers of low to middle income earners will be shut out of the housing market

    Interestingly, Perth appears in Demographia’s “severely unaffordable” category along with Sydney and Melbourne, despite having only around a quarter of the population. Newman neglected this detail while praising the city’s rail network on the 7:30 Report.

    Though Perth can fall back on the resources boom, south-eastern cities aren’t so lucky. They are service-based regions with very dispersed patterns of employment, even by world standards.

    Writing in a publication of the 2008 9th World Congress of Metropolis, Sydney University’s John Black observed that “apart from some noticeable peaks, employment density is quite uniform across the [Sydney metropolitan] region”. According to the NSW Department of Transport, only 12 per cent of Sydney’s jobs are in the CBD and second tier centres like North Sydney, Chatswood, Parramatta, Hurstville and Penrith have less than 2 per cent each. David McCloskey, Bob Birrell and Rose Yip of Monash University (demographers, not urban planners) report the same about Melbourne. The CBD hosts around 20 per cent of jobs and the rest are scattered all over the metropolitan region.

    Platitudes like “we must locate people close to where they work”, or “we must locate jobs close to where people live”, have little basis in reality. They infringe another immovable law of economics, relating to economic rents or bid-rents. This mechanism determines how industries and firms are distributed. Put simply, a parcel of land will go to whichever use delivers the highest profits. Centrally located land (near major transport or infrastructure hubs) commands high prices, and goes to the most profitable uses. Peripheral land goes to less profitable or marginal activities.

    Over the last thirty years, economic deregulation, flexible transport, advanced communications and population growth have raised up a sector in the latter category, extracting value from cheap outer-metropolitan land and low rents. It includes industries like transport and distribution, building and construction, food, consumer products, personal services, wholesale and retail. They depend on favourable location costs and proximity to urban markets and labour pools. According to the Greater Western Sydney Economic Development Board, “prime industrial land with direct access to transport infrastructure is 75% cheaper [in GWS] than other areas of Sydney”.

    Ultimately, green planning will phase out cheap urban land, undermining this sector and destroying jobs in the process. Breakthroughs in automotive and energy technologies offer the prospect of adaptation to a distant future of expensive oil. There’s no way to adapt to rising land values.

    Green rated chaos

    Many are in denial about this, recycling visions of the “concentric ring model” of urban form. This relic of pre-war sociology allocated industry to the core, or cores, and residences to the periphery. Take the Sydney Morning Herald sponsored Long Term Public Transport Plan, recently released with great fanfare. Authored by a committee of green-tinged experts and academics, the plan proclaims, according to a Herald feature, that “Sydney retains a strong centre-based structure, with nearly 40 per cent of the city’s jobs and most of its major retail, educational and entertainment facilities located within 26 key centres”. This is an essential precondition for the proposed network of denser rail infrastructure.

    But the plan’s own figures don’t add up to Sydney having a “strong centre-based structure”. A hefty 60 per cent of jobs aren’t centralised and the plan actually cites 33 “centres” flung all over the Sydney region, from Norwest Business Park in the north, to Penrith in the west and Hurstville in the south. Apart from the CBD with 12 per cent, none of the centres have more than 1.8 per cent of Sydney’s jobs.

    Concentrating housing in a city of dispersed jobs means horrendous traffic congestion, the costs of which loom large in State of Australian Cities 2010. Currently, around 72.3 per cent of Sydney’s people drive to work. No configuration of public transport will be efficient, leaving motorists to converge on dense localities. This is a city projected to explode from today’s 4.2 million people to 7 million in 2050. In Melbourne’s case, McCloskey, Birrell and Yip state plainly that raising densities along tram and train lines will end in chaos. Of the 1.4 million people who work outside central Melbourne, only 4.4 per cent use public transport.

    On the other hand, attempts to concentrate jobs will throw thousands onto the dole queues. At least this is a type of solution: the unemployed don’t commute.

    Ironically, some thriving “centres” in the Herald plan wouldn’t exist without the expansion of Sydney’s arterial road network. Examining the “edge city” phenomenon in Sydney, Peter Murphy and Robert Freestone conceded, way back in 1994, that the jobs-rich “global arc corridor” owed a lot to strategic road junctions like the intersection of Lane Cove Road with Epping Road in North Ryde and with the Pacific Highway in Gordon.

    “The most prestigious development has overwhelmingly favoured the middle-ring northern and north-western parts of Sydney in centres easily accessible by car …” say Murphy and Freestone, having explained that “there are now diversified employment centres in the suburbs which have grown up almost despite, rather than because of, traditional land-use planning policies”. These days the NSW Government bows to green intimidation, failing in its new Metropolitan Transport Plan to complete the highly successful Orbital Motorway Network, leaving M4 West, the F3 link and duplication of the M5 tunnel in limbo.

    Demands that at we reshape our cities to fight climate change are illogical. Let’s assume, for argument’s sake, that there’s a case to cut Australia’s 1.4 per cent contribution to global carbon. Even the Australian Conservation Foundation’s Consumption Atlas ranks urban settlement patterns well below the general level of consumption as a factor in emissions. And general consumption is a function of living standards, not urban form. Since the world is far from putting constraints on consumption, calls for a transformation of settlement patterns are baseless.

    But it’s worse. The Consumption Atlas and an analysis by Demographia’s Wendell Cox disclose that emissions across affluent inner-urban areas exceed those on the fringe. By focusing on settlement patterns rather than consumption levels, green planners engage in a form of class discrimination. The costs of climate change are heaped on outer-suburban working people, who lose jobs, mobility and housing amenity, while the affluent emerge unscathed.

    This article first apeared at The New City Journal

    Photo by Amit (Sydney)