Monday, February 05, 2007

Adolph & Three "I's"

Adolph Nobody Learns His Three "I's"

By John Taylor; 2007 Feb 06

Dear Friends, I want to share with you today three articles that I think are extremely important. Not only that, they go together, if you read and think about them deeply enough. But, mostly, it is so cold in this unheated study where I write that my fingers are about to fall off. Better to get out of here and let others do the writing for today.

I put the most demanding article first. At the same time it is also the best article on the environment I have seen in a while, and I have been reading quite a few. I find Krugman's concept of the "three I's" extremely insightful, and I will be adopting them for my "Adolph Nobody" argument. The great bungle of this climate crisis is a persistent refusal to ask professional economists to run the economy; it is as if a mortally ill patient refused even to see a doctor.

The second article describes not only how Adolph Nobody is killing outright twenty thousand Canadians every year (this would be an act of war if anybody else were doing the killing) but also describes some simple ways to eliminate the fatal screw-ups that cause this bloodshed. I will never forget how when my mother was being wheeled into an operation a couple of orderlies were running down the hall (playing football or something) and one fell on her, breaking all her ribs. Worse still, the authorities were afraid to tell her, for fear she would sue, so she went through these therapeutic exercises for months in extreme pain, not knowing why her rib cage hurt so much. Unbelievable. Curse you Adolph Nobody, curse you to hell! Anyway, this technique of cross-professional borrowing should be used systematically, I should think, among all professions.

The third article arrived only yesterday; it describes the Mother of All Environmental Atrocities committed by Adolph Nobody lately. Most surprisingly this mess is not the work of the "Three I's" but of Adolph Nobody, pure and simple. Nobody is in charge of this planet, and meanwhile national borders act as blinders. The result: a planet destroyed, in spades. This focuses on Europe, but I read that the use of bio-fuels, which is pushed by agents of the three I's, in the States is threatening to take over so much farmland that corn and other crops will soon start shooting through the roof. Which do you want to do, eat or keep feeding Big Oil?


Earth in the Balance Sheet: Economists Go for the Green

from: Krugman, Paul, The Accidental Theorist; And Other Dispatches from the Dismal Science, W.W. Norton and Company, New York, 1998, originally published in Slate, April 17, 1997.

The Accidental Theorist, pp. 167-172

Like most people who think at all about how much burden their way of life places on Spaceship Earth, I feel a bit guilty. But on Earth Day in 1997 my conscience was clearer than usual-and so were those of 2,500 other economists.

A few months earlier, an organization called Redefining Progress enlisted five economists -- the Nobel laureates Robert Solow and Kenneth Arrow, together with Harvard's Dale Jorgenson, Yale's William Nordhaus, and myself -- to circulate an "Economists' Statement on Climate Change," calling for serious measures to limit the emission of greenhouse gases. To be honest, I agreed to be one of the original signatories mainly as a gesture of goodwill, and never expected to hear any more about it; but the statement ended up being signed by, yes, more than 2,500 economists. Whatever else may come of the enterprise, it was an impressive demonstration of a little-known fact: Many economists are also enthusiastic environmentalists.

Partly this is just because of who economists are: Being by definition well-educated and, for the most part, pretty well-off, they have the usual prejudices of their class -- and most upper-middleclass Americans are sentimental about the environment, as long as protecting it does not impinge on their lifestyle. (I bring bags and bottles to the recycling center in my gas-guzzling sports utility vehicle.)

But my unscientific impression is that economists are on average more pro-environment than other people of similar incomes and backgrounds. Why? Because standard economic theory automatically predisposes those who believe in it to favor strong environmental protection.

This is not, of course, the popular image. Everyone knows that economists are people who know the price of everything and the value of nothing, who think that anything that increases gross domestic product is good and anything else is worthless, and who believe that whatever free markets do must be right. (I'm sorry to say that some of the people at Redefining Progress published an impressively ill-informed diatribe along these lines in the Atlantic back in 1995.)

But the reality is that even the most conventional economic doctrine is a lot more subtle than that. True, economists generally believe that a system of free markets is a pretty efficient way to run an economy, as long as the prices are right --as long, in particular, as people pay the true social cost of their actions.

Environmental issues, however, more or less by definition involve situations in which the price is wrong, in which the private costs of an activity fail to reflect its true social costs.

Let me quote from the textbook (by William Baumol and Alan Blinder) that I assigned when I taught Economics 1 last year: "When a firm pollutes a river, it uses some of society's resources just as surely as when it burns coal. However, if the firm pays for coal but not for the use of clean water, it is to be expected that management will be economical in its use of coal and wasteful in its use of water." In other words, when it comes to the environment, we do not expect the free market to get it right.

So what should be done? Going all the way back to Paul Samuelson's first edition in 1948, every economics textbook I know of has argued that the government should intervene in the market to discourage activities that damage the environment.

The usual recommendation is to do so either by charging fees for the right to engage in such nasty activities -- a.k.a. "pollution taxes" or by auctioning off rights to pollute.

Indeed, as the extraordinary response to the climate-change statement reminds us, the idea of pollution taxes is one of those iconic positions, like free trade, that commands the assent of virtually every card-carrying economist.

Yet while pollution and related "negative externalities" such as traffic congestion are obvious problems, in practice, efforts to make markets take environmental costs into account are few and far between. So economists who actually believe the things they teach generally support a much more aggressive program of environmental protection than the one we actually have.

True, they tend to oppose detailed regulations that tell people exactly how they must reduce pollution, preferring schemes that provide a financial incentive to pollute less but leave the details up to the private sector.

But I would be hard pressed to think of a single economist not actually employed by an anti-environmental lobbying operation who believes that the United States should protect the environment less, not more, than it currently does. (The signers of the climate-change statement, incidentally, included thirteen economists from that temple of free-market theory, the University of Chicago.)

But won't protecting the environment reduce the gross domestic product? Not necessarily -- and anyway, so what?

At first sight, it might seem obvious that pollution taxes will reduce GDP. After all, any tax reduces the incentives to work, save, and invest. Thus a tax on exhaust emissions from cars will induce people to drive cleaner cars or avoid driving altogether. But since it will also in effect lower the payoff to earning extra money (since you wouldn't end up driving the second car you could buy with that money anyway), people will not work as hard as they would have without the tax.

The result is that taxes on pollution (or anything else) will, other things being equal, tend to reduce overall monetary output in the economy -- which is to say, GDP.

But things need not be equal, because there is already a whole lot of taxing and spending going on. Even in the United States, where the government is smaller than in any other advanced country, about a third of GDP passes through its hands. So existing taxes already discourage people from engaging in taxable activities like working or investing.

What this means is that the revenue from any new taxes on pollution could be used to reduce other taxes, such as Social Security contributions or the income tax (but not, of course, the capital-gains tax). While the pollution taxes would discourage some activities that are counted in the GDP, the reduction in other taxes would encourage other such activities. So measured GDP might well fall very little, or even rise.

Does this constitute an independent argument for taxing pollution, quite aside from its environmental payoff? Would we want to have, say, a carbon tax even if we weren't worried about global warming? Well, there has been an excruciatingly technical argument about this, mysteriously known as the "double dividend" debate; the general consensus seems to be no, and that on balance pollution taxes would be more likely to reduce GDP slightly than to increase it.

But so what? "Gross domestic product is not a measure of the nation's economic well-being" -- so declares the textbook as soon as it introduces the concept. If getting the price of the environment right means a rise in consumption of non-market goods like clean air and leisure time at the expense of marketed consumption, so be it.

Isn't this amazing? Not only do thousands of economists agree on something, but what they agree on is the warm and cuddly idea that we should do more to protect the environment. Can 2,500 economists be wrong? Well, yes -- but this time they aren't. The Great Green Tax Shift -- a shift away from taxes on employment and income toward taxes on pollution and other negative externalities -- has everything going for it. It is supported by good science and good economics, as well as by good intentions.

Inevitably, then, it appears at the moment to be a complete political nonstarter. The problem, as with many good policy ideas, is that the Great Green Tax Shift runs up against the three I's.

First, there is Ignorance. In 1996 Congress rushed to cut gasoline taxes to offset a temporary price rise. Not many voters stopped to ask where the money was coming from. So what politician will be foolish enough to take the first step in trying to institute new taxes on all-American pollution, even with the assurance that other taxes will be lowered at the same time? (My friends in the Clinton administration tell me that the word "taxes" has been banned even from internal discussions about environmental policy.)

Then there are Interests. It is hard to think of a way to limit global warming that will not gradually reduce the number of coalmining jobs. As labor-market adjustment problems go, this is a pretty small one. But the coal miners and the energy companies are actively opposed to green taxes, while the broader public that would benefit from them is not actively in support.

Finally, there is Ideology. It used to be that the big problem in formulating a sensible environmental policy came from the Left -- from people who insisted that since pollution is evil, it is immoral to put a price on it. These days, however, the main problem comes from the Right -- from conservatives who, unlike most economists, really do think that the free market is always right -- to such an extent that they refuse to believe even the most overwhelming scientific evidence if it seems to suggest a justification for government action.

So I do not, realistically, expect the Economists' Statement to change the world. But then I didn't expect it to go as far as it has. Certainly those of us who signed it did the right thing; and maybe, just maybe, we did our bit toward saving the planet.


Now Where Were We? Medical errors are killing Canadians. How to stop the bungling

by Danylo Hawaleshka, Macleans, Dec 4, 2006, p. 48

Doctors have a reputation for bristling when being told what to do. "Lowly" nurses find their objections ignored, perhaps no more tragically than in 1994, when 12 babies died after heart surgery at a Winnipeg hospital. Years later, an inquiry concluded several of those deaths could have been avoided if warnings by the nursing staff had been heeded. More recently, studies have shed light on just how often medical errors occur -- one suggested they kill up to 24,000 hospitalized Canadians annually. Little wonder then that a new Pollara poll indicates a remarkable lack of confidence among Canadians, with 60 per cent of respondents saying they think it "likely" someone treated in a hospital will suffer a "serious medical error." The medical establishment is feeling it too, and is turning to a seemingly unlikely ally -- the airline industry.

Dr. Richard Karl is both surgeon and pilot, and divides his time between operating on cancer patients, flying his twin-engine turbo-prop Piper Cheyenne, and consulting for the Surgical Safety Institute in Tampa, Fla., which he founded. Karl is an example of how medicine is increasingly trying to improve its practices by learning how other high-risk sectors -- aviation, nuclear energy, even Formula One racing -- manage and reduce risk.

Karl instructs health care professionals on "crew resource management," an operational style borrowed from the U.S. Federal Aviation Administration. CRM emphasizes open communication at the expense of deference to institutionalized hierarchy. In the United States, Karl notes, physicians leave behind 1,500 surgical instruments in their stitched-up patients every year. The airlines, by contrast, "never land with the wheels up. They have a way of doing things right."

Improving safety can be as simple as requiring a mandatory checklist be completed prior to a surgical intervention, a sort of pre-flight briefing for the O.R.

It is often assumed everyone is on the same page in the operating theatre, and because those involved are trained, highly motivated professionals, the vast majority of surgeries go smoothly, says Dr. Sam Sheps, a professor in the department of health care and epidemiology at the University of British Columbia. But without a formalized process, a simple, honest mistake can easily go unnoticed.

"Pilots brief each other before the flight, they talk about the weather, what they might encounter in terms of traffic -- they're looking at all sorts of information," I Sheps says. "Well, the same thing should be happening in I.C.U.'s, O.R.'s, emergency rooms even."

Edmonton's regional health authority, Capital Health, is one of the early Canadian adopters. For the past year, every surgical team has had to run through a checklist, says Dr. David Mador, a urologist who performs bladder and prostate cancer surgeries. Mador's operations often involve as many as seven team members, so it is critical nothing is assumed in order to avoid errors, such as operating on the right-side kidney instead of the left.

"A mandatory process, where you have to review the information before you actually start doing anything, helps us avoid what sometimes can be disasters," Mador says.

Karl has seen what can happen when a rigorous routine isn't followed. He recalls once getting ready to operate on a cancer patient, when he noticed the results of critical blood work were missing from the files. Regardless, the anesthesiologist had gone ahead and inserted an epidural catheter in the man's back. When the lab results finally arrived, Karl noted the patient's blood thinner had not been stopped in time.

"Well, even the valet parking guys know you shouldn't operate on some body's liver if the blood won't clot," Karl says, "I canceled his surgery, and now we were in the uncomfortable position of having to explain to the patient why it was unsafe to take the catheter out because his blood was thin -- of course, it was unsafe to put it in, but they hadn't checked."

In one of the odder crossover collaborations, the glamorous world of Formula One racing is also teaching doctors a thing or two. F1 drivers regularly screech to a stop in narrow pit stalls so 24 crew members can swarm the vehicle for servicing in seconds. A British physician, who also happened to be a race fan, wondered how two-dozen crew members keep from tripping all over each other, and what lessons could be learned by the children's hospital he worked in.

He showed Ferrari's technical director a video of a patient being transferred from the O.R. to the intensive care unit. Ferrari's man was struck by how several conversations were going on at once, while equipment was disconnected or reconnected, but not necessarily in any particular order, and with no single person in obvious charge. In the Ferrari pit, each person has a designated task, done in sequence, and most often without discussion. When the doctors applied some of the F1 tactics, technical errors during patient transfers dropped 42 per cent.

In 2004, Sheps co-authored the Canadian Adverse Events Study, a landmark investigation that estimated that preventable adverse events caused the deaths of between 9,250 and almost 24,000 patients in acute care hospitals in 2000.

Today, hospitalized patients face a one in nine chance of getting an infection, and another one in nine chance of suffering an error with their medication, says Philip Hassen, chief executive officer of the Canadian Patient Safety Institute. To bring the risks down, the institute is pursuing several initiatives.

These include training programs in root-cause analysis, the issuing of national safety alerts, looking at new ways to certify and re-certify nurses and physicians, and coordinating the country's 16 independent medical simulation centres.

"We bury problems in the health care industry," Hassen says. "It's partly because no one wants to feel that they've done anything wrong."

Hassen would like to see an anonymous reporting system for errors and near misses, similar to how air crews today can report concerns anonymously to NASA, which then informs the FAA. Hassen notes the name of the Air France pilot who crashed in Toronto last year has never been released.

"We all make human errors, but the problem is we want to 'get' the person, and that by 'getting' a person that will somehow solve the problem -- it never does," Hassen says. "The airline industry learned that, and they learned you have to talk about safety, and you have to begin to actually understand the causes."

There are no quick fixes. Student physicians have to be trained, Karl says, and the old guard has to accept the new collaborative culture.

"Thirty years ago, the captain on the airplane was the captain -- he told the co-pilot how much sugar he wanted in his coffee and that was about it," Karl says. "But they kept flying airplanes into the ground, and finally decided that was a bad idea."


Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare

New York Times, By Elisabeth Rosenthal, Published: January 31, 2007

AMSTERDAM, Jan. 25  Just a few years ago, politicians and environmental groups in the Netherlands were thrilled by the early and rapid adoption of sustainable energy, achieved in part by coaxing electrical plants to use bio-fuel  in particular, palm oil from Southeast Asia.

Spurred by government subsidies, energy companies became so enthusiastic that they designed generators that ran exclusively on the oil, which in theory would be cleaner than fossil fuels like coal because it is derived from plants. (One) palm oil estate on the outskirts of Kuala Lumpur, Malaysia. Exports hit a record $9 billion last year because of strong European demand.

But last year, when scientists studied practices at palm plantations in Indonesia and Malaysia, this green fairy tale began to look more like an environmental nightmare.  Rising demand for palm oil in Europe brought about the clearing of huge tracts of Southeast Asian rainforest and the overuse of chemical fertilizer there.

Worse still, the scientists said, space for the expanding palm plantations was often created by draining and burning peat land, which sent huge amounts of carbon emissions into the atmosphere.

Considering these emissions, Indonesia had quickly become the worlds third-leading producer of carbon emissions that scientists believe are responsible for global warming, ranked after the United States and China, according to a study released in December by researchers from Wetlands International and Delft Hydraulics, both in the Netherlands.

It was shocking and totally smashed all the good reasons we initially went into palm oil, said Alex Kaat, a spokesman for Wetlands, a conservation group.

The production of biofuels, long a cornerstone of the quest for greener energy, may sometimes create more harmful emissions than fossil fuels, scientific studies are finding.

As a result, politicians in many countries are rethinking the billions of dollars in subsidies that have indiscriminately supported the spread of all of these supposedly eco-friendly fuels for vehicles and factories. The 2003 European Union Biofuels Directive, which demands that all member states aim to have 5.75 percent of transportation run by biofuel in 2010, is now under review.

If you make biofuels properly, you will reduce greenhouse emissions, said Peder Jensen, of the European Environment Agency in Copenhagen. But that depends very much on the types of plants and how they are grown and processed. You can end up with a 90 percent reduction compared to fossil fuels  or a 20 percent increase.

He added, Its important to take a life-cycle view, and not to just see what the effects are here in Europe. In the Netherlands, the data from Indonesia has provoked soul-searching, and helped prompt the government to suspend palm oil subsidies. The Netherlands, a leader in green energy, is now leading the effort to distinguish which biofuels are truly environmentally sound.

The government, environmental groups and some of the Netherlands green energy companies are trying to develop programs to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner. Krista van Velzen, a member of Parliament, said the Netherlands should pay compensation to Indonesia for the damage that palm oil has caused. We cannot only think: does it pollute the Netherlands?

In the United States and Brazil most biofuel is ethanol (made from corn in the United States and sugar in Brazil), used to power vehicles made to run on gasoline. In Europe it is mostly local rapeseed and sunflower oil, used to make diesel fuel. In a small number of instances, plant oil is used in place of diesel fuel, without further refinement. But as many European countries push for more green energy, they are increasingly importing plant oils from the tropics, since there is simply not enough plant matter for fuel production at home.

On the surface, the environmental equation that supports biofuels is simple: Since they are derived from plants, biofuels absorb carbon while they are grown and release it when they are burned. In theory that neutralizes their emissions. But the industry was promoted long before there was adequate research, said Reanne Creyghton, who runs Friends of the Earth's campaign against palm oil here.

Biofuelswatch, an environment group in Britain, now says that biofuels should not automatically be classed as renewable energy. It supports a moratorium on subsidies until more research can determine whether various biofuels in different regions are produced in a nonpolluting manner.

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