Wednesday, August 31, 2011

Some Quick Responses

Galatea wrote:
What if benefits from lightbulb or window replacement do indeed outweigh greater cost, but over a decent span of time -- say, a year's worth of energy bills?

The example I am really thinking of here is air conditioning. A cheap window unit air conditioner cost me $100. A wall-mounted efficient Japanese beast would have cost me $1000. I didn't have $1000 when I moved in. But a year later, I'd spent more cooling the bedroom than I would have with the Mitsubishi.

Paying me to make the efficient choice would have been a way of expanding my capability to make a long-term decision. Instead, I made the short-run choice: I want to not have heat stroke now, and lose money later.

FLG doubts that the Mitsubishi would've saved you $900 in energy bills over a year. Over five or ten years? Okay. The question is whether the savings, spread out over years, is worth more than $900 when discounted to today. Maybe, maybe not. To be honest, FLG'd rather have the government increase the cost of energy through a tax rather than subsidizing initial purchases. It's less distorting that way.

Now, one thing that increasing the cost of energy doesn't do, which you pointed out, is deal with liquidity issues. If you don't have $1,000 and are unable to borrow $1,000, then there's an issue. If, however, you are able, but unwilling to borrow the $1,000 to purchase the Mitsubishi, then FLG has less issue. It's just a straight up investment decision. The investment in the the more efficient AC unit just doesn't pay out. Again, raising energy prices through a tax may change this calculation.

Dance wrote over at Prof Mondo's place:
Also, really? Comparing IQs? Is that ever a useful line of discussion? (note: I come from a household where my mother taught a one-room schoolhouse and took kids diagnosed as special-Ed and brought them up to/past grade level. Let’s improve nurture before worrying about nature. (are those short-term/long-term categories, FLG?))

Not sure if they are long-term versus short-term. FLG is all for improving Nurture wherever and whenever possible, but to ignore Nature entirely seems a bit unwise. But he certainly agrees that talking about IQs is not particularly useful or helpful.

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