William J. Polley

I'll take you up on the flaw in the Chicago calculation.

The nearest major port to Chapel Hill, NC. is Newport News, Va-- about 200 miles away. They do not include the truck transportation from Newport News to Chapel Hill in their calculations and this would be about triple the 60 miles they assumed the local farming would drive their truck. So their analysis is seriously biased to underestimate the cost of transportation.

Something I do not understand. I never see liberals making fun of conservatives like this. But conservatives seem to think this type of teenage humor of taking passing comments out of context is fantastic sophisticated analysis.

I mean, do you really take this type of stupidity seriously and think it is the type of analysis that makes people change their minds about political and economic developments?

I sorry, I do not understand why serious people waste their times on such trivialities. Can you explain it? I'm really curious.

Long response, but read it all, please...

There may be flaws in the argument, but this isn't one of them. They do include the truck transportation, but only give it 160 miles. If you raised that to 200 as you say, it wouldn't make much of a difference. If you tripled the truck mileage and kept the rest of their calculations the same, you'd get it down to 500 tangerines per gallon, which is still better than they get for the local calculation.

Now, for your other comments. I don't think anyone is claiming that this is a "sophisticated" analysis. I'm certainly not. I even challenged my readers to find any flaws or refine it. It is what it is--a rough, back of the envelope calculation that at the very least shows that buying locally may not have a smaller carbon footprint than buying from Spain when you remember that long distance transportation is very efficient in the "per ton" sense. So when I said that "At best, Edwards should have thought more carefully about her example" I really meant that. It sounded like something off-the-cuff, and when any politician or anyone campaigning for a politician says something off-the-cuff that doesn't stand up to scrutiny, it deserves to be called out.

Should some passing comments get a free pass?

As for context, I've looked at every article I can find on this and I can only find one thing missing from what was in the original Politico piece or in what I wrote. That is that the point she was trying to make was that carbon taxes will raise the price of food and anything else transported over long distances. From what it sounds like, the reporters were trying desperately during the Q&A to figure out what she meant and it took some repeated questions to finally get it out. Only later was there a real clarification from the campaign. So there you go, the lack of context started with the original. Glad we're all clear on that now.

Some progressives weren't too happy either. From Dissident Voice (http://www.dissidentvoice.org/2007/07/it-takes-more-than-a-tangerine/)

"John Edwards talks about worker rights. Does his wife have any idea how many workers would lose their livelihoods if the jobs of growers, pickers, packers, truckers and store clerks were eliminated by a mandate for locally grown — or because of reduced sales because consumers couldn’t afford to buy as much food?"

There's more, including a suggestion for a mandate to cut back on meat consumption because meat-eaters have a larger carbon footprint.

But they are, and I fear the Edwards's are still, missing the point. If you tax carbon emissions, you raise the cost of production and distribution. Will this hurt those who get their products to market in small trucks or in large rail cars? This is what some people are failing to acknowledge, and it is not trivial. It is a serious part of the policy debate, even if the Chicago Boyz' back of the envelope calculation is itself a little bit of hyperbole. There's a bit of truth in it as well.

The bottom line is that Edwards didn't have a good response when asked if he would raise the price of food. He'd have to think about it. But of course he would! And the writer at Dissident Voice would get so specific as to raise the price of meat and so forth. Now we can debate what the appropriate carbon tax is, but launching that discussion by swearing off tangerines is, well, wrong-headed--in my humble yet honest opinion. If this is their opener, I'm skeptical about how much thought they've put into it. Again, that is not a trivial concern.

Finally, your comment that you've never seen liberals make fun of conservatives "like this" is puzzling. Certainly you have seen liberals make fun of conservatives somehow, right? (I can send you some examples if you want.) Just not in response to a poorly thought out example? Ok, maybe, but I don't think you've looked hard enough. But I wouldn't even call this making fun. My "let them eat cake" line was funny, perhaps even ironic, but not making fun.

I've been called an "idiot" on a radio talk show for saying that war is not good for the economy. I wear that one like a badge of courage.

Your mileage may vary.

Her comments that she would eat fewer tangerines because the proposals would raise the cost of tangerines is in an offhanded manner saying exactly what you are saying. She is agreeing completely with your argument that a carbon tax will raise prices and cause harm to consumers.She is just saying it in a different way that the typical lay person may understand better than your economic terminology.

Your point is that the tax would raise prices. She agrees completely with that. The only people who seem to disagree with that are the Chicago Boyz.

You can debate if it is a good idea or not,but you agree on the consequences.

You are making fun of her because she agrees with you while quoting the people who do not agree with you,the Chicago Boyz.

No, no, no! The example is going to draw a layperson away from the real issue.

Ok, let me lay this out as carefully as I can.

1) Mrs. Edwards emphasized the importance of buying locally. Reason: Shipping goods long distances increases your carbon footprint.

I disagree with this. The Chicago Boyz gave a back-of-the-envelope reason why one should be skeptical. They show that the carbon footprint of a person who consumes foreign tangerines may be no greater (and may in fact be smaller) than that of someone who consumes local fruit. The point that shipping goods in large quantities (by ship or rail) is very energy efficient on a per ton basis is a scientific fact.

Are there complications and potential problems with their analysis? Sure. Their numbers might be off a bit because goods tend not to travel in a straight line. But this would not invalidate the point. Straight line or not, goods tend to travel in the least cost manner as a first approximation. If you live in San Francisco, you may get your oranges by truck from southern California rather than by rail from Florida. It may even be cheaper than for someone in Chicago who gets them by rail from either source.

So, the big point on which the Chicago Boyz and I differ from the Edwards' is that reducing your carbon footprint means buying locally. And that is essentially where the Chicago Boyz left it in their post. Again for clarity... This is the key.

2) After the fact, the campaign said that they meant that taxes on carbon would cause products that are shipped to be more costly.

And of course no one would disagree with this. But it wasn't part of the original comment. The Chicago Boyz didn't address it.

But the problem is that while taxes on carbon would cause products that are shipped to be more costly, it is not uniform across different modes of transportation.

To see why, think of my orange example. Because of the differential energy consumption per mile, if you raise the tax on carbon enough, there is a point at which the person in San Francisco would switch from California oranges shipped by truck to Florida oranges shipped by rail. (It may or may not be efficient to ship California oranges by rail to San Francisco--that's a question for an economic consultant. But that's probably more of a long run question anyway.)

3) So ironically, their answer after the fact is somewhat at odds with the original example. If there is a tax on carbon, I'd rather be in the rail business than the trucking business. Again, long distance shippers are more efficient per ton than short distance shippers. Their carbon tax idea does not translate well to a buy locally campaign, unless...

4) The Politico article mentioned that Edwards was talking about "trade policy". If this carbon footprint discussion is cover for protectionism, then I'm even more worried. Should we keep out Spanish tangerines because getting them here uses too much energy?

I have tried to lay out the basis for an argument that such a trade policy would be self-defeating.

This is neither trivial, nor making fun. The ideas they are advocating get picked up by others and lead to suggestions that we need a "mandate" to cut back on meat consumption. This is serious.

OK, if you want to believe that a carbon tax leads to a drop in transportation costs and an increase in real after tax consumer income, more power to you.

One piece of advice, do not tell Greg Mankiw because
it would sure play havoc with his Pigou tax champaign.

Well it seems to me that the Chicago Boyz used some worse case scenarios in assuming an average 60 mile trip and a 500 lb load. Where I live you could do very well with an average 15 mile trip. Moreover I doubt most local farmers would limit themselves to 500 lbs or transport most products in a pickup truck to start with. They have access to tractor-trailers and are not afraid to use them.

So in addition to the 'last mile' issue discussed above, they have shifted an advantage that derives entirely from tonnage to one of local vs long distance. For example is it really cheaper in terms of carbon footprint to ship 500 tons of tangerines to Ontario, Fla from Spain as it would be to truck 500 tons of tangerines produced within 60 miles in the aptly named surrounding Orange County? I would hardly think so.

I haven't examined the numbers but it seems from your summary that the Boyz set up an inefficiency strawman, assigning the local farmer with the most inefficient possible scenario while perhaps minimizing some of those of the intermodal transport guy. For example everyone involved in maintaining that ship or that train or the shipyard crane or the refrigerated warehouse are themselves creating a carbon footprint simply by commuting to and from their respective worksites. It would probably be between difficult and impossible to calculate how those incremental footprints should be applied to any given shipment but they are certainly there. For that matter there would be the matter of the original carbon footprint that went into the manufacture of the ship, locomotive and tracks. Once again allocating that over the life of the ship or trainline to individual shipments might make that a trivial amount, who knows.

But I have to be with Spencer on this one, this looks more like a cheap shot at the expense of Mrs. Edwards than any kind of serious analysis.

Spencer,

Where did I say anything about real after tax consumer income?

I said that a carbon tax would have a different effect on different modes of transportation. Do you disagree?

Bruce,

"It would probably be between difficult and impossible to calculate..."

I totally agree, and I don't think it makes a huge difference for the analysis. Not to mention the fact that many of those costs are sunk and thus should not be considered a discussion surrounding the imposition of a carbon tax now.

Tractor trailers are less efficient per ton than rail or ship. The numbers might be different, but the basic point remains.

As for your local vs. long distance point, I covered that with my California vs Florida orange example. Yes, if you live in Florida, it is probably more efficient to get your tangerines locally. But it might be the case that a customer in Chicago would find it less costly to import from Spain than to go by rail from Florida. I say "might". In reality, market prices will tell you.

And again, this brings me back to my main point. Really, I would like to hear from you on this. A carbon tax would increase prices on goods because it would increase production and distribution costs. However, it would have a different effect on goods shipped by different modes of transportation. Do you believe that a carbon tax will, as a first approximation, benefit (i.e. raise average cost by a smaller amount) local farmers who transport by semi-truck within, say, a 200 mile radius over distant producers in this country or elsewhere who use ship and/or rail?

Or, will trade policy need to be coupled with the carbon tax as a comprehensive solution to get the "right" result?

These are the questions.

The entire issue is over the impact of a carbon tax.

She says that a carbon tax will raise the cost of transportation and change the relative prices of
goods transported long distances vs domestically produced goods.

The entire issue of rail vs trucks vs water vs air transport is a smoke screen like a magician uses too fool you into looking elsewhere.

You keep arguing that it will have an insignificant impact on the cost of a tangerine.
I agree with that that and have no issue over that.

But you are taking this example another step to use the tangerine example to argue that a carbon tax will not raise transportation cost or have a negative impact on consumer well being.

I can not agree with that at all.

It will make relative cost change and according to the principles of comparative advantage it is relative costs not absolute cost that matter.

The mode of transportation is not a smokescreen.

A carbon tax will increase the price of goods that are transported because transportation uses carbon based fuel. The tax raises the cost of emitting carbon dioxide and that cost ends up getting passed along to the final consumer.

But the amount that the final goods price increases depends on how much fuel was used to get that good to market. A mode of transport that can move more goods for the same carbon emission will mean less of in increase in the final prices of those goods than a less efficient mode of transport.

If the purpose of the tax is to reduce carbon emissions, then it will necessarily favor more efficient modes of transport over less efficient ones.

This is precisely an application of the principle of comparative advantage and relative costs.

At no time did I say that the tax will not raise transportation costs. I have said over and over that it will raise the price of goods transported more efficiently by less than the amount that price of goods transported less efficiently will increase.

This would suggest that the radius at which it makes sense to ship by more efficient modes increases and the radius at which it makes sense to ship by less efficient modes decreases.

On the margin, prices go up a little for all goods, regardless of where they come from, and buying locally is no more attractive in the aggregate.

Food simply must travel, sometimes long distances. A carbon tax will encourage people to seek the most efficient way to move food in quantities needed to feed lots of people. The tendency would be toward larger volume shipments rather than smaller.

I am commenting from an iPhone which limits my speed. I.e. More tomorrow.
What I can say is that it was the Boyz that introduced the pickup/tractor-trailer contrast. And in any case even with rail the 'last miles' issue remains.

True. The Boyz did introduce the pickup/tractor-trailer contrast. I'll give you that. I even see a number of local haulers using a box truck that is somewhere in between.

But do you think it is realistic to expect that any significant part of the nation's food supply is going to come from within 100 miles (or some other arbitrary number) of the person who consumes it?

And do you think that if it did it would represent greater overall carbon fuel efficiency?

As for the last mile, that will always be the most inefficient. If the local grower sells to a warehouse, then from that point on there's no difference. If the local grower sells directly to the supermarket, then he or she might create a smaller carbon footprint, but it will have other efficiency costs (which may increase the carbon footprint).

There might be some margins (i.e. certain products in certain places) along which a carbon tax would increase local production. But to suggest that it would result in a whole-scale shift suffers from a fallacy of composition problem. If everything goes more local (and undoes the gains from specialization and efficient distribution networks) you're going to just end up using more carbon.

You see, I'd buy the nuanced version--that some products in some places would shift toward local production. But that nuanced version is not what I'm hearing. I'm hearing that we need to reduce the number of miles that our food travels and avoid supermarkets, full stop. That's just not realistic.

And I bristle at the notion that reducing the number of miles that food travels is either the motivation for policy or the marketing tool to sell it to the voters or both.

See my next two posts on the issue.