Precipitation and political determinism

Or, as Tyler Cowen puts it, a rainfall theory of democracy:

Why have some countries remained obstinately authoritarian despite repeated waves of democratization while others have exhibited uninterrupted democracy? This paper explores the emergence and persistence of authoritarianism and democracy. We argue that settled agriculture requires moderate levels of precipitation, and that settled agriculture eventually gave birth to the fundamental institutions that under-gird today’s stable democracies.

... and now brace yourself for the awesome use of econometrics...

An instrumental variables approach demonstrates that while low levels of rainfall cause persistent autocracy and high levels of rainfall strongly favor it as well, moderate rainfall supports stable democracy. This econometric strategy also shows that rainfall works through the institutions of the modern territorial state borne from settled agriculture, institutions that are proxied for by low levels of contemporary tribalism.

Sad news: SO2 is dead

Tim Haab reports from the Heartland that the teetering SO2 cap and trade market is "Elvis dead."

The story goes something like this: The SO2 market was designed as if SO2 was a uniformly mixed pollutant. This made trading easier. One ton of SO2 in Ohio could be traded for one ton in Illinois. But, the impacts of each of those tons is different. Those states who absorbed a disproportionate impact from SO2 trading sued the EPA. Congress issued the Clear Air Interstate Rules limiting interstate trades of SO2. SO2 prices crashed. EPA lost the lawsuit: Must scrap the SO2 market and start over. SO2 market dies quietly.

Leaving us without a textbook example of market-based environmental policy... and that is the least of it.

It's all about messaging

Speaking of farmers and climate change, Chris Clayton highlights has an interesting story from a climate-skeptical Kansas town that's nevertheless reduced its energy use by 5% from baseline (which is a lot).

You don't make a case to do something in Kansas by saying Al Gore backs it, but you can reshape the message and get the same result.

Climate and Energy Project looked at what it would take to get Kansans to overcome their skepticism about climate change.

So the (Climate and Energy) project ran an experiment to see if by focusing on thrift, patriotism, spiritual conviction and economic prosperity, it could rally residents of six Kansas towns to take meaningful steps to conserve energy and consider renewable fuels.

The most resonant themes were thrift (i.e. efficiency), reducing dependency on foreign oil, green jobs and "creation care":

The obligation of Christians to act as stewards of the world that God gave them, even creating a sermon bank with talking points they could download.

This is probably even much more effective than arguing that rising temperatures from climate change will hammer yields.

Heat and crop yields in 2010

This may be premature, but I'm very tempted to award a gold star for clairvoyance to Michael Roberts, whose research on the effect of heat on crop yields I've blogged here and here. Here he is on August 12:

[Current temperatures] are still rising fast. If this keeps up for a few more days I'd say yields will get hammered.

(to give credit where credit is due, the market may have seen the same thing)

Anyway, fast forward to last week, the October forecasts for wheat, corn and soy are all well below the September forecasts (although USDA puts a bizarrely positive spin on it). As Michael's chart below shows, the September forecast is almost always very good, and revisions are generally upward, not downward, so something funny happened this year, and late heat seems to be a very strong hypothesis.
Michael is investigating the more detailed data and I hope will post any findings as they arise. As I mentioned before, if it was the heat, it will be very valuable to prove and communicate this to stakeholders in agriculture, some of whom have taken very skeptical views toward climate change and its impact on them specifically.

Food price spikes in unexpected places

Russian wheat, sure, but I never saw Korean cabbage coming:

One head of cabbage can now cost over 11,000 won ($10), more than pork and up from 2,000-3,000 won a year ago (see chart). Kimchi is now being dubbed keum-chi, the first syllable being Korean for gold.

The triggers seems to be the classics - poor harvest, perhaps exacerbated by hoarding - and I think it would be a bridge too far to connect this definitively to broader trends of global food price inflation, climate change, etc. But it is becoming a local political issue:

President Lee Myung-bak says he will be getting his personal stash from Western producers, earning him comparisons to Marie-Antoinette from South Korea’s numerous and critical bloggers.

... and I think it is worthwhile to keep track of these sorts of things.

Meta-report on Potash takeover

Felix Salmon pulls together what he likes to call a report report report on the Conference Board of Canada's report on various Potash Corp takeover scenarios, and the media's coverage thereof. The punch line is that

A successful takeover of Saskatoon-based Potash Corp could slash the province’s revenues by at least $2 billion over the next decade while having little or no net effect on employment, according to a report commissioned by the province.

... but a takeover by Sinochem would be far worse, with potentially foregone tax revenues of more than $10 billion over the next ten years.

Potash Corp's CEO has been doing a lot of talking, but I find it impossible to believe that a Sinochem bid could ever be politically feasible, so unless another multi-national bidder emerges, he won't be independent for much longer. That said, the market is still trading higher than BHP's $130/share offer price so a critical mass of people does seem to believe someone else - or another higher bid from BHP - is still out there.

Military goes renewable

From the NY Times, this might work:

Last week, a Marine company from California arrived in the rugged outback of Helmand Province bearing novel equipment: portable solar panels that fold up into boxes; energy-conserving lights; solar tent shields that provide shade and electricity; solar chargers for computers and communications equipment.

The 150 Marines of Company I, Third Battalion, Fifth Marines, will be the first to take renewable technology into a battle zone, where the new equipment will replace diesel and kerosene-based fuels that would ordinarily generate power to run their encampment.

But this is preposterous:

The Air Force will have its entire fleet certified to fly on biofuels by 2011 and has already flown test flights using a 50-50 mix of plant-based biofuel and jet fuel; the Navy took its first delivery of fuel made from algae this summer. Biofuels can in theory be produced wherever the raw materials, like plants, are available, and could ultimately be made near battlefields. [emphasis mine]

So instead of sending truckloads of diesel fuel to a war zone, the military will in the future construct a mini-scale bio-refinery, then plant, grow and harvest a climatically appropriate fuelcrop to fuel its trucks and helicopters?

I wish Company I the best of luck.