President Biden is making a big environmental mistake
Also: Why the US should again embrace World’s Fairs
“Never has the world held a brighter promise of things to come or a greater need for new resources; for the tools and machinery of power and mobility; for the building together of a road to a new life of abundance and a greater dignity for us all.” - Narration from the Futurama exhibit at the 1964 New York World’s Fair
In This Issue
The Micro Reads: R&D, the macroeconomics of racial integration, SETI, and more . . .
Best of the Political Economy Podcast: Is the United States really meritocratic? My long-read Q&A with Adrian Wooldridge
The Short Read: Why America should again embrace World’s Fairs
The Long Read: Biden just made a big mistake reversing Trump’s update of NEPA environmental rules
The Micro Reads
🧪 “Why Basic Science Matters for Economic Growth” - IMF | “We estimate that a 10 percent permanent increase in the stock of a country’s own basic research can increase productivity by 0.3 percent. The impact of the same increase in the stock of foreign basic research is larger. Productivity increases by 0.6 percent. . . . Our analysis shows that an implementable hybrid policy that doubles subsidies to private research (basic and applied alike) and boosts public research expenditure by a third could increase productivity growth in advanced economies by 0.2 percentage point a year.” I would add that the spillover effects also show the importance of a free trade, free movement in a globalized economy where people can exchange ideas and work together (especially in the US, I hope).
👩🏽🤝🧑🏼 “The Macroeconomic Benefits of Racial Integration” - Mark Zandi, Moody’s Analytics | Better together, wealthier too. “The findings of this paper show that the more racially integrated our society, the stronger our economy. . . . Indeed, if communities across the country were to more fully integrate racially so that they were comparable to the nation’s most integrated communities, we estimate that the nation’s real GDP growth over the next decade would increase from 2.4% to 2.7% per annum. This would be an economic game changer. Of course, racial integration is at best slow to change, but even modest changes to encourage integrated communities could meaningfully boost our economy’s long-term growth.”
👽 “How Much SETI Has Been Done? Finding Needles in the n-Dimensional Cosmic Haystack” - Jason T. Wright, Shubham Kanodia, Emily G. Lubar| I include the study because, one, I find it interesting, and two, I like to imagine the inspirational impact of detecting an advanced civilization, even if no actual contact was ever made. “Here, we develop the metaphor of the multidimensional ‘Cosmic Haystack’ through which SETI hunts for alien ‘needles’ into a quantitative, eight-dimensional model and perform an I include this study because, one, I find it interesting, and two, imagine the inspirational value a finding advanced intelligent life even no contact with actually made. Imagine analytic integral to compute the fraction of this haystack that several large radio SETI programs have collectively examined. . . . We conclude that the fraction of it searched to date is also very small: similar to the ratio of the volume of a large hot tub or small swimming pool to that of the Earth's oceans.”
🤖 Writer Liu Cixin on how his visions of the future collide with reality - WSJ | Here’s a bit on the future of AI from a Q&A with the author of The Three-Body Problem:
I don’t think AI will overtake humans in the short term, but it will have a profound impact on society. Recently, I stayed at a hotel near Beijing, and I didn’t encounter a single human worker during my stay. From checking in to ordering takeout, there wasn’t a single human interaction, everything was done on apps and with AI-powered bots. This is more and more common in China. I used to think that AI would displace simple and repetitive jobs, but now I think the opposite: It will replace more “senior” positions like doctors, lawyers, teachers and stock analysts. On the other hand, it’s the jobs that are more labor intensive that will be harder to replace. I renovated my house recently, and needed an electrician to rewire the entire living room. I really can’t see a situation where AI can replace that kind of a job in the short term.
Best of the Political Economy Podcast
Adrian Wooldridge is the political editor of The Economist magazine and Bagehot columnist. In his latest book is, The Aristocracy of Talent: How Meritocracy Made the Modern World, he discusses whether meritocracy is rigged by the already wealthy and privileged, as well as how America’s “aristocracy of talent” can be improved. A snippet from my podcast chat with him:
Pethokoukis: Wealthy people are still going to devote considerable resources to their children. Do we prevent them from doing that? Ensuring more downward mobility seems like a much harder question.
Wooldridge: I think the first thing that we need to do is to complete the meritocratic revolution in the formal sense. So if you look at Harvard University now, only somewhere between 20 and 40 percent of places are given away on the basis of pure academic performance. A huge number of places are hooked to various things such as whether your parents went to Harvard, whether your parents teach at Harvard or are a member of the staff at the University, athletic scholarships, privileges for donors — all sorts of things will get you in. And plus, obviously, affirmative action and things like that. Because of the law cases brought by Asian students, we’ve seen lots of ways in which that university — and I think that it’s also true of many, many other universities — deliberately tips the scales in favor of already-privileged people.
So I would be in favor of getting rid of that and giving 100 percent of the places on the basis of pure academic merit. I think that’s one thing that we could do. And that in itself would be a revolution, but I think we need to go much further than that because we need to start helping people much earlier on in their educational journey, because by the time you’re 18, a lot of the damage of poor background and poor opportunities has been done. So I would be in favor of academically selective schools, such as the ones that flourish in New York and have flourished for over a century in New York, and of allocating places in those schools on the basis of objective tests — SATs, IQ tests, tests that try to read through your achievement and polish and look at your raw intellectual ability. And I think America is moving in exactly the wrong direction here.
The Short Read
🎪 Why America should again embrace World’s Fairs
If you Google the search term “World’s Fair,” the first question that comes up in the “People also ask” box is “Do they still do the World’s fair?” Well, they do. Expo 2020 is currently being hosted by Dubai. And even though the United States has not hosted a World’s Fair since New Orleans in 1984, it still attends. If you travel to Dubai, you’ll find a US pavilion that features a one-to-one scale replica of a SpaceX Falcon 9 rocket — the tallest object at the expo — and a Koran owned by Thomas Jefferson. And it’s kind of cool looking, I guess:
But the $60 million pavilion wasn’t paid for by the US. Rather, it was financed by the United Arab Emirates, a key US security partner in the region. Even if Washington wanted to foot the bill, it legally couldn’t have. But the Biden administration apparently wants to change that two-decade-old ban. From Reuters:
U.S. Commissioner General to the Expo in Dubai Robert Clark, who was appointed by President Joe Biden, said on Tuesday that he would lobby Congress to pass legislation to allow the government to finance the country's participation in future world fairs. The United States is banned by Congress from using public funds to take part in fairs organised by the Bureau International des Expositions (BIE), like the six-month Expo that started in Dubai last week. "One of my missions going forward . . . is to educate the United States Congress, on both sides of the aisle, to the benefits of participating in the Expo," Clark said at Expo. "I am having those conversations now."
Just as the end of the Space Race helped kill the Apollo program, the end of the Cold War undermined Washington’s interest in World’s Fairs as global prestige-building events. That, even though several fairs figure prominently in the story of the American Century — especially the 1933 “Century of Progress” exposition in Chicago, the final pre-WWII fair in New York City in 1939, Seattle’s 1962 Century 21 Exposition, and the 1964 New York World's Fair (not approved by the governing BIE).
And they weren’t just tourist attractions. Those fairs reinforced for a global audience that America was a powerful country on the ascent. (No surprise, China has embraced the expositions in a big way.) Perhaps even more importantly, they presented a techno-optimist vision, both through the display of new technologies and speculation about technologies to come. “World’s Fairs, especially American World’s Fairs, gave us the future . . . and tried to sell people on the future,” said Charles Pappas, author of Flying Cars, Zombie Dogs, and Robot Overlords: How World's Fairs and Trade Expos Changed the World, in a 2017 speech at the State Department. (You can look forward to my podcast chat with in a couple of weeks.)
I would love America to return in a big way to World’s Fairs, both for geopolitical reasons and to again impart a vision of how technology can solve big problems and make the world a better place for everyone. I love this vision of New World’s Fair from Cameron Wiese:
In this world, you explore the depths of our oceans, take a mission to Mars, and travel back in time to the 1893 Chicago World's Fair recreated in VR. You tour the geothermal plant powering the Fair, see the 3D-printed homes of tomorrow, and watch synthetic organisms decompose the plastic polluting our oceans. You meet the bright minds of tomorrow at the World's Science Competition, watch de-extinct wooly mammoths play, and cheer researchers as they debut the cure for aging. . . . At the end of the night, you catch a ride home in a driverless taxi. With your forehead pressed against the glass, you can't help but feel a renewed sense of wonder. The challenges of our day no longer seem like impossible feats to retreat from, but exciting problems to solve. You can't wait to see how much we achieve by the next World's Fair and what you can do to be a part of it.
The Long Read
🛣 President Biden just made a big mistake reversing Trump’s modernization of NEPA environmental rules
The short-term debt limit agreement will allow Democrats to focus on passing the Biden economic agenda, both the infrastructure and social spending bills. But that good news, at least from a Democratic perspective, should be tempered by a pretty terrible decision by the White House. Reuters reports that the Biden White House is restoring key provisions of the 1970s-era National Environmental Policy Act that the Trump administration had overhauled. Those changes allowed agencies to exclude the climate impact of major projects, such as the now cancelled Keystone XL oil pipeline. The changes also expanded the categories of projects that could be excluded from NEPA altogether, Reuters notes.
And now those changes are going to be reversed:
The new rule proposed by the White House Council for Environmental Quality would direct the agency to account for climate change and other indirect environmental impacts of a project; empower federal agencies to consider alternative designs or approaches for a company's proposed projects and let agencies adopt reviews that go beyond council's regulations. . . . Environmental advocates said they will work with the White House council to ensure that NEPA reviews give a voice to communities that are affected by big infrastructure projects.
File this under “Just Because Trump Did It Doesn’t Make it Wrong.” The irony here is that NEPA rules — which compel federal agencies planning major actions to consider potential environmental impacts (but not necessarily do anything beyond that) — are an obstacle to addressing climate change through the production of clean and abundant energy. Now I’ve written quite a bit lately about NEPA and how over the decades those impact statements have grown longer and take longer to complete. As Manhattan Institute economist Brian Riedel explained in congressional testimony back in April:
Environmental reviews commonly exceed 1,000 pages and require on average seven years to complete (compared to no more than one to two years in Canada and 3.5 years in the European Union).
Several environmental impact statements now take more than 17 years to complete — and no ground can be broken until the project has survived the legal process, including appeals by any litigant.
In America — unlike many other countries — environmental and historical reviews can be challenged in court by a wide range of stakeholders, and these challenges can take years or even decades to be decided. Other countries use faster, non-judicial options to enforce these regulations, rather than expensive and time-consuming lawsuits that essentially become a project veto.
I highlight NEPA not because I love pollution or a much hotter climate, but because the rules have turned into something they were never meant to be. When the bill passed in 1970, lawmakers weren’t trying to hamper the building of infrastructure or clean energy facilities. Many in Congress saw NEPA as more a statement of congressional concern about the environment, one reflecting growing public concern. “For many legislators, undoubtedly, a vote for NEPA was symbolic — akin to a vote for motherhood and apple pie,” writes Richard Liroff in A National Policy for the Environment: NEPA and its Aftermath. “Little did they realize, however, that in voting to enact NEPA, they were placing a potent weapon in the hands of citizen activists.”
Indeed, I would note the emphasis on citizen activism in the previously mentioned White House statement. And let me again mention the 2019 paper “Infrastructure Costs” that finds a “suggestive” connection between a three-fold increase in real spending per mile on interstate highway construction from the 1960s to the 1980s and a spate of federal and state environmental laws that expanded the scope for considering citizen concerns in project design.
There’s also this 2020 analysis from Brookings Institution economist Clifford Winston:
Before highway authorities can begin actual roadwork, they must perform engineering analyses and obtain permits indicating that they have satisfied National Environment and Policy Act and, if applicable, state environmental quality reviews to ensure that projects are built in a safe and responsible manner and that they will not adversely affect the environment and communities. [My research suggests] the average time to complete such a NEPA review has grown sharply over time and that the permitting process for major projects may take as long as ten years.
And it’s not just highways. The American Wind Energy Association, for instance, said the Trump rule changes would make it easier to build wind farms both on land and offshore. Likewise, NEPA makes it hard to develop geothermal energy, current the subject of much startup activity. This from analyst Eli Duorado (who deserves a lot of credit for his policy entrepreneurship on NEPA) from the Center for Growth and Opportunity at Utah State University:
Drilling on federal lands involves federal permitting — which involves environmental review. Environmental review, mandated by the National Environmental Policy Act any time a federal agency takes a major action that could affect the environment, can take years. Conveniently, the oil and gas industry got themselves an exclusion from these requirements. The effects of drilling an oil and gas well on federal lands are rebuttably presumed to be insignificant, as long as certain limitations apply — for example, the surface disturbance of the well is less than 5 acres. Oil and gas wells are very similar to geothermal wells, so it makes sense that they would have very similar environmental impacts. As I have written for CGO, simply extending oil and gas’s categorical exclusion to geothermal energy is an absolute no-brainer. This permitting issue shows that the nearly non-existent geothermal lobby is (surprise!) less effective than the oil and gas lobby.
Interestingly, the anti-energy impacts from NEPA were obvious almost from the very beginning. As nuclear-theorist-turned-futurist Herman Kahn wrote in 1975:
The huge cost associated with protracted delays were evidently not contemplated by Congress when it passed [NEPA]. Besides the postponement in building the Trans-Alaska Pipeline, there are many other examples of costly delays caused by objections made by environmentalists. Indeed, it is difficult to find any proposed project related to the important area of new energy supplies that has not been so affected, [including] nuclear power, thermal electric power, transmission lines, pipe lines, refineries, petroleum and natural gas, and even geothermal power.
To govern is to choose. And all choices involve deciding which trade-offs to accept and which to reject. But there are always trade-offs. And President Biden just chose to make his infrastructure dreams more costly and take longer to implement, not to mention delaying a broader transition to abundant clean energy.