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Perverted Logic

March 11, 2014

A recent Carnegie Mellon study concluded that making terrible investments is better than making merely bad investments.

This wasn’t exactly what the study had in mind, but it’s the only logical conclusion that can be drawn from the study.

We are truly living in George Orwell’s age of double speak.

Diagram of Social Classes Depicted in George Orwell’s Book, 1984

Diagram of Social Classes Depicted in George Orwell’s Book, 1984

Quoting from an article in the Pittsburgh Tribune, “The Carnegie Mellon University study concluded that in order to achieve the greatest gains from renewable energy sources, officials should not focus on the locations that have the greatest potential for capacity, but places where the highest number of people would benefit by offsetting the most pollutants.”

Lima Azevedo, an assistant professor at CMU’s Center for Climate and Energy Decision Making, said, “In many places in California or Arizona, the same solar panel will generate much more electricity than in Pennsylvania, given that the solar resource is much better at those locations.”

He went on to indicate that investing in solar and wind in areas where populations were largest would result in greater social benefit because of the larger populations.

But, it’s been clearly demonstrated that solar and wind in northern populated areas, such as Pennsylvania and New York, have worse economic outcomes then solar in Arizona or wind in Montana.

PV Solar in Arizona might have a payback of 14 years, while PV solar in Washington, DC, would have a payback greater than 32 years. See Solar-Induced Death Spiral.

According to the Carnegie Mellon study, it would be better to invest in PV Solar in, or around, Washington, DC, than in Phoenix, Arizona.

In other words, invest more money where it will have the worst economic payback.

In fact, the life of PV solar equipment may be around 25 years, so its cost would never be recovered in Washington, DC, or other northern areas, such as Albany, New York, where the payback period is 42 years.

While this may reduce per capita emissions, it wastes money.

This type of perverted logic is damaging to the economy, and results in making investments that drain money from the economy. It reduces investments in measures that could increase productivity, or efficiency and create more jobs.

One has to wonder why a university, such as Carnegie Mellon, would produce such a study.

Using social costs always distorts economics. A good example of this is trying to establish a social cost of carbon that essentially establishes a price on CO2 emissions.

The OMB has provided guidance to all government departments and agencies on using the Social Cost of Carbon when evaluating economic alternatives.

It’s only by applying this type of distortion that the Carnegie Mellon study can make any sense.

Which, of course, makes no sense, because even if the U.S cut its CO2 emissions to zero, worldwide CO2 emissions would still increase.

We are truly living in George Orwell’s age of double speak.

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4 Comments leave one →
  1. March 11, 2014 5:41 pm

    Donn, another excellent post. Thanks. blogging onward.


  1. Perverted Logic, another excellent post by Donn | budbromley
  2. Weekly Climate and Energy News Roundup | Watts Up With That?

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