Saturday, August 2, 2014

Population Pyramids for Israel and Palestine. Whoa to the policy-maker who ignores this!

Demographics is seldom talked about when it comes to geopolitical issues but it is an important explicit and implicit variable that underlies many conflicts.

Here is what Israel and Palestine look like projected to 2015.

All is not equal in terms the age group 19 and under, especially.

Source: HERE

Friday, August 1, 2014

It takes a nation to stockpile this much ethanol. No lie. It literally takes a nation. Find out which one here.

US ethanol stocks soar to 16-month high: EIA

US ethanol stocks rose 647,000 barrels to a 16-month high of 18.587 million barrels in the week that ended July 25 despite a slight decline in US ethanol production, which dipped 5,000 b/d to 954,000 b/d, US Energy Information Administration data showed Wednesday.
 As I like to do, I will put this into some perspective.

18.587 million barrels of ethanol equals 780,654,000 gallons of ethanol (42 gallons in a barrel).

One bushel of corn (56 pounds) produces 2.8 gallons of ethanol.

So, it took 278,805,000 bushels of corn (780,654,000/2.8) to produce the 18.587 million barrels of ethanol the US has in stock.

The stock of ethanol was produced from multiple corn plantings over time, so in many cases the same acreage was used to produce multiple harvests of corn.

In 2013, the average yield of corn per acre was 158 bushels.

This means, in the aggregate, the number of acres of corn needed to produce the current stock of ethanol was 1,764,588 (278,805,000/158).

How much is that? The total acreage of the US is 1,875,714. Virtually the whole US minus a couple of counties.

How many people could that feed?  Just askin'...

Note: Please remember my caveat---the same land would have to be used multiple times to get this amount of ethanol over time. I am not saying it literally takes the whole country.  Thanks!

Corn killed Bubba Gump Shrimp. "That's all I have to say about that". See how here.

Source: Big Picture Agriculture

Kay MacDonald over at Big Picture Agriculture has this graphic showing the "Dead Zone" in the Gulf of Mexico just off the coasts of Texas and Louisiana and the following comment:

"This year’s Deadzone in our Gulf of Mexico waters will be about the size of Connecticut. It is estimated that the Dead Zone causes losses of $82 million per year to the seafood and tourism industries. 
Much of it is caused by corn cropland fertilizer runoff that ends up going down the Mississippi River. Corn used to fuel cars – cropland used to feed cars, not people. In contrast, a healthy Gulf of Mexico sans Dead Zone would be capable of growing more shrimp, crabs, clams, and fish which humans love to eat."
This clearly illustrates an important concept in AP Microeconomics: Negative Externality.

Negative externalities occur when the production of a good imposes a cost (or costs) on third parties not involved in producing or consuming the good.

Farmers grow corn. The fertilizer used in the process becomes part of the run-off from irrigation and/or rains that make their way to streams and rivers then eventually the Gulf of Mexico in this instance.  The chemicals in the fertilizer destroy/damage the aquatic ecosystem that allow shrimp and other sea creatures to thrive.

Each farmers contribution to the problem is small but in the aggregate all farmers along the waterways that feed the Gulf of Mexico cause approximately $82 million dollars in lost revenues to fisherman of all types along the Gulf Coast.

This loss in revenue (a cost) is borne by the fisherman ("Third Parties") and not by the farmers and/or consumers of corn.

There are potentially 3 solutions to this problem:

(1) tax the producers and/or consumers of corn up to at least the amount of the damage--$82 million.
(2) impose a regulation forcing farmers to prevent the run-off hence the damage to the Gulf
(3) Farmers collectively agree to pay the fisherman $82 million for the damage they cause ("Coase" solution).

All 3 of these "internalize" the monetary value of externality and require the parties to the actual transaction to bear the full cost of the damage they impose.

Seems fair, doesn't it?

Thursday, July 31, 2014

World-wide Car sales from 1990 to Present. You are not going to believe these numbers.

This chart amazed me. Note the years along the horizontal axis. The first two bars represent two DECADES worth of car sales worldwide.  The other four represent single year sales (the last bar for 2014 is a projection).

The total number of cars sold in 2011 and half of 2012 EQUALED the total amount sold in the 20 year time span from 1990 to 2010.

Ponder that for a moment when it comes to energy and environmental  issues.

Statistic: Number of cars sold worldwide from 1990 to 2014 (in million units) | Statista
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