Day: December 20, 2022

Is the FTC kneecapping VR before it even gets off the ground?

In a courtroom in San Joe, California today, the US government squared off against a social media company and grilled that company’s CEO about its investments in another technology company, and its general business strategy for the new field of wearable virtual reality.

The app in question, the fitness VR app Within, is poised to be acquired by social media giant Meta (formerly Facebook) for use on its virtual reality headsets and ecosystem.

The deal itself has not yet been finalized, but that hasn’t stopped the nation’s antitrust agency from flexing its muscles in Silicon Valley.

When Meta CEO Mark Zuckerberg took the stand today, lawyers from the Federal Trade Commission aimed to pepper him on the overall business strategy of Meta’s well-known pivot to the metaverse, or virtual reality space, and whether his plans were about…business success?

If the FTC succeeds, it will halt Meta’s purchase of the workout app Within, developed by Los Angeles developers beginning in 2014. While that may put smiles on the faces of some regulators and populist politicians in Washington, D.C., it will do nothing for consumers. And it may even harm the future development of this entire sector.

At last estimate, the entire “metaverse economy” is projected to one day be worth either $800 billion or even trillions by 2030. Meta itself has poured in an ungodly $10 billion in the last year alone, and its own products are still rather limited in terms of user adoption.

The fact that the FTC and other regulators are trying to kneecap virtual reality, before it really even begins, is more startling than anything else.

If the last two decades of economic growth and innovation from Silicon Valley have taught us anything, it is that capital, talent, and business acumen are crucial ingredients for success and user satisfaction, but it isn’t everything. A supportive infrastructure, an investment-friendly climate, and a high demand for developers and skilled employees are also necessary and bring with them exponential benefits.

The companies and firms that have spun off from talent formerly of giants like Google and PayPal — not to speak of Elon Musk, Peter Thiel, and the rest of the PayPay Mafia — have undoubtedly made consumers’ lives better, and helped our economy grow beyond leaps and bounds.

Among those successes, there have been thousands more failures, but those have been at the hands of consumers and users rather than government agencies and federal lawsuits by regulators. And if the media coverage surrounding this case gives any indication, it seems much of this action stems not from antitrust law or precedent, but rather as a kind of payback.

The Associated Press ran a bizarre “analysis” last week, framing the FTC v. Meta/Within case as some kind of retribution for Facebook’s acquisition of Instagram in 2012. Back then, that decision was largely panned by technology journalists and never received a peep from regulators. Since then, it is grown to become one of the most popular apps found in app stores.

Considering Instagram’s success in the last decade, thanks to investments and entrepreneurial prowess by Meta, as some kind of evidence to halt all future mergers and acquisitions of a company that over a billion global consumers is not only wrong, but it begs the question of why the FTC is even involved in the first place.

Consumers benefit when competitors compete, when innovators innovate, and when laws provide regulatory clarity and guidance to protect consumers and police bad actors.

But this case seems more like a hunt for ghosts of Christmas past rather than protecting us from any real harm. And it may do more damage than regulators estimate.

My colleague Satya Marar summed this up in RealClear last month:

Start-ups depend on millions in investment to develop and deploy their products. Investors value these firms based not only on the viability of their products, but on the firm’s potential resale value. Larger firms also often acquire smaller ones to apply their resources, existing expertise and economies of scale to further develop their ideas or to expand them to more users.

Making mergers and acquisitions more expensive, without strong evidence they’ll hurt consumers, makes it tougher for start-ups to attract the capital they need and will only deter innovators from striking out on their own or developing ideas that could improve our lives in an environment where 90% of start-ups eventually fail and 58% expect to be acquired.

The job of the FTC is not to protect consumers from innovations that have not yet happened. That should be the furthered thing for its mission. Rather, it should be focused on consumer welfare, punishing bad actors that take advantage of consumers, break laws, and promote real consumer harm.

Mergers and acquisitions provide value for consumers because they match great ideas and technology with the funding and support to scale them for public benefit. Especially considering the metaverse is so new, it is frankly bewildering that we would be wasting millions in taxpayer dollars to chase down an investment before it even bears fruit — just because a company was too successful last time.

When it comes to our regulatory agencies, we have to ask who they are looking out for when it comes to consumer wants and wishes: the consumers that wish to benefit from future innovations.? Or incumbent players who want to slay the largest dragon in the room.

In this case, it seems the FTC has stretched a bit too far, and consumers may be worse off for it.

A Critique of ‘Can Anti-Vaping Policies Curb Drinking Externalities?: Evidence From E-Cigarette Taxation and Traffic Fatalities’

Written by Sinclair Davidson

Recently The Economist published a report into a study that investigated vaping and taxation. The Economist reported the main conclusion of the study as being:

The study found that increasing ecigarette taxes reduces this, too. A $1 rise in ecigarette taxes brings    a 10-14% decline in the number of alcohol related traffic deaths per 100,000 among 16 to 20 year olds.

That seems to be a very impressive result. Yet, as always with public health related research, it should not be taken at face value. While The Economist itself does not provide any critique of the underlaying study, it does caution against the obvious policy conclusions that appear to follow from the study.

The study, ‘Can Anti-Vaping Policies Curb Drinking Externalities?: Evidence From E-Cigarette Taxation and Traffic Fatalities’ forms part of the Center For Health Economics And Policy Studies working paper series at San Diego State University and can be found at their website. It is also available at the NBER website and the SSRN website. At this time, the paper has not been published in an academic journal nor does it appear to have been subject to formal peer-review. It has very likely been workshopped and informally reviewed by the author’s colleagues and friends.

The paper itself has 5 co-authors. All of the authors are economists and identify as being labor economists and health economists. While the paper itself deploys the language of economics – the phrase ‘externality’ in the title and frequent mentions of ‘spillovers’ in the text – style of the paper is very much in the public health tradition. For example, there is no formal (or even informal) model to guide our interpretation of the empirical results. There are no hypotheses set out linking the empirical results to any model, definitions are vague and appear to subtly vary over the paper, summary statistics are not fully reported, the results of empirical estimations are not fully reported – for example, no goodness of fit statistics are reported at all – and, finally strong policy conclusions are reached that are not consistent with the evidence that has been produced. 

As with many of the papers we see in public health, there is a combination of the obvious, non-sequitur, and leaps of faith that combines with overly complex econometric technique that allows the authors to draw conclusions that are not fully supported by theory or data.

What is the purpose of this paper?

In the abstract, we are told:

This paper is the first to explore the spillover effects of e-cigarette taxes on teenage drinking and alcohol-related traffic fatalities.

Then in the introduction (pg.4), we are told:

This study is the first to study the effects of ENDS [electronic nicotine device systems] taxes on teenage and young adult drinking and alcohol-related traffic fatalities.

In the conclusion (pg. 28), we are told:

This study offers the first causal evidence on the impact of ENDS taxes on teen alcohol misuse and alcohol-related traffic fatalities.

So the authors claim to be investigating the relationship between taxation on vaping products and teen (or youth or young adult) consumption of alcohol and traffic fatalities. 

What does the paper claim to find?

From the introduction, we are told:

  • ‘we confirm that ENDS taxation reduces teen ENDS use, a one-dollar increase in ENDS taxes reduces teen vaping by 5.4 percentage points (or approximately 24 percent), a substantial effect.’
  • ‘we find that a one-dollar increase in ENDS taxes leads to a 1-to-2 percentage point reduction in the probability of teenage and young adult binge drinking.’
  • ‘Our results indicate that a one-dollar increase in ENDS taxes results in a 0.4 to 0.6 decline in the number of alcohol-related traffic fatalities per 100,000 16-to-20-year-olds in a treated state-year.’

It is this latter result that The Economist reports on. This result is also the ‘externality’ that is found in the title of the paper. 

To be complete, what does the paper not find?

  • ‘We find little evidence that alcohol use among those ages 21-and-older are affected by ENDS taxes.’
  • ‘We find no evidence that ENDS taxes are related to teenage traffic fatalities that do not involve alcohol … .’

This latter point is very important – the story being told in the paper relates to the social cost of alcohol. It is alcohol in this story that contributes to traffic fatalities – not vaping, or even smoking, for that matter. Now it is true that some individuals may consume both alcohol and nicotine. Yet many consume neither, or just one of the two. The story being told in this paper is that government mandated efforts to reduce (even suppress) the incidence of vaping via taxation has the effect of also reducing alcohol consumption and, by consequence, traffic fatalities for individuals aged between 16 and 20 years old – but not for individuals over the age of 20. 

This result is so specific that it seems spurious. 

This result is also not replicated in the existing literature. Vaping is a somewhat recent innovation to the consumption of nicotine. Historically individuals have accessed nicotine via combustible cigarettes, cigars, pipes and the like. Governments have tended to tax combustible nicotine products and attempt to reduce (or suppress) consumption of these products. The authors of the paper do not report any result demonstrating an externality (or spillover) from tobacco taxation resulting in reduced alcohol consumption and consequently fewer road fatalities. 

By contrast, however, they do point to a study by Adams and Cotti (2008): 

… we observe an increase in fatal accidents involving alcohol following bans on smoking in bars that is not observed in places without bans. Although an increased accident risk might seem surprising at first, two strands of literature on consumer behavior suggest potential explanations — smokers driving longer distances to a bordering jurisdiction that allows smoking in bars and smokers driving longer distances within their jurisdiction to bars that still allow smoking, perhaps through non-compliance or outdoor seating.

It must be emphasised, the notion that the increased taxation of vaping will result in fewer traffic fatalities due to reduced alcohol influenced driving is a new, and unique, result in the policy literature.

Finally, it must be pointed out that the authors make a claim that they are performing a general equilibrium analysis. Three times they make the claim:

At page 4:

Understanding the general equilibrium effects of public health policies targeting ENDS use is necessary to document the full costs and benefits to society.

At page 28:

… in order to provide a more complete understanding of general equilibrium effects of public health policies targeting ENDS.

At page 31:

Given that ENDS taxation, and optimal ENDS policy more generally, is contentious and ongoing, considering general equilibrium effects is essential.

To be very clear – the authors simply do not provide a general equilibrium analysis of ENDS taxation. They perform a patial equilibrium analysis looking at the impact of taxation on vaping and then attempt to link that analysis to alcohol consumption and road fatalities. A general equilibrium analyses would have to, at least, incorporate substitution effects between vaping and combustible nicotine products and investigate the various (private and social) costs and benefits associated with policy choices. To be fair, the authors do indicate that increased taxes on vaping does result in increased consumption of combustible nicotine products but that insight is not incorporated into their empirical analysis. 

Is there a theoretical basis for the paper’s findings?

The authors, at page 4, offer this possible explanation:

If the adoption of ENDS taxes causes a sizable reduction in the number of ENDS users, such a policy shock could generate important changes in alcohol use, which may include drinking-related externalities with substantial social costs.

That statement is some general, and so vague, that it is difficult to dispute it. Yet we are never told what this statement could possibly mean. For example:

  • It could mean that high levels of vaping taxation results in less vaping and less drinking.
  • It could mean that high levels of vaping taxation results in the same amount of vaping, but less drinking. 
  • It could mean that high levels of vaping taxation results in less vaping and more drinking.

The latter two possible meanings could be explained by a budget constraint – vaping and alcohol are consumed subject to a budget constraint and if one form of consumption becomes more expensive individuals substitute away from the more expensive activity to the less expensive activity. Or it could be that some individuals prefer, say, vaping to alcohol and when vaping becomes relatively more expensive they cut back on alcohol consumption to maintain their desired level of vaping.

The study simply does not explore these possibilities. We are informed that the results imply the very first possibility above. Vaping and alcohol consumption for 16 – 20 year olds are complements and the results show that increased taxation results in both less vaping and less alcohol consumption. 

Empirical Strategy

The paper combines data from 5 databases. Four of the five databases contain individual data as to the consumption of alcohol and nicotine for various groups and ages of respondents. The fifth database contains  traffic fatality data for the US by state and year. Being economists the authors estimate various sophisticated regression models and report robustness tests. While the paper is silent on the package used to estimate the regressions it is very likely to be Stata and a similar package and there is no doubt that the regressions have be correctly estimated.

There are problems, however, with the data that has been used in the regressions and in the specification of the equations. As is often the case, so inferences have to be made at either the 5% confidence level or even the 10% confidence level. In one instance the authors are reduced to telling us that the sign is in the correct direction.

A challenge with many public health research projects is that the data are collected from secondary sources and do not neatly match the purpose the researchers wish to apply it to. Furthermore control variables need to be applied – sometimes at higher levels of aggregation than the actual data. For example, in this study individual data as to alcohol consumption and vaping consumption is collected. While the paper suggests that this is done over the period 2003 – 2019, in fact vaping data are only collected after 2013. 

The questions relating to alcohol use are very broad. Any person who had at least one drink in the past 30 days is defined as being an alcohol user. Given that we are told that (some) surveys are distributed between January and June that means that anyone having had a drink over Christmas and New Year is not only a drinker but a multiple ‘offender’. As far as I can tell the regressions do not control for when the data was collected. 

They also include data bases that collects information about adult usage of alcohol and vaping. It is not clear why they do this, given that the study is about teenage drinking, vaping taxation, and fatalities. 

In the regression analysis they include control variables such as state based policy variables (at a high level of aggregation) and individual characteristics such as age, ethnicity, grade (surely highly correlated with age), sex, and in some specifications educational attainment. What they do not include are any indicators of a propensity for risky behaviour, part-time employment or some other source of income, whether or not they hold a drivers licence, or have access to a motor vehicle. In particular they do not control for whether the individual lives in a city or rural area (presumably having less access to various forms of public transport). Driving ages vary across the US by state and no attempt has been made to include this variable in the analysis. It is true that state based control variables are included in the analysis, but those variables are doing a lot work.

It is only the final dataset that directly addresses the research question that the authors claim to be investigating. 

Irrelevant Results

All of this data is used to demonstrate that higher levels of vaping taxation results in lower levels of vaping. Those results are shown in table 1. This is unsurprising. Demand curves slope down and this is how the world is meant to work.

In table 2 we see the impact that vaping taxation has on alcohol consumption. In the first panel we see there is no statistically significant relationship between ‘any alcohol consumption’ and the taxation of vaping. In the second and third panel we see that there is a statistically significant negative relationship between the number of drinks being consumed and, at least, one binge drinking incident and the taxation of vaping. This result could be consistent with a number of possible explanations, however, we cannot draw any serious conclusion from these results because the authors have not controlled for actual vaping in these results. The regression results in table 2 have a very serious omission – the lack of control for respondent vaping. 

The results in the final panel of table 2 relate to multiple binge drinking events. The author’s preferred specification is only statistically significant at the 10% level and is not robust to changes in the control variables used in the regression. 

Tables 3 and 4 contain robustness tests using a different regression analysis. Table 3 in particular shows clear negative relationships between alcohol consumption and vaping taxation. It, however, also suffers from the omitted variable bias that we saw in table 2.

In table 5, the authors investigate the overlap between those individuals who both vape and binge drink. While this group of individuals – and their propensity to get involved in traffic fatalities – is the very group that the authors claim to be investigating, very little shared about them. For example, we only discover on page 30 that 40% of teen vapers also binge drink. From the summary statistics we discover that 19.7% of teens (in the state-based sample) vape. That suggests that 7.9% of teens both vape and binge drink. While that may seem to be a high number, 19.9% of teens were classified as binge drinkers, so it would appear that 12% on teens binge drink, but do not vape. 

Table 5 is a lost opportunity. By including vaping in the dependent variable (a binary indicator) and not as a independent variable it reduces the ability for readers to form any firm views on the actualy dynamics in the data.

Tables 7 and 8 add other (adult) age groups into the mix. The results are age distributed – there are different effects for younger consumers than for older consumers. Given the stated research question, the results here are not interesting.

What is interesting are the results in table 6. Here the authors segment their data by sex, age, and ethnicity. A vaping tax reduces the number of drinks consumed by white males under the age of 17. At the 1% level of significance vaping taxes reduce binge drinking for 17 – 18 year olds, Hispanics and Other. Similarly at the 1% significance level a vaping tax reduces multiple instances of binge drinking for people of colour (Black, Hispanic, and Other). While public health academics may welcome results such as this, the fact is that the lack of consistency in the results undermines any confidence we can place in those results. It is very likely that random variation in the data is driving the random variations in the results. 

Getting to the Main Result

Table 9 contains results that address the research question that the authors claim to be answering. The results are not as promising as advertised. In this table the authors deploy data from the Fatality Analysis Reporting System (FARS). This data set contains state by state data on traffic fatalities. The authors extract the following information from the data set: ‘Total Traffic Fatalities, Traffic Fatalities with Driver BAC > 0, Traffic Fatalities with Driver BAC > 0.1, Traffic Fatalities with Driver BAC = 0 …’.

The authors claim that they have used the natural log of the ‘the age-specific traffic fatality rate (number of traffic fatalities per 100,000 population) in state s and year t’ as the dependent variable in a regression that includes vaping taxation and various state-based control variables. The authors do not explain why the have taken the natural log of the fatality rate. They also claim that some instances of a zero fatality rate as occurred and they have corrected for this by substituting the natural log of 1 (i.e. zero) in the regression. However, to my mind this suggests a data error in the analysis – it is not clear why any state in the US would have zero road fatalities in any of the age groups the authors claim to include in their analysis (16 – 20, 21 – 39, 40 and older). In the very instance the underlaying analysis is suspect.

There is a further problem with the dependent variable.

Consider how the authors describe their finding:

From the Abstract and again in the introduction:

… a 0.4 to 0.6 decline in the number of alcohol-related traffic fatalities per 100,000 16-to-20-year-olds in a treated state-year.

From page 15:

We focus on the period from 2003-2019 and generate a state-by-year panel of traffic fatalities for those ages 18-to-20, ages 21-to-39, and 40-and-older. Given our interest in traffic fatalities involving alcohol, we make use of information collected on Blood Alcohol Content (BAC) of the driver as well as the timing of the accident given that the alcohol-related fatalities frequently occur on nights and weekends.

At page 26, they describe the results in table 9 as follows:

  • ‘Table 9 presents estimates of the effects of ENDS taxes on traffic fatalities among 16-to-20-year-olds, generated from equation (4).’
  • First, we find that ENDS taxes are essentially unrelated to total traffic fatalities among 16-to-20-year-olds …
  • ‘…our results show consistent evidence of an ENDS tax-induced decline in alcohol-involved traffic fatalities.’

At page 27:

  • ‘… results imply an approximately 5-to-9 percent decline in alcohol involved traffic fatalities among 16-to-20-year-olds.’

It is very clear that they are describing fatalities amongst an age cohort (in this case 16 – 20). They are not describing the age of the driver, but rather the age of the people killed in the incident. 

By contrast also on page 15:

For traffic fatalities where the BAC of the driver is reported, the rate of traffic fatalities involving 18-to-20-year-old drivers with a BAC > 0 was 4.5 per 100,000 population. For those ages 21-to-39 and 40-and-older, the numbers are 5.9 and 2.5, respectively.

This is actually the variable that the authors should be using. Drivers aged 16 – 20 who have a BAC > 0. Yet, even here, they report the data for drivers aged 18 – 20. To be fair, this may be a typo. All the discussion and description – apart from this one instance – suggests that the authors have used fatality rate by age group as their dependent variable, not driver involved in a fatality aged 16 – 20. 

It is very likely that the authors have mis-specified their dependent variable of interest. The chain of causation that they want to demonstrate is that vaping taxation results in lower alcohol consumption amongst 16 – 20 year olds who then are less likely to cause traffic fatalities by drink driving. As it stands they are reporting results that demonstrate that vaping taxes lead to lower levels of alcohol consumption that result in fewer 16 – 20 year olds dying in traffic incidents where the driver of the vehicle is under the influence of alcohol but may not be aged 16 – 20. What makes this result even more problematic is that the authors demonstrate the effect they report only applies the individuals aged 16 – 20.  

Given this analysis it is very likely that the conclusions in this paper are based on a spurious regression.

A looming PFAS ban threatens Europe’s economic and energy security.

Europe’s stance on per- and polyfluoroalkyl substances (shortened to PFAS) has only grown harsher over time. The first wave of limitations began in 2009, when the  European Chemicals Agency restricted perflurooctane sulfonic acid, a subtype of PFAS, in line with the international Stockholm Convention. 

The elimination of another (perfluorooctanic acid)  soon followed under the European Persistent Organic Pollutants Regulation in 2020. This year, Germany, Norway, and Sweden went further and called on the European Commission to phase out all PFAS in Europe. 

Eliminating so-called “forever chemicals” might seem like the sensible thing to do. After all, the substances are known to have seeped from water sources into human bodies, raising fears of adverse health effects. High concentrations of some of these materials in the bloodstream can cause liver, heart, kidney, or lung damage, disrupt neurological and immune systems, interrupt normal hormonal functions, and even lead to cancer. PFASs are also a potential environmental threat through water and soil pollution. And, true to their name, PFAS materials hardly degrade over time. Instead, they break down into other PFAS compounds via digestion or environmental wear and tear. 

However, removing the substances can be far more harmful than the presence of the chemicals themselves. 

PFASs are integral to any 21st-century high-tech economy. Semiconductors require a coating of fluoropolymers, yet another PFAS, to withstand the intense chemical treatments involved in their manufacturing process. Without semiconductors, we cannot have phones, computers, laptops, TVs, or any modern-day appliance. 

A world with zero risks is impossible. Instead of hopelessly trying to build one, Europe should weigh the pros and cons of PFAS on a case-by-case basis and settle on the least harmful option.

Removing PFAS wholesale will create chaos by forcig integrated circuit suppliers to look for substitutes where none are available. The Belgian government saw the consequences of this when a factory in Antwerp shut down for seven months in response to tightening regulations. Doing the same to the microchip industry, currently suffering from supply chain difficulties, will cripple a 49 billion EUR European industry and nullify investments promised by the 40 billion EUR European Chip Act

Silicon chips would be just the start. A full PFAS ban is a danger to Europe’s energy security. The same group of highly resistant and flexible materials provides thecoating for the batteries and hydrogen fuel cells powering electric vehicles. Fluoropolymers help build wind turbines, and fluorinated gases help cool downheating pumps. Removing them creates artificial scarcities in renewables, making Europe’s energy needs (not to mention its climate goals) all the more unmanageable. 

The EU’s remaining alternative is to procure the compounds or their replacements from China, already the world’s biggest exporter of rare earth minerals. This would undermine Europe’s strategic autonomy

A world with zero risks is impossible. Instead of hopelessly trying to build one, Europe should weigh the pros and cons of PFAS on a case-by-case basis and settle on the least harmful option. Some products, such as firefighter foam, could be phased out without severe repercussions. In the case of others (semiconductors and energy supplies, among them), it is better to minimize excessive exposure by policing company excesses. 

Strict punishments for dumping have proven more than adequate, substantially reducing water PFAS presence since the early 2000s. That is a healthier and better future we can all get behind. 

Originally published here

Reputation Works Better Than Regulation: Why Demand Should Determine Prices

Dynamic pricing is receiving a lot of attention, given the media storm surrounding the recent sale of Taylor Swift’s concert tickets. Problems with pre-sale pricing and ticket availability for Swift’s “Eras” tour frustrated fans and prompted politicians to cry foul concerning Ticketmaster’s sales strategy. 

Alexandria Ocasio-Cortez was among the the first to assert that Ticketmaster’s supposed monopoly status should be “reigned in,” while other members of Congress such as Amy KlobucharIlhan Omar, Richard BlumenthalDavid Cicilline, and Bill Pascrell also felt it necessary to denounce the dominant status of Ticketmaster. 

This isn’t the first concert that had fans fans demonizing Ticketmaster for its dynamic pricing policy, and this isn’t the first time government officials vowed to intervene in the live entertainment sector. In light of recent events, let’s clarify what dynamic pricing is, why it is a worthwhile strategy for firms to pursue. Politicians should refrain from playing referee, particularly since a firm’s reputation, rather than regulation, plays a greater role in remedying consumer concerns. In fact, in under a month’s time, Ticketmaster has not only apologized to fans for the debacle but has already started the process of making amends by announcing that Verified Fans will have a second chance to purchase tickets for the coveted concert. That response rate is unheard of in the halls of Congress.

Why Demand Levels Should Determine Prices

Dynamic pricing has been around in some form or other for centuries. It is a pricing policy that allows for variations rather than one that is fixed. During the 1950s, however, price adjustments were beginning to be harnessed as a strategic matter in relation to demand conditions. Nobel Laureate William Vikrey proposed that prices should increase for public transport systems at peak periods to lessen congestion. His discovery that a change in price could influence use and consumption patterns by either stimulating or suppressing demand appealed to the interests of the private sector. 

Under a dynamic pricing policy, prices shift according to market conditions, consumer interest, and competitive pressures. Thanks to technological advancements that can assess changes in these factors, companies can better determine demand levels, and pivot their prices, in near-real time.

With dynamic pricing, last-minute tickets to a show can either be a steal if there are unsold seats, or can cost a small fortune if those seats remain in high demand. A Tik Tok influencer demonstrated this by spending $10,000 on two tickets to a Harry Styles concert. 

Dynamic pricing happens all around us, and anyone who has rushed to a restaurant to take advantage of happy hour deals knows all too well how crucial it is that their server input the order before the hour is up. Those who prefer to dine late must forgo the happy-hour price perks. This illustrates an important benefit of dynamic pricing: it furthers opportunities for price discrimination. Despite the negative connotation, price discrimination can be a strategic move. Different markets are charged different prices for the same offering, as in the classic example of granting student or senior discounts for movie tickets when other ticket buyers (seeing the same film in the same theater at the same time) pay full-price. 

Why Both Companies and Customers Leverage Dynamic Pricing

Another important aspect of a flexible pricing approach is that it can create opportunities for cross-subsidization within a firm. Charging a higher price to a market who is willing and able to pay for it allows a firm to offer the product at a lower price to a market with limited purchasing power. Price differentials and price adjustments should be harnessed in a dynamic and interconnected marketplace, and indeed it is common practice.

Price adjustments occur not only across the globe, but also across the street. Retailers like Target will adjust their in-store and online prices in relation to local economic factors, and its savviest shoppers know to adjust their preferred store zip codes and clear their caches to take advantage of price match policies when they are in their favor. Just as technology has enabled firms to track trends and pivot prices, it has also enabled consumers to compare prices in real time, submit requests for returns, and vocalize concerns.

Prices can rise or fall under a dynamic pricing policy, and such an approach works best if the perception of consumer surplus is kept intact, meaning consumers believe they are receiving something of greater value as compared to the price. 

Why The Consumer Remains King In A Free Market

When done well, dynamic pricing adapts to consumers; when done poorly it is seen as taking advantage of them. Yet, it is important to bear in mind that the consumer is never truly captive. If a price is too high, because demand is too great or supply is too scarce, consumers are not forced to buy. For this reason, businesses should take care regarding consumer interests, and charge what they can when they can. 

Ticketmaster has the right to charge what it wants, as it has assumed the rights to the seats at the venue where Taylor Swift performs. And Swifties have the right to refuse purchasing those seats if the show is not worth it to them. Moreover, Taylor Swift has the right to establish her own ticket distribution system if she is unhappy with Ticketmaster’s functionality as an intermediary between her shows and her fanbase.

Over 14 million users flocked to Ticketmaster’s website to make a purchase during the pre-sale release and, according to Ticketmaster, to meet that level of demand “Taylor would need to perform over 900 stadium shows (almost 20x the number of shows she is doing)…that’s a stadium show every single night for the next 2.5 years.” 

It seems it is not Ticketmaster pushing up prices, but rather fans’ demand. 

As consumers, we must remember that in a market-based system, consumers determine what is of value, what is demanded, and what is consumed. To maintain such authority, we would be wise to use our wallets, rather than Washington cronies, to curtail costs.

Originally published here

Rokok Elektrik dan Miskonsepsinya

Rokok elektrik atau vape saat ini merupakan salah satu produk yang menjadi bagian keseharian yang tidak bisa dilepaskan dari jutaan orang di seluruh dunia, termasuk juga tentunya di Indonesia. Di berbagai tempat, khususnya di wilayah perkotaan, kita bisa dengan mudah menemukan berbagai pengguna vape, dan juga berbagai pertokoan yang menjual produk-produk rokok elektrik yang sangat beragam.

Semakin banyaknya konsumen yang memilih untuk mengkonsumsi vape atau rokok elektrik ini tentu disebabkan oleh berbagai hal. Setiap orang tentu memiliki alasan yang berbeda-beda mengenai mengapa mereka menggunakan vape, mulai dari harganya yang secara umum lebih murah dibandingkan dengan rokok konvensional, pilihan rasa yang lebih beragam, dan juga untuk membantu mereka mengurangi konsumsi rokok konvensional yang dibakar, yang bisa menimbulkan berbagai penyakit kronis.

Di sisi lain, ada juga sebagian kalangan yang memiliki sikap kritis dalam menanggapi semakin meningkatnya pengguna vape atau rokok elektrik yang ada di Indonesia. Mereka berpandangan bahwa vape merupakan produk yang sangat berbahaya, sama seperti rokok konvensional yang dibakar.

Padahal, sudah ada laporan yang dikeluarkan oleh berbagai lembaga kesehatan internasional yang menyatakan bahwa, vape atau rokok elektrik merupakan produk yang jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar. Salah satu dari lembaga kesehatan yang telah mengeluarkan laporan tersebut adalah lembaga kesehatan publik asal Britania Raya, Public Health England (PHE). PHE dalam laporannya menyatakan bahwa vape atau rokok elektrik merupakan produk yang 95% jauh lebih tidak berbahaya bila dibandingkan dengan rokok konvensional (theguardian.com, 28/12/2018).

Oleh karena itu, untuk melihat fenomena tersebut secara lebih dalam, beberapa waktu lalu, lembaga advokasi konsumen internasional, Consumer Choice Center (CCC), melakukan riset mengenai persepsi masyarakat terkait dengan kebijakan harm reduction produk-produk tembakau, khususnya rokok konvensional yang dibakar. Penelitian itu sendiri dilakukan di dua negara Eropa, yakni Jerman dan Prancis.

Meskipun sudah ada laporan yang dikeluarkan oleh lembaga kesehatan publik dari berbagai negara bahwa vape atau rokok elektrik jauh lebih tidak berbahaya dibandingkan dengan rokok konvensional yang dibakar, tetapi masih banyak miskonsepsi yang diyakini oleh banyak orang. Hal ini bisa dilihat dari hasil laporan yang dilakukan oleh CCC.

Berdasarkan riset yang dilakukan oleh CCC misalnya, di Jerman, hanya ada 3 dari 15 dokter yang pernah mendengar dan mengetahui istilah harm reduction untuk mengurangi dampak buruk dari rokok. Oleh karena itu tidak mengherankan bahwa, sebagian besar dokter di Jerman tidak menganggap bahwa produk-produk vape atau rokok elektrik sebagai alat yang bisa digunakan untuk program harm reduction (consumerchoicecenter.org, 2022).

Sebagai catatan, harm reduction sendiri merupakan serangkaian kebijakan kesehatan publik yang dirancang dengan tujuan untuk mengurangi dampak negatif dari perilaku sosial tertentu. Hal ini mencakup berbagai perilaku, seperti konsumsi rokok, kegiatan seksual yang beresiko, dan lain sebagainya.

Kembali ke penelitian yang dilakukan oleh CCC, hal ini cukup berbeda dari hasil penelitian yang ada di Prancis. Di negara tempat Menara Eiffel tersebut, sebagian besar dokter pernah mendengar dan mengetahui istilah harm reduction, dan menganggap bahwa vape atau rokok elektrik bisa digunakan sebagai alat harm reduction.

Hasil penelitian lainna, ditembukan bahwa 33% perokok di Prancis dan 43% perokok di Jerman menganggap bahwa rokok elektrik memiliki bahaya yang sama atau bahkan lebih berbahaya dari rokok konvensional yang dibakar. Selain itu 69% perokok di Prancis dan 74% perokok di Jerman menganggap nikotin dapat menyebabkan kanker.

Hal ini adalah pandangan yang sangat keliru, karena nikotin dalam rokok merupakan kandungan yang menyebabkan ketagihan, namun nikotin tidak menyebabkan kanker. Ada berbagai terapi berbasis nikotin yang aman yang disarankan oleh dokter untuk para perokok yang ingin berhenti merokok (cancerresearchuk.org, 24/3/2021),

Adanya miskonsepsi tersebut juga menimbulkan dampak yang negatif dan membuat para perokok di kedua negara tersebut menjadi lebih sulit untuk menghilangkan kebiasaannya yang sangat berbahaya tersebut. Berdasarkan riset yang dilakukan CCC misalnya, 29% perokok di Prancis dan 45% perokok di Jerman tidak pernah mendapatkan masukan dari dokter tentang bagaimana langkah efektif yang bisa mereka lakukan untuk berhenti merokok.

Dari penelitian CCC di atas, meskipun dilakukan di dua negara Eropa, ada hal yang bisa ditarik dan memiliki relevansi dengan fenomena yang terjadi di Indonesia. Di Indonesia sendiri, miskonsepsi mengenai rokok elektrik merupakan sesuatu yang sangat umum. Beberapa waktu lalu misalnya, tidak sedikit pekerja medis misalnya yang mengadvokasi agar pemerintah melarang seluruh produk vape yang ada di Indonesia (cnnindonesia.com, 24/9/2019).

Sebagai penutup, adanya miskonsepsi mengenai produk-produk vape dan juga kegunannya sebagai alat harm reduction bagi para perokok tentu akan sangat merugikan publik, khususnya mereka yang sudah kecanduan dengan rokok dan memiliki keinginan untuk berhenti. Hal ini semakin berbahaya terutama di negara dengan tingkat perokok yang sangat tinggi seperti di Indonesia. Untuk itu, adanya kampanye mengenai pentingnya produk-produk tembakau alternatif seperti rokok elektrik untuk alat harm reduction merupakan sesuatu yang sangat penting, agar semakin banyak orang-orang yang bisa terbantu untuk mereka berhenti merokok.

Originally published here

CCC supports MOH to conduct full re-assessment on Tobacco Bill

THE Consumer Choice Centre (CCC) which represents consumers in over 100 countries across the globe has commended newly minted Health Minister Dr Zaliha Mustafa for taking the right measure to re-assess the Tobacco Bill.

Recently Dr Zaliha said the proposed Tobacco and Smoking Products Control Bill 2022 will be reviewed and re-evaluated before a decision is being made. The PKR-Pakatan Harapan (PH) MP for Sekijang is spot on for mentioning that implementation of any key policy must be pursued gradually or on a step-by-step basis and not drastically.

Concurring with the decision of Dr Zaliha, CCC Malaysia associate Tarmizi Anuwar said some of the proposed measures which include the Generational End Game (GEG) policy is too extreme and has created a lot of complexity.

He also pointed out the need to differentiate tobacco products from vape given the latter’s potential as a less harmful product to help reduce the number of cigarette smokers in the country.

Read the full text here

Feeding 8 Billion People Has Never Been Easier

Boosting agricultural efficiency can help us create a world of more abundant food

The United Nations recently confirmed that the world population has officially reached 8 billion. However, what should be a celebration of humanity’s ability to innovate and populate has many analysts worried about the future: How is the planet supposed to lodge, power and feed this large number of people? According to a recent Politico headline, for one, climate change poses “8 billion reasons to worry.”

But while feeding 8 billion souls and counting might have been an insurmountable challenge for humanity a century ago, we are at a point where we cannot only do that, but we can also achieve it while using fewer resources. It’s a testament to the fact that when we harness innovation, we can enjoy greater abundance—both in the quantity and quality of what we have.

Getting to Peak Farmland Use

Even though the beginnings of modern farming date back to the 1850s and the Industrial Revolution—with the rise of machinery—it was the mid-20th century that was the real kick-starter for higher productivity. My own grandfather, born in 1925, used to farm with horses and plows on a farm (one that has since been replaced with a small airport handling around 100 flights a day). With the money they made from selling acreage (a regrettable decision given today’s property prices), my family invested in farming machinery that sped up work during harvest season.

Were my grandfather alive today, he would have a hard time believing his eyes at the high-tech level to which we have evolved. Tractors used to be mere replacements for horses in their early conception. Today, they are equipped with computers that regulate and measure everything from soil health to crop protection dosage. The modern farmer looks at computer screens almost as much as I do as a white-collar worker.

The technological progress of the last few decades has culminated in incredible agricultural efficiency. Our World in Data visualizes three major analyses that use different methodologies based on UN Food and Agriculture Organization data from 1961 onward, and while there is a divergence among the researchers on exactly how much land is used globally for farming, all agree that humanity surpassed peak agricultural land use between 1990 and the year 2000. This means that since that time, even as the planet’s food needs have continued to increase, farmers have been able to feed more people with fewer resources.

The effects of getting past peak farmland use are significant. Agriculture affects our environment by two factors. First, greenhouse gas emissions are caused by soil disruptions. And second, agriculture contributes to biodiversity loss. One of the major contributors to the reduction in forestland has not been the increase of habitation areas (humanity lives very densely given its size), but rather our need for farmland. Restoring the planet’s wildlands and wildlife can be achieved through increased agricultural efficiency: When we need less land to grow the same amount of food as we used to, that excess land can be reclaimed by nature.

The Promise—and Risks—of Agricultural Efficiency

How exactly were farmers able to achieve this upgrade in efficiency? One factor is crop protection. Up until the mainstream availability of chemical fungicides, insecticides and herbicides (all of which we know as pesticides), farmers were virtually powerless against the vast array of pests that destroyed their crops. For reference, there are 30,000 weed species, 3,000 species of nematodes and 10,000 species of plant-eating insects that farmers need to battle. Before we had chemicals to protect crops, our agriculture system was primarily dependent on luck to prevent significant losses, which explains why historically, religions across the globe have long focused prayers on good harvests and why harvest festivals are so common.

The Irish famine of 1845 killed 1 million people, which at the time represented 15% of the total population. Occurring about a century before the mainstream introduction of fungicides, the farming population had no ability to fight potato blight—leading to famines across Europe that caused civil unrest, even toppling the French July Monarchy in the Revolution of 1848.

Pesticides have offered a solution to farmers since the 1960s, significantly improving the chances of a good harvest, even if their use doesn’t fully guarantee that crops won’t be lost. However, with the use of pesticides came the risks associated with them. Inaccurate dosage and overuse not only posed environmental risks but also were costly for farms.

As farmers educated themselves on the appropriate deployment of chemicals, per-acre use declined by 40% over the last 60 years. Better guidance from manufacturers regarding dosage, as well as a more thorough understanding by farmers of exactly how much active ingredient was needed, also cut pesticide persistence (the degree to which a chemical is not broken down and remains in the soil) in half. The amount of active ingredients applied to crops fell by 95% over the same period of time. New technologies such as smart sprayers also cut pesticide use by precisely analyzing how much of a chemical was required for specific crops.

Last year, Sri Lanka inadvertently gave us a case study of the necessity of modern crop protection. In April 2021, the now-former President Gotabaya Rajapaksa banned all chemical fertilizers and pesticides in an effort to transition the country to an all-organic food model. The move steered the country into a food crisis: Domestic food production dropped by 50% and decimated the vital tea sector on which the country depends.

As the government scrambled to repeal the measure mere months after it was enacted, Sri Lankans became dependent on food aid from India and toppled the government after weeks of protests. Even with the law repealed by an interim government, 30% of the country faces acute food insecurity.

Innovation’s Many Benefits

One-size-fits-all solutions for the world’s farming challenges—from reducing greenhouse gas emissions to feeding more people efficiently—does not exist. Yet the experience of Sri Lanka shows that we cannot give up on the innovations of modern agriculture. We should also resist the conclusion that organic farming is manifestly the enemy of progress—it, too, can harness modern scientific miracles.

To date, organic agriculture has proven to be less efficient than conventional farming and has a larger carbon footprint—and that’s why not all in the organic sector preach a back-to-basics approach to their creed. Some argue that organic farming would benefit from new breeding techniques (NBTs), which use technologies such as CRISPR Cas-9 gene-editing for plant breeding. CRISPR is a technology that allows us to shut off undesirable genes in DNA, potentially even editing out genetic typos to improve both the resilience and health benefits of plants and to cure diseases.

While the organic community’s resistance to genetically modified crops may often be ideological, the advantages of genetic modification have become apparent in those jurisdictions where it can legally be deployed in food production. Gene-editing allows for crops to absorb 30% more carbon dioxide without ill effects on them, makes wheat safe for people suffering from celiac disease, creates allergy-free peanuts, and produces drought-resistant rice in India. Overall, gene-edited crops grow more efficiently with less resource use (such as water), thus accelerating the speed with which agricultural efficiency advances.

And the ability to selectively edit the genomic structure of crops has an application range that far surpasses what we believed to be previously feasible. In Japan, for example, a CRISPR-derived tomato that relieves hypertension has been approved for market use. The fruit produces higher levels of gamma-aminobutyric acid (GABA), which has been shown to reduce high blood pressure, a risk factor for heart disease and stroke. The opportunities presented by gene-editing include longer and healthier lives, and the ability to ease access to healthcare. If our food becomes our medicine at the same time, the prices of pharmaceuticals might even become less of a concern in the future.

The reason some places, such as Japan, Israel, the United States and Canada, have taken a more light-touch approach to the regulation of gene-edited crops is simple: Most of the crops we use today have had their genomes altered in a number of ways, either through selective cross-breeding or through nature- or human-caused gene mutations. Humans have long used ionizing radiation to create random mutations in crops—a technique that is less precise than gene-editing and is legal for use in organic agriculture, even in jurisdictions such as the European Union where NBTs are not currently permitted. Ionizing radiation is employed in plant-breeding to initiate heritable genetic changes, using techniques such as iron beam radiation, X-rays or UV lights. Despite its usefulness to create genetic variety, this technique is less reliable than modern gene-editing.

Some jurisdictions, most prominently the European Union, prohibit the use of gene-editing over unjustified precautionary rules, and they express skepticism over the import of food products derived from NBTs. Those jurisdictions that still ban gene-editing should adopt rules and regulations similar to those in the United States, Canada and Japan. New crop varieties can still be approved by regulatory agencies, without restricting the entire technology. Furthermore, regulators should allow for free food trade on an open marketplace, to make sure consumers get the maximum amount of choice.

The story of modern agriculture is impressive. It displays to what extent humanity is capable of overcoming the supposed limits to its own growth and development. Agricultural efficiency will continue to improve insofar as we allow for scientists, plant breeders and farmers to fully deploy their knowledge and skill in a way that benefits consumers and the environment alike.

Originally published here

After the FTX Fraud, It’s Time to Be Even More Bullish on Crypto

When the Securities and Exchange Commission announced charges against FTX CEO Sam Bankman-Fried this week, it ended a nearly 2-month-long drama.

Bankman-Fried’s unethical business setup between his hedge fund Alameda Research and crypto exchange FTX (including the 130 related companies now in bankruptcy) were enough of a worry for the broader cryptocurrency economy and devotees of decentralization. But as we’ve come to learn, the abuse of customer money was far worse.

There were billion-dollar loans to Alameda Research and FTX executives and staff, comingling of customer and company assets between the various entities, and seemingly invisible liquidity printed up on one company’s balance sheet while it was actually on another. These meet the classic definitions of fraudulent behavior.

Many perceive the FTX collapse as a novel crypto affair, dealing with digital assets and cryptocurrencies. But FTX’s downfall is best described as a typical financial fraud found on Wall Street.

FTX ran a fractional reserve bank using printed money as collateral, gambling away customer money in risky products while paying out clients using money from other investors.

Bernie Madoff could not have designed it better.

While many will claim that more regulation or oversight is necessary for the crypto industry in the aftermath, the case of FTX seems more like a failure of existing systems than a loophole.

Regulators at the Securities and Exchange Commission, the Commodity Futures Trading Commission and members of Congress regularly met with FTX’s team, lavishing praise on their meteoric rise.

Celebrity endorsements, Super Bowl ads and stadium sponsorship deals gave the offshore exchange clout with mega investors such as Kevin O’Leary and Bill Ackman, who still defend Bankman-Fried. Highly regarded banks and investment funds similarly poured billions of dollars into the company’s pockets while doing limited due diligence.

Whatever failure that may be, it is not one of unclear regulation or the speculative nature of digital currencies.

Bitcoin — as a decentralized digital currency — did not cause each of the player in the FTX saga to look the other way.

A prudent approach would be to apply cautious regulation that recognizes the revolution of cryptocurrencies and enforces existing laws.

The answer to preventing the next FTX lies less in creating convoluted regulatory environments stricter than the banking system, as some propose, and more in applying existing laws while promoting a pathway for legitimate entrepreneurship.

Self-dealing, fraud and market manipulation remain illegal and should be prosecuted.

These are basic principles that we have all agreed to follow, and one we hope our public officials recognize, no matter the asset.

Originally published here


Loyers, gel hydro, pétrole – le plafonnement des prix n’est pas économiquement viable. Cependant, les politiques retombent toujours dans le même piège. 

Tous les quelques mois, les gouvernements remettent au goût du jour un vieux sophisme économique qui a fait ses preuves depuis longtemps et le transforment en politique publique. L’inflation que nous connaissons actuellement a été causée par l’une des erreurs les plus dévastatrices de la politique monétaire : la croyance que l’on peut résoudre les difficultés économiques en imprimant plus de monnaie.

Avant d’examiner les raisons pour lesquelles le plafonnement des prix du pétrole ne fonctionnera pas, nous pouvons facilement déterminer que les plafonds de prix existants ou récents étaient tout aussi inefficaces, voire nuisibles. Prenons l’exemple du contrôle des loyers. Dans un effort pour réduire les prix des loyers, les gouvernements de toute l’Europe et du monde entier tentent de limiter le montant que vous êtes légalement autorisé à facturer pour la location d’une maison ou d’un appartement. Berlin en est un exemple frappant, où les prix des logements ont continué à augmenter en dépit de mesures strictes de contrôle des loyers : les zones où les loyers sont contrôlés connaissent une baisse de la construction de logements, tandis que les prix augmentent dans les zones qui n’appliquent pas cette politique.

Le contrôle des loyers est en fait une vieille erreur économique qui refuse de mourir. Même l’économiste de gauche Paul Krugman nous l’a dit il y a plus de 20 ans dans le New York Times : « L’analyse du contrôle des loyers est l’une des questions les mieux comprises de toute l’économie, et – parmi les économistes, en tout cas – l’une des moins controversées. » Lorsque l’État intervient dans l’équilibre de l’offre et de la demande, cela donne très rarement des résultats positifs, que ce soit à Paris ou à San Francisco. Et pourtant, les gouvernements essaient encore et encore.

En 2020, alors que la crise du COVID-19 venait de prendre son envol et que les gens se bousculaient pour se procurer des masques et des désinfectants pour les mains, le gouvernement français n’a pas été en mesure de fournir bon nombre des articles que nous pensions nécessaires à l’époque. Les désinfectants pour les mains étaient en quantité limitée et certains détaillants ajoutaient de fortes majorations de prix pour profiter du manque d’approvisionnement. “Je vous annonce que nous prendrons aujourd’hui le décret d’encadrement des prix des gels hydroalcooliques”, annoncait Bruno Le Maire. La mesure a-t-elle amélioré la disponibilité des désinfectants pour les mains ? Pas du tout, mais elle a satisfait le besoin d’une action de l’État par tant de personnes qui la soutiennent en France.

Alors maintenant que l’Europe est confrontée à une crise énergétique – parce que pendant des décennies nous avons paresseusement compté sur l’énergie bon marché d’autocraties peu fiables –  que nous suggère l’Union européenne ? Vous l’avez deviné : plafonner les prix. En vertu d’un nouvel accord, les pays du G7 interdiront à leurs compagnies d’assurance et de transport maritime de faciliter les expéditions de pétrole russe vers des pays tiers, si elles sont vendues au-dessus de 60 dollars le baril. Le système sera revu tous les deux mois, et l’objectif est de fixer le plafond à un niveau inférieur d’au moins 5 % au prix du marché du brut russe.

Le mouvement n’est pas très prévisible ; il n’est pas non plus sans précédent. La Hongrie a introduit un plafonnement du prix du pétrole et a rapidement vu les stations-service manquer de carburant. L’Associated Press nous explique: « Dans des centaines de stations-service en Hongrie, une mosaïque confuse de panneaux en papier est suspendue aux pompes pour indiquer aux clients ce qui est disponible – ou non – et à quel prix et en quelle quantité. Dans une station de Martonvasar, une ville située à 30 km au sud-ouest de Budapest, la capitale hongroise, un panneau informe les automobilistes qu’ils ne peuvent acheter que deux litres de carburant à un prix réduit fixé par le gouvernement il y a plus d’un an. Selon le propriétaire de la station, cette limite de quantité est dûe au fait que la compagnie énergétique publique MOL n’a pas effectué de livraison de carburant à son entreprise et à de nombreuses autres comme elle, au cours des trois dernières semaines. »

Alors, à quoi peut bien servir un plafonnement du prix du pétrole à l’échelle européenne ? Pour une fois, l’État russe a annoncé qu’il n’accepterait pas les limites de prix, mais certains pourraient faire valoir que la Russie n’a pas vraiment le choix, car l’Europe est un marché vital. La triste réalité est que seule la Russie sait si cela est vrai, et la Russie ne nous le dira certainement pas. Les pays d’Asie centrale achètent du pétrole russe, probablement avec plaisir à des prix supérieurs à ceux fixés par l’UE ; et l’Europe ne peut pas se permettre d’être du côté des perdants d’un tel pari.

En outre, les entreprises énergétiques européennes risquent d’être plus durement touchées par le plafonnement des prix que les producteurs d’origine. L’exemple d’Uniper vient à l’esprit : l’État allemand a dû injecter 15 milliardsd’euros dans l’entreprise pour éviter sa faillite. Ce n’est pas sans raison que la Pologne a longtemps bloqué le plafonnement du prix du pétrole, avant de finir par céder sous la pression politique. Le temps nous dira si nous ajoutons les pénuries de carburant aux pannes d’électricité cet hiver.

Originally published here

Attacks on forestry industry strain credulity

Canadian forest management is an envy of the world, routinely atop the global standings for stewardship and sustainability, writes Yaël Ossowski and David Clement

With an immense land mass filled to the brim with natural resources, Canada is bountiful with energy and industry that provide dividends for its citizens.

Whether that means reserves of oil, softwood lumber, or iron ore used to make steel, responsible use of these resources makes Canada punch above its weight when it comes to economic growth, productivity, and a strong standard of living.

While these jobs continue to power the nation, many environmentalist activist groups — both foreign and domestic — have continued to call our country to task on the sustainable production of our natural resources. And too often, their bombastic and unfounded claims are accepted wholesale by many media outlets.

In only the latest example, the US NGO Natural Resources Defense Council partnered with Nature Canada to release a report making the shocking claim that carbon emissions from the forestry sector are even more than oilsands production.

Instead of applying a critical analysis to a claim that has been rejected by Natural Resources Canada and international experts, The Canadian Press accepted the activist groups’ claim, accusing our own agencies of “using questionable methods to underestimate emissions from the forest industry.”

Even though our government ministries use internationally accepted standards for calculating emission levels from activity, NRDC and Nature Canada aim to paint Canada as a powerhouse, not of responsible resource management, but reckless greenhouse gas emission.

This stands against science. According to the United Nations, Canada’s forest area has remained relatively stable for the last 30 years, despite the surge in forestry industries, wildfires, and clearing for residential use. That means Canada is actually a global leader in replanting and repopulating its forests, especially compared to Brazil, China, and other nations with large forests.

If this is true, why then are activist groups claiming that Canada’s industry providing us with both construction wood and paper (used in now-mandated cardboard food packages) is more of a polluter than oil extraction?

The major claim in the report is that industry emissions must be combined with those from naturally-occurring wildfires, plant diseases, and invasive insects, none of which are understood to be commercial activity undertaken by Canada’s loggers. Rather, these are part of nature’s ordinary life cycles that we can only hope to mitigate and limit, if not prevent.

Considering that The Canadian Press and other outlets that reported on these claims didn’t reject them outright is concerning. But more concerning is what these activist groups seek as a result of their flawed findings.

Just days after the report’s release in October, activists were meeting with senators and ministers to “force the hand of policy-makers themselves,” potentially leading to restrictions and emission limits that would hurt not only Canadian jobs and industry, but also significantly skew our fight against climate change.

It is worth remembering that Canadian forest management is an envy of the world, routinely atop the global standings for stewardship and sustainability.

Cardboard, made from pulp sourced in our forests, is now the destined alternative to plastic for food packaging products, mostly due to restrictions and bans sought by these same groups.

The aim of making Canada a global leader for sustainable climate progress is noble, and one that we should all agree on. However, that must be done with scientific facts and evidence, not the twisting of facts and caution to fit the narrative of heavily funded environmental groups with another agenda.

If our news media aims to both inform and educate our citizens, it will have to do a better job of calling out misinformation on all sides. That is the only way we will be equipped to deal with climate issues going forward.

Originally published here

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