Today's Top 10 is a guest post from Eric Crampton, who is Head of Research at the New Zealand Initiative.
As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.
And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.
See all previous Top 10s here.
1. Gordon Tullock
Gordon Tullock, one of the founding fathers of public choice and, in my view, the best economist of the 20th Century, died last month.
Peter Boettke, one of Gordon’s colleagues at George Mason, provided this retrospective on the life and times of Tullock at the meetings of the Southern Economics Association.
"Tullock was an irascible, but very charming man to those who knew and worked with him. His gruff exterior, combined with a quick and biting wit often at others expense, led many to misunderstand him. He was simply one of the quickest and cleverest social scientists to practice in the second half of the 20th century. At a seminar once, Tullock turned to me and asked what I thought of the argument being made in the presentation. I replied, “Gordon, I have to think a bit more, I am not that quick on my feet.” To which Tullock pointing the nearest empty chair simply said, “Well sit down then.” He didn’t want the conversation to stop – he never did."
2. The state of numeracy
I’ve been reading a lot on teacher quality and education. Rose Patterson, one of our (NZ Initiative) fine researchers, is looking at the state of numeracy in New Zealand.
There’s growing international evidence that teacher quality might be the root of a few problems. As a potted history, for too long during the 19th and 20th centuries, women’s employment options were pretty limited. Social convention and discrimination meant that talented, ambitious women had few options outside of a few particular occupations, including teaching.
As the world got better, school systems lost the access they once had to a pool of very talented, bright people who had few other options. To keep talented teachers, salaries needed to increase to match opportunities elsewhere. But they didn’t.
Markets then equilibrated by reducing the quality of incoming teachers, and providing teachers with job security in lieu of pay. Or at least that’s the potted history in a lot of places.
I wonder how much it applies here. An NBER working paper by Eric Hanushek and coauthors makes the case that when wages for public sector workers other than teachers rise, teachers’ cognitive skills drop, and that this mechanism is responsible for much of the international differences in student performance. The full paper is subscription-gated, but the technique’s pretty ingenious.
3. What should an ethical environmentalist conclude?
The New Zealand Initiative recently released Jason Krupp’s report on the state of the mineral estate; it made the case for allowing greater extraction for the benefit of regional economies.
Predictably, critics have focused on coal rather than iron, gold and platinum; New Zealand does have a lot of coal. The implications of greater mining of cleaner New Zealand coal aren’t as clear-cut as climate change activists might believe though.
First, coking coal is needed in steel-making; New Zealand has good reserves.
Second, much of New Zealand’s thermal coal is cleaner and of higher quality than alternatives in use elsewhere: in particular, in India.
If New Zealand coal displaces dirty Indian coal, mined under worse environmental conditions, what should an ethical environmentalist conclude?
Bryan Caplan surveys the moral case for fossil fuels: it’s stronger than you think. I personally entirely support a global carbon tax, if that matters.
4. It takes time
In our work on housing, and on mining, it’s become increasingly clear to us that the RMA needs some fixing.
For one great anecdotal account, here’s Michelle Powles’ story of what they needed to do to get consent to build their West Auckland home.
5. Elon Musk’s betting on solar batteries
If he manages to pull this off, it’s a huge development for solar energy. Solar is getting very close to being a cost-effective solution for households.
I’ve not put up panels yet, as I don’t think we’re there yet, but once solar’s cheaper over the long term than grid power, I’ll be looking at it.
Batteries could make solar even better by tiding households through to the times when the sun doesn’t shine. All of it, though, will make life difficult for power companies and for the lines companies. I’m thinking here less about profitability and more about logistics and planning.
New Zealand, at least, has half-hourly demand markets, so if a pile of households drop off the grid when the sun comes out, hydroelectric plants can dial back output.
But if we move to a system where grid becomes backup supply for a lot of people rather than main supply, line charges will have to rise substantially as fraction of the overall power bill. Things could get interesting.
6. They did it even when they knew
When Working for Families came in, colleagues around the Economics Department at Canterbury started making bets on what it would do to female labour supply.
Since WFF payments are based on family income rather than individual income, the effective marginal tax rate on second earners went up substantially: a woman returning to the workforce after childbirth would face not only her own personal tax rate, but also the WFF abatement that comes with every dollar she contributes to family income.
Treasury recently released a nice working paper looking at the effects. 9,000 women dropped out of the workforce due to WFF and women in work cut back their hours by an average of a half-hour each. This will have consequences for the gender wage gap.
7. Compelling cases
Hans Rosling – is there anything he can’t do?
From making the single most compelling case for economic growth in his TED talk on the magic washing machine, he’s gone on to help fix Ebola.
8. It isn't everything
Even for economists, money isn’t everything. Heck, in many of our models, money drops out entirely.
What we really care about is utility – people’s well-being, as they assess it themselves.
So why not measure that directly and have government policy target happiness instead of GDP? Well, there are problems with that, as Mark White points out.
9. Yes, minimum wages still do hurt employment
Even in the United States, where minimum wages are much lower than ours as a fraction of average wages, minimum wage hikes both raise wages for low-skilled works and make it harder for them to find jobs.
10. Risk adverse terrified ninnies
Productivity growth and technological progress has slowed over the past decades.
One potential reason? We’re turning into a world of risk-averse terrified ninnies.
Could it be that the missing part of the jigsaw is our attitude towards risk? Nothing ventured, nothing gained, as the saying goes. Many of the achievements of the Golden Quarter just wouldn’t be attempted now. The assault on smallpox, spearheaded by a worldwide vaccination campaign, probably killed several thousand people, though it saved tens of millions more. In the 1960s, new medicines were rushed to market. Not all of them worked and a few (thalidomide) had disastrous consequences. But the overall result was a medical boom that brought huge benefits to millions. Today, this is impossible.
The time for a new drug candidate to gain approval in the US rose from less than eight years in the 1960s to nearly 13 years by the 1990s. Many promising new treatments now take 20 years or more to reach the market. In 2011, several medical charities and research institutes in the UK accused EU-driven clinical regulations of ‘stifling medical advances’. It would not be an exaggeration to say that people are dying in the cause of making medicine safer.
Risk-aversion has become a potent weapon in the war against progress on other fronts. In 1992, the Swiss genetic engineer Ingo Potrykus developed a variety of rice in which the grain, rather than the leaves, contain a large concentration of Vitamin A. Deficiency in this vitamin causes blindness and death among hundreds of thousands every year in the developing world. And yet, thanks to a well-funded fear-mongering campaign by anti-GM fundamentalists, the world has not seen the benefits of this invention.
55 Comments
#2 Is very interesting, kind of ties in with #6. Women in the work force.....Wouldn't it be nice if we could get rid of gender discrimination and/or bias, and value/reward people for their skills and personalities?
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This binary gender focus seems to be causing a lot f issues. Time for a rethink.
#9
How would this US biased assessment reconcile with the recent report that nations with less inequality have raised productivity faster than the others?
Presumably raising the minimum wage may affect employment in some minor way while those employed gain far more income as agroup even though their numbers may fall.
While I accept that the NZ initiative is not just Business Round Table in drag, I still read their output with some scepticism.
One can be sure the following outcomes will not add a jot of productivity.
Top public servants get cream of pay packet rises
Jump in public servants on $100K-plus
RE #10 Risk averse? Hmmm maybe risk aware would be a better description.
The promises of technology have so often failed to deliver benefits that exceed their costs; other than in the short term (balance sheet benefits vs tragedy of the commons). The real ninnies are the sold down the creek public drowning in a sea of plastics, pesticides, antibiotic strengthened bugs, GMO who knows what foods, watching the 6th mass extinction event unfold before us. The gains from science were largely a result of an ignorance of their costs to nature.
We will return to a balance with nature again, but not at a level we will be happy with. Infinite science on a finite planet ....? Not going to happen.
Artists are often at the cutting edge of thought in society. The iconic New Zealand band Herbs are one such band that have been commenting on social issues for decades. It would take a fairly significant issue to drag them out of retirement, but deep sea drilling for oil did the trick.
I travelled to Ahipara in the weekend with good friend and oil drilling engineer Pete Bethune to see them at the protest concert. What a great day in a stunning location with some amazing people. Seems like the locals don't believe the propaganda from government or statoil.
Real scary is when you hear an expert like Pete talk of the risks invovled and the history of failures in the industry, do we really want to put out jewels at risk?
Notably absent has been media coverage of the event.
"If New Zealand coal displaces dirty Indian coal, mined under worse environmental conditions, what should an ethical environmentalist conclude?"
a) We cant mine it eithr way, but we will..
b) Or after we've mined out NZ they'll go back to dirty Indian coal anyway.
c) There are non-ethical environmentalists? suggest not.
Agreed Steven. It seemed a low brow reply.
Yesterday in David's 9am bulletin I put up a link showing NZ has had a quiet revolution in renewable energy. Geothermal energy has overtaken gas produced energy in NZ and industry experts say NZ has enough resource consented renewable energy schemes to power an electrified fleet of vehicles travelling the current average distances. Something I have said before.
But David leaps back to the 60s in a renewable versus fossil fuel argument!
Just to be clear David renewable energy is NZ's future and fossil fuels is its past.
I can but assume it s comment on the vandalism by environmentalists. My answer to that these are vandals and not environmentalists. I dont think a real enironmentalist can respect part of the environment and then damage another part like this. Simple, I hope they go to jail.
The problem for the BB generation is 2 fold. a) if you as the mature generation accept that there is climate change and things like peak minerals then really its a moral issue you cannot ignore. You as the BB generation have squandered future generations essentials so now you have to do something about it (if you have any morals anyway). b) if its ending the oldies are entering an age of greater reliance on healthcare and having a "jolly" retirement jetting and cruising about the world. If the game is over then that isnt going to happen (and it is). Not to mention their pensions / income are reliant on BAU and growth and with the wealth they have gained, they are about the only tax target left.
If you understand that oil is the only way to give you the lifestyle you enjoy today nothing else will do then its bye bye a hell of a lot as we switch to an geo-thermal and renewable economy with less free energy, a lot less.
There will be less energy per NZ capita. I cant see how you can believe that NZ is OK even if the rest of the world goes pear shaped, we wil be impacted if only in greatly limited imports. I mean even if we expand electricity from the present max of 72% to 100% of todays electrcity consumption we then have to a) take that still highr for EV type transport and b) import that EV transport with our low wages v other OECD wages which are far higher. I cant see how we can compete.
regards
Steven did you even read the NZ Herald article I referenced. Google "Geothermal powers ahead of gas". Currently 79% (not 72%) of electricity production in NZ is produced from renewable sources and there is enough consented but not built renewable supply that NZ could power our vehicle fleet if it converted to EV.
Of course there are concerns about how this is possible. In particular in relation to energy density. But actual energy production is not the constraining factor.
Worldwide Grantham and other serious thinkers believe it will be a race between PV supply increasing and coming down in price versus energy demand stabilising due to population peaking.
Really Steven it is a certainty that NZ will win this battle. It is places like Nigeria where the battle is doubt and maybe you should direct your preaching to places like that.
Do you read any science publications at all or watch any science presentations at all? It is distressing how "science" in the decadent west has become a source of endless pessimism and misguided political interference (all gamed by rent-seekers and driven by them anyway). Most of the claimed experts peddling the doom and gloom "science" are shallow and opportunistic ideologically motivated charlatans. Unfortunately doom and gloom sells, otherwise we would all be rational optimists like Matt Ridley.
How about this Phil.
The effect of fossil fuel has meant that the percentage of unearners, such as scientists (and academic in general) has grown also. Someone might be able to grab the stats on professors per 100,000 people over the last 250 years or so to help this proposal of mine.
Where becoming a scientist was once a luxury that was reserved for the very best, now it is open to the mob so that every man and his dog with something to say can do so. The average quality of scientist is thus reduced. Perhaps the numbers mean there is a higher quality at the top, but since science is a profession of consensus it is the average quality that matters. Science is going down hill.
At the same time as the quality is being lowered, whenever you create a method for unearned income it tends to grow over time. A profession that is getting weaker at delivering quality is getting stronger at defending its privileged unearnt income.
Just some spontaneous thinking for a Saturday morning.
I don't think there is as much consensus in the official view of science (or any other acaddemic discipline for that matter) as you might think. The academic world is dominated by its own elites. I like to think they have got there on merit but once that smaller group settle on what is acceptable and not acceptable debate their views tend to dominate the whole discipline. Ask any junior academic how hard it is to publish an unfashionable piece of research.
As long as it is pretty much the best at the top science can tolerate a large number of mediocre scientists without it affecting the overall quality of the discipline.
If you get time I strongly recommend the David Lodge "Campus Trilogy". A much funnier description of how this all works.
http://www.macrobusiness.com.au/2014/12/asx-at-the-close-417/ Something is happening in Australia. Read Gunnamatta in the comment stream here for an investment bankers perspective.
#5 lines charge would stay the same, solar doesn't add extra demand it removes it. At present we don't pay for the lines only when we use them, we pay a fixed daily charge regardless our use. Or does part of the variable use charge go to the lines company too?
The issue is more about peak usage for the generators. If everyone installed solar, and the dams only needed to run in winter evenings when the sun is down and the heaters are on, the fixed costs of hydro needs to be apportioned over less usage... Or does it? Perhaps we just need less dams, and the remaining dams run a bit more peaky. Full on for winter evening, and off the rest of the time. So long as running at full capacity on winter evenings means they are generating the same amount of power over the course of the year, then the costs are spread just as evenly. Someone needs to do some modelling of this stuff.
As it has happenned in Aus., where generators have their own lines, conversions to solar and the subsequent feed-in payments meant less revenue for the generators who sought to maintain the margin by distributing the fixed lines charges among all their subs. So those without solar also paid a bit more.
Hydro flow is easier to wind up and down to match load than the coal fired/steam turbine arrangement in Aus., which is best just left running.
The Ultimate is going off grid entirely so the company just cannot send you a bill for the umbilical when your usage of their product is nil or negative.
Decent building design and materials that best suit the local climate, separating lighting with more efficient LED's, and other things that can now easily be run on lower voltages so you can use improving battery technology including the one in the car, bottled gas for cook and heat on demand, having more than 1 source of generation, it can be windy at night, and a nominal backup generator for the occasional burst of energy when building a shed or something. The gap is narrowing......
I have always said that the technology and the renewables that will solve our energy problems, are going to be primarily "on site". It is the dinosaur mass energy industry that is the main obstacle to all this.
Marxism was an unnecessary "solution" to a problem that transport and technology, especially refrigeration, solved anyway. We are in a similar position today. Utopian political "solutions" themselves will be the tragedy for humanity, while those nations that simply let technology and the market fix the problem, will OWN the future, just like the West did as half the globe committed Marxist economic Hara-Kiri.
yeah it's that generator... not sure the neighbours are going to like it. I'm thinking if there was a quiet mirco gas turbine generator, keep the mains gas for cooking and heating and ditch the power lines. But without the gas based generator, you still need the grid tie for building the shed. And the line charges on gas 4x the electrics.
I remember reading something once by Germaine Greer of all people - she is actually quite sound on some things like the stupidity of a lot of the Green nonsense - where she said that we are going to have to get used to a lot more ugliness - but for reasons of functionality - in building and urban design.
She referred to the fashion for preserving "heritage" quaint and cutesey old structures that are nevertheless functionality nightmares compared to more modern buildings - and she said the trend already evident was going to continue; we would have to make up our minds whether we want the functionality or the aesthetic niceties. Quite insightful, really.
Mind you, there are opportunities for quite clever styling of structures and sites with solar and wind power generation and so on. Another reality is that a lot of this stuff will work better in lower density urban environments than in higher density. Besides people like me tearing our hair out at the economic and socio-economic madness of growth containment, people like Dushko Bogunovich are tearing their hair out at the throwing away of major sustainability potential in low density urban form.
Again, how much growth is enough, we now know it can't continue forever so we need new ways of looking at how we do things, not relying on growth, which simply put, means more people. More and more of us are understanding that it is finite and that finite is not far away. New thinking is required, not this stupid capitalism v socialism crap.
So advocate policies that target the right things, then - and urban form is not one of them.
Anthony Downs, who is a pretty dry academic kind of guy, said in a 2004 book that urban form mandates to address resource and energy issues, is like wanting to adjust the position of a picture on a living room wall by jacking up the entire house and trying to move it around until the picture is right.
Simply pricing the actual things being consumed right by fees and taxes, allows the market to achieve the greatest actual change in desired objectives, at the lowest opportunity cost.
Raegun feel free to write an article or Top 10 explaining your new thinking. I know David is always looking for new contributions. But bear in mind the ideas need to be genuinely new and not regurgitated ideas where wealth is transfered from hardworking productive labour and entrepreneurs to lazy rentiers...
Human overpopulation of the planet and the rise of the rentier class are just two SEPARATE issues that concern me, I am also extremely concerned at the loss of the world's wildlife, corporate control of our lives and our increasing separation from the sources of our food, and how we are going to adjust to a change world where energy is concerned.
Which particular thing would you like me to start with, almost none of them will affect me personally, I don't have enough of my life left for them to make a lot of difference, however, I do have a few grandchildren (but only a few, our lot have done our bit toward a bit of de-population) who definitely will be.
raegun, population growth is a different policy issue from economic growth. Put simply we don't have as many choices about dealing with population growth as we do economic growth.
Those of who are concerned about how we house a growing population, especially in Auckland, just want to deal with the world as it is. We have little control over how many people live in NZ and not much choice over whether they want to live in Auckland or elsewhere. There is not much point arguing about how things would be ideally - it is what it is.
Economic and population growth are intrinsically linked to each other unless you have some sort of disaster to clean up after from time to time, like war or earthquakes, and just putting the whole thing off the way that people are will not lead to anything good. Fact is the world has to work out how to prosper WITHOUT growth, in fact we have to do it while we REDUCE our numbers, not just keep on sticking our heads in the sand and blathering on about growth, growth, growth constantly.
How you can possibly say that economic and population growth are different things is beyond me
Go back and re-read what I said. Population growth policy is different from economic growth policy. I never said population and economy are unrelated.
In New Zealand our death rate has exceeded our birthrate for years but natural increase will not flip from growing to sinking for another couple of decades. There is little we can do by way of policy to stop the demographic trends that are already underway. We could tinker with discretionary immigration but that could backfire badly. So we will have the population we have. The challenge is not finding new ways to pretend we shouldn't have that population but to house them (amongst other things).
You are welcome to argue policies around the GDP per capita of the population we do end up with.
Okay you can argue semantics then, but economic and population policy SHOULD be linked that is for sure.
My argument is that we have got to start thinking in a whole another way than the current way we do.
Why would "tinkering" with discretionary immigration backfire, anyway, not doing it probably will as well.
There is no pretence about all of this, the only pretence going in is the one that says that we can go on "growing". We cannot, this place has its limits
We are a lucky ducky country. By 2050 we will have reached a plateau population assuming nothing too weird happens between now and then. But that population will be over-weighted towards retirement age and elderly. Fortunately because people want to come and live in NZ we can selectively fill not only skills gaps but age gaps as well.
It may be some poor 25yo Laotian that gets to wipe my geriatric bum one day. For which I intend to be very grateful.
Oh and one more time:it doesn't matter what you think SHOULD happen. You will get the population you get. The policy debate is about what you do with that population. The population will grow regardless of policy settings.
Although I am rapidly becoming sympathetic to the idea of euthanasing idiots.
Nope, not 2050, 2020 at most
"weird happens" indeed exactly that. When we eat fossil fuels and fossil fuels get too expensive, maybe scarce and un-affordable by many and we collapse into yet another recession then we'll finally realise we dont want any more ppl.
"The population will grow regardless of policy settings." no it wont, see above.
regards
We are just talking about NZ right?
The good news is 2020 is basically real time. We can write this prediction on the wall and track it. It would help if you could explain the mechanisms by which this will happen: starvation, disease, war, celibacy, euthanasia. How will this play out in 2015,16,17,18,19? Elections in 2017, 2020; how do they go?
So what you are saying is that either there will be a catastophic collapse in birth rates or a catastrophic increase in death rates. You are saying our government will find some way to prevent the 1m NZ citizens currently living elsewhere and the 20m Australians from exercising their absolute right to waltz in the door any time they like.
steven and raegun, a steady rise in population to at least 5m is a given, Its like the sun rising and setting. The choices you CAN argue are not about the number of people but about what all of our lives are like.
Just talking about NZ, yes and no. First up we are approaching 5 million already, so why on earth is Auckland talking of catering to another mill in about 30 years. Those sums do not add up.
The problem is that the human race seems unable, at the moment, to prosper without constantly increasing its population, so the problem is not if we stop now, stop at 5 million or 20 for that matter. The problem that is going to confront us soon is how we do it WITHOUT increasing population.
Look at Japan, they have an aging population and it is regarded as problematical whereas perhaps it should be seen as an opportunity to begin the process of figuring out how this will work in future with population stability.
It's all very well and good sidelining the whole issue as we have a bit more space but the real problem is pretty much right here and right now, give or take a few years.
We have to think again and someone has to broach the issue of it all and start getting figuring out how this wil work.
I am trying to consider this as a process that might happen without us going to war, but it is a tried and true for having a bit of a cull then re-booting growth again, that, and natural disasters that can have a similar effect.
At the risk of repeating myself it's not "wanting" or "planning" it just is.
It is a matter of basic biology that population growth follows resource growth. Populations of any living thing increase in response to favourable conditions. Our exploitation of cheap energy over the last 150 years has boosted food production hugely and enabled the sharp lift in global population over that time. But, what we are about to witness - if the observable trends of today pan out - is an incredible miracle where humans voluntarily restrict reproduction even though population could still continue to grow.
From what I have seen the data give reasons to be optimistic about global population stabilsing without a mass extinction fo the human race.
But, if you want to do one practical thing embrace the Meat-Free Monday movement. A small shift in eating patterns away from meat in the developed world will do more to help the world through the next 30 years than just about anything else.
I only eat meat a couple of times a week at most, so just easy enough to make one of those days a Monday. The thing I try hardest to do is avoid as much plastic as possible, frustratingly difficult these days.
And again at the risk of repeating myself, the difficulty we face is making it work without growing, no-one seems to be bothering about that and worse the exact opposite and more is still being espoused as our saviour (check out what political parties have on offer). To me, it just seems to be one great buck passing exercise and an unworkable ponzi scheme.
Absolutely agee that there doesn't seem much discussion about what a healthy economy looks like when populations are stable or declining. And we are only haing a limited discussion about income distribution is a highly productive (automated) world.
Given how long it takes for the public sector to embrace new ideas we can't start having those discussions too soon.
Density is only an issue if you expect to keep using the same amount of energy per household. The fact is that better design can dramatically reduce the amount we use. One of the reaons the I don't agree with Hugh is that the style of subdivision and design he advocates completely ignores passive thermal performance, and the need for transport fuel to maintain it. It is short term thinking. At least commercial buildings are now using a quarter of the energy they were 20 years ago, residential needs to get its head out of the sand in this regard.
Go and talk to Professor Bin Su at Unitec, he has all the design solutions at his fingertips(as do I now thanks to him). It is a bit like using science correctly, their is a correct empirical process to follow when locating and designing housing. Even Vitruvious outlined how one should regard the environment before you build. One of the early is the thermal performance and their are solid rules western developments violate.
I do tend to agree with you on visually pleasing, but otherwise inefficient design. There is a solid area of growth for good designers to achieve both functions as IMO it is in general currently performed poorly.
Yes I completely get it and I have always said you and the like at Hugh are right. But it won't change no matter how long Hugh bangs on about it. It is too late for that now finance has got a strangle hold, there isn't and won't be a free market. Unfortunately this means that the environmental costs can't be priced in either.
Follow Brendons advice at 2:41pm above, Hugh makes a contribution further up but the post of Gunnamatta is a pretty good summary IMO.
My thought yesterday that my prediction based on (M.V)+i=P.Q is for money to increase to hold up price when the effects of interest lower velocity and quantity is creamed off the top by finance. Interest rates must go down over time. Taking this further, since the figures for New Zealand are worse than Gunnamatta outlines for Australia (75% of M3 is residential mortgages) then as houses are money then that has to grow also. In this instance Price and Money are closely linked. Prices and Money rise because of the effect of interest, that means house prices have to rise over time. History tells you that a pause of 3-4 years is possible, but that rise they will. That is they will rise until underlying fundamentals prevent this from happenening, things like ability to service the debt.
http://www.macrobusiness.com.au/2014/12/australian-real-estate-prices-a…
It is now a proper article with 120 odd comments!
yes . thats why the rule of thumb that it always goes up (unless catastrophy kills the money value).
You also see where the inelasticity is coming in, and how foreign sourced credit removes that limiting faundamental...but only for those with foreign funding.
That is, of course, using "money" as "currency". Because there's unlimited currency because the i factor is just a number so the money can be sliced infinitely fine. currency = money * slice ratio.
Be a little cautious when equating modern to smart, most of the stuf built in the West for the last 100 years isn't as smart as this.
http://www.treehugger.com/green-architecture/what-smart-home-anyway.html
You need to look at the RMA constraints on our basically run of river dams before considering your hydro proposal.
Not an option for other than small changes in demand as they also have to react to wind power variations..
Thermal must remain part of the mix - about where it is now.
We will need coal into the foreseeable future for steel and aluminium manufacture. Roughly half the worlds coal demand - Zero emissions targets are just a joke.
It would be useful to get an accountant's perspective. The biggest line item in the operating cost of dams is depreciation. The current business models assume that there is no end to operating the dams at current levels. In theory the depreciation will accumulate capital to replace the existing structures when they start to crumble.
It would be useful to know what is legally and technically possible by way of changing that model to reflect declining use or even the eventual deconstruction of dams.
As I understand it depreciation is embedded in International Financial Reporting Standards and GAAP. So eny entity that chose not to account for depreciation would have its accounts tagged by their auditors. That's why you would need an accountant to weigh in on this matter as to what was legal and not legal.
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