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cover of episode How Profits Motivate Change

How Profits Motivate Change

2023/3/22
logo of podcast Money For the Rest of Us

Money For the Rest of Us

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David Stein
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Martin Wolf: 利润是驱动改变的关键因素。如果某项活动有利可图,它就会被执行,即使面临投资者的抵制,也会有其他人继续投资。监管可能限制某些活动,但政治阻力可能会使监管变得困难。 John Byrne Murdoch: 能源转型受经济因素驱动。当可再生能源成本低于煤炭时,煤炭需求下降,可再生能源需求上升。印度的例子说明了可再生能源成本下降如何迅速改变能源预测。 David Stein: 能源转型缓慢的原因包括现有基础设施的低边际成本、替代能源成本高、现有企业阻力、当地居民抵制以及电网整合投资不足等。加快能源转型的措施包括改变激励机制,增加可再生能源的利润激励,减少对化石燃料的补贴,引入碳定价等。政府在能源转型中扮演重要角色,即使利润是主要的激励因素,政府也通过法规或财政支持参与其中。能源转型是一个复杂的过程,可能产生许多意想不到的后果。 中央亚利桑那项目案例研究表明,大型工程项目并非解决问题的最佳方案,经济和财务因素同样重要。水资源管理类似于资金管理,取决于假设和风险承受能力。亚利桑那州水资源价格低廉,缺乏节水激励。利润激励机制促进自下而上的创新,但如果成本定价不当,则可能产生外部性,需要政府、家庭和企业之间的协调。亚利桑那州水资源问题的解决需要通过利润激励机制,促进农业结构调整,减少用水量大的作物种植,鼓励在水源附近种植高利润作物。 Martin Wolf: The simple proposition is that if something is profitable, it will be done. Even if investors refuse to invest in certain sectors, as long as those sectors are profitable, others will continue to invest. Regulation may curb some activities, but political resistance is likely to make such regulation difficult. John Byrne Murdoch: The energy transition is driven by economic factors. When the cost of renewable energy is lower than coal, the demand for coal decreases, and the demand for renewable energy increases. The example of India shows how a decrease in the cost of renewable energy can quickly change energy forecasts. David Stein: The slow pace of energy transition is due to factors such as the low marginal cost of existing infrastructure, the high cost of alternative energy, resistance from existing businesses, local resident resistance, and insufficient investment in grid integration. Measures to accelerate the energy transition include changing incentive mechanisms, increasing profit incentives for renewable energy, reducing subsidies for fossil fuels, and introducing carbon pricing. The government plays an important role in the energy transition, even if profit is the main incentive, the government participates through regulations or financial support. The energy transition is a complex process that can have many unintended consequences. The Central Arizona Project case study shows that large engineering projects are not always the best solution to problems, and economic and financial factors are equally important. Water resource management is similar to financial management, depending on assumptions and risk tolerance. The low price of water resources in Arizona lacks incentives for water conservation. Profit incentive mechanisms promote bottom-up innovation, but if the cost is not priced correctly, externalities may arise, requiring coordination between government, households, and businesses. The solution to Arizona's water resource problems requires profit incentive mechanisms to promote agricultural restructuring, reduce the cultivation of water-intensive crops, and encourage the cultivation of high-profit crops near water sources.

Deep Dive

Shownotes Transcript

"If something is profitable, it will be done," says Martin Wolf of the Financial Times. We explore how profits will drive the energy transition and how and where water from the Colorado River is used.

Topics covered include:

  • How profits have led to higher energy market share for natural gas and renewal energy
  • What is hindering a faster transition to renewables
  • What is contributing to a water shortage in the southwestern U.S,. and how will it be resolved
  • Why big infrastructure projects often aren't the best solution to solve a problem
  • Why some regulation is helpful

For more information on this episode click here).

Show Notes

The market can deliver the green transition by Martin Wolf—The Financial Times)

Where the Water Goes: Life and Death Along the Colorado River by David Owen—Penguin Random House)

Economics may take us to net zero all on its own by John Burn-Murdoch—The Financial Times)

The Gregor Letter by Gregor Macdonald—Substack)

The Inflation Reduction Act: Here's what's in it—McKinsey & Company)

Management of the Colorado River: Water Allocations, Drought, and the Federal Role by Charles V. Stern and Pervaze A. Sheikh—Congressional Research Service)

The Supreme Court wrestles with questions over the Navajo Nation's water rights by Becky Sullivan—NPR)

As the Colorado River Shrinks, Washington Prepares to Spread the Pain by Christopher Flavelle—The New York Times)

Can Western States Agree on the Future of the Colorado River? by Matt Vasilogambros—Pew)

A matter of priorities by DeEtte Person—Know Your Water News)

Average monthly water prices in the United States as of July 2022, by selected state—Statista)

Election to Designate AMA for the Douglas Basin—Arizona Department of Water Resources)

Arizona Is in a Race to the Bottom of Its Water Wells, With Saudi Arabia’s Help by Natalie Koch—The New York Times)

Arizona gets serious about piping water from Mexico in nonbinding desalination resolution by Brandon Loomis—AZ Central)

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