California is making rooftop solar panels compulsory on new homes from 2020. But some economists are sceptical

A solar panel being fitted on a San Francisco rooftop. Image: Getty.

More California rooftops will soon sport solar panels, partly due to a new state mandate requiring them for all new houses and low-rise residential buildings by 2020.

This rule immediately sparked lively debates. Even experts who generally advocate for solar energy expressed skepticism that it was actually a good idea.

As an environmental economist who studies the design of environmental policies, I believe that doing something about climate change is important, but I don’t consider this new solar mandate to be the best way to achieve that goal. I’m also concerned that it could exacerbate problems with California’s housing market.

More than two sides

You might expect the debate over this policy, which became official when the California Energy Commission unanimously voted in favor of it on May, to pit two well-defined camps against each other.

Environmentalists who prize fighting climate change might love it due to a presumption that increasing the share of power California derives from solar panels will reduce greenhouse gas emissions by cutting demand for natural gas and coal.

On the other hand, those who question whether the costs of addressing climate change are worth it might hate the solar mandate, since they either see no benefits or think the benefits aren’t worth the costs.

But there are more than two sides.

Environmental economics 101

Many renewable energy experts, including economists like me, want governments to do something to address climate change but question the mandate.

University of California, Berkeley economist Severin Borenstein summed up this take in his open letter to the California Energy Commission opposing the rule. University of California, Davis economist James Bushnell also opposes the mandate for similar reasons.

Above all, what we economists call “command-and-control policies” like this mandate – inflexible requirements that apply to everyone – often don’t make sense. For example, going solar is less economical in some cases. Even in sunny California, builders can construct housing in shady areas, and not all homeowners use enough electricity for the investment to pay off before they move away.

The mandate does have some exemptions tied to shade and available roof space, but there could property owners subjected to the requirement to own or lease solar panels who might consider it unreasonable.

We tend to think that “market-based policies” would work better. By relying on incentives instead of requirements, people get to decide for themselves what to do.

Good examples of these policies include a tax on pollution, like British Columbia’s carbon tax, or a cap-and-trade market, like the European Union’s Emissions Trading System. Instead of restricting the right to pollute, these approaches make people and businesses pay to pollute, either through taxation or by buying mandatory permits.

The flexibility of market-based policies can make meeting pollution reduction goals cost-effective. When people – or businesses – have to factor the costs of pollution into their decision-making, they have a financial incentive to pollute less and will find ways to do so. By reducing pollution as cheaply as possible, more money is left over to spend on other pressing needs like housing, health care and education.

This advantage is not merely theoretical. By many accounts, market-based policies have successfully worked according to theory, including the U.S. sulfur dioxide trading program and the EU’s carbon trading program.

California itself has a cap-and-trade market. I believe that expanding and improving it would cut carbon emissions more cost-effectively than the solar mandate would.

Many economists also fear that the mandate will worsen California’s housing unaffordability. This crisis has many causes, such as restrictive zoning regulations that curtail construction. But the solar-panel requirement, which could increase the cost of a new home by more than $10,000, probably won’t help, even though supporters of the policy argue that the solar panels will pay for themselves in terms of lower monthly electricity costs.

The solar mandate’s fans

The solar mandate’s defenders, including Goernor. Jerry Brown and Sierra Club leader Rachel Golden, make several arguments – two of which I find credible.

The first is what I’d call the “Panglossian” argument, after the character in “Candide,” Voltaire’s 18th-century classic satire. In what Voltaire would call “the best of all possible worlds,” taxing carbon would make perfect sense.

But this is a world riddled with political obstacles that make enacting almost any climate policy next to impossible. If a big American state can enact an imperfect law like this mandate that might do some good, then it should go for it.

The other argument I find reasonable is that by drumming up more demand, the solar mandate will expand the solar panel market – thereby driving solar costs down, perhaps more quickly than a carbon tax would. There’s some evidence supporting the theory that these mandates can spur innovation in renewable electricity technologies.

If the mandate works out, it might address two issues at once: shrinking California’s carbon footprint and bolstering technological progress in the solar industry.

To be sure, the cost of residential solar panels has plummeted in recent years, although generating solar energy through rooftop panels remains less cost-effective than power from utility-scale solar farms.

A practical policy

After mulling all the various arguments made by these different camps, I don’t think that whether California’s rooftop solar mandate is the perfect policy for the climate or the state’s homebuyers is the question.

The answer to that question is a resounding no – but that is beside the point because no policy is perfect. The key question is whether this policy – given its imperfections and given the difficulty in passing more cost-effective policies – is a winner overall. That question is harder to answer.

The ConversationUltimately, I believe the mandate will yield some environmental benefits, though they could be more cost-effectively achieved through other means.

Garth Heutel, Associate Professor of Economics, Georgia State University.

This article was originally published on The Conversation. Read the original article.


What’s killing northerners?

The Angel of the North. Image: Getty.

There is a stark disparity in wealth and health between people in the north and south of England, commonly referred to as England’s “north-south divide”. The causes of this inequality are complex; it’s influenced by the environment, jobs, migration and lifestyle factors – as well as the long-term political power imbalances, which have concentrated resources and investment in the south, especially in and around London.

Life expectancy is also lower in the north, mainly because the region is more deprived. But new analysis of national mortality data highlights a shockingly large mortality gap between young adults, aged 25 to 44, living in the north and south of England. This gap first emerged in the late 1990s, and seems to have been growing ever since.

In 1995, there were 2% more deaths among northerners aged 25 to 34 than southerners (in other words, 2% “excess mortality”). But by 2015, northerners in this age group were 29% more likely to die than their southern counterparts. Likewise, in the 35 to 44 age group, there was 3% difference in mortality between northerners and southerners in 1995. But by 2015, there were 49% more deaths among northerners than southerners in this age group.

Excess mortality in the north compared with south of England by age groups, from 1965 to 2015. Follow the lines to see that people born around 1980 are the ones most affected around 2015.

While mortality increased among northerners aged 25 to 34, and plateaued among 35 to 44-year-olds, southern mortality mainly declined across both age groups. Overall, between 2014 and 2016, northerners aged 25 to 44 were 41% more likely to die than southerners in the same age group. In real terms, this means that between 2014 and 2016, 1,881 more women and 3,530 more men aged between 25 and 44 years died in the north, than in the south.

What’s killing northerners?

To understand what’s driving this mortality gap among young adults, our team of researchers looked at the causes of death from 2014 to 2016, and sorted them into eight groups: accidents, alcohol related, cardiovascular related (heart conditions, diabetes, obesity and so on), suicide, drug related, breast cancer, other cancers and other causes.

Controlling for the age and sex of the population in the north and the south, we found that it was mostly the deaths of northern men contributing to the difference in mortality – and these deaths were caused mainly by cardiovascular conditions, alcohol and drug misuse. Accidents (for men) and cancer (for women) also played important roles.

From 2014 to 2016, northerners were 47% more likely to die for cardiovascular reasons, 109% for alcohol misuse and 60% for drug misuse, across both men and women aged 25 to 44 years old. Although the national rate of death from cardiovascular reasons has dropped since 1981, the longstanding gap between north and south remains.

Death and deprivation

The gap in life expectancy between north and south is usually put down to socioeconomic deprivation. We considered further data for 2016, to find out if this held true for deaths among young people. We found that, while two thirds of the gap were explained by the fact that people lived in deprived areas, the remaining one third could be caused by some unmeasured form of deprivation, or by differences in culture, infrastructure, migration or extreme weather.

Mortality for people aged 25 to 44 years in 2016, at small area geographical level for the whole of England.

Northern men faced a higher risk of dying young than northern women – partly because overall mortality rates are higher for men than for women, pretty much at every age, but also because men tend to be more susceptible to socioeconomic pressures. Although anachronistic, the expectation to have a job and be able to sustain a family weighs more on men. Accidents, alcohol misuse, drug misuse and suicide are all strongly associated with low socioeconomic status.

Suicide risk is twice as high among the most deprived men, compared to the most affluent. Suicide risk has also been associated with unemployment, and substantial increases in suicide have been observed during periods of recession – especially among men. Further evidence tells us that unskilled men between ages 25 and 39 are between ten and 20 times more likely to die from alcohol-related causes, compared to professionals.

Alcohol underpins the steep increase in liver cirrhosis deaths in Britain from the 1990s – which is when the north-south divide in mortality between people aged 25 to 44 also started to emerge. Previous research has shown that men in this age group, who live in the most deprived areas, are five times more likely to die from alcohol-related diseases than those in the most affluent areas. For women in deprived areas, the risk is four times greater.

It’s also widely known that mortality rates for cancer are higher in more deprived areas, and people have worse survival rates in places where smoking and alcohol abuse is more prevalent. Heroin and crack cocaine addiction and deaths from drug overdoses are also strongly associated with deprivation.

The greater number of deaths from accidents in the north should be considered in the context of transport infrastructure investment, which is heavily skewed towards the south – especially London, which enjoys the lowest mortality in the country. What’s more, if reliable and affordable public transport is not available, people will drive more and expose themselves to higher risk of an accident.

Deaths for young adults in the north of England have been increasing compared to those in the south since the late 1990s, creating new health divides between England’s regions. It seems that persistent social, economic and health inequalities are responsible for a growing trend of psychological distress, despair and risk taking among young northerners. Without major changes, the extreme concentration of power, wealth and opportunity in the south will continue to damage people’s health, and worsen the north-south divide.

The Conversation

Evangelos Kontopantelis, Professor in Data Science and Health Services Research, University of Manchester

This article is republished from The Conversation under a Creative Commons license. Read the original article.