Dirty Power / Shift the Baseline

At an MIT Energy Initiative talk last week, a representative from China"s electric company told us about China's aggressive green energy goals for the next few decades. On one slide, he talked about reducing carbon emissions by 45% per unit of GDP. This sounds great, until you realize that China expects to grow its economy 6x in the same period, so you are looking at a 3x increase in carbon. Putting the two slides together, I felt a bit hoodwinked.

This has been a constant point of contention between the developed and the developing world. Our post-industrial economies hum along efficiently and provide us with a standard of living unimaginable to our grandparents. Meanwhile, 5 billion people are struggling to lift themselves out of a pre-industrial existence. Instituting a nation-by-nation carbon cap freezes the status quo in a manner that probably should be unacceptable to a group of people who largely don't even have indoor plumbing.

In a static, closed system it shouldn't matter much whether you auction off a quantity-limited set of carbon allowances or impose a carbon tax. The magic of price/supply elasticity dictates that the outcome should be the same either way. But that magic only applies within one nation. How do you decide ahead of time the allowable carbon output for each nation? Can you? Should you?

Would you set caps or targets normalized to GDP as implied by the Chinese representative? Could such a system kick an economy while it is down? (A local depression would reduce your relative carbon allowances, making it harder to recover.) Is is verifiable?

There is a simplicity in taxing emissions rather than auctioning quantity limits. A roughly consistent worldwide price on carbon would automatically and dynamically adjust emissions as economies develop and become more or less energy intensive. It is much more transparent and implementable than a single global allowance auction. It would enable developing nations to grow and increase their absolute and relative output while still recognizing the cost of that growth.

Nobody wants to mire developing nations in poverty. Nobody wants them to have a free ride either. We need a regulatory framework which recognizes that 1/3 of the world is growing faster than laws or treaties can adapt.

SDM Summer 2010 review

Another semester, another chunk of knowledge. Summer term is a bit accelerated at MIT since it tries to pack a full semester of content into fewer weeks. Classes meet for more hours each week and the workload per unit time is higher. Fortunately, the institute is air conditioned.

ESD.763 covered supply chain logistics from a very high level. I didn't walk out of this class feeling like I could design and run a supply chain on my own, but I now feel that I have a solid grounding in the issues and the fundamentals. We started with some good mathematical grounding in Markov chains and queue theory. Then we covered a rich set of cases to see how these theories are applied in the real world. Learning about 7-11 Japan was mind-blowing. Hourly resupply with shifting stock throughout the day? Insane. This class only ran for the first half of the semester; having its workload disappear just as other classes ramped up was scheduling genius. I appreciated that Professor Martinez-de-Albeniz would challenge poorly-thought-out answers with harsh and well-deserved reality.

15.514 Financial and Managerial Accounting should have been painful. Who wants to spend three evenings per week learning about accounting in the summer? It turned out to be much more engaging than I thought it would be. I viewed the class as "defense against the dark arts." I never plan to do any accounting myself, but I feel that I should now be able to spot and understand a severe irregularity if someone tries to sneak it by me. Professor Scott Keating was committed to both our understanding and keeping the material as engaging as it realistically can be.

ESD.33 Systems Engineering reminded me of my employee training on the "Design V" back at Ford. This was mostly familiar material, and it suffers a bit by being so loose and heuristic-based. It's necessary material but I don't see a systematic way to teach it. This class, however, was responsible for my favorite project of the summer: an examination of the electrical grid in Hawaii. (Separate article on this to come.)

ESD.945 SLaM Lab Praxis was the first formal "leadership" training we have yet had. In this class we covered decision making, setting strategic directions, how to disagree productively, and how to respond to changes in the external environment. This was good material and Professor Michael Davies delivers it with passion. There is a good chance that I will be taking the followup class this Fall.

And now, three weeks off for some backpacking/kayaking/thesis-writing.

Wave Goodbye

Google has stabilized Wave. The occasional miss should not be a surprise in a company with a freewheeling, beta-oriented culture. There is something to be said for the argument that Wave was poorly communicated. If you have a new product and can't describe what it is in a paragraph of text, you have a problem. Who is it for? What do you do with it? How does this make your life better?

My theory is that Wave failed because of its invitation strategy. Wave is a communications platform. If you can't use it to communicate with anyone, it's useless. In school, we frequently form fast ad-hoc groups for projects and problem sets. Wave would have been perfect perfect for this since email is too unstructured and Google Groups is too heavyweight. I tried early on to sell a few of my teams on Wave, but quickly gave up when we ran into invitation/registration problems. When you only have a week to get your team moving, tool overhead is something you can't afford.

Google's Buzz has been maligned for lacking any meaningful functionality, but it did the right thing in becoming available for everyone, everywhere, immediately. I appreciate Google's caution in wanting to ramp Wave in a controlled fashion, but a slow rollout can be death for a social product.