The Odd Decouple
This is good news: according to NW Current, more and more utilities are becoming interested in "decoupling" -- which could be the single most cost-effective step I've heard of for encouraging conservation.
Here's how decoupling works. Utility rates are pretty tightly regulated: rate structures are dictated by utility commissions and the like. Traditionally, rate structures link a utility's profits to its sales: the more a utility sells, the greater its profits. But that creates a huge disincentive for conservation: if utilities get people to cut their consumption, they cut into their own earnings. In fact, a private utility that tries to get its customers to use gas more efficiently could actually run the risk of a shareholder lawsuit.
Under decoupling, though, utility rates are structured so that a utility's profit margins can rise when consumption falls. (In other words, a utility's earnings are "decoupled" from its gross sales.) This simple change can make it profitable for utilities to promote conservation. And as a result, decoupling aligns the utility's incentives with the incentives of its customers: everyone has an incentive to use energy more efficiently. Northwest Natural, an Oregon gas company, has been operating under a decoupled rate structure since 2002. One result -- it's shifted staff from marketing (trying to get people to buy more gas) to customer service. Whee!
Decoupling is one of those nifty little ideas with a huge potential payoff for a seemingly insignificant change. It doesn't take much to make decoupling a reality -- it relies on a simple alteration to the rules, rather than regulatory strictures or costly upgrades to technology. So it's nice to see it catching on.
Income Inequality Bonanza
In the New York Times, columnist Paul Krugman deflates the notion that widening income gaps are the result of education and specialized skills:
...a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.
The Economic Policy Institute makes the same point on their website: "Since 2000, the real earnings of college-educated workers (those with bachelor's degrees) have fallen quite steeply..." So having a degree doesn't guarantee that you'll grab a big slice of income pie. But who is capturing all the wealth?
As Krugman points out, big income gains have lately been restricted to a very tiny slice of Americans:
Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. [Emphasis added.]
In other words, not only are the ultra-rich getting richer, but they're getting richer much, much faster than the plain old rich. And even if you count yourself among the fortunate few who earn more than 90 percent of American households, your gains (as a class) have been very slow.
And the picture looks even bleaker for young workers.
