Daily Score Blog

As today's NY Times points out, the Regional Greenhouse Gas Initiative -- a 10-state consortium that's implementing a greenhouse gas cap-and-trade system for the electric power sector -- is set to get underway in just nine days:

On Sept. 25, utilities will start bidding at auction for allowances, which they can later sell — mimicking the so-called cap-and-trade programs that effectively reduced acid rain in the 1990s.

It's a huge milestone: the first legally binding carbon cap and trade program on the continent.

RGGI's got its flaws, of course.  In particular, it only covers power plants, leaving out the substantial emissions from industry, transportation, and home heating.  Plus, they're still trying to figure out how to deal with electricity imports; emissions from power that's imported from other states or from Canada aren't covered by the RGGI program.  Most troubling, RGGI may even have gotten the initial target-setting exercise wrong; they may have overestimated emissions, meaning that there will be no real reductions during the first year of the program.  (This is the same problem that plagued the EU's emissions system, but it's pretty easy to fix after the first year or so.)

Still, despite any problems, a carbon cap is a carbon cap -- and my hat's off to the states that are getting a head start!!

Here's a thought. 

Wall Street is in turmoil.  Real estate doesn't look like it'll be a good investment for a while.  Commodity prices have been falling like a stone.  The dollar is gaining strength against international currencies, making many overseas investments seem riskier.

So if business or home investors are looking for a place to park some money -- and don't want to just stuff it in a mattress -- what should they do? 

I'm not an investment professional. If you're looking for real investment wisdom, you should probably look elsewhere.  Still, it seems that there's one great investment opportunity that's getting overlooked:  energy efficiency.

Yes, oil and gas prices have fallen from this summer's vertiginous heights.  But they're still pretty high.  And investing in an efficiency upgrade -- a new furnace or HVAC system, more efficient windows, better insulation, smarter lighting -- is a great way to cash in on high energy prices. 

And overall, efficiency upgrades to buildings tend to be a pretty safe investment.  The payout in energy savings is reliable, and -- more importantly -- the return on an efficiency investment actually grows as energy prices rise.  The more that energy costs, the more money an efficiency upgrade will save you.  That makes efficiency a great  "countercyclical" investment, and a smart hedge against energy inflation.  Plus, the return is all tax free -- after all, you don't get taxed on money you don't spend!

So right now, when other good investment opportunities are looking scarce, I think a lot of us would be well-served by adding more efficiency to our portfolios.  Here's one site that offers a do it yourself home energy audit, with links to smart energy saving ideas. Any takers?

A synthetic chemical called bisphenol A has been on our radar screen for a while.  Scientists have known for some time that bisphenol A (called BPA for short*) can mimic the effects of estrogen in mammals, causing a range of subtle but potentially serious health effects. 

And that's especially troubling, since we use BPA for storing food and water.  BPA is a key component of polycarbonate water bottles, and is also used as a liner for canned goods and liquid infant formulas.  And BPA doesn't just stay put in the container -- it can leach into foods and beverages.  BPA was recently found in the urine of 93 percent of adults and children that the CDC tested; and most of our BPA exposure comes from what we eat and drink.

Yuck.

But as if you needed it, now there's even more reason to freak out: a new population-based study published in the Journal of the American Medical Association -- primo credibility -- has linked BPA to heart disease and diabetes. 

For now, the US Food and Drug Administration is sticking by its guns, claiming that BPA is safe -- or, rather, that "A margin of safety exists that is adequate to protect consumers, including infants and children, at the current levels of exposure."  We'll see how long that position lasts...

[*Apologies to the Bonneville Power Administration, which is also commonly known as BPA.  Too many acronyms!]

Oregon's Measure 63 -- which would eliminate the need for building permits for projects less than $35,000 -- would carry a cost to local and state governments. And lucky for you, I'm going to tell you what it is.  

First, official fiscal estimate from Oregon's Department of Revenue is here. But it's only 4 sentences long, a monument to Hemingway-esque terseness that does not illuminate very much. Luckily for us, however, the Revenue Department also produces an explanation of the fiscal estimate.

Even the explanation is short enough to include the entire thing here:

Through a reduction in the number of building permits, this measure will reduce local government revenue between $4 million and $8 million annually and will depend on the level of construction activity and the degree to which inspections are still requested by residential property owners. The measure will also reduce local government spending by a similar amount, as fewer inspections for minor improvements will be required.

Similarly, because the state receives a surcharge of 12% on certain local permit revenue, this measure will reduce state government revenues between $450,000 and $750,000 per year.

County assessors use permit information to identify taxable property. If these permits are no longer issued this property will be more difficult to identify and assess. As a result there may be some loss of property tax revenue for schools and other local governments. Similarly, there may be some loss of school district revenue.

And that's about all there is to say, I guess. Measure 63 isn't going to wreck government finances, it's just going to sting a little. Local governments will mostly just lay off inspectors to reduce their expenditures. The state government will take a small hit. And some school districts may, over time, see some of their funding bleed away.

The bigger question, I think, is what kind of economic damage Measure 63 will do to the private sector. What will happen to the building industry itself?

More on that later.