An investment proposal

First, credit where credit is due. I read Mike the Mad Biologist. His post pointed me here, which mentioned an atrociously written Washington Post article (bad arithmetic, erased without comment, then corrected, with no reflection of the vastly different results in the text). This got me to think about buying efficient light bulbs as an investment, and so I did some interest calculations, as if the bulb were paying a mortgage.

I’ve long been interested in LED lighting, and have installed some myself in places where it was a clear win (underneath cabinets and on bicycles). I’ve been wary of “LED light bulbs” for some time, because to be fair, diplomatic, and objective, up till now, most of them have been overpriced crap. But last weekend or so, I was at the Home Despot, saw some LED light bulbs, read the labels, decided that it was worth my while to try one of them. I got a 14 watt bulb claiming to be the equivalent of a 75W bulb, installed it, and so far, so good — it’s bright, good color temperature, and instant-on, as expected. Lifetime is TBD; claims to have a 5 year warranty (but did I save the receipt? Whoops, need to remember to do that when I buy more), also claims to have a 25000 hour life, which is reasonable for LEDs. Also claims to be dimmable, but the reviews consistently say “no, not really, not like you’d expect”.

So, if I view this bulb as an investment, what is the rate of return? Let’s benchmark it against an incandescent bulb, since that is what the Post did. I initially decided to assume that I was saving 60 watts per bulb (15 instead of 75), running it 6 hours a day, and paying $.12/kwh for electricity (actually, I pay $.15, I just checked last month’s bill). Electricity savings come to about $1.30 per month.

Assume, also, that an incandescent bulb costs a dollar, and has a lifetime of 1500, so include the cost of the bulb in each month’s savings. At 6 hours per day, the bulb savings are 12 cents per month. Total savings are $1.42/month.

Assume the bulb will last 10 years (21600 hours at 6/day). I paid $30 for the bulb, plus sales tax, rounded up, is $32.

So, supposing I made an investment of $32, and it paid me back $1.42 per month for 120 months, at which point, no more payments, just as if I were loaning money to someone else for an itty-bitty mortgage. Spreadsheets have a “RATE” function that will determine the interest rate given a present value, future value, payment amount, and number of payments; in this case, -32, 0, 1.42, and 120. And out pops 4.4 percent. Not very exciting, though it helps that it is free of taxes, since it is money saved, not money earned. And if you only ran a bulb 3 hours a day, and only saved 45 watts, and only paid $.10 per killowatt hour, only 1.2%. That’s not much of an investment, is it?

But those interest rates are PER MONTH, not per year. So really, 1.2% — that’s 14.4% return, per year, tax free. If you return to the original assumptions, the $32 investment in an LED light bulb pays out at 52.8% per year.

What’s the risk in this investment? I see three possible risks that could cause it to fail to pay out.

First, you can only save money that you have; if you go bankrupt, then it’s not interesting that you aren’t paying money to the electric company, because you’re already not paying money to the electric company. However, all investments are vulnerable to bankruptcy risk.

Second, electricity in the next few years could become incredibly cheap (pigs could fly, too).

Third, the bulb could fail. Obviously, it pays to save your receipt; that gives you insurance of some sort for up to 5 years. If the bulb fails in five years instead of lasting ten, then the payout is not as impressive. If electricity is too cheap, or if you don’t run the bulb enough hours per day, it won’t pay out (3 hours per day, $.10/kwh, 45 watt savings, 5 years, will not pay off). But, if a bulb is on even 4 hours a day at $.10/kWH, the interest rate is 7.4%, or 3 hours at $.12/kWH, is 5%. Where I live with $.15/kWH electricity, 3 hours a day, 45 watts less, failing at 5 years, pays off at 14.8%. At 6 hours a day, 45.8%. I really like the idea of an investment that pays me 14.8% annual interest, tax-free, when it “fails”.

Did you notice that the Washington Post thought it was more important to tell you about the terrible government-subsidized light bulbs, when they could have been giving you this useful information instead? Says something about their priorities, doesn’t it? Hard to believe that anyone would think time spent reading that would be well-spent.

Numbers that were larger than I had imagined.

From a Slashdot discussion of how fast ice caps could or could not melt, this time with all the arithmetic corrected and embedded references.

Radius of earth, r = 6.4 × 10⁶ m

Size of illuminated disk = PI × r² = 1.3 × 10¹⁴ m²

Sunlight at top of atmosphere = 1366 W/m²

Continuous solar watts, p = 1366 W/m² × 1.3 × 10¹⁴ m² = 1.8 × 10¹⁷ W

Solar energy per year = p × seconds/year = 1.8 × 10¹⁷ × 3.15 × 10⁷ = 5.6 × 10²⁴ J

Volume of Greenland and Antarctic ice caps = 33 × 10⁶ km³ = 33 × 10¹⁵ m³ = 33 × 10¹⁸ l

Weight of ice caps = 0.92 kg/l × 33 × 10¹⁸ l = 3 × 10¹⁹ kg

Heat to melt the ice caps = 333.55 × 10³ J/kg × 3 × 10¹⁹ kg = 1 × 10²⁵J

Years of total solar power received by earth required to melt the ice caps =
1 × 10²⁵J / 5.6 × 10²⁴ J = 1.8 year

And you might think, that’s a lot, right? But consider the size of the ocean: 1.3 × 10⁹ km³, versus 3.3 × 10⁷ km³. It takes 80 calories to melt a gram of ice, and it takes 1 calorie to heat a gram of liquid water by 1 degree C. That is, to melt all the ice (but not warm it to ocean temperature), the oceans would cool on average by (3.3 × 80)/130 = 2 degrees C.

And this is why global warming is slow, and why changes in ocean currents can produce much larger effects in the short-term. There’s an enormous amount of heat stored in the oceans.

Mistah Kurtz – he dead

I am really enjoying this Romney vs Gingrich contest in Florida. Romney is one of the Hollow Men, willing to say or do anything to get the nomination.

But Gingrich? Mr. Kurtz, clearly. “Are my methods unsound?” “I don’t see any method at all, sir.”

Two cycle tracks

One is officially inbound to Cambridge, the other is officially outbound from Cambridge. The two tracks are on opposite sides of Concord Ave.

On one side, we have an almost completely unbroken cycle track adjacent to a sidewalk. There’s only one place on the whole stretch where a car might drive across it. Together they make a great wide flat space, and when it snows, it is plowed.

On the other side the cycle track is cut several times by cross streets and driveways, and sometimes it is level with the sidewalk, sometimes it is level with the street. It is not plowed.

And they could have plowed it, but just decided not to:

The plow didn’t fit on the sidewalk, so they plowed the cycle track here, but only as long as they were forced to.

I have to wonder, what they heck were they thinking when they built this second cycle track? Running bicycles across driveways and cross streets is a recipe for accidents, and after spending all the money to build this thing, they don’t even plow it (and when it’s not covered with snow, it’s often full of gravel and sand). Why waste the money? Why put those arrows on both sides to attempt to guilt cyclists into doing something unsafe? The inbound side is safe and attractive, why not just shift the whole road a few feet and put both directions over there?

Apparently the New York Times acts as a stenographer for propagandists

Public editor asks: “Should we not do this?“

That they even had to think about this is appalling.

Insincere “skeptic” shills

Interesting BBC article, on how, if it were not for our CO2 emissions, we should expect another ice age in 1500 years. It includes some discussion of how low CO2 would need to be for this to occur — one estimate is 240ppm, others are as high as 270ppm. Our current levels are 390ppm, and we passed 320ppm in 1965.

Yet the reporter manages to find (why?) people who insist that this means that our current unrestrained CO2 emissions are a good thing. These presumably are the same people who end up overdosed on medicine — because if a little is good, why not take a lot?

They also have a blinkered view of planning for the future. Once we dig/drill all the carbon and burn it, it’s out of our control. Eventually it will be reabsorbed into the oceans and other carbon sinks, and we’ll have deprived ourselves of a handy knob for warming the planet. If CO2 levels sink below the ice age threshold while we are still in a glacier-friendly part of the Milankovitch cycle, we’ll be up a frozen creek without a paddle. You can tell these guys are insincere shills, because if they really cared about preventing the next ice age, they’d be in favor of throttling emissions back to much lower (but non-zero) levels, and preserving our ability to inject CO2 into the atmosphere in the future.

Mandatory helmet laws

Mandatory helmet laws for car drivers and passengers, of course. Why?

Cars crashes are a significant source of serious head injuries:

almost half of all brain injuries severe enough to require hospitalization (49%, 145,000 people) are the result of motor vehicle accidents. These injuries frequently result in death (56,000) or lasting disability (99,000).

There’s little downside.
Unlike motorcycle helmets, car helmets need not be heavy because drivers are somewhat protected by their cars. Drivers, unlike bicycle riders, are not engaged in significant physical activity, so they don’t need to worry about getting a sweaty head. Some people may be deterred from driving by a mandatory helmet law, just as cyclists in Australia were deterred by their mandatory helmet law. However, while reduced cycling is bad for public health (39% higher mortality rate for non-cyclist commuters — a catastrophe), reduced driving is not; if anything, by displacing people into other forms of transit (walking, cycling, possibly to/from mass transit), it can be a public health benefit.

It is certainly true that some people may not like the idea of wearing helmets to drive or ride in cars, but the same is true of some people riding motorcycles, and some people riding bicycles, yet helmet use is mandatory in most places for motorcyclists and some places for bicyclists. A helmet law for cars would be relatively convenient (just leave the helmets locked in the car when not in use) and less of a burden than the laws that already exist for two-wheeled transportation, and would save more lives.

Bent the needle on my irony meter

Someone commenting on some article about Ron Paul was complaining that the bought-and-paid-for media were not giving him the serious coverage that he deserves. This could easily be true, but I thought that bought-and-paid-for was exactly what Libertarians liked best.

From the department of stupid subsidies

Once upon a time, employers could pay for employee parking without it being treated as taxable income — no limit. Someone noticed that it was unfair not to also subsidize mass transit use in a similar way, and for a while both could be subsidized, with a limit this year of $230/month. The article below notes the equal subsidies could expire at the end of 2011, with 2012 limits of $240/month for parking and $125/month for mass transit.

http://www.nytimes.com/2011/12/10/your-money/why-drivers-get-more-commuter-tax-benefits-than-bus-riders.html

Of course, the bicycle subsidy is all of $20/month, only eligible if the bike is used for a “substantial portion” (majority?) of your commute, and cannot be combined with any other commuting subsidy.

$230/month is $2760 per year. At a 25% marginal tax rate, that’s $690 a year in federal subsidy (taxes not levied) on driving. For comparison, per-mile, for the average US driver (13476 miles per year), that is over a $.05 / mile federal tax subsidy (it’s not entirely fair to call this a per-mile subsidy, since it is for parking, not travel, but it gives a sense of the magnitude — working only from direct costs, some people like to claim that the government subsidy for “driving”, meaning roads, is only about a penny per mile.)

At this point, I think I’d be happiest if all these subsidies were just dialed down to zero. If parking’s expensive, let it be expensive. If people don’t like that, there are other choices. Why not let the invisible hand do its work?

Greenland, rebounding faster because of glacier melt

Wheeeee!

Normal rates are 15mm per year. Where weather was warmest and ice melted most, the bedrock rose 20mm in only 5 months (over 3x the normal annual rate).

http://researchnews.osu.edu/archive/greenlift.htm

Comments on the news reports are (as usual) polluted by dumbasses who think they know more than a tenured professor in Earth Sciences.