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Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

timharford.com

21–30 of 291 posts

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#21
post #4
post #2

I don’t buy the queue argument. It would devolve in to a bunch of churn inevitably resulting in thrown hands and black eyes.

It’s a good lesson in the importance of picking the right things to measure/optimize for. Queue length is not a good thing to optimize for by itself.

I don't even see how it does that. Unless there is some factor that prevents you from leaving and immediately re-entering the line at the front.

I feel like I missed something.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#22
post #6
post #4

Earlier quoted context omitted.

It’s a good lesson in the importance of picking the right things to measure/optimize for. Queue length is not a good thing to optimize for by itself.

Exactly, I don't get how that would increase throughput.

It's not about increasing throughout, it's about increasing user satisfaction. A system where 60 customers are served an hour, and none of them has queued, is theoretically better than one where the same amount are served, but each has queued for 10 boring minutes. You achieve this by disincentivising queueing.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#23

I was curious to see if anyone had tried the coal mine bit. This is the closest I could find, a business plan to sell coal attached to carbon credits. Not sure what’s happened since 2016. https://www.nytimes.com/2016/10/02/business/energy-environme...

Greenpeace had claimed that they tried to offer Vattenfall to buy their coal mines in Eastern Germany to shut them down (they were later sold to czeck company EPH), but it's a bit unclear how serious that offer was: https://www.fr.de/wirtschaft/greenpeace-bietet-kohle-tagebau...

Though maybe that's also a cautionary tale. Back when that happened (2015) the political discussion around coal in Germany was that a coal exit wasn't really part of the discussion and local politicians would say things like coal will be mined until the 2040s. Since then the debate has moved to "Coal exit in 2038", and more recently to "Coal exit very likely in 2030".

What I'm trying to say: Even if you're successful with such a project, it's not exactly clear how much you gain. The political discourse on climate is moving fast (though still not fast enough).

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#24
post #6

Earlier quoted context omitted.

Exactly, I don't get how that would increase throughput.

It's not about increasing throughout, it's about increasing user satisfaction. A system where 60 customers are served an hour, and none of them has queued, is theoretically better than one where the same amount are served, but each has queued for 10 boring minutes. You achieve this by disincentivising queueing.

So people would only go to a stand if there's nobody being served, because being behind the person currently being served is discouraged. Essentially, you'd just move the queue: people would wait for a "spot" to open up (a stand with no customer) and then go there.

If it's orderly, they kind of queue in the middle. If it's not, you'll have a large brawl as people try to get in front of each other.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#25

Earlier quoted context omitted.

That’s not how it works. If the price of coal goes up, other generation technologies outcompete it (renewables and natural gas). By disrupting the fossil fuel supply chain, you apply pressure to the point where coal generators are taken offline and demolished (lots of videos if you Google for coal plant demolition). This ensures you can’t go back, as the lead time is too long to build new coal and no one will finance…

That's an expensive bet if your model parameters are off by just a little bit.

Most risk is manageable, tail risk is unavoidable. You can do everything right and still have a government put you out of business or have the market move against you in a way you couldn’t have predicted.

With that said, the theory is sound based on existing economic conditions. 75% of coal generators in the US and roughly 45% globally operate unprofitably, for example (per Bloomberg NEF).

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#26
post #2

I don’t buy the queue argument. It would devolve in to a bunch of churn inevitably resulting in thrown hands and black eyes.

The queue proposal sounds like a Monty Python skit.

If we adopt the rule that the next person to be served is the most recent person to join line, it's inevitable that a second line will form with people waiting to go to the first line and if someone tries to go to bypass the second line and go directly to the first line, the crowd in the first line will direct their rage at this person and compel him or her to queue in the second line - it's just as if there were only one line and the person had cut in that.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#27

I don't think the idea of reverse logic is even clear. Exactly what aspect should you choose to reverse? A better name would be unintuitive logic, but we already know some things are unintuitive.

Incentive.

When you are given something I want it too. I might even want you not to have it if I can't have it. However, if I am the one giving you the thing it becomes important for me that you have the thing even if I no longer do.

This is intuitive even if it is logically an eyesore.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#28
post #9

If environmentalists made major impact shutting down mines, the price of coal would go up incentivizing new ones or at least to increase the output of existing ones - demand hasn’t changed. Just the same with buying gas stations and shutting them down, too.

It's pretty much what environmentalists have done with dams, right? They buy them and then dismantle them to restore the natural flow of rivers. It's more effective than lobbying the government to pass legislation forcing the removal of the dam.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#29
post #9

If environmentalists made major impact shutting down mines, the price of coal would go up incentivizing new ones or at least to increase the output of existing ones - demand hasn’t changed. Just the same with buying gas stations and shutting them down, too.

But there's other products that compete and it takes time for products to get to market.

If you shut down some number of oil production the price would go up quickly but it would take much longer for alternative sources to come online.

Also when prices of gas goes up, unlike in the past, there are now alternatives in EVs.

Re: Buy a coal mine, drive a gas guzzler, and other uses of reverse logic

#30
post #9

If environmentalists made major impact shutting down mines, the price of coal would go up incentivizing new ones or at least to increase the output of existing ones - demand hasn’t changed. Just the same with buying gas stations and shutting them down, too.

That’s not how it works. If the price of coal goes up, other generation technologies outcompete it (renewables and natural gas). By disrupting the fossil fuel supply chain, you apply pressure to the point where coal generators are taken offline and demolished (lots of videos if you Google for coal plant demolition). This ensures you can’t go back, as the lead time is too long to build new coal and no one will finance…

This might work if (1) coal production cannot be increased cheaply enough and (2) alternative generation can be deployed faster than increasing the coal supply.

I think that the only kind of generation that can quickly replace coal would be based on burning LNG and turning the same turbines.

Solar is great but unstable, adding a battery is pretty expensive yet.

Nuclear is sadly way too slow and expensive to build, even if no NIMBY protests would appear.

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