Friday, January 20, 2017

Climate Tricks 58, Trump's climate advisor to reverse US government alarmism

Mr. Trump has a foul mouth but in terms of climate and energy policies, he is a realist, not alarmist. Now the world should begin to realize that climate change is mainly nature-made, not man-made.

Below are some fb updates from world famous climatologist, Dr. Roy Spencer of UAH last January 15, 2017:

"good news, looks like my friend Will Happer is one step closer to being Trump's Science Advisor."

"I've helped Will come up to speed on climate issues over the years...
Will is familiar with government service and the press, he will play by the rules. Definitely not a loose cannon."

"It now looks like my co-conspirator (and boss) John Christy is being floated to head NOAA. I can't see any other reason for his name to be mentioned in this new article by James Delingpole (James will probably neither confirm nor deny his intention-- wink wink nudge nudge). John has said it's the only position he'd consider taking, and I recommended him for it to two Trump transition team members. The downside is we really need him here in Huntsville...but he'd do a great job as NOAA Administrator." http://www.spectator.co.uk/.../stop-worrying-about-trump.../

"... John "knows" NOAA, their mission, and is an expert on thermometer measurements. He's a good scientist AND manager. I'd like to see him get to the bottom of the thermometer adjustment mess...it won't be easy. He's been working with Anthony Watts and others on what I believe to be the best analysis of U.S. temperature data. I'd LOVE to see that work get legs....

again, we are just reading between the lines here. He has not yet been offered the position. John alerted me to the new article, and I believe it's the second "trial balloon" that has been floated with his name."


There were 2 other GOP candidates who were skeptic of "man-made" CC, Ted Cruz and Marco Rubio. But I doubt if pushed to the wall, they will challenge the climate establishment heads on. Seems that only Trump has the ball to take the huge climate alarmism establishment.

Two comments from two American friends:

Roy W. Spencer I agree. No one else would dare challenge the orthodoxy. Too many powerful people invested in green schemes.

Todd Foster "John Christy is being floated to head NOAA..." Will I ever get tired of such win. And that's Trump's biggest asset. His complete inability to be cowed by a media that fewer and fewer even trust. Yes, he'll take a beating from the howling monkeys of the press but he'll just keep pushing on, to higher approval ratings.

Wow, Dr. Spencer commented on my wall, haha, was so happy. I have heard him first in 2009 in NYC, 2nd ICCC by the Heartland Institute. Since I was not so familiar with the highly technical aspects of climate science that time, was struggling with a very steep learning curve right there at the conference, I did not fully comprehend his talk and discussion about positive vs. negative cloud feedbacks to more CO2 added to the atmosphere, related topics. That conference was a start for me to read more about the technical aspects of climate science. I was visiting his blog, WUWT, others more regularly.

When I attended the 4th ICCC in Chicago, still sponsored by Heartland, I was more familiar with the basic concepts. Solar irradiance, GCRs, PDO, AMO, cloud feedback, UHI, datasets from UAH, RSS, and so on. When I saw Dr. Spencer during a coffee break, I asked for a selfie with him, he gladly obliged. I was awed, so happy to stand beside this huge, giant mind in climate science :-)

More articles here. This one is from new friend in fb, Willis Eschenbach. I think Willis was also present in the 2 ICCCs that I have attended, but I did not know him then.

"These NOAA claims of wildly accelerating rates of sea level rise are not science in any form. They are government sponsored hysteria, and whoever did this at NOAA should resign.

Unfortunately, the costs of this rampant alarmism will be huge, as coastal communities will struggle to comply with a meaninglessly exaggerated risk." -- https://wattsupwiththat.com/.../noaa-jumps-the-shark-in.../

"In my opinion, we are an over-regulated society. Over-regulation not only destroys prosperity and jobs, it ends up killing people. And political pressures in government to perform scientific research that favors biased policy outcomes is part of the problem.

Science is being misused, prostituted if you wish.

Yes, we need regulations to help keep our air, water, and food reasonably clean. But government agencies must be required to take into account the costs and risks their regulations impose upon society." -- Roy W. Spencer http://www.drroyspencer.com/.../science-under-president.../
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See also:

BWorld 105, Top 10 energy news of 2016

* This is my article in BusinessWorld last January 6, 2017.



Here is my list of 5 international and 5 national or Philippine important energy issues last year.

INTERNATIONAL

1. Donald Trump and his energy policies.

US president-elect Donald Trump’s energy policies are summarized in his major campaign platform, “Seven actions to protect American workers” and these include:

“FIFTH, I will lift the restrictions on the production of $50 trillion dollars’ worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal... SEVENTH, cancel billions in payments to UN climate change programs and use the money to fix America’s water and environmental infrastructure.”

So far some of Mr. Trump’s Cabinet Secretaries are his fellow skeptics of the anthropogenic or “man-made” climate change claim (climate change is largely cyclical and natural or “nature-made”), or simply pro-oil. These include: (a) Environmental Protection Agency (EPA) head is Scott Pruitt, former attorney general of Oklahoma; (b) DoE Secretary is former Texas Governor Rick Perry who is pro-drilling; and (c) Secretary of State is Rex Tillerson, CEO of the oil giant Exxon Mobil Corp.

2. OPEC cut on oil production.

For eight years, OPEC never cut its oil production despite declining oil prices to protect its global market share under intense pressure from huge shale oil supply from the US. In November 2016, OPEC finally blinked and decided to cut their collective oil output by 1.2 million barrels per day (mbpd) hoping for an increase in oil prices. Non-OPEC countries like Russia and Mexico made an agreement with OPEC to cut output by another 0.56 mbpd, for a total projected output cutback of about 1.8 mbpd. So far, price impact was marginal as oil prices before this OPEC decision was already touching $50 a barrel. But once US shale oil output ramps up, this marginal price increase can easily be reversed.

3. More wind-solar means more expensive electricity in selected countries in Europe.

The numbers below show that countries with expensive electricity (1-5) have zero or little nuclear power, have high wind power (except Belgium and Italy), and high solar capacity (except Spain). And cheaper electricity countries (6-10) have high nuclear power (except UK and Netherlands) and low wind (except Sweden), low solar capacity (see Table 1).


4. By 2040, 46% of global energy demand will come from Asia Pacific.

Based on a recent report by Exxon Mobil which grabbed global energy headlines, it said that it expects China, India, and the rest of Asia Pacific (including Japan, ASEAN, and Australia) will increase its global share of total energy demand from 234 quadrillion British thermal units (BTUS) in 2015 to 322 quadrillion BTUs by 2040. The percentage share of the region will rise from 41% of global demand in 2015 to 46% by 2040. In contrast, the share of EU and the US combined will shrink from 28% in 2015 to only 22% by 2040 (see Table 2). 


5. By 2040, wind, solar, biomass, other renewables will contribute only 11% of total global power generation.

Coal will remain the dominant source in power generation worldwide by 2040 but its share will decline from 44% in 2015 to 34% by 2040. The share of natural gas and nuclear power combined will increase from 38% in 2015 to 45% by 2040. The share of wind, solar, geothermal and other renewables will marginally increase from 6% in 2015 to 11% by 2040, despite all the political noise worldwide that these renewables will get “cheaper than coal” and attain “grid parity” with conventional sources like coal and natural gas.

PHILIPPINES

6. Search for an Independent Market Operator (IMO) of WESM.

In the last Congress, then Sen. Serge Osmeña, Chairman of the Senate Committee on Energy conducted a series of meetings until January 2016 about the absence of an IMO that is supposed to manage the Wholesale Electricity Spot Market (WESM). The Philippine Electricity Market Corporation (PEMC) as market operator of WESM remains weird because (a) PEMC Board is chaired by the DoE Secretary, many board members are government officials; (b) Even the supposed four independent directors plus consumer representative (5 total) are all appointed by the DoE Secretary; and (c) PEMC is regulated by the Energy Regulatory Commission (ERC), which is under the administrative control of the DoE Secretary, who chairs the PEMC that is regulated by ERC.

7. WESM Mindanao, IMEM.

Aside from issues on the new Market Management System (MMS) for WESM rules and the transition to a real IMO, the move to create a WESM in Mindanao via the Interim Mindanao Electricity Market (IMEM) is gaining ground. The Mindanao dispatch protocol will have to be spelled out in detail too.

8. Imposition of Renewable Portfolio Standards (RPS).

In June 2016, the DoE issued a draft Department Circular (DC) on RPS, a provision in the RE Act of 2008 (RA 9513) that “requires electricity suppliers to source an agreed portion of their energy supply from eligible RE resources.” This RPS will result in more expensive electricity because wind, solar, biomass, and small hydro that are not given feed in tariff (FiT) privilege of guaranteed price for 20 years can demand higher price for their energy output because distribution utilities will have zero choice but buy from them otherwise the DoE will penalize them.

The draft DC wanted an initial “2.15% to be applied to the total supply portfolio of the Mandated Participant in each grid.” When asked what will be the projected price implication of such policy, DoE and National Renewable Energy Board (NREB) officials answered that no study on price implications has been made yet. A weird proposal where proponents have no clear idea on the cost of implementation to energy consumers, the DC was shelved.

9. Shift in energy mix from energy source to system capability.

During the administration of DoE Secretaries Petilla and Monsada, the DoE wanted an energy mix based on energy source or technology, 30-30-30-10 for coal-natural gas-RE-oil, respectively. This is highly distortionary because many REs are either seasonal (hydro can be baseload only during the rainy season, biomass can be baseload only if feedstock is available) or intermittent like wind and solar. New DoE Secretary Cusi changed the energy mix based on system capability: 70-20-10 for base load-mid merit-peaking plants, respectively. This is a more rational mixture.

10. Endless demand for expanded, higher feed in tariff (FiT).

As more solar farms and wind farms are constructed nationwide, their developers and owners are lobbying hard for an expanded FiT 2 with guaranteed price for 20 years. Even geothermal developers also lobbied that their new plants should also be given FiT. Currently, three wind developers -- Trans-Asia Renewable Energy Corporation (TAREC), Alternergy Wind One Corporation (AWOC), and Petrowind Energy, Inc. (PWEI) are petitioning the ERC that their FiT rate be raised from P7.40/kWh to P7.93/kWh. Three wind farms were lucky or favored to get P8.53/kWh under the original FiT -- EDC Burgos (Lopez group), Northern Luzon UPC Caparispisan (Ayala group) and Northwind Power Bangui (partly Ayala).
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See also:
BWorld 102, Top 10 news of 2016, January 10, 2016 
BWorld 104, Top 10 positive news in Asian trade, January 14, 2016

Transport Econ 20, On traffic and road sharing

My former teacher at UP Diliman, Prof. Segundo "Doy" Romero posted one hour+ ago about road sharing. Part of his post,


"...As a people we should resolve to now be moving people, but we are moving private vehicles instead. Emergency powers are being readied to deal with the traffic crisis. Meantime, it's everyman and everywoman for himself. The answer to the mobiity crisis? Buy another car! This is to dodge the number coding restrictions.

This is where political will is supposed to be needed. It is time for radical solutions, like Tony Oposa's idea of road sharing -- half of all lanes for motorists, half of them for pedestrians and cyclists. Or steep congestion pricing...."

I commented on it, I wrote,

"half of all lanes for motorists, half of them for pedestrians and cyclists." Lousy proposal sir. You mix cars and buses with bicycles and skateboards and pedestrians in one road? and if one wayward bus or car hits any of those bicycles, pedestrians, who's to blame, Oposa? the bus/car driver? the pedestrians?

Sir Doy clarified that it's half of all lanes (e.g. 4 out of 8 lanes). Then a certain Benjamin de la Pena replied, 

"Nonoy Oplas, that's a ridiculous comment. Who said anything about "mixing" - you build sidewalks, protected bike lanes, and transit only lanes."

I replied to both: "precisely sir. Edsa is 6 lanes, 3 for cars/buses/trucks, 3 for bicycles, skateboards, pedestrians. There will always be impatient drivers on the motorists lane, especially on an emergency trip or night time, etc. and will sway to the 3 lanes of bicycles, etc. Accidents will happen there. Who's to blame, Oposa and supporters? MMDA? drivers...?

Benjamin, you build sidewalks in the middle of EDSA? hehehe"


Then see the succeeding comments of Benjamin, calling me as "minimal thinking" which for me is an insult.


I am regularly engaged in a number of debates, past and present. I always make a distinction to criticize an idea or comment, not the person. Shoot the message, not the messenger. Like "that's a lousy idea" and not "Mr. X is lousy." Now see succeeding comments from this man. Explicitly saying that he was insulting me then claim later that he was not attacking me.


Sir Doy said that "Benjie is one of our foremost Filipino urban and mobility specialists in the country." His fb profile says that he also graduated from UP, studied Urban Planning at Harvard U, lives in Miami, Florida.

Fine, and if I criticize an idea -- mixing cars, buses, bicycles, pedestrians in Edsa -- he can personally insult or attack people who disagree with the idea? It speaks of his character.

Meanwhile, back to the issue. I notice that many people are actually forced to drive their cars because of the inconvenience and some dangers of multiple rides. Take someone living in UP Village or Batasan Hills in QC, working in Buendia, Makati or BGC, Taguig. Four rides: (1) tricycle from house to Philcoa or Sandiganbayan/Commonwealth, (2) jeepney from there to MRT station in Quezon Avenue, (3) MRT to Buendia or Ayala station, (4) jeep to office in Buendia or bus to BGC.

Four rides going to work, four rides going back home, 8 rides, daily. If one has to wear a formal corporate dress daily, or carrying a laptop, other important documents, or some big cash, it is very inconvenient to make those multiple transfers being exposed to street robbers, dust, heat, smog, or rain in between rides, the hassle of walking-waiting-standing between rides, etc.

Because of this inconvenience of public transpo, many middle class and rich people are forced to drive their cars or motorcycles, or take Uber/Grab/taxi, which means more private vehicles on the road, more traffic congestion. Even if the most modern MRT trains are available tomorrow, many people will still avoid those multiple rides and will use their cars or motorcycles.

One solution here would have been those air-con vans that act like school buses. Pick up passengers from the nearest points from their house, if not in front of their house, bring them to their offices in one convenient and comfortable ride. But LTFRB disallows this, they only allow point to point vans, which means people must walk or ride tricycles to the vans' terminal, then walk far or ride a jeep to their offices or final destinations, reverse the process going back home.

Those aircon vans were market solutions to the traffic problem. No taxpayers money, no new government bureaucracies will be committed to provide such solution, just allow the van owners/operators and commuters to decide the dynamics such service in terms of pricing/fare, service quality and safety.

This is not to say that I do not support the development of mass transport system, I support it. It's just that while it will take years if not decades to have a modern integrated transpo system, this house-to-office aircon vans transpo is the easiest, quickest, least distorting transpo solution to traffic congestion.

The road-sharing as proposed by Oposa, et al? No. Children, babies, oldies, physically disabled, pregnant women, those carrying important and heavy luggage, should be riding in comfort as much as possible, not pedaling or skating or walking in Edsa and other major roads. Thus, these roads should not be constricted via forced "road sharing"

Update:

Benjamin posted this on twitter, bragging that he insulted me.


Ahh, arrogant id___. Good that he lives in America, meaning one less arrogant soul in the Philippines. One disease of central planners is the tendency to be arrogant and "all-knowing" and their patience for contrary views is low.
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See also:

Monday, January 16, 2017

Inequality 31, Economics, politics and forcing equality

A number of my friends have posted in facebook in agreement with this article from The Economist, "To be relevant, economists need to take politics into account." so I will post to contradict it. This article or its title is misleading if not wrong because: 

(1) It is saying that economists writing about plain economics are not relevant, so to make them relevant, they must write about economics + politics + sociology + anthropology + history + genderology + ...?

(2) Consider a simple demand-supply price equilibrium theory. A big storm damaged crops in a major food producing region that substantially supplies food in M.Manila, so the supply goes down, the price goes up since demand remains the same. No need for politics, history, anthro, sociology, gender, etc. to inject into the analysis to make it relevant.

Now comes politics, government imposes price control on food items supplied by other regions not affected by that big storm "to protect the poor." Things become awful, formal supply goes down, turns to "black market" supply. It is politics inserted into normal economic phenomena that distort things. And people think economists should always factor in politics, history, etc. in an otherwise simple situation. Lousy.

(3) Economists who comment on political issues -- politics around the world, political ramifications of federalism and parliamentarism, revamp of the constitution, etc. -- then they must insert politics, history, etc. in their analysis.

Consider this paper, "Economics versus Politics: Pitfalls of
Policy Advice" by Daron Acemoglu and James A. Robinson, Journal of Economic Perspectives—Volume 27, Number 2—Spring 2013. http://economics.mit.edu/files/10403

"Our argument is that economic policy should not just focus on removing market failures and correcting distortions but, particularly when it will affect the distribution of income and rents in society..." (last par. of the paper)

Can people, economists "remove market failures"? Wow. Only central planners would think that way. Consider these:

1. Mr. X and his friends demand a 500 GB USB that is sold for only P1,000. Demand is there but supply is zero, so market failure.

2. Mr. Y and his friends supply a rice variety that is said to cure 10 types of common diseases and sold at P800/kilo, no one buys their rice. Supply is there but demand is zero, so market failure.

Anyone, anytime and anywhere can create a market failure, as shown by 2 examples above. Some guys like economists (and politicians, etc.) think they can stop or remove that? Wow.

On inequality, it's part of nature, it's good. Otherwise people will work only few hours a day and demand that their pay, their house, healthcare, etc should be at least 1/5 that of the privileges enjoyed by Bill Gates and Henry Sy or John Gokongwei, etc. to have equality in society. The world has progressed because of respecting inequality, not forcing equality like socialist countries.

Now consider this drama by Oxfam and many other groups, institutions like the UN. https://www.oxfam.org/.../just-8-men-own-same-wealth-half...


Ok, the incomes and wealth of Bill Gates, Zuckerberg, etc. have expanded up to the troposphere, did they make people's lives, our lives, poorer and lousier? Do we have lousy and despicable lives because Zuckerberg got richer each year because of facebook?

No. On the contrary, we enjoy more comfortable, more convenient lives because of the inventions of these super rich people. If people think that Zuckerberg et al are creating a more despicable world because of their inventions and companies, they better opt out of fb, youtube, google, iphone, etc because everytime they use those things, they contribute to further enrichment of these super super rich people.

The world enjoys more comfort, more welfare because of the innovations made by these super-efficient, super-ambitious and super-rich people. Soon people will be working only 4 or 3 days a week and still get high pay because of rising productivity (and rising inequality) introduced by those super-efficient people. We should support the expansion of more super rich people instead of demonizing them. The politics of envy is only for the envious, like Oxfam and the UN :-)

The only way to stop rising inequality is via dictatorship. Put a gun on people's heads and tell them to stop being too innovative, too inventive, too revolutionary in business, to stop and limit excellence.

Central planners would clap this scenario. They get huge pay and various political perks doing all types of social engineering to force equality in the world.
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See also:

Saturday, January 14, 2017

BWorld 104, Top 10 positive news in Asian trade

* This is my article in BusinessWorld last January 04, 2017.


Global trade has significantly slowed down in 2015 which is ironic because it was the start of significant oil price declines. After recovering from the 2009-2010 global financial turmoil that started in the US, global exports reached $18.3 trillion in 2011, $19.0 trillion in 2014, but declined to $16.5 trillion in 2015.

Nonetheless, there are some good news in Asian trade which battled this global trend in export decline.

Below is my list of these positive developments.

1 China, Vietnam, Hong Kong, and the Philippines did not follow this global trend. Their exports in 2015 were higher than their 2011 levels. For the Philippines, exports reached $58.6 billion in 2015, higher than 2011’s $48.3 billion.

2 Many Asian economies remain leading exporters and importers in merchandise or goods trade, led by China, Japan, South Korea, and Hong Kong.

3 Five ASEAN countries are important players in global merchandise trade with at least $150 billion in exports. The Philippines is playing a far catch up with Indonesia and Vietnam.

4 In services trade (including revenues from tourism and business process outsourcing (BPO) firms) many Asian economies still remain part of the big- and medium-size players, at par or even larger than the average European economies. The $915-billion revenues in 2015 is for all 28 EU economies.

5 Within the ASEAN, the Philippines is a medium-size services exporter while Indonesia did not belong to the top 50 in 2015 (see Table 1).


6 In some sectors, the Philippines ranked #10 globally in 2015 in the exports of telecommunications, computer, and information with revenues of $3.5 billion, and #6 in exports of computer services with revenues of $3.2 billion.

7 Of the economic blocs and free trade areas (FTAs) in the world, ASEAN is the third biggest next to the European Union and North American FTA (NAFTA). They are followed by the Gulf Cooperation Council (GCC), European FTA (EFTA), SAARC Preferential Trading Arrangement (SAPTA), and Mercado Común del Sur (MERCUSOR).

8 An expanded ASEAN + 6 (China, Japan, South Korea, India, Australia, New Zealand) under the Regional Comprehensive Economic Partnership (RCEP) will easily overtake both the EU and NAFTA in total merchandise exports. Those six partners are huge exporters except New Zealand (see Table 2).


9 The statement “this is the Asian century” in terms of trade and GDP growth will become true starting this decade. The main factor to sustain this momentum is Asia’s huge and generally young population especially in India, Indonesia, Philippines, and Vietnam, comprising 1.7 billion people with an average age of only 24-25 years old which is one-half of the average age of Japan and many developed countries in Europe.

10 The statement “If America (or Europe) turns protectionist, Asia loses” is wrong. Whoever starts serious protectionism is the loser. Free trade creates good will with other countries while expanding the choices and options for local consumers and manufacturers, which expand their productive capacity.

Should Mr. Trump proceed with his campaign promise to ditch the Trans-Pacific Partnership (TPP), it can be good news for other Asian economies that are outside of the five Asian economies that are part of the TPP. They are expected to suffer some exports decline to big markets of the US, Canada, and Japan due to trade diversion from non-members to TPP members.

Freer trade and fewer restrictions in the movement of goods and people are becoming the norm in emerging and transitioning economies of Asia than in developed Asia, Europe, and America.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers and a SEANET Fellow. Both institutes are members of Economic Freedom Network (EFN) Asia.
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BWorld 102, Top 10 news of 2016, January 10, 2016 

Energy 89, DOE not concurring with PH's Paris agreement, good

Some PH Senators declared that the Senate will ratify the Paris Agreement of more expensive, unstable electricity "to save the planet" even if the DOE did not concur with it. Portion of the report said, "32 of the 33 agencies having already submitted their certificates of concurrence to Malacañang."
(Phl to ratify Paris climate pact in July, Philippine Star, January 10, 2017)

The agency or department that did not concur with the PH (actually CCC) commitment to the Paris Agreement is the DOE, thanks Sec. Cusi.

“In the Cabinet, officially I have the only department that has not concurred in the ratification of the climate [pact].”

“I cannot concur on the ratification of the climate change [pact] because that can be used against DoE in approving the kind of power plants that we are going to have,” he said.

Mr. Cusi said the country’s pledge to cut carbon emissions by 70% means reaching a level that has already been met -- in 2015.

“What does it mean? Wala na tayong gagawin [We can’t do anything],” he said, referring to curtailing the country’s development."

Many big countries like the US, Germany, UK, have not ratified their Paris commitment. Those who ratified are mostly small countries. $100 B a year of climate money transfer from developed to developing countries has become a huge extortion project that will produce huge disappointment from beggar countries. Almost ALL developed countries are already heavily indebted, they have huge public debts, don't have enough money for their own citizens. And they will give away huge money to developing countries, many of whom are led by despots and corrupt leaders, will not happen.

The degree of climate extortion varies. While the "consensus" is $100 B a year starting 2020, some UN officials and planet saviours want $500 B a year. Less flood or no flood or more floods; less snow, no snow or more snow, that money should be given to them.


As for energy prices, Meralco generation charges for Sept-Oct-Nov 2016 below. All these power plants are using coal and nat gas, except TMO, a peaking plant that uses oil. WESM prices are cheap, down to only P2.54/kWh last Nov. Which means FIT Allowance will be high so that pampered solar and wind plants at P8 to P10+ per kWh will remain "viable" through expensive electricity imposed on all energy consumers nationwide.


Sec. Cusi's energy realism should be supported against energy alarmism by other agencies and groups.
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See also:
Energy 86, Germany's RE on a wild ride, December 30, 2016 

Wednesday, January 11, 2017

BWorld 103, How to improve the RORO system

* This is my article in BusinessWorld last December 28, 2016.


The Roll-on, Roll-off (RoRo) boat system of transporting trucks, buses, and cars from one island to another is among the best inventions for archipelagic countries like the Philippines. Vehicles go inside the boat, passengers come onboard, and the boat travels to another island where it docks, unloading passengers and their cars on the way to their destinations.

My first RoRo experience was in the late 1990s when I took the bus from Cubao to Iloilo City. It was an adventure to see for the first time Oriental Mindoro outside Puerto Galera, Panay island from north to south, and the Aklan-Capiz-Iloilo provinces. It was a 25-hour trip because there were few RoRo boats that plied the Batangas-Calapan then Roxas, Oriental Mindoro-Caticlan, Aklan routes. It was exhausting but fun.

My second RoRo experience was in 2003 when I traveled by bus from Sweden to Netherlands via Denmark and Germany. Our bus entered a huge boat somewhere in Denmark, the boat traveled to and docked in Hamburg, then we boarded the bus again and traveled to The Hague, where I visited a friend.

There was a big difference between the Denmark/Germany and Philippine RoRo system of course.

First, since the boats in the former are huge, the vehicles -- once onboard -- aren’t cramped unlike in local boats.

Second, waiting time at the port in Denmark was short and didn’t take hours.

Last Dec. 21, I drove again like December last year from Makati to Iloilo City with my family, lugging cargo that weighed 300 kilos. Since it was the holiday season, there were lots of travelers who took their cars, unduly extending the waiting time for vehicles to get onboard.

Now there are only three RoRo shipping lines plying the Batangas-Calapan route: Montenegro, StarLite, and FastCat. Last year, there was a fourth player, Super Shuttle, and there was a RoRo boat plying the Batangas-Muelle/Puerto Galera route. Both are gone now.

In Roxas port, a duopoly, Montenegro and StarLite shipping lines, serve the Roxas-Caticlan route now; last year, there was SuperShuttle as the third player.

When I arrived at Roxas port, there were many cars trying to get to the next Montenegro boat while StarLite ticket office was still closed, so I drove one more hour from Roxas to Bulalacao, Oriental Mindoro, to take the Bulalacao-Caticlan route that was served only by FastCat. So FastCat is the third player to serve passengers and vehicles going to Caticlan but it’s on a different, farther seaport.

For those planning to try this adventure for the first or second time, here are the costs to bring your car to Panay island.

1. Toll fees: Makati to Batangas via SLEx, SLEx extension, STAR tollways about P320.

2. Batangas port fees: Philippine Ports Authority (PPA) terminal fee for cars P129, for passengers P30/head, children below 12 years old are free.

3. Montenegro boat: P1,920/car (jacked up from P1,500 due to the Christmas season), passengers P192/head, P120/child from 7-12 years old while children 6 years and below are free. Car driver is also free.

4. Bulalacao port: PPA terminal fee for cars P129, for passengers P15/adult, P12/child.

5. FastCat boat: P3,380/car, passengers can take the economy, premium or business classes. The latter is P500/head, P400 for students, P250 for children. Car driver is free but only for economy seat. Upgrade to business class is additional P125.

6. Fuel/diesel, Makati to Iloilo, 500+ kms, depending on car fuel consumption. My pickup consumed about P1,000.

I spent a total of P9,000 all in all, one way, from Makati to Iloilo, which is cheaper than flying for four people -- my wife, two kids, and me -- especially in December when fares are high. That doesn’t include the airport terminal fees, baggage check in charges, and taxi fares to and from the airport.

So driving a car via RoRo with about 300 kilos of cargo is cheaper.

Although long car rides tend to be inconvenient, it was nevertheless fun for my passengers, especially for my two girls who enjoyed the boat ride.

Some ugly experiences that one may encounter if driving during the holiday/Christmas season:

1. Waiting for one or two hours or more outside the gate of Batangas port as there are many cars and trucks queuing to board a boat to Calapan. Cars going to destinations other than Calapan (Abra de Ilog, etc.), they can go in anytime, no long queues for them.

2. New security bureaucracy at Batangas port. All bus passengers and car drivers must alight and go through a security check along with their hand carried bags, get the signature of an officer, go back to their vehicles and drive to the queue area for the boat ride to Calapan or other destinations. This was not done last year and previous years.

3. The Roxas, Oriental Mindoro municipal government acts like a typical extortionist. It collects P50 for each car entering and exiting Roxas port. Zero public service for visitors because the port and the roads were made by the national government, and it has a share from the various fees paid by the shipping lines. Many local governments that host ports behave this way too.

Three possible reforms to modernize the country’s RoRo system are the following.

One, consider RoRo system as a bridge, not as a seaport.

Allow unhampered movement of vehicles from one island to another as if they are just crossing a bridge and quickly proceed to their destinations. This implies that RoRo development and streamlining be put under the DPWH, not under DoTr. I heard this proposal during the Manufacturing Summit 2016 last November sponsored by the DTI and BOI.

Two, allow more shipping lines, more players to serve important routes like Batangas-Calapan, Batangas-Caticlan, Roxas-Caticlan, Sorsogon-Samar, and so on. More routes mean more options for motorists and passengers. Government should reduce the bureaucracies and taxes for new players to come in, or for existing players to expand and modernize their fleet.

Three, allow private developers, shipping lines and/or bus lines to put up their own ports, meaning deregulate and demonopolize the PPA.
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Market failure vs. Government failure, Part 6

An article today in BWorld says,  
"A market failure, in the parlance of economics, means a situation in which free markets produce wasteful outcomes."


The above statement is wrong on 2 counts: 
(1) Market failure is literal, demand is there but supply is low or zero, or vice versa. So failure of the market to adjust supply and demand. 
(2) Market failure is often a parlance of politics and government, less of economics. It is a good justification for endless government intervention and expansion for people who have no or little concept of "government failure."

Anybody can create a market failure anytime, anywhere. How?

1. Mr. X and his friends demand a 500 GB USB that is sold for only P1,000. Demand is there but supply is zero, so market failure.

2. Mr. Y and his friends supply a rice variety that is said to cure 10 types of common diseases and sold at P800/kilo, no one buys their rice. Supply is there but demand is zero, so market failure also.

Given these two examples of market failures, do they justify government intervention? Like (1) using taxpayers' money to create a new govt-owned IT company to supply that 500 GB USB and sell only at P1k or less. Or (2) Govt to procure that rice and distribute for free or at high subsidies to sick people?

No. In public finance econ (Econ 151), there is one definition there, something like "Market failure is a necessary but not sufficient condition for government intervention."

Rightly so. Because (1) market failures are generally short-term and are signals for market solutions in the short- to long-term, and (2) government intervention may only worsen the original market failure and introduce its own government failure.

From the same article, it says, "Public education... make economies more prosperous, and most economists support it, but no one can point to just why the free market doesn’t educate enough people on its own."

If people pay lots of taxes, fines, regulatory fees, mandatory social contributions, etc. to both national and local governments, there is little "disposable income" left for food, clothing, housing, gadgets, appliances, travel, etc. This explains why not many parents/guardians can send their kids to private schools, majority of parents send their kids to public education.

It's like the government disabling the people with some physical attacks then govt gives them a wheelchair and expects the people to be thankful to government for the wheelchair.
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See also: 
Market Failure vs. Government Failure, Part 3, June 23, 2010

Market Failure vs. Government Failure, Part 4, March 22, 2014 

Market Failure vs. Government Failure, Part 5, June 16, 2015