Friday, April 17, 2009

Crowd-sourcing physical Green Infrastructure pipes

Following on my previous post regarding opportunity savings in scientific research - the high cost of a next best options vs the very low cost of the one adopted - I kept thinking about economic accountability in large environmentally sound infrastructure projects. And it looks like, there is something there for crowd-sourcing.

I found the following article that made me think.

"Economic modeling typically includes only that for which we have evidently paid, with large assumptions concerning opportunity costs; or what we gave up in order to get it. Such an approach is not ideal for capturing actions we wouldn’t pay for...Nor is it suitable for capturing our future ambitions and directions, which are based on
ideals and values rather than our present constrained choices. Unpaid activity and future directions are exogenous to economics, but fundamental to society."
Social Policy Research Centre, discussion paper No. 134. University of New South Wales. 2004

From this excerpt and also from the article it contains, it appears that, at least in this respect, some Chinese science officials may suffer from a very established economic habit: - not accounting for the value of that which is free or low cost even though it is of high value (such as open source or volunteering) compared to that which is foregone to get it. This problem may be at the heart of the problem of founding large infrastructure with much less debt and tax.

Crowd-sourcing environmentally sound infrastructure:

Let's take the example of distributed and more or less crowd-sourced supply:
On the face of it, it is a great idea.

Feedback Electricity: Domestic, and commercial windows and solar cells creating a portion of electricity, and supplying any surplus for money back into the main grid.

Feedback Water: Domestic, and commercial water tanks, condensation cells etc creating the portion of water supply, and supplying any surplus for money back into the main grid.

I am not an economist, so this is just thinking aloud:

Distributed low cost is not accounted for in economic analysis when, what is low cost is being considered of low market value. In other words opportunity costs (or savings) are not considered factors.

What is the problem here logistically? Here I am a bit more knowledgeable.

Water and electricity are part of the flow stream. That stream can be distributed. But there is a much larger cost of supplying the pipeline and the reservoir. To avoid central bank debt or tax hikes --- could that also be crowd sourced?

Crowd-sourcing the Pipeline

How to get those large funds from micro-pools of money that we expect to self-administer and self-organise? Granted, I can only attempt to answer this using very basic arithmetic: division.

If a crowd based shareholding of a pipeline is underwritten by the central bank it will put the government in more debt that will in due course increase taxes; this ultimately coming back to bite taxpayers to fund the servicing and administration of the debt facility extended to the government by the central bank.

The alternative is in crowd-sourcing --- in part by pooling small credit from a small army of the multi-skilled worker recruited for the project. One model is the cellphone based Carbon-Manna model by David Palella. He proposes recruiting a smaller consortium by commercial sponsors in developed countries to kick-start the process and provide the handsets and network.

For a physical pipeline skilled and even multiskilled (clearing, digging, concreting, plumbing, electrical work, ect) workers need to volunteer.

But how could a supplier consortium of a major pipeline actually sponsor multi-skilled volunteer acts without putting those who provide that act an mass in debt just to foot the bill of coordinating the project and organizing the sponsorship?

These are tough questions.

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