Monday, 14 December 2009

We should all get free hand free phone devises from our car insurance provider.

Yesterday i saw four accidents in Nicosia. Three of them had the markings of a "i was not looking because i was on the mobile phone". We have all seen those drivers who have their one hand on the phone while speeding in very narrow streets. Heck if we are honest we have all done it, at least once. Maybe it is your boss or it might be the school of your child - you feel like you do not have any other choice than to answer your phone even when driving.

The cost of such accidents is very large. Since they are resolved with the help of the police, the minimum cost of an accident is the cost to repair the cars as well as the wages of at least two policemen for two hours. If the insurance premium is 130 euro, then the cost of an accident, even if they are just bumps on both cars far exceeds it. There is also the cost of getting caught by a policeman talking on the phone while driving: 84 Euro and 3 points on your licence.

So what i am suggesting is for car insurance companies to provide free wireless earpieces to all its insured drivers but ask an additional excess in the event of a crash while on the phone. It is a win win scenario for all and particularly for the insurance companies. The drivers get something that they might not consider as necessary until after they crash; the police can use the saved man hours to resolve other issues; and the insurance companies get free promotion, smaller payouts and safer drivers.

Yet sadly i do not think this will take place - it is an obvious choice for an economist who looks at dynamic benefits for the insurance company, but anathema to an accountant who only sees the static costs of insurance companies rise.

Friday, 11 December 2009

The economics of cutting carbon emmisions

A very good friend of mine does not believe we should cut carbon emissions. His argument is that either there is no climate change or if there is we are too late since we have ruined the world already - we just can't cut emission enough to revert the process. I disagree and have used rational (but very economic thinking) to explain why this can not be so. He does not understand me - so i thought i will but it in an economic blog and you can tell me there is a flaw in my thinking.

We can not calculate the true cost of climate change - its actual repercussion are not revealed to us in full. We do know the worst case scenario though: that within a span of some generations we will totally ruin our environment and our civilization, perhaps even destroying life. This is by far the most extreme case: in this case the cost of climate change is infinite - to quote REM "its the end of the world as we know it". Since the true cost is not revealed to us we have to assign a cost in terms of probabilities. Lets assign a probability of 0.000000000000000001% chance of this extreme scenario to take place - a pretty slim chance.

At the same time we are not sure if we can reverse climate change- maybe my friend is right: we are too late. Yet we do not know this - once again the possibility of reverting climate change is not revealed to us. Lets say that there is a 0.0001% chance of reversing climate change by reducing the emissions of the Kyoto protocols.

Yet the true cost is infinite! thus the 0.0000000001% of infinite is infinitely costly. Since the future is infinite, it is worth spending any amount of money to try and stop it, even if it even has a 0.0001% of success.

Thus the argument is clear to me: the whole point of whether or not climate change is man made and reversible is pointless right now - it will be revealed to us in the Long Run. What is more important is start cutting emissions now, irrespective of costs and of the possibility of success; the cost of not doing so is too high.

Have a nice weekend

Monday, 7 December 2009

The Parking spot of the Government Spokesman

I had to go to 2 government agencies yesterday - and as always the experience was gruelling enough to knock me out for the rest of the day. First up was the Cypriot archive - the only government service that counts 2 working days not counting the one you are in (i.e monday) and not counting Friday. Apparently they go to work on Friday but since that day the archives are closed for the public (lord knows what they do) then it their logic Friday does not count as a working day.

I then went to the Press Information Office (PIO). I loved the new organisation of the newspaper archive and Mr. Demetris there was very helpful. However on my way out i was dismayed to see the scene below. There was not enough space for the cars of the government spokesman, the principal of the PIO and the attorney general right outside the common government building they share. So the solution was simple make one of only two handicapped parking spaces into the parking space of the government spokesperson.

This works perfectly: the government spokesman, the principal of the PIO and the attorney general are almost equidistant to the door. The poor handicapped driver or carer could of course park on the remaining handicapped space.

What happens to the remaining space? Since the press does not have dedicated parking places in the PIO parking lot the remaining handicapped space was swamped with 2 cars and 3 bikes bearing the "Press" sign... the handicapped could of course park in field below the PIO, then push themselves up the steep hill, avoid the park cars, and then ask someone to lift them up the stairs; the ramp was closed by the cars of the press.

Wednesday, 2 December 2009

Well done on Malta wining the race for a European Immigration asylumn centre

Well done Malta! I have mentioned before that Malta is much more competent in the cloak and dagger policies of the European Union. Despite previous dreadful incidents relating Malta and immigrants from Africa, Malta has won the unofficial race to host the new European asylum office. The office will be placed in a pretty derelict area of the Grand harbour, which lost part of its purpose with the replacement of the port with a Freeport in Marsaxlokk.

Do not be fooled - this took some hard lobbying, and i am guessing that it helped when the decision was made to place it to a new member state since immigration is an issue of Cyprus a Malta - with the other "new" states being emigrate countries. Cyprus was not consistent enough to win it and we were focused on the December deadline for the Turkish entry...