Save the energy and all the nonsense, 2

So, Bappenas chairperson denies that the Presidential Instruction for energy saving will not affect productivity, as earlier claimed by Bank Indonesia's governor. The vice president seems outraged. I think Ibu Ani is wrong this time, Pak Jusuf is misled, and Pak Burhanuddin is right. It's true that "stop/reduce using elevators, air conditioners, etc" can save energy. But it also can reduce productivity. So, it's a matter of calculating how much energy you want to save while willing to sacrifice some degree of productivity. If, by any chance, you can direct the save-energy campaign so as to make works more efficient, that's good. If you can produce the same output with less electricity, you save energy and increase productivity. The problem is, it is not simple to identify which one is which. You want to reduce the use of electricity. For that, you encourage efficiency in computer using. Some of your staff indeed needs the computers. But some use it to play solitaire. The problem becomes harder if some workers (can) do important jobs while busy chatting with friends, and some are used to multitask between office spreadsheet and solitaire. If you can find a way to discourage office abuses only, you already increase productivity and save the energy.

But if you want the shortcut by turning off the LAN at 4pm, I'm afraid that's not a good idea. I had a discussion with a consultant hired to help manage one of the state-owned enterprises. She complains that now she rarely can work as productive as before because "there is no internet to access important documents online". I believe this is not peculiar to her. In some busy offices, you need to stay until nine at night, because you have to exhange urgent emails or calls with somebody in New York who happens to be in his/her morning primetime. Some stockmarket analysts really work after midnight and they do make use of cables broadcasting real-time financial news. Now you want to stop all that?

Think about the president's instruction to stop wearing suit ("let's now wear our own traditional customs" -- my goodness; the government now wants to tell you what to or what not to wear??) , start using stairs rather than elevators, reduce the use of air-conditioners. It sounds good. But what is the reason for having ACs and elevators at work in the first place? Convenience, comfort. And why are convenience and comfort important? For better productivity. Imagine office workers with less elevators and ACs. Do you expect increase in productivity?

I'm all for rational energy saving. But not for all the nonsense as I have written below.

Addendum 1: A friend wrote me: "OK, you're saying that the Presidential instruction did not even touch the root of the problem. What is the root of the problem?". My response: "Comprehensive energy policy". He goes, "Well, that's cliche. Give me one reason why you think reducing the use of elevators, business suits, etc is not gonna work". I replied, "Illustration might work for you. Look at the chronic traffic problem in Jakarta. If you happened to be trapped in the traffic jam Friday last week, you should have come to realize that your car was simply, well, an umbrella. A very expensive umbrella, why? Because it protected you from the heavy rain; yet the fuel was burning all the time while the car stayed still in the jam for hours. How many litres of fuel do you think Jakarta people waste in their daily traffic problems? A lot. Indonesian people? Even more. Do I think it's higher than the energy we can save from reducing elevators, suits, etc? Yes I do. So I would like to see a comprehensive energy policy that also, among all, addresses the traffic problem". My friend was not satisfied, "But don't you think there are people wasting energy in the offices?". I responded, "Of course I do. Go to government offices at nine o'clock. How many officials are playing solitaire? How many are reading gossips in the internet? How many are chatting in friendsters? A lot. The problem is, can the government itself identify all this? And even if it can, can it tell the inefficient officials from the efficient ones? Probably not. Moral hazard is at play, and pooling equilibrium is sometimes an easy shortcut...". My friend: "Stop it, you're getting too academic. Give me a break: What is your 'comprehensive energy policy' in one word?". Me: "You're typical. You don't even want to listen. But I'm getting used of people like you. My answer is: PRICE". My friend left.

Addendum 2: A collegue called me. Him: "Why do you sound so harsh to Mbak Ani? Isn't she your tutor at LPEM?". Me: "Don't get me wrong. She's not only my tutor, she is my teacher. In fact, she is one of my favourite economists. And that's why I don't want her to go the wrong way. I still want to believe that it's the newspaper who misquoted her. I don't believe that she really meant that saving energy has really nothing to do with producticity. That's why I critiscized the statement in the newspaper. That's what friends are for, isn't it? After all, I praise what she does right. Knowing her, I think what she was really saying is actually: 'Saving energy is good. Productivity is good, as well. Now there are inefficiency here and there. Let's tackle them so as to save energy and to increase productivity' So the problem really is, how to exactly identify the sources of inefficiency and shoot your silver bullet. But as I say, this 'INPRES' is at best a pain reliever. It's not solving the problem. No, as long as you we live with distorted prices".

Addendum 3: A relative called up: "Why do you and your friends keep suggesting correcting the (BBM-) prices?". "Why don't you just recommend a total cleanup in the corrupt Pertamina?". My take: "We should do both: correct the market failure and ccombat corruption". The relative continued, "The price hike. Why now?". My answer, "So, when?".

Addendum 4: A fellow blogger commented (see "comments" below) that she agrees with "leave-your-suits-at-home" policy, because of a reasonable reason. However, my point was more on citizen's freedom of wearing what he or she likes. The Government really should stay away from this one (and many others, for that matter). (It occurs to me, by the way, my friend's example of "kemben" can not be generalized. My traditional clothes are far complicated than business suits. But, no I don't really love business suits either; stop by my office, if you don't buy this-- it's just that I hate government intervention in every private matters).