Climate Change & Capitalism

The following PPT was done for a panel of The Left Forum March 18, 2012. Take a look.

Climate change & capitalism

View more PowerPoint from guston1

Climate Change: Global Civilizational Challenge.

The Kyoto Protocol, the only international agreement to fight climate change, will come to an end in two years, 2012. The world, including the US who is not bound by Kyoto, has been trying frantically for over a year to come to agreement on what is to replace Kyoto. The Copenhagen conference, last year, turned out to be totally unproductive. Yet the major players have not given up hope for reaching an agreement that would be legally binding to all its signatories.

Unfortunately the progress has been very slow to nonexistent. The meeting at Tianjin, China ended up last week in total disarray. The meeting which was expected to resolve a few of the obstacles preventing an agreement was described by participants as being full of bickering. "At times it has been like watching children in a kindergarten," said Wendell Tio from Greenpeace International.

Although the talks are scheduled to move to Cancun, Mexico, next month not many are hopeful that the level of disagreement between the US and China will diminish. Kyoto divided the world into two groups, the developed and the developing, with the former subject to strict legal limits on its emissions of carbon dioxide while the latter is subject only to voluntary restraints. And that is the rub.

Officially China has become the largest emitter of carbon in the world, replacing the US but by all conventional metrics China is a developing country and so is refusing to abide by the US demands that China and other large developing countries should be subject to strict emissions quotas also. Obviously the Mr. Su, the Chinese representative at the talks, would have nothing of these demands. Mr. Su likened the U.S. criticism to Zhubajie, a pig in a classic Chinese novel, by saying "It has no measures or actions to show for itself, and instead it criticizes China, which is actively taking measures and actions."

It is this inability to view climate change as a global problem that demands a global solution that has wrecked Copenhagen, is threatening Cancun and will probably doom the final resolution to a meaningless gesture that will do nothing to control climate change. As long as various players are attempting to guard their own selfish interest then no meaningful solution is to be expected. This is a classic case of the tragedy of the commons whereby individual actors believe that they are doing what is good for themselves but wind up in hurting themselves and all other players as well.

Climate change is arguably the most important challenge that civilization has faced. This is not a regional problem but one that would affect everyone and everything. No one has the right to neglect this issue , not even the Arab countries who do not think of themselves as being large emitters of carbon. The data says otherwise. The largest emitters of carbon on a per capita basis are the five Arab gulf countries and these are joined by Saudi Arabia as the 14 largest in the world and then Oman as the as number 20. The Arab states as a whole emit over 1.5 billion tons of carbon dioxide annually which amounts to around 5 % of the global footprint. The Arab League has failed to take any measures to either control or diminish the carbon footprint of emissions in the Arab world. Actually, the record indicates just the opposite. Saudi Arabia has joined forces with China in order to torpedo any agreement in Copenhagen. Isn’t it time that the Arab world demands that its governments face their ethical and moral responsibilities squarely?

What do you think: Should the less developed be exempted from strict limits on emissions so that the developed will shoulder the greater part of the burden of emission reductions? Does nature discriminate on the basis of the national origin of carbon emissions? What would be a fair allocation of the burden and how heavy shed it be?

The Mother Of All Leaks.

In a recent study published by Science magazine in the March 5 2010 issue it was announced that a group of scientists from over 12 different institutions has found a leak in the Siberian permafrost.

The methane , an estimated 1.5 trillion tons of frozen carbon, was thought to be sheltered by an impermeable barrier is being emitted through perforations . Natalia Shakova, the lead scientist of the research team went on to warn that "Our concern is that the subsea permafrost has been showing signs of destabilization already," she said. "If it further destabilizes, the methane emissions may not be teragrams, it would be significantly larger."

It is important to note that methane is a GHG that is 30 times deadlier than carbon dioxide and that each teragram is equivalent to 1.1 million metric tons. If this leak is to proceed and if only 1 % of the methane is released then the research scientist predict that the effect on climate change could be catastrophic. This leak might be the event to confirm that the world has already passed the tipping point since such a release would be expected to accelerate substantially the rate at which global temperature would rise.



Are there still any skeptics out there? Will we ever act , not to save the ecosystem but to save ourselves? Don't bet on it.

It Is Not Too Late If We Act Now

It is not very often that we get credible ecological news that is not full of bad news and projections. Well, I am glad to say that the following is a recent study that actually suggests that humans have not lost the race yet. Yes we are on our way towards catastrophic outcomes but we are not there yet and interestingly enough we can avoid the worst outcome if we are smart enough to change our ways and work meaningfully towards redemption.
The Stockholm Resilience Center, at Stockholm University is self described as a center of Research for Governance of Social-Ecological Systems. The Centre released a few months ago a major study undertaken by 28 world renown scientists in which they have established a new area in planetary management. Their first study describes nine planetary boundaries (listed at the bottom of this entry) that they believe humanity must not cross . The study goes on to say that human activity has thus far resulted in breaching three of these boundaries (the stared ones)but not the other six.
We are currently living in the geologic era known as the Holocene which started around 10,000 years ago. As we all know, it was during the Holocene that agriculture was developed, civilization prospered and industrialization became the norm. But unfortunately we are entering the Anthropocene, a new geological age in which human activities have grown as to form a major threat to the health of the earth.
Will we have the wisdom to adopt the right policies and change our behavior so as to avoid catastrophy? Yes we still can do that but time is quickly running out.

The nine Planetary Boundaries:
1 Strategic ozone layer
2 Biodiversity
3 Chemical Dispersion
4 Climate Change ***
5 Ocean Acidification ***
6 Freshwater consumption & the global hydrological cycle
7 Land System Change
8 Nitrogen & Phosphorus inputs to the biosphere & ocean ***
9 Atmospheric aerosol loading
*** Transgressed boundary.

Sovereign debt and Pigouvian Taxes

Sovereign debt , as a potentially crippling fiscal problem world wide, has risen to the forefront over the past few months. Whether it is the US, Europe, Japan or many other developed and developing countries the sovereign debt watch is on.

The major metrics of a pending sovereign debt crisis that have been in vogue for decades used to be applied only to developing countries. Unfortunately this is no longer the case. The Herculian efforts by governments all over the world; the developed in particular; to avoid a repeat of the debilitating depression of the 1930's has forced these countries to increase substantially their fiscal stimulus programs. In a sense the monetary and fiscal policies adopted by the officials of all of these countries have been very successful. A worst case scenario has been avoided.

But as economics has always taught us, There Ain't No Such Thing AS A Free Lunch; TANSTAAFL. Yes we avoided a deep recession and the top officials can pat themselves on the back for this. But maybe not. Is the cure at least as expensive or maybe even more so than the ailment that it saved us from? That is , currently, the $64,000 question or maybe I should say the $64 billion question?:-)

Often, our efforts at prescribing remedies are counter productive because of what is inherent in problem solving. We always seem to target the symptom rather than the disease. As a result we inevitably move from one crisis to the next as a result of the law of unintended consequences.

In our efforts to save the system and to prevent a major economic depression we proceeded to throw money at the problem in order to generate more final demand and thus put more people to work. What we did not stop to consider is the major question of how are we going to pay back all of these funds that we have borrowed? It seems that we did what we always do, shift the burden onto the future generations. The debt will not come due for some decades ,right? Wrong.Well informed individuals know that more debt implies more taxes in the future and so they take corrective by refusing to own the highly risky debt. Once we find out that the debt service is too large and that we cannot keep on rolling the debt unto the future then we will have no choice but to become deadbeats. That is where we are at the moment. The question is which country is going to go under first? Would it be Greece or would it be one of the other PIIGS? How about the UK, or evn Japan or the US? If any of these countries default would they set up a contagion that will devastate all the current international financial sytem as we know it?

Believe it or not there is a potential mechanism that if adopted could go a long way towards addressing the real cause of this issue and not only the surface phenomenon. The solution that I am about to propose is not new, actually,N.G Mankiw wrote about it in 2007.

"The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. ...

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”...some taxes align private incentives with social costs and move us toward better outcomes."


I would love to see a carbon tax levied not only in the major industrial countries but all over the globe with all the proceeds dedicated to lowering the sovereign debt. Such a tax could be a first step towards internalizing the negative externalities of all the production in the world economy. If that leads to less and more efficient production then all of us will be winners.

Note: Lebanon has already reached the point of no return. The current sovereign debt burden is so large that it will be impossible to avoid a cataclysmic crisis if we do not seek an immediate renegotiation of some of the debt and at least a partial write off. If we do not change course then we will get where we are heading, the financial abyss.

The Flat Earth Society Is Alive And Doing Well In Saudi Arabia

As the world, at least most of the countries in the world, express concern and even regret over the failure of the Conference at Copenhagen to come to a meaningful conclusion the Saudi Arabian chief negotiator at the talks expressed Saudi Arabia’s glee and satisfaction that the Copenhagen Conference failed to take any positive steps towards meeting the most important challenge that civilization has ever met. Mr. Mohammad Al-Sabban went further as to predict that the world seems to be heading towards a stalemate on the question of anthropomorphic global warming, AGW. Mr. Al-Sabban proceeded on an interview on the BBC to predict that the action on climate change will become similar to that on the Doha round of the WTO. The WTO members have been engaged in negotiations for the past ten years with no resolution in sight.

It is shameful that a country takes pride in the fact that it is not likely for the world community to make any progress on the climate change issue for at least the next ten years and furthermore Saudi Arabia is proud of its record on AGW because it was essentially the work of a China-Sudan-Saudi Arabia cabal that sank the Copenhagen Conference. Saudi Arabia’s obstructionist role in Copenhagen earned it the moniker the” most likely villain in the awkward squad”.

When the world was initially presented with the problem of AGW, many countries, institutions , scientists and individuals were skeptical until the world scientific community has practically united in adopting the view that human activities are the culprit behind climate change. It has been estimated by the scientific community that any change greater than 2 degrees Celsius will have profound global catastrophic implications that range from disease , to storms, higher ocean levels, food shortages and extinction of specie. The fact that human civilization has become a major evolutionary force can be seen in numerous scientific studies.

The Proceeding of the National Academy of Science concluded that “ Since 2000, a growing global economy, an increase in the carbon emissions required to produce each unit of economic activity, and a decreasing efficiency of carbon sinks on land and in oceans have combined to produce the most rapid 7-year increase in atmospheric CO2 since the beginning of continuous atmospheric monitoring in 1959. This is also the most rapid increase since the beginning of the industrial revolution.”

And the Intergovernmental Panel on Climate Change, IPCC, has also said that :” Warming of the climate system is unequivocal, as is now evident from observation of increases in global average air and ocean temperatures, widespread melting of snow and ice and rising global average sea level. Observational evidence from all continents and most oceans shows that major natural systems are being affected by regional climate changes, particularly temperature increases.”

In light of all the scientific evidence from all over the world that climate change is a fact , that its effects will be dramatic, that it is our duty and obligation to try to mitigate it Saudi Arabia is glad that we are not planning any action. But that position is to be expected. Would we expect the drug pusher to support measures designed to decrease drug usage? Of course not. To allow Saudi Arabia and China to have a major say in how to deal with global warming is similar to the proverbial image of putting the fox in charge of the hen house. I am not sure that Saudi Arabia and possibly all other major exporters of fossil fuels should have a say in what is to be done in order to implement strong steps that are bound to create major withdrawal symptoms but that are necessary if the addict is to be given a chance to overcome the addiction. Saudi Arabia and all the other 25 countries in its camp have prevented the global community from making any progress towards rehabilitation and sustainability by insisting that the world is flat. Such a position is demonstrably evil and unethical. But that fact that the global community allowed the "Awkward squad" to carry the day is a powerful statement about our lack of resolve. Shame on all of us.

Copenhagen, One more Time

The peace Nobel laureate Desmond Tutu sent a letter to the EU parliament in which he berated them for not acting to slow down climate change. Mr. Tutu said in his letter " The rich world is historically responsible for the emissions causing climate change and they have a moral obligation to provide the means for the countries on the front line to survive and prosper."

Mr. Tutu was in effect urging the countries of the North to overcome their differences and to live up to their moral responsibility by agreeing; during the Barcelona negotiations; to find a way out of the current impasse before Copenhagen . The developing countries have made it clear that they expect financial transfers from the developed countries of around $148 billion a year by 2020 if they are to do their part of reducing their expected carbon footprint.

But since climate change is a global issue then it does require a global solution. Again it seems obvious that we cannot have a global solution if the largest, well second largest , emitter is not ready to participate in the game. Copenhagen is exactly one month away and the US climate change bill is still languishing in the Senate sub-committee. Senator Boxer , the chair of the Environmental Committee, remains hopeful that a bill will leave her committee before Copenhagen. That is not assured because a number of the Republican senators promise not to attend the committee mark up sessions. If they do not attend then no bill can be presented to the senate at large. Even if a bill is to emerge some very powerful Democratic senators such as Max Baucus promise to hold up the measure in his powerful Finance Committee by delaying funding for the measure. What is even worse are the proposed targets. Kyoto which was initially agreed to by the US was to cut carbon emissions by 5 % from the 1990 level by 2012. The US is estimated to have released around 5 Billion tons of carbon in 1990 and thus the implicit target by 2012 would have been 4.75 billion tons.The new bill is aiming for a 20% reduction from the 2005 levels by 2020. Since the 2005 emissions are estimated to be 6 billion tons then the 20% reduction will take the US back to 4.8 billion tons by 2020. That is irresponsible behviour besides being a cruel joke on the aspirations of those that take these existential matters seriously. The US is targeting to potentially reach by 2020 a level of carbon emissions that it was supposed to have hit by 2012 and yet they want the world to call such measures responsible action. Go figure.

Mr. Yao de Bar, the UN Climate Change Secretariat said it best when he stated the need to "Step back from self interest and let common interest prevail" Nothing else will work.

TANSTAAFL

“There ain’t no such thing as a free lunch” has been traced to the late nineteenth century when saloons in the US offered free lunch for their paying customers. Obviously the idea has since become a corner stone of economics by emphasizing that whenever we make a choice then we have to sacrifice something else in exchange. The same principle governs all activities in the scientific world that is governed by the entropic nature of the universe. We can never produce something out of nothing.

It is unfortunate, in light of the above, that so many thinkers, institutions and organizations have chosen to remedy what is arguably the greatest challenge to civilization; environmental degradation; by advocating policies that are not guided by that most basic of ideas. Sustainability, an inevitable phenomenon of an increasingly complex systems, is being promoted by each and every government in the world, by the United Nations and all its agencies and many think tanks and educational institutions of higher learning through arguments and models that seek more economic growth when it is very clear that sustainability came to the forefront; as an existential issue; as a result of the destructive activities of economic growth. Major concerns about sustainability, the ability to continue the current scale of operations into the future demands that we adopt a radically different methodology rather than the current paradigm that glorifies economic growth and unfettered markets. As the proverb says "If you always do what you've always done, then you'll always get what you always got." Business as usual will only result in severe shortages and unthinkable environmental degradation.
Kenneth Boulding, the preeminent economist is reputed to have said: “Only mad men and economists believe that infinite growth is possible in a finite world”. He actually went further as to characterize that kind of irresponsible behavior as a “cowboy economy” when he suggested that we need to think of the delicate balance of a “spaceship” earth. A society without limits is a fiction.

This idea of the absolute need for limits to growth has been adopted by many thinkers in all sorts of fields, physics, anthropology, biology, ecology, philosophy and economics just to name a few. But the most effective proposition has been the one made by Herman Daly who revived the old idea of the classical economists in general and that of J. S. Mill in particular, namely steady state economics. This notion has become the foundation for all environmental visions that seek to steer human activity in such a way as to avoid the imminent collapse that we are heading towards. How far are we from the abyss is debatable but many of the models such as the Club of Rome, global ecological footprint, Pimentel estimates of the limits to the size of global population or the Energy Return on Investment (EROI) speak in terms of decades and not centuries.

Add to the above the bleak Environmental assessment of the group of 1300 scientists assembled by the UN, the dreadful outlook of James Hansen of NASA about the severity of the upcoming climate change in addition to the dire predictions of James Lovelock who has been described as “one of the environmental movement’s most influential figures” and one cannot help but be bewildered when we hear the politicians suggest more growth when it was growth that created the problem in the first place. When would we understand that more of the same is a recipe for disaster and that sustainability is not compatible with economic growth. It is simply one or the other.

Under the best of circumstances growth can be justified as a means to an end but it is pure madness when growth becomes an end in itself as it has become in the developed world. Why is it so difficult to connect the dots and conclude that since pollution is a by product of economic activity and since economic growth demands a greater scale of human activity then economic growth is the cause of environmental degradation. Maybe when all is said and done Homo sapiens (wise humans) we are not.

The world is at a critical proverbial fork in the road. We can either change direction and hope that we can avoid the abyss or we can pretend that there is a free lunch and we can have it all, economic growth and sustainability in a finite world. The choice is very clear, either follow the principles and the models that show unmistakably he absolute need for a radical change in the whole architecture or continue the pretense that we can have our cake and eat it too. Lipstick on a pig just won’t cut it.

Is Copenhagen Conference 2009 Flawed?

We are already witnessing the beginnings of a barrage of saturated media coverage about climate change and the upcoming Copenhagen conference. By the time the COP15 Conference at Copenhagen arrives it might be the only item in the news all over the world and that is good. We need to take some meaningful measures that could get us to move in the right direction. Who knows, we might even avoid the apocalypse.
The failure to reach an agreement to adopt an effective and clear plan of action to reduce greenhouse gas emissions would be a major setback to the environmental efforts to avert a catastrophic climate change, an increase in temperature greater than 2 degrees Celsius. Sea level will rise, major ocean currents would be disrupted, monsoons and hurricanes will increase both in their frequency and intensity, crop failures will become more common, desertification will increase; life as we know it will become disrupted. What is at stake is surely the greatest challenge that civilization has ever faced and a successful Copenhagen meeting is a must.
Yet if we are to act as dispassionate observers of this process we will have no choice but to note the major logical fallacy upon which Copenhagen is built. The issue is not whether the world can afford not to decrease its GHG emissions; it can not. The real issue though is whether Copenhagen can deliver us out of this self inflicted quagmire? How can it possibly do that when we even refuse to look into the root cause of this problem? Anthropogenic emissions are simply the product of human economic activity and no one is proposing that we limit economic growth. The position at Copenhagen is nothing else but an exercise in a combination of major logical fallacies such as “argumentum ad populum” combined with “argumentum ad baculum”; a false argument based on the appeal to the majority and to fear.
Let me explain. One of the major efforts that the nations, represented at Copenhagen, will confront is that of reducing car emissions. It is widely believed that the move to hybrid engines and electric plug-in vehicles, in addition to more efficient engines, will turn out to be a major contribution in achieving the sought reduction in carbon emissions. But would it? The world produced over 70 million new vehicles during 2007 but under the best estimates all the hybrids and electric plug-in will not amount to more than 2 million units a year by 2015. If these numbers hold then that is a miserly 2% of the new cars, not to mention that China and India alone are slated to replace the United States as the number one producers of vehicles in the world. Emissions from China and India, both of whom are neighbours of Bangladesh, will not be regulated. Climate change is the largest infringement on the sovereignty of Bangladesh and yet it goes on each day of the year without firing a bullet or creating a political standoff. Even if we are to assume, as unlikely as it might be, that by 2020 one fifth of the newly manufactured in the world each year would be powered by either a hybrid or an electric engine, what about all the raw materials that has to be mined and processed in order to build all of these cars not to mention all the tires, spare parts, accidents and highways that they will generate and require? Would supplying all of these resources by “developing” countries be without a carbon footprint?
A more efficient car is a welcome development but a more efficient car will be useless in reducing the human impact on the ecosystem unless we are to simultaneously build fewer cars and consequently fewer garages, less highways, less spare parts use less resources and conserve our natural capital.
It is not sufficient to set up a goal. We must set up a goal accompanied by a workable plan otherwise the goal would best be classified as a wish. Imagine ,if you will, that all the water bottling facilities in Fiji ; whose products are shipped to North America and the rest of the world; are to become totally powered by energy acquired through either thermal solar , photovoltaic or wind turbines, would that then make the consumption of such water environmentally friendly? You decide.
As you can see from the above the need to cut down on GHG’s and carbon emissions is not questioned. What is at stake is our ability, or rather inability, to accept that climate change is nothing more than a manifestation of a systemic failure and such failures demand a total redesign of the system. If we cannot understand this most basic of all facts then all our efforts, as well intentioned as they might be will be for naught.



A Podcast of the above text can be found at: ramblings11.mypodcast.com

No Real Global Commitment to Slow Climate Change

There is unanimity that climate change poses an enormous challenge to our specie. That is no longer debatable. But assessing the enormity of the problem is one thing and doing something meaningful about it is another. History is replete with examples of catastrophes that were hastened because of our inability or unwillingness to act. Every aspect of environmental degradation from climate change to desertification, from overfishing to deforestation, from population growth rates to malnutrition , from overproduction to overconsumption, from diminishing biodiversity to the unabiding trust in economic growth, from unjust distribution of income to neo imperialism, from unsustainable practices to the rejection of intrinsic value and from the conviction that the whole of creation was meant for our own whimsical use to the strong belief that humans are hard wired to be selfish is a vivid demonstration that “Homo Sapiens” ( wise humans) we are not. Yet we pretend that we are and furthermore we make believe that we are earnestly looking for a solution.
The upcoming COP 15 at Copenhagen scheduled for December 2009 was supposed to demonstrate our earnest desire in finally seeking a solution that is commensurate to the existential challenge of keeping climate change within an increase of 2 degrees centigrade. Well don’t hold your breath. The UN Development Chief Helen Clark has just issued a statement preparing us for the upcoming disappointment. She declares: “"If there's no deal as such, it won't be a failure. I think the conference will be positive but it won't dot every 'i' and cross every 't'." That does not make you very confident in the quality and commitment of international governance does it?
Kyoto and Copenhagen are about one issue only. If we believe, truly believe that climate change must be stopped and that it is essentially the result of human activity then we need to act and act promptly. Global calamity is about to strike and we have no one to blame but us. The Pogo Cartoon said it best over forty years ago” We have met the enemy and he is us”.
So what is the US, the worlds largest economy, doing about this problem? The US seems to have finally accepted the idea that it is its duty, nay its obligation, to reduce its carbon footprint since it is the greatest contributor to the anthropogenically produced carbon since the onset of the industrial revolution. Give the Obama administration its due credit. It plans to submit a plan to reduce the US contribution to the worldwide carbon emission through a cap and trade program. The proposed reductions are no where close to what they should be but they are greater reductions than what the previous administration has been willing to commit to. Under the proposed system of Cap and Trade the government will set a total level of emissions and issue against that standard permits. The emitters cannot collectively exceed the level mandated by the government but they are free to trade these permits among each other as they see fit. That does not sound so bad except the reduction in overall emissions is no where as major as the challenge dictates that it should be. The other problem, and may I suggest that this is just as major if not even more so, the government plans to give away gratis, for free, these permits to the corporations that pollute instead of auctioning these permits and raising the 100’s of billions of dollars that they are worth. Think about it, instead of asking the polluter to pay we are asking the already burdened tax payer to subsidize pollution. That is madness. But why would anyone give away for free that which is worth billions? Well we have already answered that question. Homo Sapiens we ain’t neither are we rational or even committed to the idea of biodiversity and sustainability.
And finally Iet me say that the US is not the only obstacle to finding a solution to climate change. China, India ,Brazil and Saudi Arabia are even more adamant that they do not have to apply any restraint to their level of economic activity, let the health of the global ecosystem be damned. One can easily add Russia and Indonesia to the group of countries that have to be dragged to adopt proforma carbon emission reduction targets. (The combined emissions of the above seven countries is over 56% of global carbon emissions). Enough said about our real concern for sustainability and biodiversity.