January 31, 2008

'The Story of Stuff'

Tired of being told to "go shopping" whenever a national or international crisis occurs?

Tired of hearing that "recycling" will save us?
  Note: Recycling is a very good idea, just "not enough."

Want to know how our so-called Consumer Society was manufactured?

Want to know why the linear "produce, manufacture, CONSUME" model is so deeply flawed?

Ever wonder how stuff can be so damned cheap? And wonder who is really paying "the freight"?

Want to know more about the pathway to sustainability?

Then you'll be glad to see/hear how Annie Leonard exposes the dark underbelly of our Consumer Society in a little 20 minute educational video titled The Story of Stuff.

Here is a trailer:

More at storyofstuff.com.

PS.. If I'm the last person on the block (the Planet?) to hear about The Story of Stuff—having heard about it over coffee just yesterday—chalk it up to the fact that I'm an old, retired economist living in Utah, just a small step on the far side of nowhere. But damned good scenery!

May 31, 2007

Predatory Oligarchy

Hervé Kemph is a French environmental journalist and a student of global capitalism. His book, How the Rich are Destroying the Planet has caused a bit of a stir thus far, and will likely have more impact once translated into English. Some will call Kemph's writing just another extremist environmental rant. Others, like me, will welcome it as an opportunity to examine ourselves and our culture. We will no doubt be hearing more about Kemph as time goes by. In the meantime, we have a couple of Truthout.org articles to draw from. In part:

The Rich Stand Accused, Louis-Rilles Francoeur, Le Devoir, (via Truthout.org, 01/07/07): …"We cannot understand the simultaneity of the ecological and social crises if we do not analyze them as two facets of the same disaster. This disaster derives from a system piloted by a dominant social stratum that today has no drive but greed, no ideal but conservatism, no dream but technology. This predatory oligarchy is the principal agent of the global crisis," writes Kempf. "The present form of capitalism," he adds in an interview, "has lost its former historic ends, that is to say the creation of wealth and innovation, because it has become a financial capitalism, disparaged even by capitalist economists. This capitalism, which destroys jobs by rationalizations, new technologies and globalizations, overall and everywhere increases the disparities between rich and poor within each country and between different countries," the journalist observes.

…This oligarchy he targets is not satisfied with blindly consuming and wasting the planet's material resources with its big cars, its airplane trips, its unbridled consumption of living products, its uselessly vast houses, its unrestrained energy wastage. It has also, adds Hervé Kempf, spawned a model of hyper-consumption that the lower and especially the middle classes now attempt to imitate, just as developing countries try to imitate Western countries - even though, whether instinctively or rationally, everyone clearly knows that "this ideology of waste" and its drain on planetary resources will inevitably come to an abrupt end. …

… Although he does not address the impact of unchecked [human population growth] on the decline of the planet's "biological services" in his essay, Hervé Kempf immediately acknowledges that this factor certainly has an impact that is greater overall than any hyper-consumption by this oligarchy, composed of several hundred thousand millionaires and billionaires who control the bulk of income and of financial capital. However, he explains, it's this oligarchy that creates an unsustainable model for the planet, the indirect impact of which on other social groups exceeds its direct consumption. "And," he says dryly, "not all humans have the same impact on the planet at birth: a Westerner carries more weight in the planet's fate than a baby from Niger or from India."

It's to put an end to this ostentatious consumption that he advocates radical control of wealth through "a ceiling on maximum salaries and on the accumulation of wealth," a sort of matching piece for the minimum wage, but on the upper side.

"Everyone," Kempf comments, "knows that China will never be able to reach a level of consumption per inhabitant comparable to that of the Americans, with two cars per family, three televisions, four computers and cell phones, a house three times too big for its inhabitants, which generates energy consumption that would be sufficient to the needs of ten, even twenty people on other continents." The environmental chronicler proposes that a reduction of its consumption be imposed on this oligarchy that has globalized poverty, so that it no longer feeds this unsustainable dream, which numbs the critical faculties of the entire planet to the point that it closes its eyes to the wall into which it is careening full speed ahead. …

… [K]nown for his rigor and level-headedness, [Kempf] nevertheless concludes: "It is still necessary for ecological concerns to be based on a radical political analysis of present relationships of domination. We will not be able to reduce global material consumption if the powerful are not brought down and if inequality is not combated. To the ecological principle so useful at the dawning of awareness - "Think globally, act locally" - we must add the principle that the present situation imposes: "Consume less, share better."

Ecologists, he adds, have not often conducted an inquiry into the "ecological misery" that parks the poor next to industrial neighborhoods, polluted and at risk, next to highways or noisy activities, in the most insalubrious houses and in sectors generally the least well-served by public services, including public transportation. It is wrong, he says, to act as though the economic system must grow more to bring these people out of poverty or to allow more poor people to attain greater wealth. The economic system works in the other direction, by monopolizing wealth and power at the expense of those who have the least, and of the middle classes that dream - ever more vainly - of hoisting themselves into the cocoon of the present financial oligarchy, Kempf maintains.

That's why, he says, we must "bring down the rich" rather than pull up the poor, in order to begin to respect the thresholds of irreversible deterioration of the planet's resources.

He takes aim, moreover, at the concept of sustainable development and the alibi it now constitutes for governments and companies that use it to justify other drains on resources in the name of this new rationale that is supposedly harmless for the planet. Sustainable development, he writes, has become "a semantic weapon to remove the dirty word, 'ecology.' Moreover, is there any need to still develop France, Germany, or the United States? The concept has meaning, he concluded in an interview yesterday, but only in developing countries, because it can help them to avoid a development as brutal and lawless as the one we have effected in the West. But in the West, he says, the first of our environmental responsibilities "consists of reducing our consumption of material goods" to attain a level of well-being based rather on values, knowledge, in sum on immaterial, but nonetheless very real, riches.

See also: How the Rich Are Destroying the Planet: A Review by Leslie Thatcher, Truthout.org, 03/15/07Cross-posted at Economic Dreams - Nightmares

May 10, 2007

UN-Energy on Biofuels and Sustainability

UN Report Urges Caution on Biofuels, Naked Capitalism, May 10: In an underreported story (no mention in the Financial Times or the New York Times, and the Wall Street Journal reference was in its energy blog, far from prime time), the United Nations said in essence that biofuels could create as many problems, via environmental damage and higher food prices, as they solve. …
U.N. raises doubts on biofuels, Nicole Winfield, Associated Press, May 8: … In an agency-wide assessment, the U.N. raised alarms about the potential negative impact of biofuels, just days after a climate conference in Bangkok said the world had both the money and technology to prevent global warming blamed in part on greenhouse gas emissions.

Biofuels, which are made from corn, palm oil, sugar cane and other agricultural products, have been seen by many as a cleaner and cheaper way to meet the world's soaring energy needs than with greenhouse-gas emitting fossil fuels. …

The report said bioenergy represents an "extraordinary opportunity" to reduce greenhouse gas emissions. But it warned that "rapid growth in liquid biofuel production will make substantial demands on the world's land and water resources at a time when demand for both food and forest products is also rising rapidly."

Changes in the carbon content of soils and carbon stocks in forests and peat lands might offset some or all of the benefits of the greenhouse gas reductions, it said.

"Use of large-scale monocropping could lead to significant biodiversity loss, soil erosion and nutrient leaching," it said, adding that investments in bioenergy must be managed carefully, at national, regional and local levels to avoid new environmental and social problems "some of which could have irreversible consequences."

It noted that soaring palm oil demand has already led to the clearing of tropical forests in southeast Asia.

In addition, the diversion of food crops for fuel will increase food prices, putting a strain on the poor, as evidenced by the recent steep rise in maize and sugar prices, the report said.

"Liquid biofuel production could threaten the availability of adequate food supplies by diverting land and other productive resources away from food crops," it said, adding that many biofuel crops require the best land, lots of water and environment-damaging chemical fertilizers.

While bioenergy crops can create jobs in impoverished rural areas where the bulk of the world's poor and hungry live, creating biofuels favors large-scale production, meaning small-scale farmers could be pushed off their land by industrial agriculture.

It suggested that farm co-ops, as well as government subsidies, could help small-scale farmers compete.

Such concerns have been raised by Greenpeace International and other environmental groups worried that the biofuel fad is being driven by big agricultural interests looking for new markets.

"More and more, people are realizing that there are serious environmental and serious food security issues involved in biofuels," Greenpeace biofuels expert Jan van Aken said. "There is more to the environment than climate change. Climate change is the most pressing issue, but you cannot fight climate change by large deforestation in Indonesia." …

UN-Energy: Sustainable Bioenergy: A Framework for Decision Makers [PDF], April 2007


March 27, 2007

Australian ecological economics conference in July

The Australia New Zealand Society for Ecological Economics is holding a conference on Queensland's Sunshine coast on 3 to 6 July this year, with the theme Re-inventing Sustainability: A climate for change.

The conference program is here. Some of the topics sounds pretty interesting:

  • Resilience, thresholds and surprise in interdependent natural and social systems
  • Experimental economics
  • Modelling the relations between the environment and the economy
  • Analysis and communication of uncertainty, risk, and extreme events
  • Understanding complex adaptive systems
  • Environmental accounting

If you're interested in presenting a paper, abstracts are due 15 April.

March 16, 2007

Jared Diamond on 'Failures of Group Decision-Making'

The other day our servers got hit with a virus scare. While we were without our 'electronic tools', I borrowed Jared Diamond's Collapse: How Societies Choose to Fail or Succeed from a colleague. In the book Diamond deals with a question posed by Joseph Tainter in The Collapse of Complex Societies: "How did so many societies make such bad mistakes?"

After taking us on a tour of ancient societies as well as contemporary societal failures, Diamond works toward "Practical Lessons." So, "How did so many societies make such bad mistakes?" In grappling with the question Diamond's students, along with Tainter, identified what they call "a baffling phenomenon": Failures of group decision-making on the part of whole societies or other groups. Diamond sets up four categories of potential failure:

… First of all, a group may fail to anticipate a problem before the problem actually arrives. Second when the problem does arrive, the group may fail to perceive it. Then, after they perceive it, they fail even to try to solve it. Finally, they may try to solve it, but may not succeed.
Focusing in on the third — failure to even attempt to solve a problem once it is perceived — Diamond identifies a variety of factors that keep groups from attempting solutions, including:
  • Rational behavior problems, i.e clashes of interests
    • good for me (as an individual, corporate body, or ruling elite), bad for you and everybody else
    • good for me (or us) now, bad for everyone later; e.g. shortsightedness rationalized by discounting
  • Irrational behavior problems, i.e. collision of needed new values with deeply held values
    • collision with deeply held religious or sectarian values
    • collision with deeply held secular values, e.g. individualism, communalism, technological optimism, technological pessimism, group cohesion and protection from outsides (e.g. dislike for groups like "environmental groups" who first perceive and complain about a problem)
    • crowd psychology; individual interests cowed by group pressure (e.g. groupthink, Abilene Paradox)
    • psychological denial (subconscious suppression due to, e.g. "painful emotion")
In attempting solutions we have to get beyond rationalizing. Rationalizations include, according to Diamond:
  • It's not my problem, it's someone else's problem
  • The future has always (near-term history) proven to be better (technologically) than the past, therefore the problem will take care of itself. This boils down to "Technology will solve our problems."
Will we make it out of our current messes that increasingly well-up on a global scale, as well as welling-up locally in more and more places? Diamond sums up his assessment of our prospect at the end of his book:
I'm a cautious optimist. … [O]n the one hand, I acknowledge the seriousness of the [environmental and other] problems facing us. If we don't make a determined effort to solve them, and if we don't succeed at that effort, the world as a whole within the next few decades will face a declining standard of living, or perhaps something worse. … On the other hand, we shall be able to solve our problems — if we choose to do so. … Because we are the cause of our environmental problems, we are the ones in control of them, and we can choose or not choose to stop causing them and start solving them. The future is up for grabs, lying in our own hands. We don't need new technologies to solve our problems; while new technologies can make some contribution, for the most pare we "just" need the political will to apply solutions already available. Of course that's a big "just." But many societies did find the necessary political will in the past. Our modern societies have already found the will to solve some of our problems, and to achieve partial solutions to others.

… [It depends] on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time then problems have become perceptible but before they have reached crisis proportions. This type of decision-making is the opposite of the short-term reactive decision-making that too often characterizes our elected politicians ….


Darwin's Other Idea

The other day I stumbled onto a link between Hazel Henderson — futurist, and long-time critic of economics as commonly practiced — and Charles Darwin. That led me to The Darwin Project, a site devoted to promoting the forgotten half of Darwin's ideas: the idea that human progress ought to be self-organized more by "love" and "sympathy" than by natural selection via "survival of the fittest" and "selfishness above all".

The Darwin Project was founded by David Loye. Here is a snip from the prologue to Loye's Darwin's Unfolding Revolution: And the Liberation of the 21st Century [PDF]:


THE TRUTH ABOUT DARWIN—AND US

… What would Darwin say were he living today?

What would he think, for example, on finding out that the rain forests of Brazil, about which he rhapsodized in The Voyage of the Beagle — seemingly eternal in their wonder then, with their central function as "the lungs of the planet" widely known today — were being clear cut to run cattle to provide hamburgers for the mushrooming of quasi-lethal fast food outlets all over the face of this earth?

What else should we tell him of what presently seems to check or drive us backward in human evolution? … Environmental devastation … devastation of war … Widening of the gap between rich and poor in countries and between nations … continuing valuing of the stereotypical violence-oriented male or "macho" values … and the devaluing of the more peaceful "feminine" values … over-population … terrorism and the fearful perpetual presence of nuclear overkill — both the products of the unholy mix of 20th century science, religion, and politics at its worst.

… [W]hat do you suppose Darwin would say if he was told that to a newly alarming degree he was personally responsible for this mess? What do you think he would say if he was told that over 100 years these roadblocks to the better world were rolled in place by the mindset of "survival of the fittest" and "selfishness above all" that his theory of evolution had popularized?

If he was told that for over a century, via all fields of science, all levels of schools, and the ever more rampant new power of the media, the Darwinian idea that "survival of the fittest" was the essential driver for all levels of evolution was locked in place throughout America, Europe, and Western culture more generally. That thereby heralded as the champions of progress by scholars, as well as by themselves, a loose global alliance of regressive economic and political interests and oligarchies had gradually circled the earth? That by the end of the 20th century this alliance was so powerful it could seize the leadership of the richest and militarily most powerful, thereby hypothetically "fittest," nation on this earth, i.e., the United States?

And what would Darwin say if he was told that now — whether voted in or out of office, behind scenes remaining in power and blinded by greed to the consequences — this alliance was the implacable super-driver of industrial, governmental, religious, and scientific policies that were steadily increasing all of these threats to global well-being, and indeed threatened the very survival of our species.

What would he say?

… Today the focus is mainly on Darwin’s Origin of Species. But in the 828 page sequel in which he tells us he will now deal with human evolution, The Descent of Man, Darwin writes only twice of "survival of the fittest," but 95 times of love.

He writes of selfishness 12 times, but 92 times of moral sensitivity.

Of competition 9 times, but 24 times of mutuality and mutual aid.

… While most of his successors still remain bogged down in what has become the status quo and regressive science of where Darwin was 150 years ago, the man himself — as in this book we are to see — actually went on in Descent to leap 100 years and more into the future to write of where the most advanced, i.e., progressive, science is today. …

The Unquiet Second Darwinian Revolution

Thousands of books have been written about the first Darwinian revolution, which Origin of Species set in motion. Historically, the message has been that the first Darwinian revolution ended the power of authoritarian religion over science, thereby transforming our world by freeing the rise of modern mind.

This is the first book to be written to report the rise and unfolding of the second Darwinian revolution. It is of the threat to our species and to all species now being driven by what happened to the first revolution. But much more so, it is of the immense hope for the future that the uphill struggle of this second revolution now offers us. Born out by the deeply grounded work of many who have been hailed as among the best scientists of our age, it is of the rise of the case for a better world out of the bold venturing of a progressive science that few read of today and fewer still can understand.

It is, simply put, what we must at last understand and put to good use if our species is to evolve and survive.

Out of my move out of journalism into science I was led to this conclusion through my discovery of what in terms of our brains, and how our minds work, is an astonishment. For what I found functionally amounts to a hole in the head of modern mind.

The Triumph of PseudoDarwinian Mind

… [I]f you ask almost anybody what they think or know about evolution you find that for a century practically all the space and time allotted by our schools or the media to evolution has been sopped up by two hoary and scientifically long outdated battles fueled by religious and scientific extremists. One is the battle between the Creationists and the Evolutionists, which has sopped up scarce news, book, movie and mind space for 150 years. The other is the battle of the so-called "Darwin Wars."

This pivotal struggle for the control of 20th century mind began in the early part of the century with a friendly skirmish between those who came to be known as the NeoDarwinists, who were attempting to update Darwin in terms of biology, or the Neos, and everybody who disagreed with them. But where the Wars began in earnest was with the rise of the Super-Neos— the sociobiologists in the 1970s who morphed into the evolutionary psychologists of the 1980s and 1990s. With a barrage of colorful and superbly marketed books, the Super-Neos set out to bind all the higher levels of evolution — that is, what this book reveals of the lost second or completing half for Darwin’s theory — to a theory that was only the first half of what Darwin actually wrote about.

In other words, for a century most of us have either been the captives of religious ignorance or a scientific half-truth — and the social consequences … are horrendous.

Not at all a matter of coincidence is the fact the Super-Neos rose and rapidly took over much of academia and the world of popular trade book publishing during a time of massive political and religious regression. After a century of the virtual exclusion of alternatives to traditional Darwinism from all but a fractured minority of scientists, what now globally confronts us is the immense power of "hate thy neighbor" religion and an ostensibly Darwinian paradigm of "survival of the fittest" and "selfish genes" embedded not merely in science but in every other area of life. Politics, business, education, the military — all are driven by the dark mantras of PseudoDarwinism ….

Meanwhile barreling down on our species — as we’ll also look at then — is the nightmare prospect of Dr. Strangelove's doomsday bomb and all the other disasters this hole in the head of modern mind helped lead to and leaves us poorly equipped to handle.

Invisibilizing Darwin

Some measure of how deep the hole in which the rest of Darwin was buried is the fact it took me a decade to gain the Ph.D. qualifying me to dig for it, another decade to begin to go beyond merely a glimpse here and there, and then another decade of struggling to express what I had found in a way that any but my closest scientific associates could begin to understand, appreciate — or believe.

The main clue that lured me on was the discrepancy between Darwin the man and Darwin the theory. From the little I knew of him, it seemed to me dreadfully out of character that this kind and gentle scientific visionary — a notably loving father, and to a much greater degree than was assumed a liberal or progressive politically — could really have fathered what in the hands of his successors became a basically arch-conservative as well as actively regressive formula for disaster. What did Darwin really believe? What did he actually write and say?

What I found still astounds and infuriates me every time I think of it. I found that in the comparatively neglected years of his life, long before and well after the bombshell success of The Origin of Species, Darwin was thinking and writing 100 years ahead of his time. That is, he was probing concepts that open-minded scientists — free of the hold of PseudoDarwinian Mind — began to actively deal with only within the final decades of the 20th century. …

In a sampling over a decade of hundreds of books on Darwin and evolution theory spanning the entire 20th century, I could find only about a dozen people who recorded any awareness of the "other Darwin" — or more accurately the top or completing half for his theory.

And of this dozen I could find only four people — identified in chapter five — who sufficiently comprehended what Darwin was saying to write about it with some degree of understanding.

What Was and What Might Have Been

… [H]ad Darwin’s full theory prevailed we might have known an entirely different 20th century. …

[H]ad there been widely known and taught the morally-oriented full truth about ourselves and our future, as Darwin in actuality saw it — which emerges in the neglected writings of Darwin for the first time pulled together in one place in this book — a good case can be made that … America and the rest of the world have entered the 21th century with the hardcore Darwinism of survival of the fittest and selfishness uber alles enthroned in a government of the corporation, by the corporation, and for the corporation engaged in an imperial expansion of "business as usual." …

Darwin's Greatest Adventure

… [If we study Darwin's early and later life we discover that he] writes of who we really are.

Of how, rather than as we have been brain-washed over many centuries to believe, we are basically good — that is, of how far more often than we are aware of we are driven by moral sensitivity. Of how, though selfish, we are also driven by love to transcend selfishness. Of how, though of necessity fiercely motivated to survive and prevail, we are also driven by the transcendent need to respect and care for the needs of others.

We are there as he writes of how though in part, or even throughout much of our lives, we may be the captives, victims and even slaves of forces larger than ourselves, above all we are driven by a brain and a mind with the hunger and the capability for a choice of destiny in a world in which choice of destiny is an option.

And we are there as he writes of where we are going. Not of how we are driven blindly, witlessly, through a life with no predictability — which has convinced far, far too many of us that we are but sheep in need of the wolf as leader.

Instead we are there as he writes of how we are driven by a brain that demands of life a sense of meaning and purpose, and by the vision of a better future.

We are there as he writes in the conclusion to The Descent of Man these two startling lines almost wholly ignored for a century: "Important as the struggle for existence has been and even still is, yet as far as the highest part of our nature is concerned there are other agencies more important. For the moral qualities are advanced either directly or indirectly much more through the effects of habit, by our reasoning powers, by instruction, by religion, etc., than through natural selection."

As he writes, "But the more important elements for us are love, and the distinct emotion of sympathy."

And of how, "The birth both of the species and of the individual are equally parts of that grand sequence of events that our minds refuse to accept as the result of blind chance. The understanding revolts at such a conclusion."


After reading Loye's "prologue" I decided I need to read further. After pondering which of Loye's books I ought to read, I ended up ordering instead The Real Wealth of Nations: Creating a Caring Economics by Loye's wife and partner Riane Eisler (whose book The Chalice and the Blade: Our History, Our Future remains one of my personal favorites).

February 20, 2007

Carbon Offsets: Modern Day 'Indulgences'?

Much has been made of Carbon Offset schemes. I have remained skeptical. Today I find this, to reinforce my skepticism:

(via Carbon Trade Watch): NEW PUBLICATION: "The Carbon Neutral Myth - Offset Indulgences for your Climate Sins" [PDF]

Carbon offsets are the modern day indulgences, sold to an increasingly carbon conscious public to absolve their climate sins. Scratch the surface, however, and a disturbing picture emerges, where creative accountancy and elaborate shell games cover up the impossibility of verifying genuine climate change benefits, and where communities in the South often have little choice as offset projects are inflicted on them.

This report argues that offsets place disproportionate emphasis on individual lifestyles and carbon footprints, distracting attention from the wider, systemic changes and collective political action that needs to be taken to tackle climate change. Promoting more effective and empowering approaches involves moving away from the marketing gimmicks, celebrity endorsements, technological quick fixes, and the North/South exploitation that the carbon offsets industry embodies.


February 16, 2007

Disaster Data

(Via Resilience Science, Garry Peterson, 1/28/2007):

The World Resources Institute’s EarthTrends weblog points to some data on trends in natural and manmade disasters.


Although natural and manmade disasters occur in all countries regardless of income or size, not all governments have the resources necessary for prevention and emergency response. For those regions already battling widespread poverty, disease, and malnutrition, disasters are a significant constraint on social and economic development. Understanding the trends that describe disasters through time and space is very important, particularly in light of climate change, which threatens to alter both the distribution and severity of disasters worldwide.


EarthTrends links to an interesting/scary figure on Trends in disaters below from UNEP.


trends in disasters


With growing population and infrastructures the world’s exposure to natural hazards is inevitably increasing. This is particularly true as the strongest population growth is located in coastal areas (with greater exposure to floods, cyclones and tidal waves). To make matters worse any land remaining available for urban growth is generally risk-prone, for instance flood plains or steep slopes subject to landslides. The statistics in the graph opposite reveal an exponential increase in disasters. This raises several questions. Is the increase due to a significant improvement in access to information? What part does population growth and infrastructure development play? Finally, is climate change behind the increasing frequency of natural hazards?




February 14, 2007

A 'Stern' Look at Uncertainty, Novelty, and Surprise

Via Greg Mankiw: "Economists Joe Stiglitz, Nicholas Stern, and Martin Weitzman [PDF] have new pieces on global warming. The most interesting (as well as the most technically demanding) is the one by Weitzman. His conclusion: 'The Stern Review may well be right for the wrong reasons.'" I agree. In particular, I agree with Weitzman's conclusions. Here's a condensation:

… If the conclusion from the last section — that what to do about global warming depends greatly on the imposed interest rate — is seen as disappointing, then a second conclusion is likely to seem downright unnerving. …[E]ven if we had an infinite time series of past observations, they are of limited relevance in an evolving world where the environment is changing and the past never fully repeats itself. With this interpretation of the puzzles, people are willing to pay a lot for relatively safe stores of value that might represent a bit of insurance against out-of-sample or newly-evolved rare disasters.

There is little doubt that the worst-case scenarios of global warming are genuinely frightening. The Stern Review goes over several of these unlikely disasters associated with abrupt large-scale irreversible changes in the climate system: sudden collapse of the Greenland and West Antarctica ice sheets, weakening or even reversal of thermohaline circulations like the Gulf Stream, runaway amplification of global warming due to the many potential reinforcing feedbacks…. More gradual but still very serious are elevated sea levels, drowned coastlines, extreme weather patterns, flood risks, catastrophic tropical-crop failures, new humidity-nourished contagious diseases — and the list goes on and on.

Translated into the language of the simple model used here, such rare disasters are far out in the left tail of possible low, or even negative, or even possibly very negative values of …. The net result is thicker left tails for growth rates under dynamically-evolving global climate change than we are accustomed to dealing with in our much-more-familiar dynamic-stochastic-general-equilibrium macro models, which in practice are based upon the stationary thin-tailed stochastic processes that we use to model a rational expectations equilibrium whose structure is fully known. …

… [I]n lumping together objective and subjective uncertainties and thereby obscuring their distinction — to the extent that a graduate student today hardly knows, or even cares, what kinds of probabilities are legitimate to plug into a rational expectations equilibrium and what kinds of probabilities are illegitimate for this purpose — I think that contemporary economic practise goes too far and leads to a mindset that all-too-easily identifies subjective probabilities with sample frequencies from past data. …

… The upshot of this uncertainty about uncertainties is that [we are dealing with thick left tails] whose exact thickness depends not only on how bad a catastrophe global warming might induce and with what probability, but also on how imprecise are our probability estimates of the probabilities of those bad catastrophes. …

… [T]o ignore or suppress the significance of rare tail disasters in an application of expected utility theory like cost-benefit analysis of climate change, where there is so obviously limited data and limited information about extremes, is to ignore or suppress what theory is telling us is potentially the most important part of the analysis. … The take-away message here is that the burden of proof in the economics of climate change is upon whomever wants to model optimal-expected-utility growth under endogenous greenhouse warming without uncertainty tending to matter more than risk. Such a center-or-the-distribution modeler needs to explain why the necessarily-thickened tail representing rare disasters under uncertain structure does not play a critical role in the analysis. …

Continue reading "A 'Stern' Look at Uncertainty, Novelty, and Surprise" »

February 13, 2007

IPCC and the Politization of Climate Science

Yesterday, as I was running around trying to better understand the "junk science" debates, I ran into Kerry Emanuel's Phaeton’s Reins: The human hand in climate change, Boston Review, January/February 2007. Long fascinated with complexity theory, I was captured by Emanuel's contrast of "stability myths" to complexity, chaos, complex systems, dynamics, feedback loops, etc., and to the modeling of complex systems—in this case climate- and weather-change modeling.

Toward the end of the article, Emanuel turns his attention to the contemporary dilemma of what some call "the science wars", wars of words that are really more the stuff of media, politics, and social activism than of science. Here is a snip (with some red highlights from me):

Science, politics, and the media
Science proceeds by continually testing and discarding or refining hypotheses, a process greatly aided by the naturally skeptical disposition of scientists. We are, most of us, driven by a passion to understand nature, but that means being dispassionate about pet ideas. Partisanship—whatever its source—is likely to be detected by our colleagues and to yield a loss of credibility, the true stock of the trade. We share a faith—justified by experience—that at the end of the day, there is a truth to be found, and those who cling for emotional reasons to wrong ideas will be judged by history accordingly, whereas those who see it early will be regarded as visionaries.

The evolution of the scientific debate about anthropogenic climate change illustrates both the value of skepticism and the pitfalls of partisanship. Although the notion that fossil-fuel combustion might increase CO2 and alter climate originated in the 19th century, general awareness of the issue dates to a National Academy of Sciences report in 1979 that warned that doubling CO2 content might lead to a three-to-eight-degree increase in global average temperature. Then, in 1988, James Hansen, the director of NASA’s Goddard Institute for Space Studies, set off a firestorm of controversy by testifying before Congress that he was virtually certain that a global-warming signal had emerged from the background climate variability. At that time, less was known about natural climate variability before the beginning of systematic instrumental records in the nineteenth century, and only a handful of global climate simulations had been performed. Most scientists were deeply skeptical of Hansen’s claims; I certainly was. It is important to interpret the word “skeptical” literally here: it was not that we were sure of the opposite, merely that we thought the jury was out.

At roughly this time, radical environmental groups and a handful of scientists influenced by them leapt into the fray with rather obvious ulterior motives. This jump-started the politicization of the issue, and conservative groups, financed by auto makers and big oil, responded with counterattacks. This also marked the onset of an interesting and disturbing phenomenon that continues to this day. A very small number of climate scientists adopted dogmatic positions and in so doing lost credibility among the vast majority who remained committed to an unbiased search for answers. On the left, an argument emerged urging fellow scientists to deliberately exaggerate their findings so as to galvanize an apathetic public, an idea that, fortunately, failed in the scientific arena but which took root in Hollywood, culminating in the 2004 release of The Day After Tomorrow. On the right, the search began for negative feedbacks that would counter increasing greenhouse gases: imaginative ideas emerged, but they have largely failed the acid test of comparison to observations. But as the dogmatists grew increasingly alienated from the scientific mainstream, they were embraced by political groups and journalists, who thrust them into the limelight. This produced a gross distortion in the public perception of the scientific debate. Ever eager for the drama of competing dogmas, the media largely ignored mainstream scientists whose hesitations did not make good copy. As the global-warming signal continues to emerge, this soap opera is kept alive by a dwindling number of deniers constantly tapped for interviews by journalists who pretend to look for balance.

While the American public has been misinformed by a media obsessed with sensational debate, climate scientists developed a way forward that helps them to compare notes and test one another’s ideas and also creates a valuable communication channel. Called the Intergovernmental Panel on Climate Change, or IPCC, it produces a detailed summary of the state of the science every four years, with the next one due out in February 2007. Although far from perfect, the IPCC involves serious climate scientists from many countries and has largely withstood political attack and influence.

The IPCC reports are fairly candid about what we collectively know and where the uncertainties probably lie. In the first category are findings that are not in dispute, not even by les refusards:

Continue reading "IPCC and the Politization of Climate Science" »

January 31, 2007

The Indicators Paradox

Next week I wander up to very scenic, but very cold Jackson Hole, Wyoming to work with US Forest Service colleagues on monitoring and evaluation measures for a forest plan, related to an agency strategic plan, related to governmental obligations writ large for the US as part of the global community. Forest plan indicators must therefore, somehow, link to broader Criteria and Indicators for Sustainable Development.

I find the work paradoxical. Too often we come up with 'indicators' that don't indicate, but rather abstract too much or focus too narrowly. We find ourselves either overwhelmed by too many indicators, or tend to develop summary indices that conceal more than they reveal. Either way we lose. But maybe we, along with others are learning.

My continual prodding is that we need to address indicators in a functioning management system, where people both within government organizations and beyond can "own" (can resonate with) parts of the system, and relate parts to wholes in meaningful management settings. (Here, by the way is a little framing thing I'm working on titled Effective Organizations, linked to a "post" in my Adaptive Forest Management blog titled Rebuilding Public Trust.)

Years ago, I attended the first conference of the International Society for Ecological Economics, (Washington, DC, 1990) and listened to promises for greening up national income accounts, among other metrics to help policy-makers do better, and do more for "sustainability" re: ecology, economics and environment. I've been tracking "indicator" and "story line" progress and retrogress since. I even participate in minor ways, no doubt in both arenas, depending on who you talk to.

Yesterday, while prepping for my forest-related travels I decided to scan the Ecological Economics literature to see what I could find on recent developments. I was pleasantly surprised to find Accounting Technologies and Sustainability Assessment Models, In Press, Corrected Proof, Available online 22 December 2006, by Jan Bebbington, Judy Brown, and Bob Frame:

Abstract: Within ecological economics there is recognition of the need for new approaches to decision-making to support sustainable development initiatives. There is an increasing acknowledgement of the limitations of cost–benefit analysis approaches as a measure of the (un)sustainability of organizational activities. These are viewed as particularly inappropriate within the participatory settings that sustainable development proponents seek to foster. They also fail to deal with the highly contested nature of sustainable development discourse in contemporary pluralist democracies. While advances have been made in the field of multi-criteria decision-making, there is still a relative dearth of versatile models that accommodate monetization in a way that recognizes the limits of calculative technologies. This article introduces readers to developments within the accounting discipline designed to support sustainable development decision-making and evaluation. In particular, it proposes sustainability assessment models as a viable alternative to cost–benefit analysis. Sustainability assessment models are based on an inter-disciplinary approach that recognizes the need for “accountings” that facilitate more participatory forms of decision-making and accountability. As such, they address many of the weaknesses in current approaches to cost–benefit analysis. The authors’ first experiences with sustainability assessment models were with BP and the United Kingdom oil and gas sector, where models were developed as a means of making previously external costs more central to organizational decision-making. Later work has included exploration of a range of decision-making situations in private and public sector organizations in both the United Kingdom and New Zealand. This has involved more explicit attention to plural values and issues of participation, dialogue and democracy.
I was delighted to see this update on what I'll call "nails in the coffin" re: cost-benefit analysis. I have already been mining the "references" to update my own Critiques of Cost Benefit Analysis (embedded in this post along with 13 suggested books dealing with "CBA not!" and much more.)

I was even more impressed to see the authors carry the argument forward re: summary indices in the "social and environmental accounting" arena. I wish I could daylight the article, but I'm afraid it is in the "pay for view" category. I got to it via my 'Science Direct' subscription.

Ultimately, the authors endorse a social accounting medium that allows for practitioners, decision-makers, and the public to simultaneous test (in real life settings) various approaches to environmental/social accounting and evaluation, The vetting of various methods is immediate and ongoing, as interactive dialogue. Although I'm not yet familiar with the particulars I hope they somehow incorporate blogs (or blog-like feedback mechanisms) in the systems.

Let's hope that now more people will change focus toward value pluralism and civic discovery, i.e. "participation, dialogue, and democracy." Permit me one snip:

… In New Zealand, we have sought to explicitly address the issue of competing ideological orientations. By comparing how different stakeholders explain and illustrate their perspectives, we have encouraged actors to articulate their ideological standpoints on SD (e.g. their perspectives on monetization, the use of market valuation methodologies and views on the materiality of particular dimensions of SD). We see this as crucial in facilitating dialogic learning and interaction in polyvocal environments. We also envisage groups with different ideological orientations constructing their own SAMs. Separate SAMs rather than synthesis into a "unified" account leaves stakeholders with the ability to exchange SAMs as a way of explaining and justifying different courses of action and allows them to interrogate each others’ ways of knowing. We see this as important to protect against monologism and to provide a challenge to eco-modernist "business as usual" approaches.…
For the record, I find myself intrigued with summary indices like Ecological Footprint. Maybe it's the "star power." Take a look at Who's Who for the Global Economic Footprint Network. Alternatively, Amartya Sen's name is found among the proponents and developers of the Human Development Index. See, e.g. this [PDF] and this.

No doubt efforts at furthering development of more comprehensive indices have merit, as public and political discourse and more. And some of us will continue to follow the chatter (pro and con) that swirls around them. Some of us will also follow other efforts, some related to the more comprehensive measures, some not, where people try to make sense (political, social, and problem-solving) of various sets of measures, situationally defined and refined to fit whatever context is judged to be appropriate.

Continue reading "The Indicators Paradox" »

January 30, 2007

Sustainability, Science, Practice, and Policy

New e-Journal: Sustainability, Science, Practice and Policy Have a look! No doubt we will be talking more about this one. Ok.. I'm a bit slow on the uptake. It's new to me, with first issue published in the Spring of 2005.

January 24, 2007

Key Questions on Energy

We dabble a bit in "energy" here. Over at The Oil Drum they adress energy squarely and thoroughly. Here is a teaser:

Key Questions on Energy Options (and Thoughts on the SOTU), by Robert Rapier 01/24/2007: A question was recently posed here: What is the most important question concerning ethanol production? That got me to thinking about important questions regarding not only ethanol, but all of our energy sources. There are a number of issues that we must carefully consider for any of our potential energy sources.

In my opinion, they are:

1. Is the energy source sustainable?
2. What are the potential negative externalities of producing/using this energy source?
3. What is the EROEI?
4. Is it affordable?
5. Are there better alternatives?
6. Are there other special considerations?
7. In summary, are the advantages of the source large enough to justify any negative consequences?

Go there for answers and commentary.

January 23, 2007

Are Biofuels Moving Us in the Wrong Direction?

As the political fuel behind biofuels propels us forward, is it time to take a step back for reflection? Craig Mackintosh says yes. Here is a glimpse of his very good work:

Biofuels from the Frying Pan to the Fire? Craig Mackintosh, 12/29/06:…When we take into account the scale of our past, present, and future transport requirements - are biofuels going to cut it? Do they hold the promise of securing our futures — nationally, economically, and ecologically? … Grist has an excellent collection of articles on the Biofuel subject …. Given the rate and scale of biofuel developments, I think it’s appropriate for me to bring their 'Not so fast: Issues and Implications' section to your notice. …

Throughout tropical countries like Indonesia, Malaysia, Brazil, and Colombia, rainforests and grasslands are being cleared for soybean and oil-palm plantations to make biodiesel, a product that is then marketed halfway across the world as a "green" fuel.

In Southeast Asia, and increasingly in the Amazon, plantations of the African oil palm have become wildly lucrative. After monocropping the palms on recently cleared rainforest land, growers press the palm fruit and kernel for oil that can be used in both food and industrial applications, including — and increasingly — as biodiesel.

The palm oil industry is booming: global exports increased more than 50 percent from 1999 to 2004. To meet the growing demand, producers in Malaysia and Indonesia have ramped up production by clearing thousands of square miles of rainforest for new plantations.

In Indonesia, rainforest loss for oil palms has contributed to the endangerment of 140 species of land animals, while in Malaysia animals like the Sumatran tiger and Bornean orangutan have been pushed to the brink of extinction. Fish kills have become common in waterways surrounding plantations and palm-oil mills, as soil erosion from the cleared land and mill effluents have left waterways clogged with sediment and unviable.

The boom hasn't been limited to Southeast Asia. In one of the most disturbing examples of the biofuel hype’s hidden effects, right-wing paramilitary groups in Colombia — a country mired in a four-decade-old civil war — have in recent years begun planting oil palm plantations over wide swaths of the territory they control. …

Farther south, another biodiversity hotspot is being rapidly cleared to plant a biodiesel crop. Nearly 80 percent of Brazil’s Cerrado region — a woodland savanna mix — has been cleared for agricultural production, mostly for soybeans, according to a Conservation International report.

Despite being home to thousands of endemic plant and animal species, the Cerrado has been promoted as "the last agricultural frontier" by green-revolution hero and Nobel Peace Prize winner Norman Borlaug. Low land and labor costs and high yield potential have sent investors from as far away as Iowa scrambling to buy up these Brazilian grasslands, frequently in collaboration with U.S. agribusinesses like Archer Daniels Midland, whose first Brazilian biodiesel production facility is currently in the works.

Tad Patzek, a professor in UC-Berkeley’s Department of Civil and Environmental Engineering who's known primarily as a critic of corn ethanol, says what's happening in tropical ecosystems is much more serious than the biofuel situation in the U.S. "We've already destroyed the prairie, and the topsoil in the Midwest is going, going, gone," Patzek says. "But the expensive noise we’re making here is being translated there into the total obliteration of the most precious ecosystems on earth." — 'What about the Land?'

I'd like to stimulate some discussion on this topic, as its importance cannot be underestimated. If we are considering using every available piece of land on the planet (and taking down our most valuable forests in addition) to fuel a ballooning population of vehicles, then discussion is the least we can do. …

I’m fairly sure the world still has serious issues with food and water shortages . As it stands, our dietary habits have us using more land per capita than the rest of the world (and not just our own land…). Combine this with the insatiable appetite our vehicles have, and will we not be taking this already out-of-proportion ratio into the realms of the obscene, and absurd? …

In the meantime, biofuel plants are going up everywhere and politicians are setting biofuel quotas into law. I guess I'd like to ask, where are we going with this? Are we not jumping straight from the frying pan into the fire? …

For a bit of hope (maybe?) re: Biodiesel from algae, see our earlier post on the subject, as well as another very good Mackintosh post titled As Corn Ethanol Threatens, Algae Makes Promises, 1/7/2007.

{Update Feb. 1}: Here's the latest on the Palm Oil mess, from The Oil Drum, Jan 30

January 17, 2007

Growth is Madness! A new blog

John Feeney recently started a new blog, with title and main theme, Growth is Madness! Looks promising. Here's a snip from the first post:

Our earth is in trouble. And that means we're in trouble. It's no exaggeration today to say we face a looming global ecological collapse. Scientists have warned us of this for more than a decade. The warnings, from individual experts, and organizations grow more urgent.

Yet, most people's attention is on other news. There is little awareness of the gravity of the environmental problem we face and the likely consequences if it is not vigorously addressed.

There is even less awareness of the root causes of our environmental plight. This is not too surprising as their role in creating the problems we face has been suppressed by those with vested interests in shielding us from the truth. …

Let's start with some truth right now. The root causes of the ecological collapse of which scientists are warning are:

  1. Global population growth to levels near or beyond the earth’s carrying capacity.
  2. Corporate economic growth, as defined by Herman Daly, in the form of increased physical throughput, from the extraction of raw materials, through their manufacture into commodities, to their output as wastes.
  3. Excessive and growing per capita resource consumption rates.

…But before you close this site in dismay at what, up to here, seems a profoundly pessimistic message, I’ll point out that there is room for much hope! …[T]there are effective actions we can take to avert disaster. It will take serious commitments from many nations, intergovernmental cooperation, corporate and individual efforts. Part of those efforts needs to be the spreading of accurate information to inspire others to help….


January 11, 2007

Stern Report Buzz

Almost three months after publication, The Stern Report on the costs of climate change still generates much buzz. Some of the buzz echoes methodological concerns we have aired earlier about use and abuse of cost-benefit analysis. (Or, if in a hurry: Top 10 Reasons why CBA fails ….) Here is an condensed version of Jane Galt's recent commentary:

Discount rates, again, Jane Galt, Asymmetrical Information, 01.09/2007: …[T]hough I essentially agree with the Stern Report's conclusions, I am bothered by its methods. …

It is really, really hard to price the costs of climate change. This is true for many reasons. First, some regions will benefit: Siberia and Canada will probably blossom under global warming. A true cost benefit analysis would net those benefits out, but how do you price them? How do you price losing Bangladesh? Is that a one-time loss, or should be impute to each generation a new cost for not being able to visit Bangladesh, and how do we counterbalance that against the new pleasures of visiting the Minnesota Tropical Rainforest? Should we take into account happiness research which indicates that people are roughly as happy after a big loss as they were before?

The uneven distribution of the benefits presents another pricing problem, particularly since there are wide income disparities between the affected countries. I'm not entirely clear which way this cuts, since Britain and Ireland get hosed along with Bangladesh, but it's hard to dodge the moral injustice that the United States, which produces more carbon per capita than these countries, may end up a net beneficiary of global warming.

The biggest problem is the easiest one to state: what is a cost and what is a benefit? How do you value the changes?

Continue reading "Stern Report Buzz" »

October 16, 2006

Economic Swan Dive

Jim Kunstler had a banker take him to task recently for failing "to appreciate the fantastic resilience of American can-do enterprise." Kunstler didn't budge, and reiterated his perception of a "chronically diseased" US economy. Adding, "It must be in the nature of a stock market melt-up, of the type we've seen the past month, to exert a hypnotic effect on herd expectations…" that has led to recent market euphoria. Here, in part, is what drew the banker's ire:

Swan Dive
Oct 9, 2006

…The trouble with finance [in a Peak Oil World] is a system that uses paper markers [that represent false] hope and expectation for the expansion of wealth. These markers are currencies, stocks, bonds, option contracts, derivatives plays, and other certificates that are traded in open markets. If there is no longer any hope of increased wealth in the world, then all those tradable paper markers become losers. Their value unwinds and imagined piles of wealth evaporate into thin air.

The unwinding process depends on the psychology of the people who own these certificates. If they do not understand the global oil situation and its implications, then they will continue to hope for and expect expanded wealth, and thus continue to regard their paper certificates as credible markers of value. And that is largely the case at the moment, since most of the playas in the financial markets are not paying attention to the peak oil story, or don't believe it is for real.

Two special and transient circumstances are now propping up the financial markets. One is that for practical purposes the world is virtually at peak, meaning this is an extra-special time of strange behavior (like the point in the apogee of a steep sub orbital flight in which passengers become momentarily weightless). Supply and demand for oil are only beginning to go out of whack (that is, demand just barely exceeding supply). Even at this early stage, the oil markets themselves are showing stress, as hoarding behavior sets in and induces wider swings of price volatility. But these swings in oil prices -- such as the one we're in right now, where prices have crashed 20 percent since the panic buying (hoarding) of June and July -- send false signals to the financial playas. The main false signal is that all is well on the global oil scene...there's no real supply problem...and hence no threat to the continuing expansion of industrial production and its associated wealth-generating activities. This signal just tells the playas to buy more paper markers. Thus, the stock market goes up.

The second special and transient circumstance is that so much wealth has already accumulated along the way to peak, that financial markets take on a life of their own -- as existing wealth "invests" itself in more paper markers hoping and expecting to "grow" into even more wealth. The problem here is that existing wealth is actually being squandered, since the paper markers will only lose value as the hopes and expectations vested in them dissolve in disappointment. But we haven't quite reached that point yet.

In simply bidding the markets up, the system has spun off even more gobs of presumed wealth. Some of this "liquidity" -- say, in the checking accounts of people who work for Goldman Sachs -- has found its way into Manhattan condominiums, or Aspen McMansions, and filtered through the system to everyone from the lawyers who write up the pre-nuptial agreements to the guys who sell the furniture to the people who drive the delivery trucks that bring it to the door, to the men laying tiles in the new bathrooms.

The basic insanity of a system that presumes vastly increased wealth where none will occur, has led to further distortions in finance. The most obvious one is the so-called housing bubble. The misplaced extreme expectation in the ever-increasing value of paper wealth, led to the hijacking of mortgages by financial playas who bundled them into odd lots of tradable debt (promises to pay) and used them to leverage abstruse bets (hedges) on the behavior of other kinds of paper markers (currencies, interest rate differentials, commodity prices) -- very profitably as long as all playas believed that industrial societies that run all oil would continue to grow, to produce more wealth. The level of abstraction in these rackets -- their distance from the reality of productive activity --is self-evident.

But they were so successful that the profligate creation of ever more mortgages became an increasingly reckless and irresponsible enterprise. Contracts were made with house-buyers who had no record of credit worthiness and often no real proof of income. Contracts were made on terms (interest payments) that were deceptive, even ruinously false, for the house-buyers. The reckless reassignment of lending risk into ever more abstract layers of deferred obligation, and the ease of credit that ensued, allowed millions of ordinary people to acquire real property on unrealistic terms, which had the affect of bidding up the price of houses that these owners will eventually have to surrender for nonpayment.

That process is now underway. The reckless creation of mortgages had the further effect of stealing demand for house-building from the future. So many new houses were built and then sold to people who will probably have to surrender them, and then so many more beyond that were built in the expectation and hope that reckless mortgage creation would continue forever, that there is now a massive over-supply of total existing houses while the pool of suckers for new ruinous mortgages has shrunk to zero.

Similar excesses in all the other lending and debt sectors, including "non-performing" credit card obligations and government deficits, will also unwind and thunder through the system.

Meanwhile, the false signal from the oil markets that has been broadcasting for eight weeks will come offline and a new signal will come on as prices go back up. The pause in bidding for future oil induced by the panic over-buying of the summer will end. The heating season is here. It's 40 degrees out in upstate New York this morning and the furnace is cranking. The Chinese and the Indians and even the people in France have not stopped using oil, even if Americans have put their Winnebagos up on blocks for the season.

As the price of oil goes back up, the financial markets will get a new signal that running industrial societies has just gotten more expensive again. That will dampen hopes and expectations for increased wealth from these societies. Meanwhile, the air will be coming out of millions of mortgages, and the loss of value will spread among playas holding these bundles of mortgage debt (i.e. promises that money spent on houses is being paid back, which it won't be). At the same time the houses themselves will lose value as the pool of potential buyers shrinks to nothing. That is, the inflated value (high price) of these assets will deflate.

As this occurs, there will be far fewer wage-earners putting up additional houses, fewer furniture sales, fewer trips by delivery truck drivers and fewer tile-jobs in the McBathrooms.

This is why I view the fall melt-up of the stock markets as a swan dive. We're at the apogee now, just as the world is at the apogee of its oil production. I confess, I thought the reality of our economic predicament would be recognized by the playas and their markets sooner than it has. It turns out the the chief luxury of the final cheap oil blowout has been the artificial support of unrealistic hopes and expectations. [empahsis added by Iverson]

June 26, 2006

Inconvenient Truth

Last Thursday night, my wife Karen and I saw Al Gore's new movie, An Inconvenient Truth.  It is, in my opinion, a very clear, compelling, and heartfelt documentary that profiles one man's authentic effort to educate people around the world about the need to deal with the global warming crisis. 

   

Thanks to the superb direction of Davis Guggenheim, the film offers an unexpectedly pleasant balance and interweaving of technical and factual analysis, moral and ethical challenges, and personal introspection and disclosure, with Al Gore speaking through all three of these voices in a manner that sounds completely authentic and genuinely above the deplorable politics of this controversial issue.  In philosophical terms a la the universal pragmatics of Jurgen Habermas, there is in this film a very effective differentiation and integration of validity claims in the three domains of what is true, what is right, and what is sincere--the critical ingredients of the shared understanding and coordinated action that is the apparent goal of this film.

Continue reading "Inconvenient Truth" »

April 24, 2006

Earth Day Vision of Sustainable Forestry

Hat Tip to Mark Thoma, (as posted 4/20 at Environmental Economics):

An Earth Day vision from Don Melnick, professor of conservation biology at Columbia University and Mary Pearl, president of Wildlife Trust:

Not Out of the Woods Just Yet, by Don Melnick and Mary Pearl, Commentary, NY Times: Our forests are the heart of our environmental support system. And yet, in the 36 years that have passed since the first Earth Day, on April 22, 1970, we have lost more than one billion acres of forest, with no end in sight. The people most vulnerable to the disappearance of forests are the poor: nearly three-quarters of the 1.2 billion people defined as extremely poor live in rural areas, where they rely most directly on forests for food, fuel, fiber and building materials.

Continue reading "Earth Day Vision of Sustainable Forestry" »

April 07, 2006

Immigration in terms of Population, Migration, Globalization

Blogs and more traditional news are full of immigration-related stuff these days. But I've seen little discussion interrelating globalization, population dynamics, and the environment. In Population, migration, globalization, Ecological Economics (2006: forthcoming) , Herman Daly attempts it, arguing that we rightfully ought to be as concerned over unfettered capital flight, and outsourcing, as we right now seem to be over immigration here in the US. Daly contrasts globalization ("global economic integration of many formerly national economies into one global economy, mainly by free trade and free capital mobility, but also by somewhat easier or uncontrolled migration) to internationalization (which retains a substantive nation-state presence while highlighting "increasing importance of international trade, international relations, treaties, alliances, etc.").

Was NAFTA supposed to help with the US/Mexico problem? Did it fail? If so, will CAFTA fail too? And if we are to get serious here in the US about limiting immigration, how are we to do so with the 1000 mile long US/Mexico border separating the two countries? Machine-gun turrets (or 9000 new border guards) don't seem prudent political choices. Or maybe they are. Are there really any "rising tides to lift all boats" out there? Or are we just whistling past the graveyard, hoping to ride out the impending storm and somehow then being able to bootstrap the global economy and polis toward a better world. Or maybe there is no storm, just massively enhanced productivity and trickle-down profits that allow the poor to get rich, while the rich get richer.

Here is a sampler of Daly's thoughts, highlighting links to immigration:

Continue reading "Immigration in terms of Population, Migration, Globalization" »

March 20, 2006

Allocation, Distribution, Scale, and Depth

One of the important contributions of the ecological economists to the overall economic dialogue has been their emphasis on this notion of economic scale, which they generally define as a measure of the physical volume of matter-energy throughput, or the efficiency with which the economy is using the sources and sinks of the ecosystem.  When they introduce the idea of scale, they typically do so in contrast to the more widely accepted ideas of economic allocation and distribution.  As they see it, economics must address the perennial questions of allocation, distribution, and scale, seeking the appropriate means via market, state, etc. to the desired ends of efficient allocation, fair distribution, and sustainable scale.  (Herman Daly, Beyond Growth, 45-60; Robert Costanza, et.al., Ecological Economics, 80-83)  Clearly, there are some value judgments being expressed in the crisp adjectives they choose to define their desired ends, so I will often adopt a more transparently normative, but deliberately ambiguous term like right allocation, right distribution, and right scale.

As I presented in Sustainable Growth, I think we can benefit from the recognition of a fourth facet to economic development: that of economic depth.  The easiest way to grasp economic depth is to imagine growth in economic output, absent any growth in economic scale (i.e., steady-state scale) and independent of any growth in money supply (so real, non-monetary output).  What's left is growth in economic depth, or the depth dimension of the growth in economic output.  We talk around the concept all the time without really defining it, using terms like knowledge economy, intellectual capital, experience goods, organizational learning, trust, and innovation, which are all just different components of this economic depth.  Anyway, as I have tried to demonstrate, the recognition of economic depth can reconcile the apparently irreconcilable visions of those who (accurately) recognize the ecological limits to economic scale and those who (accurately) recognize the potential for economic growth beyond these ecological limits.  Thus, we have to consider right depth in relation to right scale, right distribution, and right allocation.

This brings me to the critical question regarding the relationships among these four concepts: allocation, distribution, scale, and depth.  Can they be reconciled with each other and incorporated into a single model of the economy? 

Continue reading "Allocation, Distribution, Scale, and Depth" »

March 14, 2006

Caroline Baum on Malthus, Supply-side Shortage, Demand-side Collapse

Last fall I got Caroline Baum’s new book Just What I Said. Not since Paul Krugman’s The Great Unraveling have I found a bus-book so enticing. Like Krugman’s book, Baum packages together some of her best Bloomberg Columns as subchapters in a book on "bonds, banks, budgets, and bubbles." Often I agree with Baum's reasoning. Sometimes I disagree. But always I’m challenged to think.

One article was built from a base of Malthusian theory, casting economists as chronic worriers, "worrying about man’s ability to provide food and other necessities for a growing population." The theme of the essay, titled, "Field of Gloom is Never Too Crowded for New Blood," May 13, 2004, is focused not so much on Thomas Malthus' fear of catastrophic supply shortage, but rather on demand shortage due to productivity gains and excess capacity.

Baum concludes:

    Any discussion about the death of demand without reference to price is essentially meaningless. The demand curve … is downward sloping. For most items, lowering the price increases the quantity demanded.
    It’s always worked that way. I suspect it always will. Both consumers and producers understand it.
    I've never worried about a lack of human ingenuity. If I'm going to spend time worrying, it’ll be about the sun doing dark in 5 billion years, not the death of demand.

I can’t argue with the Baum’s conclusions as far as they go. But what is left out tells an entirely different story. This is one of those disagreement moments. My disagreement is not on the surface, but in looking deeper. Martin Zweig, for example, in his Winning on Wall Street tells us that there are times when we need to be wary of conventional wisdom. Zweig says,

As the bull market continues to move higher, more and more people turn bullish. The flash point is really hit when the crowd has gotten so optimistic that it has used up the bulk of its cash. Cash represents firepower in the stock market. When it’s depleted, the ammunition to blast stocks higher is gone.

Zweig is talking about budget constraints that play into demand as much as prices do. If people run out of cash faster than prices adjust downward there are demand-side problems to accompany attendant supply-side problems of industries running out of cash. When Zweig worries about impending bear markets, he worries about three things, mainly: extreme deflation, too high price/earnings ratios, and inverted yield curves. In the first, "extreme deflation" we see the shadow-side of the "lowering the price" argument.

My disagreement also goes for the supply-side. Baum quotes Greg Mankiw's Principles of Economics. saying that "Growth in mankind’s ingenuity has offset the effects of a larger population." Then Baum dredges up the well-known Julian Simon v. Paul Ehrlich bet, letting us all see the folly of Ehrlich's relatively near-term prediction of massive shortages of natural resource, famine and death on an unprecedented scale.

Clearly Ehrlich lost the bet. But there are many, including me, who believe that we are not yet out of the woods. It is not clear that "mankind's ingenuity" will always get us out of the ever-tightening Gordian knots that we too easily tie for ourselves. For a glimpse of this reasoning I recommend T.F.H. Allen, Joseph A. Tainter, and Thomas W. Hoekstra's Supply Side Sustainability, Donella H. Meadows et al Beyond the Limits: Confronting Global Collapse, Envisioning a Sustainable Future, and Garrett Hardin's Living Within Limits: Ecology, Economics, and Population Taboos as representative of the many books that look at the other side of this debate.

Baum too recognizes that there are many perspectives on matters economic, and concludes a different chapter with,

…. Economists continue to debate [the viability of arguments for and against cost-push inflation and] the causality between wages and prices. Neither side will convince the other of the superiority of the argument. It's merely a question of preaching to the converted or being ignored by the faithful.
I'll expand that reasoning to say that no ideological camp will convince others of the superiority of any economic argument. Mostly no one from any camp will even listen to arguments from other camps. To get a better feel for this, surf over to The History of Economic Thought’s Schools of Thought (60 or so, lumped into four main blocks). And for historically inclined, adventurous types, read through The Walrasaid to get a glimpse as to the confusion, consternation among economic ideological camps today and how it came to be.

Source: Adapted from Oct. 10, 2005 post at Econ Dreams - Econ Nightmares

March 10, 2006

Economism or Planetism: The Coming Choice

In "Economism or Planetism," John B. Cobb, Jr. (Herman Daly's coauthor in For the Common Good, Beacon Press, 1989) suggests that it is time to reassess our current "non-ideology ideology" of consumerism. Cobb argues that we ought to address both consumption and production as part of a broader whole that interrelates the human economy with the larger natural economy functioning in the biosphere. One aim is to encourage values in addition to, and sometimes in conflict with, consumerism--especially those associated with human community and a sense of belonging to the larger world. Cobb does not deny the efficiency of the market, but champions its role (where appropriate) as a means toward achievement of socially/politically/biologically determined ends. But neither does Cobb believe that markets, and market mechanisms, are a panacea for all our problems. Whether you see his prescriptive remedies to be common sense or nonsense, Cobb's ideas are worth reading and discussing every bit as much now as when first presented in 1991.


Continue reading "Economism or Planetism: The Coming Choice" »

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