Abbott's G20 agenda: climate still the elephant in the room
By Jeremy Williams, Griffith University
News emerging from Washington last week suggests climate change may amount to more than an FAQ in the appendices of this November's G20 leaders' summit agenda. President Obama's deputy national security adviser for international economics, Caroline Atkinson, has made the point that, as the G20 economies generate 80% of the world's carbon emissions, the group should give a political push to "specific steps" to address climate change.
Hog wash: Economic development in China
There has been some speculation in recent weeks as why 16,000 dead pigs floated down the Huangpu River. The rotting carcasses threatened the water supplies of those depending on this river system including the 23 million inhabitants of Shanghai. (Now, to add insult to injury, there are dead ducks to contend with as well).
Characteristically, there has been plenty of sooth-saying from Chinese government officials, but the scepticism aired on Chinese social media platform Weibo suggests that this is doing little to reassure residents.
The problem, according to a report in The Guardian yesterday, is the sheer scale of pig production. Last year, China produced and consumed half the world's pork (about 50m tonnes), and with a mortality rate of 2-4%, up to 300,000 carcasses need to be disposed of each year. Things become difficult when the capacity to process dead pigs does not keep up with the growing number of pig farms. Until now, it seems, this issue has been managed by some 'entrepreneurs' who have been buying up dead and diseased pigs and butchering them for sale as pork to unsuspecting consumers. A crackdown on black market traders has put a stop to all this and so farmers have resorted to dumping the carcasses in the river.
Mainstream economics refers to this as a 'negative externality' arising from a market transaction. I call it wanton destruction of natural capital, fuelled by rampant consumption and unsustainable production. GDP will go as a result of the expenditure required to rid the waterways of dead animals, but this is not economic development.
The Carbon Rush
[youtube=http://www.youtube.com/watch?v=SiwgXGDsXPU]
A disturbing new film premiered recently at the Green Nation Film Festival in Rio de Janeiro in the run up to the Rio+20 Summit.
Entitled The Carbon Rush, the film reveals the unsavoury side of the Clean Development Mechanism (CDM), which allows countries that are signatories to the Kyoto Protocol to implement emission-reduction projects in developing countries to earn carbon credits that can be counted towards meeting their national emission reduction targets.
According to the CDM website, there are currently 4259 registered projects, and there are a number of video clips that extol the virtues of such projects (see below). I shall reserve judgement until I get to see The Carbon Rush in full, but it seems to indicate that the CDM is susceptible to 'market failure' (to put it mildly).
[youtube=http://www.youtube.com/watch?v=0As6PHGJVFw&list=UUEBv6L0UIcPOrqMqGAOO69g&index=0&feature=plcp]
The Earth is Full
This TED talk is a useful summary of Paul Gilding's book, The Great DIsruption. Listening to the first half of his presentation, one could be forgiven for thinking that Gilding has thrown in the towel, based on his projected level of doom and gloom. This is not entirely the case. Yes, things do look grim, but Gilding is not nearly as pessimistic as James Lovelock or Clive Hamilton. The book goes into great detail as why he (and his collaborator Jorgen Randers) believe there is a future for humanity with their One Degree War Plan.
Irene is good news for GDP
[youtube=http://www.youtube.com/watch?v=77IdKFqXbUY&list=FLqVEcYXalJ6vy86WdtV2WaQ&index=1&feature=plpp]
As the clean up after Hurricane Irene commences, not too many people will realise that this is actually 'good for the economy' — at least in terms of GDP growth. The problem is that all expenditure on goods and services — even if it is cleaning up after a 'natural' disaster (sic) — ends up on the plus side of the ledger. Continuing with this logic, it actually makes sense to urge BP to have more oil spills, and to encourage crime because we spend more on burglar alarms. Robert F. Kennedy was making this same point more than four decades ago and yet GDP remains the primary macroeconomic variable shaping government policies around the world (with the notable exception of Bhutan!)
The biggest irony of all, is that even Simon Kuznets, (the man who invented GDP) in his very first report to the US Congress in 1934 went on record as saying: "… the welfare of a nation can, therefore, scarcely be inferred from a measure of national income", and then again in 1962: "Distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what."
I don't think Professor Kuznets would have argued in favour of extreme weather events as a means of growing GDP somehow.
7 billion people
[youtube=http://www.youtube.com/watch?v=sc4HxPxNrZ0]
We live in an increasingly full world. During 2011 we pass the 7 billion mark. This means that world population has more than doubled during my lifetime. When J.F. Kennedy was President of the United States, humankind numbered a mere 3 billion. How has it been possible to sustain such burgeoning population growth? Answer: access to fossil fuel energy that has enabled huge increases in productivity. Back in 1800, before the industrial revolution took hold, production could only sustain 1 billion. Is the globe over-populated by the human species? On the face of it — yes, but not necessarily. The real problem is social justice (or the lack thereof) and failure to live within our 'ecological budget constraint'. Based on the current business-as-usual model, we exceeded the carrying capacity of the Earth in the mid-1980s. In a non-polluting, renewable energy-fuelled world based on the principles of intra- and inter-generational equity, a population of 7 billion human beings may be sustainable.
Spending money we don't have, on things we don't need, to create impressions that won't last, on people we don't care about
I've wondered for some time now, why a mainstream political party doesn't use an alternative measure to GDP as a major plank of its political platform (e.g. Genuine Progress Indicator, or Index of Sustainable Economic Welfare). The use of GDP growth as a barometer of societal well-being is entirely inappropriate, a view supported by none other than the principal architect of the concept, Simon Kuznets. Bhutan has its Gross National Happiness but for everyone else, the growth of GDP remains the key macroeconomic indicator. The arguments presented in Tim Jackson's new book Prosperity Without Growth warrant serious consideration. This TED talk draws on the key themes of his book.
The Economist discovers the economic value of biodiversity
Any more of this left-wing, environmentalist, clap-trap and I might just be forced to subscribe to this magazine!
Seriously, though, having managed to get up my nose for several decades now with its doctrinaire free-market editorial, The Economist is actually starting to talk sense, analysing issues such as the plight of the world's forests in a manner that would have been total anathema a few years ago. The narrow, neoclassical approach is nowhere to be seen and instead we are treated to some penetrating insights that are extremely timely from a periodical of such standing, given the looming crisis in global biodiversity and ecosystem services.
Climate change injustice
[youtube=http://www.youtube.com/watch?v=rWfb0VMCQHE&feature=related]
This short video produced by Germanwatch highlights the distributional injustice of climate change. Many of the countries with the smallest ecological footprint are those most likely to be affected by climate change (e.g. rising sea levels in Maldives).
The 'Slumdog' effect
The Slumdog Millionaire movie has certainly caused a stir and not just because it picked up all the gongs on Oscars night. I have not seen it yet, but my lunch partner disclosed, in between mouthfuls of his naan and dahl, that he could not sit through the whole thing because of the poverty porn factor. His complaint is that the portrayal of the slum dwellers is demeaning in that it does not convey the self-respect that these people have. He also rages at the inactivity of the wealthy to right the obvious wrongs in Indian society, given 80 percent of Indians live on less than $2 per day. This sentiment is conveyed in an excellent piece in the International Herald Tribune today by Anand Giridharadas who points out that ' … economic development is not Photoshop. There is a difference between making poverty history and making the mention of poverty history'.
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