Showing posts with label Economy and ecology. Show all posts
Showing posts with label Economy and ecology. Show all posts

Friday, September 30, 2011

A third industrial revolution?

Noted American economist Jeremy Rifkin has some food for thought in his new book on what he calls The Third Industrial revolution. Check out:

'The Third Industrial Revolution is the last of the great Industrial Revolutions and will lay the foundational infrastructure for an emerging collaborative age. The forty year build-out of the TIR infrastructure will create hundreds of thousands of new businesses and hundreds of millions of new jobs...

'In the coming half century, the conventional, centralized business operations of the First and Second Industrial Revolutions will increasingly be subsumed by the distributed business practices of the Third Industrial Revolution; and the traditional, hierarchical organization of economic and political power will give way to lateral power organized nodally across society...

'The Third Industrial Revolution offers the hope that we can arrive at a sustainable post-carbon era by mid-century. We have the science, the technology, and the game plan to make it happen...

'The five pillars of the Third Industrial Revolution are (1) shifting to renewable energy; (2) transforming the building stock of every continent into micro-power plants to collect renewable energies on-site; (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies; (4) using Internet technology to transform the power grid of every continent into an energy-sharing intergrid that acts just like the Internet (when millions of buildings are generating a small amount of energy locally, on-site, they can sell surplus back to the grid and share electricity with their continental neighbors); and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart, continental, interactive power grid.

For more, read on

Thursday, June 9, 2011

Soiled soils

The planet's soils are under greater threat than ever before, at a time when we need to draw on their vital role to support life more than ever, warns an expert from the University of Sheffield in the journal Nature.

In some parts of the world, losses due to erosion are greatly outstripping the natural rate of soil formation; and the intensity of human activity is impacting the ability of soil to produce food, store carbon from the atmosphere, filter contamination from water supplies and maintain necessary biodiversity.

Because of growing demand for food, intensification of agriculture alone will put a huge strain on soils over the next few decades, and climate change adds to the challenge. Not only are nutrients being stripped away, but chemicals ocntinue to be added vigorously.

It becomes evident that what we need are rigorous forecasting methods to quantify and best utilise soil's natural capital, to assess options for maintaining or extending it, and to determine how the declines can be reversed. And we need these things well within a decade, as the team says.

Makes one wonder is there any part of the eco-system we 'wise wise humans' (homo sapiens sapiens) have left intact!

Tuesday, November 9, 2010

Ecological deficit

This year's Human Development Index (HDI) came out last week and it was full of good news. The HDI started out 20 years ago to provide a way of indexing development and progress that gives a fuller picture of human well being than GDP's shallow economic calculations. This year's report celebrates the fact that over the past 40 years “average life expectancy rose from 59 to 70 years, primary school enrollment grew from 55 to 70 percent, and per capita income doubled to more than $10,000.”

The main threat, which haunts the report, is climate change. And it is the poor south that will be affected most.“The main threat to maintaining progress in human development comes from the increasingly evident unsustainability of production and consumption patterns. .... The consequences of environmentally unsustainable production are already visible. Increased exposure to drought, floods and environmental stress is a major impediment to realizing people’s aspirations. .... The continuing reliance on fossil fuels is threatening irreparable damage to our environment and to the human development of future generations.”

It notes how cities will play a significant role, being directly dependent on external supplies of food, potable water, and energy. With over 40 percent reductions in staple grain crops, conflicts will rise. Increasing energy use in cities will aggravate the situation. The US and China are prime examples of how there is no attempts at change.

Reports like the Millenium Ecosystem Assessment show that the capacity of the world's ecosystems to provide key services are in decline. Going into a century of rapid climate change with already depleted ecosystems is a frightening prospect. Can we effect a change in our urban systems to make it less dependent on ecosystems?

Friday, April 23, 2010

Growth unlimited

India’s cities are expanding on a larger scale and at a faster pace than ever before. Worsening urban decay, gridlock and poor quality of life for citizens are foreseen by a new report from the McKinsey Global Institute (MGI)—India’s urban awakening: Building inclusive cities, sustaining economic growth.

The report finds that a lack of effective policies to manage urbanization could jeopardize India’s GDP growth rate. If the country makes and executes the right policy choices, it could boost annual GDP by 1 to 1.5 percentage points, taking the economy close to the double-digit growth it needs to create sufficient jobs for the 270 million people expected to enter the working-age population over the next 20 years.

The report projects that the country’s urban population will soar to 590 million in 2030, from 340 million in 2008. India’s cities could generate 70 percent of the net new jobs created by 2030, produce more than 70 percent of the country’s GDP, and stimulate a near-fourfold increase in per capita income.

In infrastructure, MGI projects that the economy will need 700 million to 900 million square meters of new residential and commercial space a year—equivalent to adding more than two Mumbais or one Chicago. In transportation, India will require 350 to 400 kilometers of new subway lines annually (more than 20 times the subway capacity built over the last decade) and between 19,000 and 25,000 kilometers of roads (nearly equivalent to the amount India has built over the last ten years). Yet India has traditionally underinvested in its cities compared with the countries of other urban centers around the world (exhibit).

A wake-up call? All the above will call for massive energy. Can India do it without new sources? More important will be how we take environmental considerations into account - like water management, air quality, green cover.

Thursday, October 15, 2009

Disruptive innovations

At a recent Clinton Global initiative, participants stressed on the need for disruptive innovations to tackle the many challenges facing the race. Whether it be climate change, depleting resources, energy constraints, incremental or continuous innovation is no more enough, they felt. If talking of energy economy, this means knocking out coal fired plants and replacing them with renewables.

Al Gore spoke of ‘sustainable capitalism’ which would need to include placing an adequate cost on externalities, like emissions generated from burning coal and the byproducts of manufacturing. How can such a capitalism be achieved? Through more private partnerships and more social responsibility built into business models, was the opinion.

All this means the world is moving past the idea of conservation and regulation as the spearheads of the environmental movement. While recycling and reducing waste is still important, it means totally new ways of doing things, conducting business have to emerge. What do you think? Is it possible?

While infrastructure, human capital and financing are crucial, when it comes to energy, what the world needs today is innovation that leaps across boundaries. There is China, which is rushing ahead in solar PV manufacturing, wind farm construction, efficient and electric vehicles, etc.

What is special about China? Dow Chemical CEO Andrew Liveris believes China has got it right by aligning education and workforce training with its national goals. Right back to the root - education. Have we got it right?

Wednesday, October 7, 2009

The new economy?

We apologise if climate change has monopolized our blog quite a bit. It is inevitable because everything we do is linked with how it affects the climate, directly or indirectly. Every task draws up on energy which puffs out carbon into the atmosphere which traps heat and in turn warms the globe. If we are to offset this, we need to spend and since it’s all about cost, it’s time to update the economics of climate change.

That’s what “The Economics of 350,” a new study put out by Economics for Equity and the Environment, a group of climate economists put together by Ecotrust, suggests.

350 ppm is the ambitious target which we have already crossed over but we can stabilize at that if we take certain steps and this can be done at a cost of between 1% and 3% of gross domestic product, says the study.

As the group notes, the unprecedented challenge of global warming is a ‘civilizational challenge’.

The group proposes four organizing principles for a new, pro-environmental economics. These cover, Equal rights to health and environment; Investment, opportunity, and stewardship (as this is also about investment in natural and human assets); Complexity, uncertainty, and the need for precaution; the good life and the limits of efficiency.

‘With well-designed programs and regulations, there is no trade-off between environmental and economic well-being.’ This basic finding needs to be elaborated and widely publicized. Investment should be understood in long-range, socially oriented terms (think of children's education, not market speculation), they say.

‘Our task is to understand the linkages between natural and economic systems, which exhibit complex threshold effects, dangers of irreversible damages, and interactions between global changes and place-based, location-specific effects

‘The theory of public goods is again important to rebuild, since so many things that matter are not individual commodities. It is absurd to try to attach monetary valuations to priceless values, or to view all the multiple facets of life through the distorting lens of the market.’

E3 is seeking to organize economists to engage and work with environmental groups. Towards realizing the objective of building a new economic order.

Wednesday, September 16, 2009

Taxes and human well-being

He has known to be bold. Now we must hand it to French President Sarkozy. He is among very few world leaders to be brave as well. He has begun advocating for robust carbon tax coupled with rebates or tax reductions.

The tax would be initially based on the market price for carbon dioxide emissions permits, which is now euro17 ($24.74) per ton of carbon dioxide. The government expects to raise euro3 billion, which will be entirely returned to households and businesses through a reduction in other taxes or repaid via a "Green Check”.

This will shift the tax burden from other revenue sources to energy derived from fossil fuels in an effort to discourage their use.Gasoline, diesel fuel, coal and natural gas will be subject to the tax, but not electricity.

France is a charter member of the world's largest carbon cap and trade program, the EU ETS. The ETS (some believe it has done a good job, others don’t) is limited in scope to major emitters of carbon such as power plants and industrial facilities. By applying a carbon tax to home heating fuels and transportation fuels, France can price carbon comprehensively across the economy. Boldly going where others have hesitated.

As though that were not enough to qualify, Sarkozy has gone ahead with the reports of a study and called for a more comprehensive view of economic well-being, one that puts human well-being in driver's seat.

U.S. economist Joseph Stiglitz, winner of the 2001 Nobel economics prize and a critic of free-market economists, who co-authored the report, believes: "GDP is an attempt to measure one part of what is going on in our society which is market production. It is what I call GDP fetichism to think success in that part is success for the economy and for society.”

It was Bhutan that started it all with its adoption of GNH or gross national happiness as against the GDP.

How does one measure something as subjective as happiness? By the number of times one has a hearty laugh? By the number of people seeking redress from stress? Interestingly the state of Iowa has struck a double deal in reducing work days from five to four. Travel hours weekly is reduced, and hence energy saved. And everyone is happy with the end result. Do share your thoughts on carbon taxes and GNH.

Wednesday, July 8, 2009

A new index

As the GDP goes up, what does it signify? How does it translate into our lives? Into how many lives, more importantly? Is it time to shift to some other index – like the Happy Planet Index?

The HPI was launched in 2006 as a marked departure from GDP and identified health and a positive experience of life as universal goals, besides natural resources. It combines three targets - high life expectancy, high life satisfaction, and a low ecological footprint. The ultimate efficiency ratio, it takes into consideration carrying capacity of the planet.

The second version has just been released with improved data from 143 countries. Costa Rica is the greenest and happiest country in the world, according to the HPI index.

Unique in the world for having combined its ministries of energy and the environment back in the 1970s, a staggering 99 per cent of its energy comes from renewable sources. In 1997, a carbon tax was introduced on emissions – with the funds gained being used to pay indigenous communities to protect their surrounding forests. Deforestation has been reversed, and forests cover twice as much land as 20 years ago. In 2007, the Costa Rican Government declared that it intended to become carbon neutral by 2021.

The US with its affluent lifestyle figures way below in the index, and that is largely owing to its BIG eco-footprint which requires more than 3 planets to sustain!

HPI is claimed to be a much better way of looking the success of countries than through standard measures of economic growth. The HPI shows, for example, that fast-growing economies such as the US, China and India were all greener and happier 20 years ago than they are today.

The HPI goes to prove that it is possible to live long, happy lives with much smaller ecological footprints than the highest-consuming nations.

In a telling commentary, the report recalls how British economist John Maynard Keynes thought that, by the end of the twentieth century, people would be working two days a week thanks to the great productivity increases he was seeing. He assumed that, rather than producing more to keep everyone in work, we would simply work fewer hours and take the benefits of increasing productivity as increasing leisure time. How could he have known that humanity would choose instead to continue working longer hours so as to produce and consume products that do not enhance our well-being, whilst ravaging our finite and precious natural resources?

Are we simply producing more and more of what we do not need? At the expense of the environment? Care to share your thoughts?

Thursday, June 11, 2009

Fudging accounts?

There is increasing evidence that climate change will affect financial performance of companies. At the World Business Summit in Copenhagen last month, the Climate Disclosure Standards Board (CDSB) announced a draft framework for the inclusion of climate change information in companies' annual reports.

The framework aims to “mainstream” climate change reporting – to recognize the risks and opportunities global warming presents and how corporate strategies are addressing them. The CDSB is a consortium of business and environmental organisations, including among others the Carbon Disclosure Project (CDP), The Climate Group and International Emissions Trading Association.

The reporting framework is now open to public consultation until September with a proposed update to be released in time for the Copenhagen negotiations in December.

Meanwhile, the first of the big banks HSBC which went carbon neutral in 2005 has released its 2008 Sustainability report. Has the move on climate change helped? Yes, through its lending policies where its commitment to the issue was first on the list.

By adopting a framework to move towards a low carbon economy, (even if a bit vague or largely aspirational) by planning climate change related insurance products linked to forest protection, by actively planning to review energy sector policy, it shows big plans.

But actually its carbon footprint has actually increased 44 percent since 2005! So are we seeing more of lip-service than actual translation?

Friday, June 5, 2009

Do we care?

High-rise buildings displace lakes. Malls spread like a virus across the landscape. Forests give way to resorts, farm land and residential layouts. Smog obscures blue skies and we lose touch with our essence… an essence tied to nature. To environment.

What better a way to honour environment day than to pay homage to Thomas Berry, a cultural historian by training and an ecological visionary, who recently passed away. He believed his generation had been "autistic" when it comes to the natural world. ‘Our progress as a civilization has been in direct proportion to our diminishment of the planet's lifesystems.’

We reproduce a few of Berry's thoughts here.

The ideal is to take the greatest possible amount of natural resources, process these resources, put them through the consumer economy as quickly as possible, then on to the waste heap. This we consider as progress—even though the immense accumulation of junk is overwhelming the landscape, saturating the skies, and filling the oceans.

In the process, Berry felt our inner world was affected too. Without the soaring birds, the great forests, the sounds and coloration of the insects, the free-flowing streams, the flowering fields, the sight of the clouds by day and the stars at night, we become impoverished in all that makes us human.

For the first time in history, the human is in the driver's seat, not only of cultural, but also of geological evolution. From biogenetic engineering through massive species extinction, ozone depletion, and climate change, humans are proving their reckless prowess over the unfolding of the planet.

Our ethics have not kept pace with our power. While we have codes and penalties concerning suicide, homicide, and genocide, we have no proscriptions against geocide.

For Berry, authentic progress rests in what he terms "the Great Work," through which we as a species move from being the planet's plunderers to its benefactors. The great work is ultimately the reinvention of the human.

This task will require a major reorientation of the four basic pillars of society—government, religion, the university, and corporations—which must embrace the earth and the universe as their primary educators. Or else we will become more soul-less than we are today.

Can we? Do we care?

Friday, February 20, 2009

Food will get scarce

Up to 25% of world food production could be lost to “environmental breakdowns” by 2050 unless action is taken. Cereal yields worldwide have stagnated, while one-third of these are used as feed for livestock. This figure is expected to rise to 50% by 2050, with environmental degradation and poverty rates increasing.

If you think the Rs 38 per kilo of rice is exorbitant, be ready for more. The 100 year long trend of falling food prices is likely over, with food price rises of 30-50% likely within next few decades. Those living in extreme poverty may end up spending 90% of their income on food.

The report, entitled 'The Environmental Food crises: Environment's role in averting future food crises', has been compiled by a wide group of experts from both within and outside UNEP.

Climate change emerges as one of the key factors that may undermine the chances of feeding over nine billion people by 2050. Increasing water scarcities and a rise and spread of invasive pests such as insects, diseases and weeds - may substantially depress yields in the future.

The melting and disappearing glaciers of the mighty Himalayas, linked to climate change, supply water for irrigation for near half of Asia's cereal production or a quarter of the world production.
Globally, water scarcity may reduce crop yields by up to 12 per cent.

Not to despair, the remedy is as simple as changing the ways in which food is produced, handled and disposed of across the globe- from farm to store and from fridge to landfill. When modified sustainably, this can both feed the world's rising population and help the environmental services that are the foundation of agricultural productivity in the first place, says the report.

A recent report by UNEP and the UN Conference on Trade and Development surveyed 114 small-scale farms in 24 African countries. Yields had more than doubled where organic, or near-organic practices had been used, with the in yield jumping to 128 per cent in east Africa.

The study found that organic practices outperformed traditional methods and chemical-intensive conventional farming and also found strong environmental benefits such as improved soil fertility, better retention of water and resistance to drought.

Impressive moves

Nagpur is taking a lead to become the first solar city in India by 2012. Just launched is an ambitious programme of development of solar cities. The Ministry of New and Renewable Energy proposes to develop 60 such cities during the 11th Plan Period. At least one city in each state to a maximum of five cities in a State will be supported by the Ministry.

The objectives are to meet the peak electricity demand of cities, reduce dependence on fossil fuels and expensive oil and gas for energy and to promote increased use of renewable energy.
Up to 10 per cent of energy consumption of the city will be met through renewable energy and energy efficiency measures. Fifty per cent of the cost will be shared by the Ministry.

The ministry plans to develop two cities as models in this regard, providing Rs 9.5 crore for the same after a master plan is submitted by the applying city. Great!

Going one step ahead, Himachal Pradesh is coming out this March with an environment master plan on climate change towards becoming the country’s first carbon neutral state. Setting up of an environment fund, a voluntary initiative has already helped the government to generate awareness about serious affects of environmental pollution. The drive to undertake an environment audit of all government departments and CFL scheme has invoked a positive response.

Payment for Environment Services(PES), an issue which Himachal Pradesh had raised with the Planning Commission, after its team visited Costa Rica to study the country’s model, has received endorsement from environment experts. The state plans to adopt technological interventions for reduction of Greenhouse gas emissions from sources such as industrial, business, residential, automobiles, energy, landfills and agriculture sectors.

It also aims to mitigate emissions through undertake conservation strategies such as afforestation programmes, promoting use of renewable energy, meeting energy requirement from the hydel power, biomass rather than fossil fuels, recovery of energy from the waste and to prevent change in forest land use, etc.

Impressive. What else can one say? In a nation which has for long been using the excuse of development to delay emission mitigation, such actions are laudable. It raises questions like: why should ecological concerns be seen always as opposing development? Isn’t there some definition of development we need to rework in an economy where people in the BPL levels don’t seem to reduce?

Is it a great achievement that a farmer sports a mobile phone? Ok, he has access to markets but what about access to good hospitals or education? The costs are far too high. Forget the farmer, even the urban middle class is finding the costs of basic essentials prohibitive.

Let us know what you think.

Meanwhile, a recent survey study, by HSBC’s Climate Partnership , has noted that nearly 45% of Indians surveyed view climate change as a higher priority than economic turmoil. However, what is being done is not much. In a report titled, “Green India Standards” published by the Institute of Financial Management and Research, Indian states were evaluated on an Environment Sustainability Index based on performance based indicators covering components such as environmental stress, environmental governance, and population pressure. Overall, only a handful of India’s 28 Indian states achieved a high ESI ranking.

Possibly it is the dual control over some subjects by the state and centre that hampers states from acting in a sustainable manner. Perhaps localized decision may be best as they are more in touch with the pulse of the stakeholders, resources, etc. But if the HSBC survey is anything to go by, it is time our governments woke up to the job.

Do we merely become stragglers in the green movement or take a lead?

Monday, February 16, 2009

The wealth of the planet

Leading economists of the world, including Nicholas Stern, have cautioned against delay in a global redoubling of efforts to cut greenhouse gas emissions to bring it down to 80 percent (of 1990 levels) by 2050. A global fund of $400 billion to be invested in low carbon technology can not only tackle climate change, but also help tide over the economic crisis and create jobs.

Looks like even the giant in a hurry to open coal based thermal plants, China, is considering the creation of Low Carbon Zones (LCZs) as against special economic zones (SEZs). The LCZs would aim to stimulate transformational regional political leadership, endorsed at the national level, to create an enabling environment for large-scale innovative low carbon private and public investment. They could pioneer approaches to decarbonisation, compatible with Chinese institutions and development approaches. A pilot has been planned for China’s heavy industrial province of Jilin.

Outlined in a new report, is another concept China is looking at - developing low carbon cities. The program aims to recruit, motivate, and engage 20 Chinese cities in a five-year campaign to transform and accelerate the local market for energy efficiency and renewable energy technologies. MOUs have already been signed with the cities of Guiyang and Dezhou.

For all the brickbats aimed at China, its emissions that have overtaken those by the US (not per capita wise), and its pollution, does look like the rising giant is softening the blows to the climate in some ways.

Coming back to the economy, Sir David King, former UK scientific adviser, and presently director of the Smith School of Enterprise and the Environment at Oxford University, in a lecture to the UK government also advised politicians not to allow the financial crisis to distract them from tackling climate change.

King noted that with growing population and dwindling resources, fundamental changes to the global economy and society were necessary. “Consumerism has been a wonderful model for growing up economies in the 20th century. Is that model fit for purpose in the 21st century, when resource shortage is our biggest challenge?”

Adam Smith’s The Wealth of Nations had proposed that everyone be free – free of bondage and of political, economic and regulatory, free in choice of , and free to own and exchange the products of that labour (“free trade”). “Little else is requisite to carry a state to the highest degree of opulence but peace, easy taxes and a tolerable administration of justice.”

But has this opulence been achieved by everyone??

So, is it time to change the way we address economic growth? Is it necessary to cry a halt to unlimited growth? What better way than reigning in unlimited wants?

As ecological economist Herman Daly puts it: When you have to classify the very capacity of the Earth to support life as an “externality”, then it is time to rethink your theory.

Any theories, anyone?

Thursday, October 16, 2008

The three Fs!

Funny. But there seems to be some kind of comradeship in the world of words too, going by the crises we are seeing. These are in the areas of - food, fuel and finance! Which came first, is a tough question. But what is welcome is a recognition of the linked nature of the three fs.

A Green Economy Initiative to be spearheaded by the United Nations Environment Programme (UNEP) will be launched soon in London. It aims to create millions of jobs, revive the world economy, slash poverty and avert environmental disaster, as financial markets plunge in the west.

The new multimillion dollar initiative – which is being already funded by the German and Norwegian Governments and the European Commission – arises out of a study commissioned by world leaders at the 2006 G8 summit into the economic value of ecosystems. It argues that the world is caught up in not one, but three interlinked crises, with the food and fuel crunches accompanying and intensifying the financial one.

Soaring prices of grain and oil, it stresses, have stemmed from outdated economic priorities that have concentrated on short term exploitation of the world's resources, without considering how they can be used to sustain prosperity in the long term. Over the last quarter of a century, says UNEP, world growth has doubled, but 60 per cent of the natural resources that provide food, water, energy and clean air have been seriously degraded.

Achim Steiner, UNEP's Executive Director, adds that new research shows that every year, for example the felling of forests deprives the world of over $2.5 trillion worth of such services in supplying water, generating rainfall, stopping soil erosion, cleaning the air and reducing global warming . By comparison, he points out, the global financial crisis is so far estimated to have cost the world the smaller one-off sum of $1.5 trillion.

The economy driven so far by finance capital will now have to shift gears to one driven by natural resource capital, says UNEP.

The initiative will be launched in London on October 22nd, with the announcement of three projects, concentrating on how investing in the world's natural systems, in renewable energy and in other green technologies would stimulate growth and provide jobs.

Finally, there seems to be global acknowledgement of the crucial role played by eco-resources in the well being of people and nations. While organisations have taken admirable lead to show the way, a la Google, individuals too have not lagged behind. Blogs and new websites show a new level of interest in 'saving the planet'.

Innovative ideas have not only seen the development of PV paints on steel that replicate photosynthesis, or inflatable floating ballons that concentrate sunlight onto the PV panel, harnessing tidal power, and geothermal power; but also show up in awareness portals like http://www.350.org/ that is whipping up energy and enthusiasm through arts, dance and music to send across the message of global warming. Participants are from across the world.

Which brings us to yet another welcome sign, that of global partnerships and cooperation. Perhaps it is a recognition of scarce resources left, or the urgency to act together, but businesses and people are getting together on their acts. There is after all more sense in pooling up resources and knowledge. Patents are another thing but over and above them is the need being felt to share expertise and share profits.

It took a heated planet to get that message across.