The dilemma posed to humanity is summed up in these two New Year reports in the New York Times: the imperative to face the threats posed by the damage humanity is doing to the ecosphere; the damage to the "99 per cent" inflicted by the "1 per cent"; and the damage done by the utopian theory that masks their greed.  [AUE]

Switching to a sustainable - steady-state - economy ought to offer activity to everyone, since that is the size of the task, but the 'one percent's addiction to obscene levels of wealth - and their grip on the levers of power - will negate any such switchover.

A Tempestuous Year

Is there a connection between last year’s extreme weather events and global warming?

The answers might be a lot clearer if the Republicans in Congress were less hostile to climate change research.

A typical year in the United States features three or four weather disasters costing more than $1 billion.

In 2009 there were nine.

Last year brought a dozen, at a cost of $52 billion, making it the most extreme year for weather since accurate record keeping began in the 19th century.

There was drought in the Southwest while Hurricane Irene and Tropical Storm Lee destroyed homes and rerouted rivers in the Northeast.

The most severe tornado ever recorded, and the most tornadoes recorded in a single month, flailed the Southeast. Floods drowned the Midwest.

Climate researchers have been cautious about linking individual events to rising global temperatures.

Yet the evidence tells us the earth is warming, largely as a result of the burning of fossil fuels and other human activity.

And many of last year’s extreme weather events were consistent with the effects of climate change.

A warming atmosphere will hold more water, supplying the fuel for storms; steadily rising temperatures are likely to promote droughts.

Climate is a complex subject, and definitive answers will require more study.

But as Justin Gillis recently noted in The Times, the political climate for that is not favorable.

House Republicans, many of whom reject the scientific consensus about the human causes of global warming, took aim at almost every program that had to do with global warming.

Senate negotiators managed to protect most in the 2012 budget, but the National Oceanic and Atmospheric Administration — the hub of much of the government’s research into the effects of climate change on weather — took a big hit.

NYT  01 Jan 2012

Newt Gingrich Kills Climate Science Chapter ...

I Just Got Here, but I Know Trouble When I See It

On the deficit, the big worry isn’t the current shortfall, which is projected to decline sharply as the economy recovers. Rather, it’s the long-run outlook.

Over the next 20 to 30 years, rising health care costs and the retirement of the baby boomers are projected to cause deficits that make the current one look puny.

At the rate we’re going, the United States would almost surely default on its debt one day.

And like the costs of maintaining a home, the costs of dealing with our budget problems will only grow if we wait ...

But we can’t focus on the deficit alone.

Persistent unemployment is destroying the lives and wasting the talents of more than 13 million Americans.

Worse, the longer that people remain out of work, the more likely they are to suffer a permanent loss of skills and withdraw from the labor force ...

NYT  01 Jan 2012    

World's largest solar plant powers up

Localise, Localise, Localise

Rebooting for the Global Economy

The UK and the eurozone in the shifting global economy

In which blogger PhilipD explicates the problems posed by LSE professor Danny Quah's prescription for growth

We can't mistake a short-term boom fuelled by exigent government actions for sustained long-term growth ...

How would I propose to change matters?

My suggestions at the event were general and therefore impractical. But here they are again:

• Reboot the UK economy: Take the pain and turn around to engage fully with the emerging economies; do business with them as economic partner — no more, no less. The emerging economies are now the world's engine of growth: Deal with it.

• Unleash our universities and other thoughtful, creative industries. This is NOT to raise government spending, but just to free up extant restrictions on their operations. UK higher education is hugely in demand by the emerging economies. If there's anything that's going to help re-balance the global economy, this is it.

• Throw out long-standing aesthetics and principles – they're also called prejudices. Become enamoured of what works — whether it's guided capitalism under a bit of state control or anything else we previously thought completely nuts (ie outside the Washington consensus). Celebrate the virtues of working hard, raising productivity, saving for the future – not revile them as many do today for Germany or used to do most obviously recently only for China (and yet might come back to doing so again soon).

PhilipD 13 January 2012 5:19PM

Reboot the UK economy: Take the pain and turn around to engage fully with the emerging economies; do business with them as economic partner — no more, no less. The emerging economies are now the world's engine of growth: Deal with it.

The problem as I see it with this analysis and recommended solution is that it is failing to see the reasons for the 'developing world' being the 'engine of growth'.

Historically, there are only two ways in which countries can achieve very high levels of growth over a significant period of time:

1. Strike oil.

2. Start from a low base, then adopt the technology and know-how of more advanced countries in order to catch up.

Currently, China and India are doing #2. This inevitably means that growth will slow down as they use up the low hanging fruit of borrowed technology, and start having to develop their own ways of achieving productivity growth.

South Korea and Taiwan succeeded in this (as did many countries in the past, including the USA which started slow before accellerating past the first adopters of the industrial revolution). But even in doing so, their growth rates have significantly slowed down - in fact, more or less to the rates of the slow growing countries - otherwise known as the technologically advanced nations.

Japan and Ireland, to pick just two, showed the problems that can arise, as they confused all growth with productivity growth, and so blythly ignored bubbles that did enormous damage to their economies.

All the evidence suggests that China in particular, and probably India too, are likely to fall into the same trap.

As for the other fast growing countries, those like Brazil are heavily dependent on commodity prices staying high. They might... or they might not.

Its very easy, when looking at the current situation, to see being locked into exporting to 'slow growing' economies like Europe and the US as a problem.

But for the foreseeable future, these are the biggest economies in the world and will likely remain so. The slow growth is as much caused by the necessity of these countries to engage in the hard work of creating new forms of productivity and innovatory improvements, which is inevitably much harder than simply copying other more advanced countries.

For all the praise given to Germany recently, we forget that as recently as 5 years or so ago everyone was criticizing it for its slow growth and scoleric political system, while the anglo saxon system was supposedly wonderfully dynamic.

Before that, everyone was in thrall to the supposedly unbeatable Japanese model. And so on and so forth.

The lesson therefore, is that any policy recommendations that relies on leaping on the current world economic star horse is likely to fail.

For the UK (or the rest of Europe for that matter) to succeed, a number of things need to be recognised:

1. High sustainable economic growth over a long period is not possible for advanced economies. The pie is largely fixed, and policy should focus on making the best social use of this pie.

2. The economic growth that will occur will only occur through technological innovation and its real world applications. The current financial system has proven useless at funding this. You either fundamentally reform the financial system, or the government should lead directly on this. Anything else is BS.

3. It may not appear in economics textbooks, but really, the laws of thermodynamics apply to economies too.

There is simply not enough available energy in the world for the population of the planet to achieve western living standards.

As a matter of urgency, there must be an absolute focus on making more with less energy. The countries that lead on this will lead the world.

Gdn  13 Jan 2012

Eurozone crisis: thanks to globalisation, we really are all in it together

Goldman's analysts identify two other ways in which the crisis that has spiralled out from Greece and Portugal to plunge the German economy into the red in the final quarter of 2011 will hit scores of other countries.

First, "deleveraging" – the process of struggling banks withdrawing assets to get their balance sheets back in shape – will squeeze the flow of credit and make it harder for businesses in many emerging countries to raise capital from foreign investors ...

Goldman identifies a disturbingly long list of economies that could be in the firing line.

Turkey, Colombia, Hong Kong, Peru, Indonesia, Russia and Poland ... may now be heavily exposed to the sharp change in mood in Brussels and beyond ...

Gdn  12 Jan 2012    A free market train wreck    Global Risks 2012    The Merkozy Plan

Alternatives to fossil fuels

French Rating Cut; More Debt Downgrades Are Expected

Eurozone thrown into new crisis as France loses AAA credit rating

Eurozone's Friday the 13th

High Speed Rail and the End of Growth

Given the time scale suggested for the completion of the London-Birmingham leg of this project, it's essential to examine it against ...

• the 'Branch Office Britain' test;   [BOB]
• the climate change-fossil fuel question, and specifically the availability of 'green' electricity to power the trains;    [AtFF]
• the impact of Peak Oil, and the likely imperative to localise the economy;    [PO]
• leading to the 'could-the-money-be-better-spent-on-other-projects' question.

It's unlikely that any of these questions have been uppermost in the minds of those - whether in the previous government, or the coalition - planning this huge project.

In particular, it's indicative of the bankruptcy of forward thinking on the part of the current generation of politicians, that concurrently with the announcement of the HS2 project, Ed ...

Miliband ... will set out three ways to achieve fairness in more austere times:

• Reforming the economy to support long-term wealth creation with rewards fairly shared.

• Tackling vested interests that squeeze the living standards of families across the country.

• Making choices that favour the "hardworking majority".

[Gdn]

This all seems very distant from the-then Secretary of State at the Department of Energy and Climate Change who advocated ...

A global campaign in the style of Make Poverty History is needed to pressure political leaders into sealing a treaty on tackling climate change, Ed Miliband, the environment secretary, has said.

Miliband told the Guardian a "popular mobilisation" was needed to help politicians push through an agreement to limit carbon emissions in the face of concerns about the economy.

"There will be some people saying 'we can't go ahead with an agreement on climate change, it's not the biggest priority'. And, therefore, what you need is countervailing forces. Some of those countervailing forces come from popular mobilisation." ...

Guardian 08 December 2008

If Labour is not assessing policies in the light of climate change and resource depletion, it ought, nevertheless, to be answering the question: what would a reformed economy "with rewards fairly shared" look like, and is it possible to superimpose such egalitarianism on to globalised corporate capital?

It's clear that HS2 is based on the belief that the current growth-based global-free-market economy is the only show on the planet, and concerns about the climate and resource depletion are very firmly on the back-burner.

The EU's Emissions Trading System Isn't Working

Emissions trading, the European Union hoped, would limit the release of harmful greenhouse gases. But it isn't working.

The price for emissions certificates has plunged, a development that is actually making coal more attractive than renewable energy ...

Der Spiegel     Carbon Trading    Fire and Floods

Leak exposes how Heartland Institute works to undermine climate science

The Heartland Institute, founded in 1984, has built a reputation over the years for providing a forum for climate change sceptics.

But it is especially known for hosting a series of lavish conferences of climate science doubters at expensive hotels at New York's Time Square as well as in Washington DC.

If authentic the documents provide an intriguing glimpse at the fundraising and political priorities of one of the most powerful and vocal groups working to discredit the established science on climate change and so block any chance of policies to reduce global warming pollution.

"It's a rare glimpse behind the wall of a key climate denial organisation," Kert Davies, director of research for Greenpeace, said in a telephone interview.

"It's more than just a gotcha to have these documents. It shows there is a co-ordinated effort to have an alternative reality on the climate science in order to have an impact on the policy." ...

Gdn  15 Feb 2012    Corporate Sociopathy Log    Fire and Floods

Why the energy industry is so invested in climate change denial

Climate change scepticism

Center on Climate and Environmental Policy

Heartland Institute

The commodity price revolution

The vital physical ingredients of life – commodities such as iron, wheat, sugar and zinc – are now two and a half times as expensive, on average, as they were at the turn of the century, and that's excluding the impact of inflation ...

The rapid expansion in the global population and the phenomenal rise of emerging markets such as China and India mean there are now far more people who can afford to buy non-essential items – as well as more people to buy the basics.

At the top end of the wealth league, emerging market growth has created a new generation of billionaires, while growing income disparity in the West means the rich, at least, are getting richer.

The growth in the super-wealthy is increasing demand for exotic items, thereby pushing up their prices.

And on the supply side, much of the "low-hanging fruit" in the resources world has long been plucked, forcing miners and energy companies to seek out ever more remote supplies, such as oil contained in tar sands, under deep water, or around the Arctic.

So, while resources are not yet running out, they are becoming more expensive – and more environmentally hazardous – to "harvest". As a result, oil now costs twice as much to extract as it did a decade ago.

Unfortunately, things are only going to get worse, because the trends that have created the commodities boom are accelerating ...

Ind  11 Feb 2012    Eating the Future Log    Last Nation Standing

A Hole in the World

Compare and Contrast

QE has one purpose only: it enables the coalition to go on borrowing money at low rates, so as to retain Britain's AAA status.

Fitch has been well fooled by this tactic since it enables the bankers' lackeys in the coalition to pay lip service to rebalancing the British economy, while actually doing nothing.

The proposal to use the money to boost the green economy would, on the other hand, create jobs and grow tax returns, which would also have the merit of reducing government borrowing.

The best use of £50bn QE? Bypass the banks and go direct to green projects

The central banks' focus on entrusting banks to expand the money supply is standard practice. But it hardly makes sense at a time when the very problem is stagnating bank credit.

And longer term, we need to challenge the virtual monopoly we have allowed the private sector banks to exercise over the creation of credit.

Measures to increase bank credit need to be stepped up. But in the meantime, the banking system needs to be circumvented.

The Bank has a long history of lending directly to the economy, not just to banks or the government.

It needs to expand the range of assets and investments it undertakes.

For example, it could purchase solar panel installations for the nation, with newly created money.

This would be highly productive, hence not inflationary, creating thousands of jobs, reducing electricity bills, and cutting climate emissions.

There are many other options, including funding green R&D, nationwide broadband, Bank of England cycle paths in every city – you name it ...

Gdn  10 Feb 2012

Bank of England's £50bn QE puts Britain in 'better position than Germany'

Fitch said the additional £50bn of gilt purchases planned by the Bank's Monetary Policy Committee would "significantly reduce" the UK's need to tap the private sector to fund its budget deficit ...

Fitch said: "The UK's deficit is larger than both France and Germany; however the maturity profile of the debt means that the UK's borrowing requirement in 2012 is less than that of France ...

Tel  10 Feb 2012    A free market train wreck    Alternatives to Borrowing    Green Investment Bank    
Is the coalition eco-friendly?    QE    Whither Britain? Log

Pensioners are paying the price for Sir Mervyn’s 'funny money’

What quantitative easing means for annuities

Davos guide: what you need to know about the World Economic Forum

The agenda is a full one, with the mood one of caution and some trepidation. Slowing growth, financial fragility, governments teetering on the brink of insolvency and default, and clear signs of a public backlash against the excesses of the rich and powerful: all have created a sombre backdrop to the invitation-only affair ...

GreatGrandDad
22 January 2012 10:06AM

D is for Denial in Davos.

No way will they face up to the fundamental fact that the whole of modern industrialism, and the capitalism invented to serve it, and the consumerism which depends on it and which it depends on was the result of outpourings of easily-won energy from within Earth, and that its 'growth' is now of the cancerous sort.

Of course dystopia will be the result.

Countries (particularly Britain) that have not maintained a strong agrarian (or 'peasant') sector, or cannot quickly re-develop one, are faced with socially disruptive de-development.

But those who can afford Davos will be the last to face up to it.

Even though properly-faced up to it is no bad thing.

It is downright daft to have one person overworked and stressed out, with another completely out of work but stressed out by searching for a non-existent job.

Both should be on a three-day week and each should be able have a productive allotment.

Expect a clamour for job-sharing----but not for it to emanate from Davos

Gdn  22 Jan 2012    Global Risks 2012    W.E.F.

Thames Estuary airport plans to be examined

The government is to hold a formal consultation on UK aviation - including controversial plans for a new airport in the Thames Estuary ...

Passenger demand for London's airports is forecast to increase from 140 million a year in 2010 to 400 million passengers a year by 2050, according to a previous report by the Greater London Authority ...

Mr (Boris) Johnson ... told BBC Radio 4's Today programme there would be plenty of sovereign wealth funds willing to invest in the project.

"The difficulty would not be the financing of the airport per se... the difficulty obviously would be in the infrastructure, connectivity between the airport and central London, and that's why the consultation is essential," he said.

"We can't go on expecting Britain to compete with France, Germany and other European countries when we simply can't supply the flights to these growth destinations - China, Latin America.

"We are being badly left behind." ...

BBC NEWS  18 Jan 2012    Aviation    Eating the Future Log    

Last Nation Standing     Peak Oil

'Boris Island' airport plan grounded

Greenpeace urges government to halt 'reckless' Arctic oil rush

The Peak of the Oil Age

Peak oil alarm revealed by secret official talks

We must end our oil dependency

Many Americans gave up hope last year

Joseph Stiglitz summarises what needs to be done, and why it won't happen ...

... long-term problems – including climate change and other environmental threats, and increasing inequality in most countries around the world – have not gone away.

Some have grown more severe. For example, high unemployment has depressed wages and increased poverty.

The good news is that addressing these long-term problems would actually help to solve the short-term problems.

Increased investment to retro-fit the economy for global warming would help to stimulate economic activity, growth, and job creation.

More progressive taxation, in effect redistributing income from the top to the middle and bottom, would simultaneously reduce inequality and increase employment by boosting total demand.

Higher taxes at the top could generate revenues to finance needed public investment, and to provide some social protection for those at the bottom, including the unemployed ...

The worry, however, is that politics and ideology on both sides of the Atlantic, but especially in the US, will not allow any of this to occur ...

Gdn  13 Jan 2012    A free market train wreck    Global Risks 2012

Cutting the Deficit Comes First    Last Nation Standing

New green alliance in savage attack on George Osborne

Osborne's anti-green agenda splits Coalition

Osborne's Goldfinger killing attempts to be "greenest government ever"

A global energy war looms

World oil supplies are set to run out faster than expected

"The World in 2050"

HSBC's very own astrologer - oops, sorry, economist - Karen Ward has been reading the entrails

Britain set to outgrow even the mighty Germany

The Torygraph's Jeremy Warner is in raptures ...

A new report from HSBC, "The World in 2050", an ambitious attempt to forecast how national economies might look by the middle of the century, suggests that it is very much the latter.

If HSBC is right, the UK's position as the world's sixth largest economy is secure, at least for the next 38 years.

What's more, the gap with the next one up, Germany, will narrow quite considerably.

Indeed, on HSBC's numbers, the difference by 2050 is so marginal that Britain may by then be the largest economy in Europe ...

Tel  11 Jan 2012

How the world's economies will rank in 2050 – if the environment doesn't collapse first

Larry Elliott, on the other hand, is less optimistic ...

These are, of course, only projections based on current income per capita, rule of law, democracy, education levels and demographic change.

"We assume," Ward admits "that policymakers will continue to make progress in addressing economic flaws and that they avoid wars and remain open to global trade and capital."

While the HSBC economist freely accepts that some of her assumptions might not prove to be accurate, it might be worth tossing a couple of other assumptions into the mix.

Global growth on this scale is going to require a lot of fuel, and it is going to be one heck of a challenge to find alternative sources of energy as supplies of fossil fuels are used up.

And given the pressures on the environment, does this little planet of ours have the carrying capacity to cope?

Gdn  11 Jan 2012    Global Risks 2012

WEF warns of economic turmoil and social upheaval

World's largest solar plant powers up

Spanish venture is as big as 210 football pitches and has 600,000 mirrors. But there's a dark side ...

When Rainer Kistner, Andasol's director, talks about business prospects, he can find little cause for celebration.

The source of his woes are the so-called feed-in tariffs, the indirect government subsidy which acts as the financial lifeblood for renewable energy projects.

They were slashed by half last week in the UK, and, Kistner fears, they face equally dismal prospects in Spain, too.

"In the future, we know that tariffs will go down. Dramatically," Kistner gloomily predicts. "It cannot affect existing power plants" – such as Andasol – "but the government has to give some sort of guarantee to the investors. It can't say it'll pay so many euros per kilowatt hour... for the next 25 years and two years later say 'Sorry, but we'll give you only half of this'."

Spanish and UK solar energy are not alone in facing an imminent crisis.

Globally, renewable energy is on the retreat, to the point where last month the Ernst & Young accountancy firm warned that, should the eurozone debt crisis worsen, a climate funding gap of $45bn (£29bn) worldwide could emerge by 2015.

Ind  01 Jan 2012    Alternatives to Fossil Fuels

Trashing ... the environment

Ministers feel the heat over solar energy cuts

Last chance to save the solar industry

Solar Power

UK manufacturing faces a long march to rebalance economy

'Greening' the economy? Forget it: growth is in aviation and vehicles ...

Manufacturing will be an economic and emotional totem for British business this year ...

The drive to rebalance the economy – three-quarters of Britain's GDP is dependent on services such as advertising and retail – has widespread support ...

One manufacturing sector guaranteed to have a strong year is automotives, Britain's biggest export market.

The Society of Motor Manufacturers and Traders says 1.5m cars will be built in Britain this year, up from 1.4m in 2011.

This is good news for exports because eight out of ten of those vehicles will be sold abroad.

Paul Everitt, SMMT chief executive, says he expects production to increase, even against the backdrop of a faltering eurozone ...

Obs  01 Jan 2012    A free market train wreck    

Why Britain should think about doing things the German way

Manufacturing sector

Are we really heading for a second Great Depression?

Doomsday

It is not difficult to conjure up doomsday scenarios. Here are just three:

First, the global financial system is exposed as a giant pyramid selling scheme – piles of dodgy loans leveraged up against inadequate capital base.

The house of cards collapses and the global economy implodes.

Secondly the global economy is panning out the way Marx said it would, in a race to the bottom as the owners of capital look for ever-cheaper sources of labour to prevent profits falling, leading eventually to class war.

And thirdly, the stresses and strains in the global economy are symptoms of a planet operating well beyond its carrying capacity.

Environmental Armageddon awaits.

Were any of these dystopian visions of the future to come to pass, they would make the 1930s seem pretty benign by comparison ...

kasa
16 December 2011 12:56PM

The third point about Environmental Armageddon is crucial although this term is inappropriate to the more gradual descent for humanity into an environmentally disfunctioning world.

The Club of Rome's report back in the seventies on the limits of growth should have marked the beginning of a transition away from the current economic model and calculation of econmic growth.

It didn´t but today it is very apparent that our current model is practically obselete.

The idea that we can reactivate the world economy by yet more credit and consumption seems increasingly absurd.

The doctrine inherent in the current economic crisis of easy borrowing of future wealth to maintain excessive levels of consumption in the present is parallelled in our attitude and behaviour towards the natural world and when that bubble bursts there will be no bailouts or sovereign debt plan to prop up the global ecosystem.

Gdn  16 Dec 2011    Global Risks 2012

The Club of Rome

Job Losses Over Drilling Ban Fail to Materialize

"Global deepwater oil production is expected to double by 2030"

Deepwater oil drilling has played an increasingly important role in world energy markets in recent years, and that has not changed after several accidents in the waters of Australia, Britain, Mexico and the United States.

Since 2006, nearly half the total oil and gas reserves added worldwide have been in deepwater areas.

Six million barrels of oil a day, or 7 percent of total global production, are now produced in deepwater areas.

Global deepwater oil production is expected to double by 2030.

With the world becoming increasingly dependent on deepwater oil supplies, the BP spill has so far had a very limited effect on drilling around the world.

Britain has stepped up inspections of offshore rigs. Brazil has announced a safety review that will take a year to complete before it makes any regulatory changes related to its fast-growing offshore drilling industry. Angola has increased inspections.

But there are few signs of any slowdown in drilling.

In Norway, which already has strong regulations, the BP accident at first shook the industry.

An auction of about 100 offshore lots was initially postponed, but in the end, only six lots in environmentally sensitive areas were kept off limits.

In Nigeria and Ghana, some government officials have expressed caution about deepwater drilling, but there have been no significant delays ...

NYT  24 Aug 2010    Peak Oil

Confronting Collapse