It's dark in Swtizerland this week, as the Davos World Economic Forum gets ready to begin this week amid a tumultuous past couple of days for the global economy. However, as Klaus Schwab's article in "Foreign Affairs" this month demonstrates, the future is bright for those wanting to see great things from the world's corporations (http://www.foreignaffairs.org/20080101faessay87108/klaus-schwab/global-corporate-citizenship.html).
Schwab notes that the time is now for the globe's largest companies to become better global citizens, as business leaders, government policymakers, activists and individuals the world over struggle to address social, environmental and economic issues ranging from climate change to poverty. Luckily, the author also notes, corporations seem to be "waking up" to their responsibilities as movers and shakers throughout the world. Just as governments provided for their people in past centuries, so too will businesses offer helping hands in the coming years.
For the latter half of the twentieth century, capitalism - in all its forms, good and bad - was the West's weapon against an expansionist and Communist Soviet Union. Capitalism "won" this duel with the fall of the Berlin Wall and disintegration of the Soviet Union. Afterwards, though, began a discourse about the best and most effective form of capitalism - and this debate rages on today still. Corporations have started to realize over the past couple of years that they must be more responsible for global ills like global warming and poverty, more responsive to the public's demands, and more proactive in both discourse and action. Fortunately, both I and Schwab think that corporations are doing a better job at all of those things - but overall the corporate community still has a long way to go.
Take climate change, for example. Although major financial institutions like HSBC, Deutsche Bank and Citigroup have taken great strides in decreasing their environmental and atmospheric impacts, they could always do more - screening all investments, for instance, to ensure that they have a small (if any) impact on the environment and global greenhouse gas levels. Shell and BP have begun to diversify their business models to become "energy" companies rather than "oil" companies. While the world is benefitting from these companies' influx of funding and technological leadership to the alternative energy world, their core business is still derived from finding, extracting, refining and distributing carbon-intensive products.
With all of these "good news" stories coming from corporations, all could still do more. I think both Schwab and I would agree corporations are heading down the right path, and that more remains to be done. So even as Davos opens with a bit of a gloom, hopefully Schwab will be able to see the increasingly-intense light coming from the global corporate world.
-M.
Wednesday, January 23, 2008
Tuesday, January 22, 2008
Good from a Bad: An Economic Wake-Up Call?
So, the U.S. economy is slowing down. Big surprise - both Merril Lynch and Goldman Sachs announced months ago that they believed there was at least a good chance the United States was heading to a recession. But when the Fed cut interested rates unexpectedly today by 3/4 of a percentage point - in response to rapidly declining Asian and European indexes yesterday, when America was enjoying a holiday - it signaled panic (and not confidence) to investors, who proceeded to urge even the U.S. stock exchanges down quite a bit.
While economic recessions are never a good thing - unemployment increases, tighter spending, decreased loans from banks - perhaps Americans needed an economic shock to their system to help them get their consumption in order. A couple relatively "good" things that could arise from an economic slowdown:
1. Tighter personal budgets.
Americans are notorious overconsumers - driving their kids three blocks to school rather than walking them there, driving individually to work rather than carpooling, building and living in ill-designed and poorly-insulated homes - and perhaps this will force people to realize how much "waste" is in their budgets. While I certainly enjoy my high quality of life, I have realized over the past several months how wasteful I truly could be at times, and I know that when I move back to the U.S. (whenever that happens), I will bring back some beneficial European lifestyle habits.
2. Higher energy efficiency.
I am convinced that America's contribution to global warming can be reduced most significantly and in the cheapest way possible by decreasing our demand for energy. By spending a little bit of savings, Americans can improve their home insulation, install more efficient hot water heaters, light bulbs and appliances, and fix up leaky HVAC units - and save FAR MORE MONEY in the long term with drastically reduced utility bills. Also, by adjusting their behaviors (maybe turning off the air conditioning in the summers during the day, when one is at work and not at home), Americans can also save money and energy. Perhaps this will be a positive byproduct from an otherwise negative economic recession.
3. Increased government spending on alternative energy research, design, development and implementation.
Smart stimulus to the economy (read: spending from or incentives offered by the government to help the private sector maintain employment levels and incomes) can be the best resolution to an impending recession. Spending money on enhancing our deployment of renewable energy sources - as well as developing cutting edge technologies - could help pull us out of this potentially-upcoming recession. It would also train a new generation of American children in science, math, engineering and technology - skills we are sorely lacking when compared to the rest of the world. It would also diversify our energy portfolio, which should be a major strategic goal (just as a diversified financial portfolio insulates an investor from major losses, so too does a diversified energy portfolio insulate an economy from commodity-based price shocks). It would also allow us to decrease our dependence on oil imports (which, admittedly, will be around for awhile until we revamp our transportation sector to utilize hydrogen), which is a political "hot topic" these days.
With that said, recessions are not fun. They are difficult. Life becomes comparatively "harder." But, if we channel the increased efficiencies and the thriftiness that is bound to occur into long-lasting habits, I think our economy - and our environment - will strongly benefit.
-M.
While economic recessions are never a good thing - unemployment increases, tighter spending, decreased loans from banks - perhaps Americans needed an economic shock to their system to help them get their consumption in order. A couple relatively "good" things that could arise from an economic slowdown:
1. Tighter personal budgets.
Americans are notorious overconsumers - driving their kids three blocks to school rather than walking them there, driving individually to work rather than carpooling, building and living in ill-designed and poorly-insulated homes - and perhaps this will force people to realize how much "waste" is in their budgets. While I certainly enjoy my high quality of life, I have realized over the past several months how wasteful I truly could be at times, and I know that when I move back to the U.S. (whenever that happens), I will bring back some beneficial European lifestyle habits.
2. Higher energy efficiency.
I am convinced that America's contribution to global warming can be reduced most significantly and in the cheapest way possible by decreasing our demand for energy. By spending a little bit of savings, Americans can improve their home insulation, install more efficient hot water heaters, light bulbs and appliances, and fix up leaky HVAC units - and save FAR MORE MONEY in the long term with drastically reduced utility bills. Also, by adjusting their behaviors (maybe turning off the air conditioning in the summers during the day, when one is at work and not at home), Americans can also save money and energy. Perhaps this will be a positive byproduct from an otherwise negative economic recession.
3. Increased government spending on alternative energy research, design, development and implementation.
Smart stimulus to the economy (read: spending from or incentives offered by the government to help the private sector maintain employment levels and incomes) can be the best resolution to an impending recession. Spending money on enhancing our deployment of renewable energy sources - as well as developing cutting edge technologies - could help pull us out of this potentially-upcoming recession. It would also train a new generation of American children in science, math, engineering and technology - skills we are sorely lacking when compared to the rest of the world. It would also diversify our energy portfolio, which should be a major strategic goal (just as a diversified financial portfolio insulates an investor from major losses, so too does a diversified energy portfolio insulate an economy from commodity-based price shocks). It would also allow us to decrease our dependence on oil imports (which, admittedly, will be around for awhile until we revamp our transportation sector to utilize hydrogen), which is a political "hot topic" these days.
With that said, recessions are not fun. They are difficult. Life becomes comparatively "harder." But, if we channel the increased efficiencies and the thriftiness that is bound to occur into long-lasting habits, I think our economy - and our environment - will strongly benefit.
-M.
Monday, January 21, 2008
Peak Oil, Climate Conferences and Supply Chains – OH MY!
BP’s Peak Oil Pronouncement
The world’s third largest publicly-traded oil company, BP, announced last week that global “oil demand to peak before supply” (http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjgxMDg). Essentially, the company claims that diversified energy sources, environmental regulation, and soaring oil prices will cause demand to decrease, causing a peak in production that could possibly occur in the near future. The company representative, Special Economic Advisor Peter Davies, noted that this peak will occur because of a demand-side slowdown and not a supply-side lack.
Of course BP says that.
Shell has downgraded its proven reserves by several billion barrels of oil over five announcements throughout the past several years (see a good summary article from 2005 here from The Guardian in the UK: http://www.guardian.co.uk/business/2005/feb/04/oilandpetrol.news). As a result, the company took a huge reputation hit with consumers and several heads rolled, including those of the CEO, chief exploration boss and finance director. Although its share prices have shown strong growth in the past couple of years, that is attributable more to the rising price of oil. As oil gets more and more expensive – and production costs drop as technologies improve and processes become more efficient – oil companies reap even greater profit. Think about the profits Shell could have recorded had it not overestimated its oil stores.
So, from a purely financial and reputation standpoint, BP must assuage increasing concern that global oil supply – especially in the “proven” category – has not peaked.
I am undecided on the whole “peak oil” debate. First of all, I’m not a petroleum or geological engineer, so this is outside my traditional skill set; however, I do know that discoveries of traditional oil fields peaked awhile ago, and that proven reserves have remained relatively stable because the rising price of oil and improving technologies have made extraction from deep-water fields and from tar sands economical and actually possible.
The days of spending $10/barrel are drawing to a close as Middle Eastern countries (which enjoy the cheapest and easiest extraction rates in the world) have opened their valves to quench the West’s oil thirst. That means marginal costs of extraction are increasing every day, as that cheap oil is used up and companies like BP and Shell must spend extravagant amounts of energy to extract usable oil from places like the depths of the Gulf of Mexico and the tar sands in Canada. I won’t even discuss the details of controversies surrounding extraction in those two areas, but suffice it to say they are many.
So, I don’t blame BP for making such an announcement – it is in their best business interests to do so, as a company – and it might even be possible that demand will cause a production peak before supply does. I sure hope so – behavior changes and demand-side reductions will be the most affordable, economic and necessary ways for the developed world to reduce their climate impacts.
The world’s third largest publicly-traded oil company, BP, announced last week that global “oil demand to peak before supply” (http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjgxMDg). Essentially, the company claims that diversified energy sources, environmental regulation, and soaring oil prices will cause demand to decrease, causing a peak in production that could possibly occur in the near future. The company representative, Special Economic Advisor Peter Davies, noted that this peak will occur because of a demand-side slowdown and not a supply-side lack.
Of course BP says that.
Shell has downgraded its proven reserves by several billion barrels of oil over five announcements throughout the past several years (see a good summary article from 2005 here from The Guardian in the UK: http://www.guardian.co.uk/business/2005/feb/04/oilandpetrol.news). As a result, the company took a huge reputation hit with consumers and several heads rolled, including those of the CEO, chief exploration boss and finance director. Although its share prices have shown strong growth in the past couple of years, that is attributable more to the rising price of oil. As oil gets more and more expensive – and production costs drop as technologies improve and processes become more efficient – oil companies reap even greater profit. Think about the profits Shell could have recorded had it not overestimated its oil stores.
So, from a purely financial and reputation standpoint, BP must assuage increasing concern that global oil supply – especially in the “proven” category – has not peaked.
I am undecided on the whole “peak oil” debate. First of all, I’m not a petroleum or geological engineer, so this is outside my traditional skill set; however, I do know that discoveries of traditional oil fields peaked awhile ago, and that proven reserves have remained relatively stable because the rising price of oil and improving technologies have made extraction from deep-water fields and from tar sands economical and actually possible.
The days of spending $10/barrel are drawing to a close as Middle Eastern countries (which enjoy the cheapest and easiest extraction rates in the world) have opened their valves to quench the West’s oil thirst. That means marginal costs of extraction are increasing every day, as that cheap oil is used up and companies like BP and Shell must spend extravagant amounts of energy to extract usable oil from places like the depths of the Gulf of Mexico and the tar sands in Canada. I won’t even discuss the details of controversies surrounding extraction in those two areas, but suffice it to say they are many.
So, I don’t blame BP for making such an announcement – it is in their best business interests to do so, as a company – and it might even be possible that demand will cause a production peak before supply does. I sure hope so – behavior changes and demand-side reductions will be the most affordable, economic and necessary ways for the developed world to reduce their climate impacts.
George W. Bush’s Side-Show Antics
President Bush and the United States have called for climate talks in Hawaii for January 30-31, which will “…further the shared objectives of reducing greenhouse gas emissions, increasing energy security and efficiency, and sustaining economic growth, and will help to advance the negotiations under the UN Framework Convention on Climate Change…” (http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjgxMTA).
I am skeptical – surprised?
At the UNFCCC’s “Climate Roadmap” negotiations in December in Bali, the United States held out until the last minute – in the face of opposition from literally the rest of the entire world – to agree that deep cuts in emissions needed to occur, with action coming from every country around the globe. Dubya also insists that the U.S. is best served through voluntary cuts in emissions and often cites the fact that America’s carbon intensity has remained static and/or decreased during his presidency.
Unfortunately for G-Dub, carbon intensity is a relatively worthless measure, which only demonstrates that the economy has grown without significantly increasing emissions at the same time. This is understandable since GDP and emissions do not have to grow at the same rate at the same time.
As you see in the graph below (Energy Consumption v. GDP, from Shell Scenarios 2005-2006), emissions increase with energy use, and energy use increases with GDP growth – until a certain point. At around $12,000/capita GDP, every country develops at the same rate – how much energy each person consumes after that point, however, is dependent upon a nation’s policies and behaviors. The United States has chosen to use far more energy per capita as GDP increases, rather than conserve more and use less while still enjoying economic growth. Japan has done it. The European Union has done it. Australia has done it better than us. And all the while that our carbon intensity has been “good,” our net emissions have still increased. There is no reason that the President should be citing a fact that distorts this reality.
So, Dubya, I’m not quite sure what your true motivations are for this conference in January. Is it to really extract the “aspirations” of major economies regarding their desired emissions cuts, or is it to further your “voluntary” reduction program, which you erroneously claim is cutting American greenhouse gas emissions?
Supply Chain Inclusion in Emissions Liability
The Carbon Disclosure Project (CDP) – a coalition of 315 institutional investors, NGOs, and other important global environmental and financial players – has sought emissions measurements and reduction targets from the world’s largest corporations for the past several years.
This outstanding group has been immensely successful in pressuring multinationals to account for and seek to decrease their emissions by publicizing their emissions tallies (or pointing a finger at them for not reporting). Until now, the CDP has focused solely on core business practices; however, it announced yesterday that it is partnering with companies who rely upon the world’s most extensive supply chains to identify and reduce emissions from those entire supply chains.
What a huge step – essentially, these companies are setting an important precedent by saying that they are liable for emissions from their entire supply chain – an area of responsibility they have been traditionally reticent to embrace. The first step to addressing any problem is to admit the existence of one, and this is a major first step. Kudos to CDP and to those companies involved (more info here: http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MjgxNjE).
-M.
Sunday, January 20, 2008
Hot Campaign Trail - Cool Earth?
While the U.S. presidential primary season is heating up, if one of the Nevada and South Carolina contests picked America’s next president, then the world could be cooling down.
This weekend’s caucuses and primaries saw Democrat Hillary Clinton and Republican Mitt Romney win in Nevada, while Republican John McCain topped the South Carolina competition.
All three have espoused positive views on climate change and have demonstrated understanding of this complex scientific, technical and political issue.
Clinton’s win in Nevada – where the numerically- and politically-powerful Culinary Workers union supported her opponent, Barack Obama – is key to her campaign leading into the delegate-rich Super Tuesday states on Feb. 5. Had she lost in Nevada and South Carolina (where Obama is predicted to win resoundingly), her campaign would have undoubtedly suffered significant drops in support on Feb. 5.
While fellow Democrats Obama and John Edwards have similar views, I like Hillary’s positions best on climate change-related issues. I think she has put out the strongest amount of support for a cap-and-trade system in the U.S. with ambitious (yet attainable) reduction goals, and supports “clean coal” technology (which I am convinced will be necessary if we are to cool our world, in light of India’s and China’s increasing reliance upon coal for electricity generation). She also is “neutral” on nuclear, waiting to see if innovations arise that would solve problems associated with waste disposal.
I also like that Hillary has strongly supported the “Apollo Alliance” (www.apolloalliance.org), which is a coalition of non-profit organizations, policymakers, unions, and researchers that seeks to solve America’s declining power in science, technology and math, its reliance on foreign energy sources, and uncertain economic future by pouring billions into renewable energy research and development. Spurring a “green” revolution through these (or similar) means would be a huge boost to the United States and the world as it seeks to tackle climate change.
On the Republican side, John McCain finally eked out the primary victory he has dwelled upon for eight longs years – South Carolina. This conservative southern stronghold, while not powerful numerically, has successfully picked the GOP’s eventual nominee every election since 1980. Popular among independent and moderate Republicans, McCain beat out conservative opponent Mike Huckabee in a significant victory that will boost his campaign heading into Super Tuesday.
McCain has long been at the forefront of his party in environmental issues, teaming with Democratic Senator Joe Lieberman to sponsor the Climate Security Act in 2005. Although it did not pass the Senate, it went further than any previous climate-related bill has ever gone in that body, and would have established a then-cutting edge cap-and-trade system. While working for Environmental Defense in 2005, I traveled throughout my home state of Kansas, trying to drum up legislative support in the Kansas Farm Bureau for this bill – hoping that the endorsement of one of the largest and most influential political groups in the state would win the votes of Kansas Senators Sam Brownback and Pat Roberts. Ever since then, I’ve enjoyed following McCain’s “environmentalist” public career – and I hope he will continue that “green” streak should he win the Republican nomination (but not the White House – I’m a Hillary fan myself).
Mitt Romney came out on top in Nevada by a resounding margin – not surprisingly, considering around 25 percent of caucus-goers in the state are fellow Mormons (and hence probably identified strongly with the religious trials he has, unfortunately, been subjected to during his campaign). While Romney does not appear to be as fervently pro-environment as Clinton and McCain, his complex positions on issues like establishing a cap-and-trade system and supporting a fixed percentage of renewable energy generation seem to be sound.
For example, Romney would not support U.S. creation of or participation in a cap-and-trade system unless the rest of the world (cough, cough, India and China, cough) participates as well. While I feel India and China should participate on different terms than America, I don’t think their inaction should excuse ours as well. Since we contribute around 25 percent of global greenhouse gas emissions – yet comprise less than 10 percent of worldwide population – we have an inherent and significant responsibility to decrease our climate impact.
Further, I think Romney is right (or is he just being cautious? There’s a fine line to be drawn here…) on not setting an arbitrary number on the amount of renewable energy that should be generated in the United States. While picking a number is important, economically is does not make the most sense. The cheapest and best way to encourage alternative energy production is not by requiring a portfolio of production – but by offering incentives that encourage producers to generate as much as possible. Large amounts of renewable energy will occur naturally as a result. Also, requiring vast amounts of biofuel production in the United States may not be the best option, either, considering the nearly-neutral (or negative? This point is still debated.) net energy and emissions balances of corn- and wheat-based ethanol. While I love this boon because it is encouraging higher commodity prices and economic growth in my agricultural home state, it is also driving up food prices worldwide while having potentially-negative environmental consequences. So, while Romney may not be a poster-child for the climate change movement, he may not be as bad as some suggest.
As my younger sister well knows (she’s a Barack supporter), I am a huge Hillary fan and I want her to win. I think she’s the best choice for president, hands down, with the optimum combination of diplomacy skills, experience, and – especially – positions on climate-related issues.
While I want to be celebrating another November Clinton victory, any of the three winners of Saturday’s primaries would be OK in my book on environmental issues.
As the campaign trail starts cookin’ heading into Super Tuesday, perhaps our fiery outlook for global temperatures may start to cool…
-M.
For more information on candidates’ environmental positions, visit http://www.grist.org/candidate_chart_08.html.
This weekend’s caucuses and primaries saw Democrat Hillary Clinton and Republican Mitt Romney win in Nevada, while Republican John McCain topped the South Carolina competition.
All three have espoused positive views on climate change and have demonstrated understanding of this complex scientific, technical and political issue.
Clinton’s win in Nevada – where the numerically- and politically-powerful Culinary Workers union supported her opponent, Barack Obama – is key to her campaign leading into the delegate-rich Super Tuesday states on Feb. 5. Had she lost in Nevada and South Carolina (where Obama is predicted to win resoundingly), her campaign would have undoubtedly suffered significant drops in support on Feb. 5.
While fellow Democrats Obama and John Edwards have similar views, I like Hillary’s positions best on climate change-related issues. I think she has put out the strongest amount of support for a cap-and-trade system in the U.S. with ambitious (yet attainable) reduction goals, and supports “clean coal” technology (which I am convinced will be necessary if we are to cool our world, in light of India’s and China’s increasing reliance upon coal for electricity generation). She also is “neutral” on nuclear, waiting to see if innovations arise that would solve problems associated with waste disposal.
I also like that Hillary has strongly supported the “Apollo Alliance” (www.apolloalliance.org), which is a coalition of non-profit organizations, policymakers, unions, and researchers that seeks to solve America’s declining power in science, technology and math, its reliance on foreign energy sources, and uncertain economic future by pouring billions into renewable energy research and development. Spurring a “green” revolution through these (or similar) means would be a huge boost to the United States and the world as it seeks to tackle climate change.
On the Republican side, John McCain finally eked out the primary victory he has dwelled upon for eight longs years – South Carolina. This conservative southern stronghold, while not powerful numerically, has successfully picked the GOP’s eventual nominee every election since 1980. Popular among independent and moderate Republicans, McCain beat out conservative opponent Mike Huckabee in a significant victory that will boost his campaign heading into Super Tuesday.
McCain has long been at the forefront of his party in environmental issues, teaming with Democratic Senator Joe Lieberman to sponsor the Climate Security Act in 2005. Although it did not pass the Senate, it went further than any previous climate-related bill has ever gone in that body, and would have established a then-cutting edge cap-and-trade system. While working for Environmental Defense in 2005, I traveled throughout my home state of Kansas, trying to drum up legislative support in the Kansas Farm Bureau for this bill – hoping that the endorsement of one of the largest and most influential political groups in the state would win the votes of Kansas Senators Sam Brownback and Pat Roberts. Ever since then, I’ve enjoyed following McCain’s “environmentalist” public career – and I hope he will continue that “green” streak should he win the Republican nomination (but not the White House – I’m a Hillary fan myself).
Mitt Romney came out on top in Nevada by a resounding margin – not surprisingly, considering around 25 percent of caucus-goers in the state are fellow Mormons (and hence probably identified strongly with the religious trials he has, unfortunately, been subjected to during his campaign). While Romney does not appear to be as fervently pro-environment as Clinton and McCain, his complex positions on issues like establishing a cap-and-trade system and supporting a fixed percentage of renewable energy generation seem to be sound.
For example, Romney would not support U.S. creation of or participation in a cap-and-trade system unless the rest of the world (cough, cough, India and China, cough) participates as well. While I feel India and China should participate on different terms than America, I don’t think their inaction should excuse ours as well. Since we contribute around 25 percent of global greenhouse gas emissions – yet comprise less than 10 percent of worldwide population – we have an inherent and significant responsibility to decrease our climate impact.
Further, I think Romney is right (or is he just being cautious? There’s a fine line to be drawn here…) on not setting an arbitrary number on the amount of renewable energy that should be generated in the United States. While picking a number is important, economically is does not make the most sense. The cheapest and best way to encourage alternative energy production is not by requiring a portfolio of production – but by offering incentives that encourage producers to generate as much as possible. Large amounts of renewable energy will occur naturally as a result. Also, requiring vast amounts of biofuel production in the United States may not be the best option, either, considering the nearly-neutral (or negative? This point is still debated.) net energy and emissions balances of corn- and wheat-based ethanol. While I love this boon because it is encouraging higher commodity prices and economic growth in my agricultural home state, it is also driving up food prices worldwide while having potentially-negative environmental consequences. So, while Romney may not be a poster-child for the climate change movement, he may not be as bad as some suggest.
As my younger sister well knows (she’s a Barack supporter), I am a huge Hillary fan and I want her to win. I think she’s the best choice for president, hands down, with the optimum combination of diplomacy skills, experience, and – especially – positions on climate-related issues.
While I want to be celebrating another November Clinton victory, any of the three winners of Saturday’s primaries would be OK in my book on environmental issues.
As the campaign trail starts cookin’ heading into Super Tuesday, perhaps our fiery outlook for global temperatures may start to cool…
-M.
For more information on candidates’ environmental positions, visit http://www.grist.org/candidate_chart_08.html.
Saturday, January 19, 2008
Carbon Costs Causing European Industry to Lose Business? I Think Not...
One of the main arguments used by the United States in rejecting the Kyoto protocol, as well as numerous other international environmental agreements that would put a price on carbon, is that it would cause its industry to lose competitive advantage.
Well, a recent report by the University of Cambridge (among others) regarding the European Union Emissions Trading Scheme (EU ETS) and its impacts on Europe’s industries’ global competitiveness will help put that argument to rest.
Among the main points of the report – found here: http://www.climate-strategies.org/uploads/ClimateStrategies_competitiveness_final_report_140108.pdf - is that even if companies in the United States or other countries (including the G8+5 group of Brazil, Mexico, South Africa, India and China) do not have to deal with a price on carbon emissions, European industry will not suffer noticeably from a loss of jobs, consumers, etc. to those countries.
In other words, putting a price on carbon will not lead to lost jobs, skyrocketing prices or a weakened economy.
The key is to distribute properly the costs of buying carbon credits and/or decreasing emissions throughout an economy’s industries to shift the pressure away from the most carbon-intensive industries – thus getting the greatest “bang for the buck.” The report notes further that governments, trade associations and industry leaders must decide the best steps to take (via policy, cost redistribution through supply chains, etc.) based on industry-specific details.
While encouraging, this report has a couple of “yellow flags” for me. First, it notes that “imports [into a country signed up to Kyoto] might accelerate once global demand growth declines, and large excess supplies are available at low prices” (p.7); however, the threat of imports referenced above is unlikely, I think, since they would come from lower-cost manufacturing bases in the developing world and flow to the developed, transportation costs will be even higher because of the price of carbon emitted during said transport. This would force European companies to look for closer production facilities, possibly in the European Economic Community, to decrease carbon-constrained shipping costs. So, while possible, I don’t think it will make an impact warranting such a warning.
Secondly, what is to prevent a company from passing its entire carbon-induced cost burden onto consumers, one particular supplier, etc.? In a perfect world, a company would pass along its carbon costs of transporting raw and finished materials throughout its supply chain to decrease its effect on its bottom line and on consumers; however, to what extent can that really be expected? Thus the importance of sound national and industrial/trade association policy.
It is time for the United States to wake up. Although signs of hope arose during the “climate roadmap” negotiations in Bali in December, by not becoming a partner in international environmental agreements and refusing to offer more robust financial incentives and price signals, the U.S. government is hurting, rather than helping, its economy – and this report blows apart one of its key arguments for doing just that.
-M.
Well, a recent report by the University of Cambridge (among others) regarding the European Union Emissions Trading Scheme (EU ETS) and its impacts on Europe’s industries’ global competitiveness will help put that argument to rest.
Among the main points of the report – found here: http://www.climate-strategies.org/uploads/ClimateStrategies_competitiveness_final_report_140108.pdf - is that even if companies in the United States or other countries (including the G8+5 group of Brazil, Mexico, South Africa, India and China) do not have to deal with a price on carbon emissions, European industry will not suffer noticeably from a loss of jobs, consumers, etc. to those countries.
In other words, putting a price on carbon will not lead to lost jobs, skyrocketing prices or a weakened economy.
The key is to distribute properly the costs of buying carbon credits and/or decreasing emissions throughout an economy’s industries to shift the pressure away from the most carbon-intensive industries – thus getting the greatest “bang for the buck.” The report notes further that governments, trade associations and industry leaders must decide the best steps to take (via policy, cost redistribution through supply chains, etc.) based on industry-specific details.
While encouraging, this report has a couple of “yellow flags” for me. First, it notes that “imports [into a country signed up to Kyoto] might accelerate once global demand growth declines, and large excess supplies are available at low prices” (p.7); however, the threat of imports referenced above is unlikely, I think, since they would come from lower-cost manufacturing bases in the developing world and flow to the developed, transportation costs will be even higher because of the price of carbon emitted during said transport. This would force European companies to look for closer production facilities, possibly in the European Economic Community, to decrease carbon-constrained shipping costs. So, while possible, I don’t think it will make an impact warranting such a warning.
Secondly, what is to prevent a company from passing its entire carbon-induced cost burden onto consumers, one particular supplier, etc.? In a perfect world, a company would pass along its carbon costs of transporting raw and finished materials throughout its supply chain to decrease its effect on its bottom line and on consumers; however, to what extent can that really be expected? Thus the importance of sound national and industrial/trade association policy.
It is time for the United States to wake up. Although signs of hope arose during the “climate roadmap” negotiations in Bali in December, by not becoming a partner in international environmental agreements and refusing to offer more robust financial incentives and price signals, the U.S. government is hurting, rather than helping, its economy – and this report blows apart one of its key arguments for doing just that.
-M.
Wednesday, January 16, 2008
"Green" Spot for Trees: Bonn Square/Westgate, Tree-Squatters, and Economic Development
I grew up in a home on a quiet brick-paved street in Wichita, Kansas, dotted with hundred-year-old homes and sheltered from the sweltering prairie sun by hundreds of beautiful and enormous trees. Those trees had been there for decades and – in addition to providing me with something to climb and to catch lightning bugs under – provided the neighborhood with a source of arboreal pride unmatched in my city.
The neighborhood association – including my mom – fought hard to keep trees from being removed when power lines were relocated in the 1990s, and in the early 2000s it worked to halt excessive tree-trimming to keep our streets cool and picturesque. So when I read an article (http://www.oxfordmail.net/news/comment/display.var.1941774.0.fighting_a_lost_cause.php) about protestors working to stop the Oxfordshire County Council from cutting down trees in Bonn Square to make room for a redevelopment project, both the child and en
vironmentalist in me was sympathetic to the protestors and urged them on; however, when I read and thought more about the project, I changed my mind.
You see, Bonn Square – while home to dozens of sprawling historic trees – is also home to delinquency and a run-down Westgate shopping center. The £300 million project will redevelop and expand the shopping center and surrounding area, and will revamp the square into a safer, more beautiful and pleasant place than it is now (http://news.bbc.co.uk/1/hi/england/oxfordshire/6102200.stm).
Several protestors, though, have fought the council on destruction of the trees, in addition to complaining about other issues surrounding the project (including that the project does not conform to local climate change laws and necessitates destroying numerous sheltered houses). Saying the square and its trees are an important part of Oxford history, some have even camped out in the trees for days to prevent their destruction.
While I admit I have a “green” spot in my heart for trees and the wonders they can do for an area, the Westgate project must continue. Bonn Square and the Westgate Center are an eyesore and in need of a major renovation. Redeveloping both is exactly what is needed – and in this case, economic growth and development triumph over the trees. With that said, landscaping and tree planting should become a priority for the developers, as should ensuring that Westgate is renovated and expanded according to local environmental and building standards. The outcry of public opposition to the tree removal proves how important this issue is for the community and how closely the developers should listen.
I read this week that the protestors have come down, as have the trees in question (http://www.oxfordmail.net/news/headlines/display.var.1963544.0.tree_protest_is_over.php). While I support the preservation of trees and natural areas as much as possible, economic improvements and growth are also important for communities. In this case, redeveloping the blighted Bonn Square area and Westgate was more important than saving the trees (which can and should be replaced as a part of the project).
So even as I remember wistfully the tree-lined streets of Kansas, I remain optimistic about a new Bonn Square and Westgate Center – along with (hopefully) relocated trees.
-M.
Photo from www.indymedia.org.uk
The neighborhood association – including my mom – fought hard to keep trees from being removed when power lines were relocated in the 1990s, and in the early 2000s it worked to halt excessive tree-trimming to keep our streets cool and picturesque. So when I read an article (http://www.oxfordmail.net/news/comment/display.var.1941774.0.fighting_a_lost_cause.php) about protestors working to stop the Oxfordshire County Council from cutting down trees in Bonn Square to make room for a redevelopment project, both the child and en
vironmentalist in me was sympathetic to the protestors and urged them on; however, when I read and thought more about the project, I changed my mind.You see, Bonn Square – while home to dozens of sprawling historic trees – is also home to delinquency and a run-down Westgate shopping center. The £300 million project will redevelop and expand the shopping center and surrounding area, and will revamp the square into a safer, more beautiful and pleasant place than it is now (http://news.bbc.co.uk/1/hi/england/oxfordshire/6102200.stm).
Several protestors, though, have fought the council on destruction of the trees, in addition to complaining about other issues surrounding the project (including that the project does not conform to local climate change laws and necessitates destroying numerous sheltered houses). Saying the square and its trees are an important part of Oxford history, some have even camped out in the trees for days to prevent their destruction.
While I admit I have a “green” spot in my heart for trees and the wonders they can do for an area, the Westgate project must continue. Bonn Square and the Westgate Center are an eyesore and in need of a major renovation. Redeveloping both is exactly what is needed – and in this case, economic growth and development triumph over the trees. With that said, landscaping and tree planting should become a priority for the developers, as should ensuring that Westgate is renovated and expanded according to local environmental and building standards. The outcry of public opposition to the tree removal proves how important this issue is for the community and how closely the developers should listen.
I read this week that the protestors have come down, as have the trees in question (http://www.oxfordmail.net/news/headlines/display.var.1963544.0.tree_protest_is_over.php). While I support the preservation of trees and natural areas as much as possible, economic improvements and growth are also important for communities. In this case, redeveloping the blighted Bonn Square area and Westgate was more important than saving the trees (which can and should be replaced as a part of the project).
So even as I remember wistfully the tree-lined streets of Kansas, I remain optimistic about a new Bonn Square and Westgate Center – along with (hopefully) relocated trees.
-M.
Photo from www.indymedia.org.uk
Subscribe to:
Posts (Atom)