There could not be two islands more different than Greenland and Easter. Greenland is the world's largest island, relatively accessible from both North America and Europe. It is a cold, icy place, inhospitable to most life and mostly untouched by civilization. The first European colonists, Icelandic Vikings, had to battle to survive, especially as the climate cooled and contact was eventually lost with Iceland.
Easter, on the other hand, is one of the most isolated pieces of land in the world. It was empty until well after year 0, and might have even been uninhabited until the middle ages. However, the island was blessed with a verdant ecosystem, and the first settlers probably thought they had stumbled into a paradise. Unlike in Greenland, the island's resources allowed a dynamic civilization to quickly spring into being. The islanders erected massive statues across the island, and developed a complex society.
Despite their clear differences, both Greenland and Easter suffered the same fate. Both civilizations were decimated by poor resource management. By the time new waves of explorers arrived on the two islands, the non-Inuit Greenlanders were completely extinct and the society of Easter had degenerated into poorly nourished and warring factions, with many of the massive statues toppled to the ground.
The reason for these collapses was that the islanders did not have the ability to maintain sustainable resource usage. In Greenland, the lack of natural forests and the marginal agricultural yields could not support a European agricultural civilization once the climate began to cool. Even as their situation became more dire, with falling crop yields and the cessation of wood imports, the Greenlanders held on to their way of life.
Only once it was too late did the Greenlanders attempt to adapt to their situation. They began to rely more on the sea for their food, but with no way to repair or replace their aging wooden ships, they could not feed everyone. They never learned to build boats out of animal material, as the Inuit did, and they never abandoned their farms. Because they were unable to adapt, they vanished.
On Easter, something slightly different happened. The island was so plentiful when the colonists arrived that there was no thought of resource conservation. Trees were felled en masse to provide wood for various uses, including the rollers probably used to build the moai. The birds and sea life on the island were hunted to provide food for an exploding population.
By the mid-second millennium AD, the resources of Easter were beginning to run dry. The forests that had once covered the island were gone, and the birds and marine life were harder and harder to find. At this stage, however, Easter was still an absolute monarchy. It is possible that a prescient ruler could have implemented resource management policies, as happened in Hawaii and other places.
Unfortunately, perhaps in response to the island's problems, the monarch was deposed and a new system was put in place whereby the first islander to capture the egg of a particular bird each year became the custodian of the island's resources. Thus, frequent leadership changes and inexperienced administration prevented the establishment of any coherent policy, and the complex society of Easter slowly faded away.
The modern world can learn much from these two stories, seeing as how we are essentially an island within a vast universe. The Earth is not as harsh (on average) as Greenland nor is it changing at as rapid a pace. Likewise, the resources of the Earth are not depleted to the extent that Easter's were. Despite this, the fact remains that many of our resources are being depleted rapidly, and those resources are at least as integral to our society as timber and food resources were to Greenland and Easter.
There are two key lessons that come from these histories that can be a helpful framework for policy development. The first is perhaps self evident, but our islanders certainly did not grasp it. It is the simple truth that prudent (and global) resource management is necessary to avoid catastrophe. Despite the fact that we are a fragmented world, with no strong leadership on resource management, we must not let that be our downfall, as it was for Easter's people.
The second lesson is that we must not be afraid to change, as the Greenlanders were. Our current model is not sufficient, and we should be aware of this. It is painfully obvious that we are using up the Earth's resources at an alarming rate. I liken this to a corporate balance sheet. The resources regenerated/discovered each year can be though of as revenues and the consumption as expenses. Any expenses in excess of revenues must be covered through debt, essentially a reduction of net assets.
If one accepts that we are currently using up the net assets of the Earth, and one also accepts that active management is necessary (i.e. the problem will not fix itself), there are essentially three ways to deal with the problem. Continuing with my balance sheet analogy, you can either increase revenues, decrease expenses, or decrease the average expense per unit of revenue. Let's look at these three options in detail:
1. Increasing Revenues - Whether or not this approach is even possible depends on the resource you are looking at. For resources like metals and land, this approach has no relevance, because those resources are generally non-substitutable and finite.
For a second set of resources, including energy resources, limited increases to revenue might be possible through technology, but the biggest gains can come from a change in "revenue mix". Think of this as being akin to Apple realizing in the late 1990's that its revenue stream from computers was essentially maximized. They shifted their strategy to obtain revenue from other, related, products (like music players and phones). This same shift can be accomplished by transferring energy usage to underutilized resources like solar and wind.
Finally, there are a third set of resources where revenues can be increased with prudent management and technology development. Some underutilized energy resources (like uranium and deuterium) and many renewable resources (like timber and food) fall into this category.
2. Improving Efficiency (expense per unit of revenue) - This is the most self explanatory of the three areas. Efforts to improve the efficiency of resources are concentrated in two areas. The first area is technological improvements, such as more efficient power plants or vehicles. The second area is improved recycling, which is especially important for resources like metals.
3. Decreasing Expenses - This is the category where the biggest potential for change exists, but it is also the one that is the most politically difficult. Reductions in "expenses" can only be achieved in one of two ways, by decreasing per-capita consumption or by decreases in population. Neither of these will be easy sells, and any policy of population control could turn out horribly wrong. Still, it is likely that part of any solution to our consumption problem will have to be found in this category.
I know that this post is less specific than others in terms of the actual externalities that need to be addressed, but I feel that the problems have been sufficiently illustrated. I will therefore jump right to some potential policy solutions.
1. Implementation of my previous proposals will help to correct our resource imbalance, especially for land and energy resources. It will also advance the development of new resource technologies.
2. Technology must be seen as an important part of environmental solutions. I will discuss this more in my next post.
3. A long-term tax policy shift away from income tax and toward consumption taxes, as I have previously advocated, would be an excellent place to start on the "expenses" side of things.
4. Supporting the sustainable development and urbanization of poor countries is one of the best ways to decrease our population growth rate. All the evidence suggests that the richer and more urbanized a country is, the lower its growth rate. This is because children are no longer an economic benefit, like they are in subsistience-agriculture based societies.
5. Making sure appropriate contraceptive methods, and information on their use, are available in developing countries for free will not only slow the spread of AIDS, but will also help contain population growth and the consequent consumption increases.
6. It is important that current recycling programs be maintained, and new ways of recycling (like making biofuel from garbage) are explored.
7. These proposals will not be enough. It is likely, that even with new technologies, that the Earth will only be able to sustainably support a few billion people at current North American levels of consumption. Since our population will likely be higher than that well into the future, and since we hope to bring many more people up to an acceptable standard of living, it is probable that those of us in the rich world will have to make some sacrifices.
I am just as unwilling as the next person to give up many of the material pleasures I have gained at the expense of the earth. For example, I will never be a vegetarian, even if it is better for the planet. Nor will I stop travelling. However, I do believe that everyone does use things they don't really need, or even want. I believe that if appropriate public policy is implemented and people start to change their mindset on consumption, that a long-term, sustainable Earth can be built, with around 7-8 billion people living on our planet with similar quality of life to what Canadians enjoy today.
Food for thought:
How much energy would be saved if all buildings were only heated to 15 degrees in the winter and cooled to 25 degrees in the summer (subject to the relaxation of corporate dress codes)? Wouldn't the inconvienience of wearing a sweater or shorts be worth it?
If the average office worker could do 1/4 to 1/3 of their work remotely, using today's technology (which I think is entirely feasable), how much fuel use could be avoided? (not to mention sanity gained)
if US households used the same amount of electricity as European ones, total household energy consumption in the US would fall by 60%. Wow.
Most energy-efficient appliances easily pay for themselves.
Tuesday, February 3, 2009
Deep Blues (4 of 6)
This post, as the title suggests, is going to be about the world's oceans and skies. However, before I get started on the environmental issues concerning air and water, I want to diverge for a minute.
In 1960, Dr. Frank Drake created an equation, that now bears his name, to estimate the number of extraterrestrial life-forms that we might possibly communicate with. Most of the parameters in his equation cannot be established with any certainty, but the results are quite interesting. Below, I list the factors in his equation, along with an *Optimistic*, a best guess and a (pessimistic) estimation.
R - Average rate of star formation in our galaxy - Known to be ~7/yr
multiplied by
Fp - Fraction of those stars which form planets - *.5*, .15, (.05)
multiplied by
Ne - Number of above planets/moons per solar system that could potentially support life - *2*, 1.5, (.05)
multiplied by
Fl - Fraction of above that actually develop life - *1*, .33, (.13)
multiplied by
Fi - Fraction of the above that develop intelligent life - *.5*, .01, (.001)
multiplied by
Fc - Fraction of the above that are willing and able to communicate with us- *.1*, .01, (.01)
multiplied by
L - The average length of time the above state persists - *100,000*, 10,000, (500)
These estimations suggest the following results:
In 1960, Dr. Frank Drake created an equation, that now bears his name, to estimate the number of extraterrestrial life-forms that we might possibly communicate with. Most of the parameters in his equation cannot be established with any certainty, but the results are quite interesting. Below, I list the factors in his equation, along with an *Optimistic*, a best guess and a (pessimistic) estimation.
R - Average rate of star formation in our galaxy - Known to be ~7/yr
multiplied by
Fp - Fraction of those stars which form planets - *.5*, .15, (.05)
multiplied by
Ne - Number of above planets/moons per solar system that could potentially support life - *2*, 1.5, (.05)
multiplied by
Fl - Fraction of above that actually develop life - *1*, .33, (.13)
multiplied by
Fi - Fraction of the above that develop intelligent life - *.5*, .01, (.001)
multiplied by
Fc - Fraction of the above that are willing and able to communicate with us- *.1*, .01, (.01)
multiplied by
L - The average length of time the above state persists - *100,000*, 10,000, (500)
These estimations suggest the following results:
The number of intelligent species that exist is likely between 1 (ourselves) and 35,000, with the best guess being around 50. The number that are willing and able to communicate with us is much lower, between zero and 3,500, with a best guess of either zero or one. This would explain the Fermi Paradox, which states "if extraterrestrial life is so common, why haven't we observed it?"
The point of all this is to illustrate that the development of humanity was quite unlikely, given the relatively small numbers above compared with estimates of 200-400 billion stars in our galaxy. Even if you look at all the instances that could have existed in the lifetime of our galaxy (assuming the first terrestrial planets forming around 6 billion years ago, an average time to the creation of life of a billion years and about 4.5 billion years on average to get from microbes to intelligence), the best guess is about 2.5 million instances of intelligent life, and only 25,000 with the capacity and willingness to communicate. In such a huge galaxy, it is an indication that our planet and ourselves are really quite a rarity.
Two factors which enabled the unlikely event of human sentience were the abundance of water on earth (water being a particularly useful substance for life) and the particular composition of our atmosphere (influenced by life), which created enough of a greenhouse effect to make Earth habitable, but did not turn us into another Venus, with oven-like surface temperatures.
It is therefore critical to our survival as a race to develop ways of managing our water and our air. If we are ever to leave Earth, and exist in either closed habitats in outer space or on the moon, or undertake massive geoengineering to terraform Mars or Venus into places that humans can live (thereby removing most significant threats to humanity's continued existence), it will become even more important.
Fortunatley, of all our environmental challenges, this is the one where the most effective action has already been taken. Programs to reduce ozone layer depletion and acid rain have been resounding successes. General air pollution reduction programs have also been successful. The remaining challenges mostly lie with the following externalities:
1. Industrial runoff and human/agricultural waste are damaging water quality (both fresh and ocean) around the world. This is resulting in ecosystem damage as well as human water shortages and increased incendences of diseased/unsafe water.
2. Since fresh water is not well-regulated, it results in a tragedy of the commons, where it is in everyone's interest to overexploit the resource. This is creating fresh water shortages in many countries.
3. There are still significant problems with non-CO2 air pollutants, which contribute less to GHG emissions but more to other problems of air pollution.
4. In many areas, the human population has simply exceeded the carrying capacity of the available water resources. Once again, this is an externality associated with population growth, but can be addressed as a water management issue.
I would propose the following strategies to address these problems:
1. My previous proposals to reduce GHG's must be implemented, as the reduction in use of fossil fuels for transport and power generation will also result in the reduction of other air pollutants.
2. Existing regulations on air pollution should be harmonized around the world, and tightened in the areas where there is scientific consensus (such as for the emission of ozone). Once harmonization is complete, I would advocate gradual tightening of regulations over time.
3. The increased urbanization I previously proposed would make water recycling and waste management easier, and decrease agricultural runoff. It would also help (along with renewable power generation) to make desalination a more economically viable option.
4. Continued research into types of plastics that biodegrade and programs to reduce plastic use in general would help alleviate detrimental effects of plastic waste.
5. In areas of water scarcity, some type of tax on excessive water usage is probably a worthwhile consideration. It fits with my overall belief about taxing bad things rather than good things.
6. Some of the ideas I will present in my next post, about carrying capacity and general resource use, have implications for these issues as well.
Wild Places of the Earth (3 of 6)
Unlike the subject of global warming, the subject of land use is not easy to sensationalize, or even define. However, it is an equally critical issue, and equal effort must be devoted to addressing it. Global warming can be defined and addressed using only two externalities, GHG emissions and destruction of carbon sinks. Land use is much more complex, and will require a more multifaceted explanation. I will start with a look at the externalities created through land use. I would suggest that the negative externalities related to land use include the following:
1. Decrease in carbon sinks due to land use change affects atmospheric carbon
2. Destruction of habitat damages ecosystems and biodiversity and subsequently affects quality of life
3. Desertification is reducing land available for agriculture or conservation
4. Deforestation for agriculture is causing erosion and infertility in nutrient-poor soils
5. 98% of the world's arable land is already under cultivation. This means that the 50% more people that will be alive in 40 years will be difficult to feed (really an externality associated with population growth, but can be addressed as a land-use issue)
6. Damage caused by the use of pesticides and other chemicals in agriculture
7. Depletion of fresh water reserves through use of extensive irrigation in agriculture.
8. The distribution of human populations and demand for uniform product availability forces expensive and environmentally damaging infrastructure & transportation costs, as well as increased use of food processing & preserving techniques (again, an externality associated with population distribution, but related to land use)
9. Damage to key biomes like rainforest, coral reefs and wetlands are reducing valuable "ecosystem services" like watershed management, nitrogen fixation and waste treatment.
Not all of these externalities are going to be able to be 100% eliminated, and I would not advocate such steps even if it was possible. Entirely mitigating these externalities would result in a radical chnage in human existence, and would fundamentally alter the world economy. I instead advocate a series of steps designed to gradually shift human society toward a more sustainable model and to blunt some of the most destructive effects of human land use without inflicting serious economic harm.
I also feel as though I should disclose my ultimate vision for what the sustainable earth of the long-term future would look like. Significant technological improvement and social change is a prerequisite for this vision, and I believe that even if the vision was universally adopted, its implementation would take a century or more. I simply present it as a template to model policy after, because without such a goal, I don't believe a complex policy approach can be successful.
My future Earth would be one of "urban islands" within a largely unspoiled landscape. Assuming a stable, long-term population of about 9 billion, I think about 8 billion could be housed within approximatley 6500 cities, of which the vast majority would have populations around 1-2 million, but where around 200 would be megaopolises with populations of 10m or greater. The remaining billion people would remain in rural areas in order to undertake tasks that cannot be centralized (such as mining or hydroelectric power generation). This would represent a fall in the earth's rural population by 2/3.
With that level of urbanization, significant portions of land could be returned to their natural state. In my ideal future world, 50% of the world's land would be returned to a pre-human state, with no human impact except for tourism (hopefully eco-tourism). Included in this 50% would be at least 50% of original (pre-agriculture) land area of each of the Earth's 14 terrestrial biomes. (For a list of the terrestrial biomes, see wikipedia). Additionally, any region defined as a biodiversity hotspot would recieve additional attention and an attempt would be made to restore as much of the original area as feasable (without knocking down cities).
For some biomes, this will be easy. Far less than 50% of the Earth's tundra and boreal forest have been substantially affected by human activity. Keeping it that way should be fairly painless, as most of the land does not have substantial economic value. Other biomes, like wetlands and rainforest, are going to be substantially more difficult. Many of these biomes have already lost more than 50% of their orginal land area and achieving the goals I have set out would require the reduction of human land use.
A reduction in human land use will require changes in agriculture. The vast majority of non-urban land modified by human activity has been for agriculture of some kind. In order to move towards increasing the "wild lands" of the Earth, agriculture must change. Coincidentally, demographics are going to force it to change anyway, so the time is ripe if this change can be managed in a positive way.
Given the externalities to mitigate, the goals I have set out and the realities of the situation, there is at least some basis for the beginnings of a policy framework. I will discuss policies here that are specific to Canada, although many of them can be adapted for usage elsewhere.
1. In 2003, approximatley 6.3% of Canada's land area was classified as "protected" by the IUCN. The global average is 10.8%. I believe that the government should endeavour to bring Canada's percentage up to the global average within ten years (and gradually increase it thereafter). This would be done by enlarging existing preserves or creating new ones, with the biomes that have been most reduced in Canada being the primary targets for conservation. Additionally, lands currently under cultivation that are only marginally arable (require massive amounts of irrigation, fertilizer or pesticides) should be targeted for purchase and restoration to orginal status.
2. A study should be done to examine the various ways of implementing a system of urban "vertical farming" (see http://www.verticalfarm.com/). If studies show such a system to be feasable with limited government support and without violating Canada's free trade agreements, development programs should be put in place immediately. I believe that the system will turn out to be economical at large enough scales, especially for crops that are usually imported from a long ways away, and will provide a much less envrionmentally damaging form of agriculture, since most inputs can be recycled and pesticides become unneccessary. Incedentally, a vertical farming program also has the potential to create many high-skill jobs in Canada, and should provide better quality, fresher food.
3. Incentives should be provided to encourage population consolidation in Canada, both within urban areas and overall. Urban development projects that create high density communities served by efficient public transit should be promoted, while excessive suburbanization should be discouraged. A second set of incentives should be provided for people to move from small towns into larger towns or cities. Associated with this migration will neccessarily have to be a further consolidation of agriculture so that the work can be done with fewer people.
4. Within both existing and new forms of agriculture, research grants should be set up for projects aiming to increase the nutritional content or yield of crops, or to decrease the needed water, fertilizer or pesticides. Genetically engineered crops combined with vertical farming offer the long term potential to drastically reduce our need for traditional agriculture and the associated land use and other environmental problems.
5. Canada should take the lead in promoting sensible solutions for land use issues worldwide. Canada, due to its low population density, high urbanization, technological prowess and abundant supplies of fresh water, is not the country where most of these land use issues are most critical. It is important that we keep in mind that we are citizens of the world as well as of Canada, and advocate for similar changes to those above in other countries of the world.
1. Decrease in carbon sinks due to land use change affects atmospheric carbon
2. Destruction of habitat damages ecosystems and biodiversity and subsequently affects quality of life
3. Desertification is reducing land available for agriculture or conservation
4. Deforestation for agriculture is causing erosion and infertility in nutrient-poor soils
5. 98% of the world's arable land is already under cultivation. This means that the 50% more people that will be alive in 40 years will be difficult to feed (really an externality associated with population growth, but can be addressed as a land-use issue)
6. Damage caused by the use of pesticides and other chemicals in agriculture
7. Depletion of fresh water reserves through use of extensive irrigation in agriculture.
8. The distribution of human populations and demand for uniform product availability forces expensive and environmentally damaging infrastructure & transportation costs, as well as increased use of food processing & preserving techniques (again, an externality associated with population distribution, but related to land use)
9. Damage to key biomes like rainforest, coral reefs and wetlands are reducing valuable "ecosystem services" like watershed management, nitrogen fixation and waste treatment.
Not all of these externalities are going to be able to be 100% eliminated, and I would not advocate such steps even if it was possible. Entirely mitigating these externalities would result in a radical chnage in human existence, and would fundamentally alter the world economy. I instead advocate a series of steps designed to gradually shift human society toward a more sustainable model and to blunt some of the most destructive effects of human land use without inflicting serious economic harm.
I also feel as though I should disclose my ultimate vision for what the sustainable earth of the long-term future would look like. Significant technological improvement and social change is a prerequisite for this vision, and I believe that even if the vision was universally adopted, its implementation would take a century or more. I simply present it as a template to model policy after, because without such a goal, I don't believe a complex policy approach can be successful.
My future Earth would be one of "urban islands" within a largely unspoiled landscape. Assuming a stable, long-term population of about 9 billion, I think about 8 billion could be housed within approximatley 6500 cities, of which the vast majority would have populations around 1-2 million, but where around 200 would be megaopolises with populations of 10m or greater. The remaining billion people would remain in rural areas in order to undertake tasks that cannot be centralized (such as mining or hydroelectric power generation). This would represent a fall in the earth's rural population by 2/3.
With that level of urbanization, significant portions of land could be returned to their natural state. In my ideal future world, 50% of the world's land would be returned to a pre-human state, with no human impact except for tourism (hopefully eco-tourism). Included in this 50% would be at least 50% of original (pre-agriculture) land area of each of the Earth's 14 terrestrial biomes. (For a list of the terrestrial biomes, see wikipedia). Additionally, any region defined as a biodiversity hotspot would recieve additional attention and an attempt would be made to restore as much of the original area as feasable (without knocking down cities).
For some biomes, this will be easy. Far less than 50% of the Earth's tundra and boreal forest have been substantially affected by human activity. Keeping it that way should be fairly painless, as most of the land does not have substantial economic value. Other biomes, like wetlands and rainforest, are going to be substantially more difficult. Many of these biomes have already lost more than 50% of their orginal land area and achieving the goals I have set out would require the reduction of human land use.
A reduction in human land use will require changes in agriculture. The vast majority of non-urban land modified by human activity has been for agriculture of some kind. In order to move towards increasing the "wild lands" of the Earth, agriculture must change. Coincidentally, demographics are going to force it to change anyway, so the time is ripe if this change can be managed in a positive way.
Given the externalities to mitigate, the goals I have set out and the realities of the situation, there is at least some basis for the beginnings of a policy framework. I will discuss policies here that are specific to Canada, although many of them can be adapted for usage elsewhere.
1. In 2003, approximatley 6.3% of Canada's land area was classified as "protected" by the IUCN. The global average is 10.8%. I believe that the government should endeavour to bring Canada's percentage up to the global average within ten years (and gradually increase it thereafter). This would be done by enlarging existing preserves or creating new ones, with the biomes that have been most reduced in Canada being the primary targets for conservation. Additionally, lands currently under cultivation that are only marginally arable (require massive amounts of irrigation, fertilizer or pesticides) should be targeted for purchase and restoration to orginal status.
2. A study should be done to examine the various ways of implementing a system of urban "vertical farming" (see http://www.verticalfarm.com/). If studies show such a system to be feasable with limited government support and without violating Canada's free trade agreements, development programs should be put in place immediately. I believe that the system will turn out to be economical at large enough scales, especially for crops that are usually imported from a long ways away, and will provide a much less envrionmentally damaging form of agriculture, since most inputs can be recycled and pesticides become unneccessary. Incedentally, a vertical farming program also has the potential to create many high-skill jobs in Canada, and should provide better quality, fresher food.
3. Incentives should be provided to encourage population consolidation in Canada, both within urban areas and overall. Urban development projects that create high density communities served by efficient public transit should be promoted, while excessive suburbanization should be discouraged. A second set of incentives should be provided for people to move from small towns into larger towns or cities. Associated with this migration will neccessarily have to be a further consolidation of agriculture so that the work can be done with fewer people.
4. Within both existing and new forms of agriculture, research grants should be set up for projects aiming to increase the nutritional content or yield of crops, or to decrease the needed water, fertilizer or pesticides. Genetically engineered crops combined with vertical farming offer the long term potential to drastically reduce our need for traditional agriculture and the associated land use and other environmental problems.
5. Canada should take the lead in promoting sensible solutions for land use issues worldwide. Canada, due to its low population density, high urbanization, technological prowess and abundant supplies of fresh water, is not the country where most of these land use issues are most critical. It is important that we keep in mind that we are citizens of the world as well as of Canada, and advocate for similar changes to those above in other countries of the world.
Not A Convenient Falsehood (2 of 6)
Global warming is certainly the environmental issue of the decade. In fact, I believe that the debate over global warming has risen to a level where it actually begins to detract from other environmental causes. As I have previously noted, I believe that global warming is a real threat, and at least partially caused by human activity, but I also recognize that a cool Earth is no use if it is a cool wasteland. Global warming must be dealt with, but not at the expense of dealing with other problems.
The prognosis on global warming is as follows, according to Wikipedia:
"Increasing global temperature will cause sea levels to rise and will change the amount and pattern of precipitation, likely including an expanse of the subtropical desert regions. Other likely effects include Arctic shrinkage and resulting Arctic methane release, increases in the intensity of extreme weather events, changes in agricultural yields, modifications of trade routes, glacier retreat, species extinctions and changes in the ranges of disease vectors."
Clearly, if some of these consequences can be mitigated, it is our responsibility to take action. In order to develop a pragmatic and effective apprach to global warming, the externalities associated with it must be identified.
Research suggests that of the atmospheric changes that can reasonably be attributed to human activity, about 75% is attributable to the burning of fossil fuels and most of the rest is due to land use change, such as deforestation. It follows (obviously in this case) that the action needed to mitigate global warming-related externalities must address both these issues.
I will discuss proposals for land-use reform in a future post, and will here discuss strategies to reduce greenhouse gas emissions. About 86% of world energy needs are provided through the burning of fossil fuels. More specifically, about 37% come from oil, 25% from coal and 23% from natural gas. Coal is the largest contributor to GHG's, with most coal being used for electricity generation. Most natural gas is used for heating or fertilizer production, as well as growing amounts in transportation and electricity generation. Crude oil is overwhelmingly (84%) used for transportation, with the rest being used to make other products, including asphalt, sulfur and plastics.
Given those statistics, it is logical that any attempt to reduce GHG's from fossil fuels will focus on the primary uses of these items, those being transportation, electricity generation, heating and fertilizer production.
Electricity production is probably the area where the most potential for change exists (It produces more emissions than any other source). Proven alternatives exist like wind, solar, hydroelectric, geothermal and nuclear fission, and other potential alternatives are in development, like tidal generation or nuclear fusion.
Transportation is the second biggest producer of emissions, and perhaps the largest sticking point, as few credible alternatives exist. Biofuels are (probably) only marginally better in terms of emissions, and require additional agricultural production (bad news..see later posts). Hydrogen and electric vehicles simply shift more emissions to electicity generation, so the success of those alternatives depend on the success of renewable generation.
The usage of natural gas for heating and cooking present a different problem. It turns out that using fossil fuels here is actually more environmentally friendly because so much energy is lost in electrical transmission and most electricity is produced using fossil fuels. It is unlikely that much can be done to reduce these emissions unless renewable generation becomes endemic.
Finally, the issue of producing fertilizer from natural gas via the Haber process must be addressed. Reductions here can be achieved mainly through agricultural innovation, which I will discuss in the later posts on land use change and agricultural conservation. It must be noted, however, that these reductions are also dependant on reliable supplies of renewable electricity.
Because the strategies for reducing GHG's from fertilizer production, heating/cooking and to some extent, transportation rely on the development of clean electricity, I believe that that must be a primary goal. The other primary goal that I can see is emphasizing efficiency over elimination, because that will allow progress to be made on all fronts without waiting for renewable generation to be the norm.
The most difficult part of policy fomulation in this case is taking the theoretical conclusions and objectives and tying them to effective and pragmatic strategies. In this case, a few strategies could be employed.
The biggest incentive to companies (especially power generation companies) to reduce their emissions is to price in the cost of the externality. For GHG's, this is much less difficult than for other externalities because they are easily measured. Two proposals have emerged, that of an emissions trading framework or that of a carbon tax. I tend to favour the trading approach for three reasons:
1. Carbon Taxes do not neccessarily result in emissions reductions. It would be extremely difficult to balance the tax so that it achieved substantial GHG reduction while still allowing businesses to be competitive.
2. Carbon Trading reflects the fact that in some industries it would be easy and cheap to reduce emissions, while in others it would be very expensive and difficult. A uniform Carbon Tax would be much less efficient at allocating emissions reductions to the sectors where they would do the least economic harm.
3. In Canada, a carbon tax is essentially a method of equalization. Most of the tax revenue would come from the wealthier, industrial areas like Alberta and Ontario, and the offsetting tax reductions would likely be spread evenly across the country. A Carbon Trading scheme could be built to avoid this problem.
The type of Carbon Trading scheme I would build would be one where absolute emissions would be capped at current levels and decrease by ~2-3% per year for 50 years. Emissions credits would be distributed at the beginning of each year. Initially, I would propose that credits be allocated based 75% on current emission levels and 25% based on an auction format, and that the percentage of credits auctioned off increase by 2% each year until it reaches 100% . However, to prevent regional wealth transfer, the auction revenues would be divided based on provincial emissions percentage and returned to the provinces for use in funding the other measures I describe below.
Carbon Trading is useful in reducing overall emissions and increasing efficiency, but it is not a comprehensive solution. It does not go far enough in incentivising the development of renewable power generation, a key goal. Also, it only achieves emissions reduction from businesses, and not individuals.I would therefore propose the following additional measures.
1. Usage of the auction proceeds from above, on a provincial basis, for funding provincially-appropriate measures to encourage renewable energy development.
2. Creation of a series of research grants and prizes for the development of certain technologies key to long-term renewable energy supplies as well as nuclear fusion.
3. Canada should immediately rejoin the ITER project, which it left in 2003.
4. A moritorium on new coal-fired powerplants that do not have carbon capture technology should be considered, and implemented if the economic cost would be reasonable.
5. Modification of the GST should be considered, towards a revenue-neutral system where items have three classifications: Harmful (A), Neutral (B) and Benefit (C), based on their environmental impact. Category A items should be subject to 10% GST, 5% for B items, and C items should be GST-free. Companies should be able to obtain a refund on the extra GST in Category A, because they already participate in emissions trading. These changes would be subject to a review of the administrative costs, which could be high, but I believe they are neccessary to encourage emissions reduction among private citizens.
These measures, I believe, would start Canada on the road to substantial emissions reductions. The emissions trading scheme alone would reduce emissions by around 50% by 2050, and with the other measures it could be even more substantial. I also believe that these proposals are sensible and pragmatic, and would not result in excessive economic harm or the substantial enlargement of government.
The prognosis on global warming is as follows, according to Wikipedia:
"Increasing global temperature will cause sea levels to rise and will change the amount and pattern of precipitation, likely including an expanse of the subtropical desert regions. Other likely effects include Arctic shrinkage and resulting Arctic methane release, increases in the intensity of extreme weather events, changes in agricultural yields, modifications of trade routes, glacier retreat, species extinctions and changes in the ranges of disease vectors."
Clearly, if some of these consequences can be mitigated, it is our responsibility to take action. In order to develop a pragmatic and effective apprach to global warming, the externalities associated with it must be identified.
Research suggests that of the atmospheric changes that can reasonably be attributed to human activity, about 75% is attributable to the burning of fossil fuels and most of the rest is due to land use change, such as deforestation. It follows (obviously in this case) that the action needed to mitigate global warming-related externalities must address both these issues.
I will discuss proposals for land-use reform in a future post, and will here discuss strategies to reduce greenhouse gas emissions. About 86% of world energy needs are provided through the burning of fossil fuels. More specifically, about 37% come from oil, 25% from coal and 23% from natural gas. Coal is the largest contributor to GHG's, with most coal being used for electricity generation. Most natural gas is used for heating or fertilizer production, as well as growing amounts in transportation and electricity generation. Crude oil is overwhelmingly (84%) used for transportation, with the rest being used to make other products, including asphalt, sulfur and plastics.
Given those statistics, it is logical that any attempt to reduce GHG's from fossil fuels will focus on the primary uses of these items, those being transportation, electricity generation, heating and fertilizer production.
Electricity production is probably the area where the most potential for change exists (It produces more emissions than any other source). Proven alternatives exist like wind, solar, hydroelectric, geothermal and nuclear fission, and other potential alternatives are in development, like tidal generation or nuclear fusion.
Transportation is the second biggest producer of emissions, and perhaps the largest sticking point, as few credible alternatives exist. Biofuels are (probably) only marginally better in terms of emissions, and require additional agricultural production (bad news..see later posts). Hydrogen and electric vehicles simply shift more emissions to electicity generation, so the success of those alternatives depend on the success of renewable generation.
The usage of natural gas for heating and cooking present a different problem. It turns out that using fossil fuels here is actually more environmentally friendly because so much energy is lost in electrical transmission and most electricity is produced using fossil fuels. It is unlikely that much can be done to reduce these emissions unless renewable generation becomes endemic.
Finally, the issue of producing fertilizer from natural gas via the Haber process must be addressed. Reductions here can be achieved mainly through agricultural innovation, which I will discuss in the later posts on land use change and agricultural conservation. It must be noted, however, that these reductions are also dependant on reliable supplies of renewable electricity.
Because the strategies for reducing GHG's from fertilizer production, heating/cooking and to some extent, transportation rely on the development of clean electricity, I believe that that must be a primary goal. The other primary goal that I can see is emphasizing efficiency over elimination, because that will allow progress to be made on all fronts without waiting for renewable generation to be the norm.
The most difficult part of policy fomulation in this case is taking the theoretical conclusions and objectives and tying them to effective and pragmatic strategies. In this case, a few strategies could be employed.
The biggest incentive to companies (especially power generation companies) to reduce their emissions is to price in the cost of the externality. For GHG's, this is much less difficult than for other externalities because they are easily measured. Two proposals have emerged, that of an emissions trading framework or that of a carbon tax. I tend to favour the trading approach for three reasons:
1. Carbon Taxes do not neccessarily result in emissions reductions. It would be extremely difficult to balance the tax so that it achieved substantial GHG reduction while still allowing businesses to be competitive.
2. Carbon Trading reflects the fact that in some industries it would be easy and cheap to reduce emissions, while in others it would be very expensive and difficult. A uniform Carbon Tax would be much less efficient at allocating emissions reductions to the sectors where they would do the least economic harm.
3. In Canada, a carbon tax is essentially a method of equalization. Most of the tax revenue would come from the wealthier, industrial areas like Alberta and Ontario, and the offsetting tax reductions would likely be spread evenly across the country. A Carbon Trading scheme could be built to avoid this problem.
The type of Carbon Trading scheme I would build would be one where absolute emissions would be capped at current levels and decrease by ~2-3% per year for 50 years. Emissions credits would be distributed at the beginning of each year. Initially, I would propose that credits be allocated based 75% on current emission levels and 25% based on an auction format, and that the percentage of credits auctioned off increase by 2% each year until it reaches 100% . However, to prevent regional wealth transfer, the auction revenues would be divided based on provincial emissions percentage and returned to the provinces for use in funding the other measures I describe below.
Carbon Trading is useful in reducing overall emissions and increasing efficiency, but it is not a comprehensive solution. It does not go far enough in incentivising the development of renewable power generation, a key goal. Also, it only achieves emissions reduction from businesses, and not individuals.I would therefore propose the following additional measures.
1. Usage of the auction proceeds from above, on a provincial basis, for funding provincially-appropriate measures to encourage renewable energy development.
2. Creation of a series of research grants and prizes for the development of certain technologies key to long-term renewable energy supplies as well as nuclear fusion.
3. Canada should immediately rejoin the ITER project, which it left in 2003.
4. A moritorium on new coal-fired powerplants that do not have carbon capture technology should be considered, and implemented if the economic cost would be reasonable.
5. Modification of the GST should be considered, towards a revenue-neutral system where items have three classifications: Harmful (A), Neutral (B) and Benefit (C), based on their environmental impact. Category A items should be subject to 10% GST, 5% for B items, and C items should be GST-free. Companies should be able to obtain a refund on the extra GST in Category A, because they already participate in emissions trading. These changes would be subject to a review of the administrative costs, which could be high, but I believe they are neccessary to encourage emissions reduction among private citizens.
These measures, I believe, would start Canada on the road to substantial emissions reductions. The emissions trading scheme alone would reduce emissions by around 50% by 2050, and with the other measures it could be even more substantial. I also believe that these proposals are sensible and pragmatic, and would not result in excessive economic harm or the substantial enlargement of government.
Monday, February 2, 2009
Conservative Conservationism (1 of 6)
This idea is a strange one. The conservative parties of the world have historically been fairly hostile towards the conservation movement in general (with the strange and interesting exception of the US Republican Party), and certainly hostile towards "environmentalists," however one might define that term. I believe, as a 21st century conservative, that this must change. Conservatives around the world must recognize that there are some very valid concerns within the conservation movement that must be addressed, whatever the historical political leanings of environmentalists. This policy is going to have to be built from the ground up, especially in Canada, where conservatives have generally been ignorant or apathetic towards environmental issues.
I believe that the foundation of a conservative environmental policy can be found within two existing conservative philosophies, those concerning the management of the economy and the role of government.
Most conservatives believe that no society can remain prosperous and dynamic without a strong economy. A conservative environmental policy, therefore, must not compromise economic growth in a significant way. However, keeping the economy strong in the long term will require sustainability and achieving this sustainability should form the core of a conservative environmental policy.
With respect to the role of government, most conservatives would like to see a government that is as small and efficient as possible. Many conservatives are sceptical of commonly proposed solutions to environmental problems, because those solutions often involve big government mandates, with significant public expenditure to fund programs administered by the bureaucracy. A conservative environmental policy must incorporate these concerns, and be geared towards public-private partnerships, incentives, efficiency and revenue neutrality.
Given those two factors, I would argue that an effective and conservative environmental policy should be based on the management of externalities. In order to explain what I mean by that, it is necessary to discuss what I am defining as an externality. Wikipedia provides a concise explanation:
"An externality is an impact on any party not directly involved in an economic decision. An externality occurs when an economic activity causes external costs or external benefits to third party stakeholders who did not directly affect the economic transaction. For example, manufacturing that causes air pollution imposes costs on others.
In a competitive market, the existence of externalities would mean that either too much or too little of the good would be produced and consumed in terms of overall costs and benefits to society. If there exist external costs (negative externalities) such as pollution, the good will be overproduced by a competitive market, as the producer does not take into account the external costs when producing the good. If there are external benefits (positive externalities) such as in areas of education or public safety, too little of the good would be produced by private markets as producers and buyers do not take into account the external benefits to others."
The role of the government, then, is to provide those services that create positive externalities in a fair and equitable way (health care, education, national defense, law enforcement etc), and to regulate or otherwise deter those activities that create negative externalities.
Most of the environmental issues facing the world today are caused by negative externalities stemming from human activity. By seeking pragmatic and efficient ways to mitigate these externalities, and providing incentives to create positive environmental externalities, a cohesive environmental policy can be established. It cannot focus only on the key issue of the day, because any approach dominated by a single issue, like global warming, cannot be a successful solution to a multifaceted issue like conservation.
This post is getting towards the long side, so I will leave it here, and elaborate on specific policy prescriptions for specific issues in five future posts.
I believe that the foundation of a conservative environmental policy can be found within two existing conservative philosophies, those concerning the management of the economy and the role of government.
Most conservatives believe that no society can remain prosperous and dynamic without a strong economy. A conservative environmental policy, therefore, must not compromise economic growth in a significant way. However, keeping the economy strong in the long term will require sustainability and achieving this sustainability should form the core of a conservative environmental policy.
With respect to the role of government, most conservatives would like to see a government that is as small and efficient as possible. Many conservatives are sceptical of commonly proposed solutions to environmental problems, because those solutions often involve big government mandates, with significant public expenditure to fund programs administered by the bureaucracy. A conservative environmental policy must incorporate these concerns, and be geared towards public-private partnerships, incentives, efficiency and revenue neutrality.
Given those two factors, I would argue that an effective and conservative environmental policy should be based on the management of externalities. In order to explain what I mean by that, it is necessary to discuss what I am defining as an externality. Wikipedia provides a concise explanation:
"An externality is an impact on any party not directly involved in an economic decision. An externality occurs when an economic activity causes external costs or external benefits to third party stakeholders who did not directly affect the economic transaction. For example, manufacturing that causes air pollution imposes costs on others.
In a competitive market, the existence of externalities would mean that either too much or too little of the good would be produced and consumed in terms of overall costs and benefits to society. If there exist external costs (negative externalities) such as pollution, the good will be overproduced by a competitive market, as the producer does not take into account the external costs when producing the good. If there are external benefits (positive externalities) such as in areas of education or public safety, too little of the good would be produced by private markets as producers and buyers do not take into account the external benefits to others."
The role of the government, then, is to provide those services that create positive externalities in a fair and equitable way (health care, education, national defense, law enforcement etc), and to regulate or otherwise deter those activities that create negative externalities.
Most of the environmental issues facing the world today are caused by negative externalities stemming from human activity. By seeking pragmatic and efficient ways to mitigate these externalities, and providing incentives to create positive environmental externalities, a cohesive environmental policy can be established. It cannot focus only on the key issue of the day, because any approach dominated by a single issue, like global warming, cannot be a successful solution to a multifaceted issue like conservation.
This post is getting towards the long side, so I will leave it here, and elaborate on specific policy prescriptions for specific issues in five future posts.
Wednesday, January 28, 2009
Saudi Alberta
A few comments that I posted on the CBC message boards attempting to outline a rational position on the oilsands...it seems that most of the other contributors favour shutting down the "tar sands" and importing more oil from the Middle East instead...
Fact Check for everyone on this message board (and around the world) calling Alberta oilsands oil "dirty": The average barrel of Saudi Arabian oil consumed in the United States is NOT MUCH BETTER for the environment than the average barrel of Canadian oilsands oil. Yes, oilsands barrels are more carbon-intensive to extract, but once you factor in emissions produced from transportation, life cycle emissions are essentially the same (especially for newer oilsands projects).
With regard to the comments being made about selling our oil to the United States and buying it back for more, there are two things that people should keep in mind:
1. The first reason we do this is because there are not enough refineries and upgraders in Canada to process all of our oil. This investment takes time, money and public support, and is certainly not made faster by all the oilsands bashing going on these days.
2. The second reason we buy oil from the US is that it is more economical to do so in Eastern Canada. Companies in Eastern Canada would never buy oil from US refiners if it wasn't cheaper than buying it from Western Canada. It just so happens to be more economically efficient to ship Alberta oil to California and use Gulf of Mexico or North Sea oil in Eastern Canada. That's the beauty of free trade.
A response to two criticisms of my argument:
1. Jennifera asks about the surface damage as a result of oilsands development. I agree that the large, strip mining projects like Syncrude (what you see on TV) are quite destructive operations. However, projects like this are not the most common oilsands projects (Most are SAGD, basically technically advanced versions of conventional wells) , and the ones that do exist take up an amount of land I consider to be a regrettable, but neccessary sacrifice in order to avoid propping up dictatorships with our money and to provide people ALL over the country with better living standards and government programs. (You're welcome for the $3000/per capita/per year Alberta pays out in equalization).
2. JeffCasselman points out that oilsands should not be considered a substitute for the development of alternative energy. I agree 100%! I think development of alternatives is a great idea. The fact remains, however, that we are going to need oil for the forseeable future. Why don't we use alternatives to replace the oil from Russia, Venezuela and the Middle East, and make North America run on 40% Canadian oil and 60% alternatives? As Canadians, it is our responsibility to think for ourselves, not just regurgitate what we hear on TV.
ValerieLaurie: I apologize for the tone of my comment with regard to equalization. I recognize that Ontario is the biggest contributor to equalization and second biggest per capita. My comment was not meant to construe that Alberta should have veto power over matters of national resource use. I am just saying that many people who advocate the destruction of the oilsands don't realize the extent of how they are affected by the economic benefits of the oilsands. The oilsands, as well as creating thousands of jobs and contributing to our social programs, also help decouple us from the US economy and insulate us from the effect of high oil prices, which has significantly helped Canada during this difficult economic time. If people want increased taxes or cuts to education and health care, along with high unemployment, in exchange for a 3% reduction of Canada's greenhouse gas emissions and a few hundred square kilometres of muskeg, thats fine. I just think they should realize that's what they are asking for.
Fact Check for everyone on this message board (and around the world) calling Alberta oilsands oil "dirty": The average barrel of Saudi Arabian oil consumed in the United States is NOT MUCH BETTER for the environment than the average barrel of Canadian oilsands oil. Yes, oilsands barrels are more carbon-intensive to extract, but once you factor in emissions produced from transportation, life cycle emissions are essentially the same (especially for newer oilsands projects).
With regard to the comments being made about selling our oil to the United States and buying it back for more, there are two things that people should keep in mind:
1. The first reason we do this is because there are not enough refineries and upgraders in Canada to process all of our oil. This investment takes time, money and public support, and is certainly not made faster by all the oilsands bashing going on these days.
2. The second reason we buy oil from the US is that it is more economical to do so in Eastern Canada. Companies in Eastern Canada would never buy oil from US refiners if it wasn't cheaper than buying it from Western Canada. It just so happens to be more economically efficient to ship Alberta oil to California and use Gulf of Mexico or North Sea oil in Eastern Canada. That's the beauty of free trade.
A response to two criticisms of my argument:
1. Jennifera asks about the surface damage as a result of oilsands development. I agree that the large, strip mining projects like Syncrude (what you see on TV) are quite destructive operations. However, projects like this are not the most common oilsands projects (Most are SAGD, basically technically advanced versions of conventional wells) , and the ones that do exist take up an amount of land I consider to be a regrettable, but neccessary sacrifice in order to avoid propping up dictatorships with our money and to provide people ALL over the country with better living standards and government programs. (You're welcome for the $3000/per capita/per year Alberta pays out in equalization).
2. JeffCasselman points out that oilsands should not be considered a substitute for the development of alternative energy. I agree 100%! I think development of alternatives is a great idea. The fact remains, however, that we are going to need oil for the forseeable future. Why don't we use alternatives to replace the oil from Russia, Venezuela and the Middle East, and make North America run on 40% Canadian oil and 60% alternatives? As Canadians, it is our responsibility to think for ourselves, not just regurgitate what we hear on TV.
ValerieLaurie: I apologize for the tone of my comment with regard to equalization. I recognize that Ontario is the biggest contributor to equalization and second biggest per capita. My comment was not meant to construe that Alberta should have veto power over matters of national resource use. I am just saying that many people who advocate the destruction of the oilsands don't realize the extent of how they are affected by the economic benefits of the oilsands. The oilsands, as well as creating thousands of jobs and contributing to our social programs, also help decouple us from the US economy and insulate us from the effect of high oil prices, which has significantly helped Canada during this difficult economic time. If people want increased taxes or cuts to education and health care, along with high unemployment, in exchange for a 3% reduction of Canada's greenhouse gas emissions and a few hundred square kilometres of muskeg, thats fine. I just think they should realize that's what they are asking for.
The Power of the Press
I posted this comment on the CBC message boards the day of Obama's inauguration.
I feel that it is neccessary to point out that when you get past all the rhetoric and media spin and Liberal "Harper is Canada's Bush" advertising, and actually take a look at the policies, Conservative policies are actually much closer to Obama's positions than to Bush's (and closer to Obama's than those of the Liberals or the NDP).
Let me give a few examples:
Harper and Obama both support Cap & Trade carbon systems, Bush and the Liberals/NDP do not.
Harper and Obama both support universal health care, delivered in a way that is efficient as well as equitable. Bush did not.
Harper and Obama both believe in fiscal responsibility, the elimination of systemic deficits and the idea of spending only what you can afford. Neither Bush or the Liberals/NDP seem to believe this.
Harper and Obama both believe that creating a strong and stable democracy in Afghanistan is vital to western interests, and worth our troops being there. The Liberals/NDP seem not to agree with this.
Harper and Obama both believe that Israel has the right to defend itself from terrorist action, and that the reason there is still conflict in the region is the unwillingness of the Palestineans to make reasonable concessions (they were offered 94% of the land they wanted and East Jerusalem in 2000 and walked away without even putting a counter-offer on the table) The Liberals/NDP/the Media certainly do not take this point of view.
Harper and Obama both believe that North American energy security is a key concern and should be addressed. The NDP and some Liberals seem to want to shut down the oilsands, necessitating even greater imports from Russia, Venezuela and the Middle East.
This is only a few items on what is a very long list. Think about this before you label Harper as synonomous with Bush/Cheney neo-cons and as the anti-Obama.
I feel that it is neccessary to point out that when you get past all the rhetoric and media spin and Liberal "Harper is Canada's Bush" advertising, and actually take a look at the policies, Conservative policies are actually much closer to Obama's positions than to Bush's (and closer to Obama's than those of the Liberals or the NDP).
Let me give a few examples:
Harper and Obama both support Cap & Trade carbon systems, Bush and the Liberals/NDP do not.
Harper and Obama both support universal health care, delivered in a way that is efficient as well as equitable. Bush did not.
Harper and Obama both believe in fiscal responsibility, the elimination of systemic deficits and the idea of spending only what you can afford. Neither Bush or the Liberals/NDP seem to believe this.
Harper and Obama both believe that creating a strong and stable democracy in Afghanistan is vital to western interests, and worth our troops being there. The Liberals/NDP seem not to agree with this.
Harper and Obama both believe that Israel has the right to defend itself from terrorist action, and that the reason there is still conflict in the region is the unwillingness of the Palestineans to make reasonable concessions (they were offered 94% of the land they wanted and East Jerusalem in 2000 and walked away without even putting a counter-offer on the table) The Liberals/NDP/the Media certainly do not take this point of view.
Harper and Obama both believe that North American energy security is a key concern and should be addressed. The NDP and some Liberals seem to want to shut down the oilsands, necessitating even greater imports from Russia, Venezuela and the Middle East.
This is only a few items on what is a very long list. Think about this before you label Harper as synonomous with Bush/Cheney neo-cons and as the anti-Obama.
Thursday, November 20, 2008
No Such Thing As A Free Lunch
The issue of governments bailing out corporations has been a contentious one of late, and I thought I would offer some thoughts on the matter. In my view, there are two conflicting motivations on this issue
1. Firms that take excessive risk or firms that cannot compete in the marketplace must be allowed to fail. If they know they will be bailed out, it only encourages further risk-taking, because all the upside is there but the downside is effectivley limited. If risky or uncompetitive firms are allowed to survive, they will eventually damage the entire framework of capitalism.
2. Governments have an important role to play in protecting their citizens from large-scale problems that affect them, but were not of their own making. If a major commercial bank were to fail, for example, many consumers would be at risk of losing their deposits, investments and insurance. In this case, the need to protect consumers outweighs the need to punish firms that take risk. However, it must be clear that these corporations, as vital as they are, cannot expect a free lunch.
Applying these two principles to the current situation, one can see that some of the bailouts that have happened were undoubtedly necessary. The AIG bailout is a good example of this. Additionally, the use of public funds to buy securitized mortgages from ailing banks strikes a good balance of helping these institutions well still providing taxpayers with the potential of getting their money back eventually.
Conversley, I strongly disagree with some of the actions that have been taken, as well as some that might occur in the future. Bailing out investment banks, for example, is something I am strongly against. The collapse of these institutions would result in reletively low impact on third parties, and their faliure would strongly disincitivise mispricing of risk in the future.
On a similar note, U.S. automakers should not be bailed out forever. They are far-reaching enough that a one-time rescue might have been justified, but problems will not be solved by throwing money at uncompetitive firms. That will only delay the inevitable. The detroit automakes have had plenty of time and money to try and turn things around, and have failed. It is time for them to either consolidate or break apart, into units that can be competitive again.
To this point, we have not seen serious problems with industries other than finance, insurance and manufacturing, but if we do, I hope that any potential bailout will only target industries whose collapse would severly damage the livelihoods of a majority of third-party citizens. Our money is better spent on other things than on propping up bad gambles by investment banks or uncompetitive automakers.
For $700 billion we could put a man on Mars, and I'd rather do that than save the jobs of I-Banking execs who've pulled in seven figure bonuses for each of the last 6 years. So that better not be where that money goes.
1. Firms that take excessive risk or firms that cannot compete in the marketplace must be allowed to fail. If they know they will be bailed out, it only encourages further risk-taking, because all the upside is there but the downside is effectivley limited. If risky or uncompetitive firms are allowed to survive, they will eventually damage the entire framework of capitalism.
2. Governments have an important role to play in protecting their citizens from large-scale problems that affect them, but were not of their own making. If a major commercial bank were to fail, for example, many consumers would be at risk of losing their deposits, investments and insurance. In this case, the need to protect consumers outweighs the need to punish firms that take risk. However, it must be clear that these corporations, as vital as they are, cannot expect a free lunch.
Applying these two principles to the current situation, one can see that some of the bailouts that have happened were undoubtedly necessary. The AIG bailout is a good example of this. Additionally, the use of public funds to buy securitized mortgages from ailing banks strikes a good balance of helping these institutions well still providing taxpayers with the potential of getting their money back eventually.
Conversley, I strongly disagree with some of the actions that have been taken, as well as some that might occur in the future. Bailing out investment banks, for example, is something I am strongly against. The collapse of these institutions would result in reletively low impact on third parties, and their faliure would strongly disincitivise mispricing of risk in the future.
On a similar note, U.S. automakers should not be bailed out forever. They are far-reaching enough that a one-time rescue might have been justified, but problems will not be solved by throwing money at uncompetitive firms. That will only delay the inevitable. The detroit automakes have had plenty of time and money to try and turn things around, and have failed. It is time for them to either consolidate or break apart, into units that can be competitive again.
To this point, we have not seen serious problems with industries other than finance, insurance and manufacturing, but if we do, I hope that any potential bailout will only target industries whose collapse would severly damage the livelihoods of a majority of third-party citizens. Our money is better spent on other things than on propping up bad gambles by investment banks or uncompetitive automakers.
For $700 billion we could put a man on Mars, and I'd rather do that than save the jobs of I-Banking execs who've pulled in seven figure bonuses for each of the last 6 years. So that better not be where that money goes.
Sunday, November 16, 2008
The Leaders of Men
In honour of Barack Obama's historic victory, and spurred on by a question Dana asked me, I decided to compile lists of my most admired Presidents and Prime Ministers. Some of these men I admire because of their policies, others because of their character. I believe that each of them has contributed something vital to their country and to the world.
U.S. Presidents
1. Abraham Lincoln- One of history's truly great men
2. Franklin D. Roosevelt- Steadied the United States through both their darkest hours, and their finest ones
3. George Washington- Held together a young, fragile nation
4. Woodrow Wilson- Perhaps more than anyone else on this list, he inspires me
5. Theodore Roosevelt- His energy and passion served his country well
6. Harry S. Truman- "The buck stops here..."
7. Dwight D. Eisenhower- A commander, through and through
8. Grover Cleveland- Perhaps the most honourable man ever to be president
9. Ronald Reagan- Brought pragmatism and new ideas to Washington
10. John F. Kennedy- "The eyes of the world now look into space..."
Canadian Prime Ministers
1. Sir Wilfred Laurier- A "pillar of fire...a true Canadianism"
2. Lester B. Pearson- The last great Liberal PM
3. Louis St. Laurent- Perhaps the most competent PM ever
4. Sir. John A. MacDonald- Flawed, but brought Canada together
5. Stephen Harper- "The west is in!"
6. John G. Diefenbaker- Made some mistakes, but he'll always be our "Chief"
7. W.L. Mackenzie King- A weirdo, but an effective one
8. Jean Chretien- 50.58%, plus he did a great job with the finances
9. Sir Robert Borden- Under him, Canada was forged in the fires of war
10. Brian Mulroney- History will be kinder to him in the future than it is today
Honourable Mentions to Al Gore and Preston Manning, two men who never got to lead their country, but who I think would have made tremendous leaders. I hope if I rewrite this list eight years from now, I will get to put Obama on it. Good luck to him.
Wednesday, June 25, 2008
The Book of Laws
In an attempt to establish a coherent worldview, I am going to try and write down a comprehensive summary of my political beliefs. I hope I can build on this is a Cartesian sort of way, and find where the inconsistencies lie. This list is intended to state my positions on issues are are currently contentious in Canada and around the world. It is not exhaustive, and does not include any of the issues on which there exists substantial agreement in Canada (such as the right to private ownership of land or the wisdom of inflation-targeting monetary policy).
Blair's Manifesto circa 2008:
The ultimate goal of all governments should be to act in the best interest of humanity.
The process of globalization should be directed as much as possible toward enabling the creation of a sustainable, global and democratic meritocracy.
Program spending should never exceed revenues in developed countries except in times of national crisis.
Governments should try to avoid over-regulation and keep themselves as small and efficient as possible.
The world's democracies should work tirelessly to spread liberal democracy to other nations, and defend any liberal democracy attacked by a non-democratic state. Israel is a liberal democracy and deserving of our support against its authoritarian enemies.
True free trade is a non-zero sum game: all parties benefit and therefore its development should be advanced as much as possible.
The current system of international trade disproportionately benefits developed countries and can be improved.
The European Union provides a useful, if imperfect, model for a future global federation. I therefore strongly support its continued development.
National and ethnic identity is an important cornerstone of human culture, and should be encouraged and maintained. This should not be seen as inconsistent with political integration.
Nationalism and international competition have the potential to foster great achievements and should be fostered. Again, I don't believe there is inconsistency here.
The long term exploration and eventual colonization of space is ultimately necessary to secure humanity's survival and should be supported accordingly.
The UN is currently a mostly irrelevant international body. A complete overhaul is necessary for it to survive.
Homosexuality is naturally occurring and is not wrong in any way. Equal rights must be afforded to GLBT's, including the right to marry, adopt, and pursue any career they wish without discrimination.
Affirmative action programs that are based on barriers that restrict an applicant's ability to achieve the otherwise necessary qualifications (primarily poverty or socioeconomic status)are good because they promote equality of opportunity. Racially, ethnically or gender based programs aimed at atonement do not have the same effect.
The current procedures for creating GMO foods do not pose a significant risk to health or the environment. GMO's should continue to be used to increase agricultural effectiveness.
Health care of the highest standard should be available free of charge to all citizens. Exceptions should be made in cases where personal choice places undue burdens on the system (smokers who get lung cancer should have to foot their bill).
With regard to non-urgent medical procedures, people should be able to pay at private clinics to lower wait times. This is a win-win situation as it shortens lines at public facilities as well.
It is a great irony that societies who value freedom and democracy so highly have so many citizens who spend a majority of their waking hours operating in a authoritarian environment at work. Increased transparency, accountability and democratization of corporations should be encouraged, and tax incentives should be given for the development of cooperative enterprises.
Climate change will have severe negative consequences for the earth, and the current warming has, at the very least, been exacerbated by human activity. It is of vital importance to limit the production of greenhouse gases in order to mitigate these effects.
Humanity is close to reaching a peak in oil production capacity. The peak for conventional sources will probably occur by 2020, and the overall peak a few years afterward. With growing demand, this will present severe problems, and will necessitate a shift away from fossil fuels.
The majority of resource wealth should be invested in programs that will provide long-term economic security to their region, so that stability can be maintained once the resources run out.
Protection of the earth's biodiversity will continue to be a key challenge for humanity. Programs that reduce land use should be pursued, with the eventual goal of providing for stable populations of all animals and plants.
Generally, I support tax policy that tends toward the taxation of negatives, like consumption and pollution, and tends away from taxing positives, like income.
I would support a heavy estate tax on estates valued above a certain amount, with exceptions for owners of family businesses and farms. I would not be averse to offsetting revenues from this tax by making income tax less progressive, allowing people to have more of what they legitimately earn.
Government is more effective when it is more participatory, and with new technologies this is easier than ever. Soliciting ideas and opinions with regard to public policy can provide a good starting point for policymakers.
Governments should provide incentives for couples to have relatively small families, especially in developing countries.
Quebec, although it has a distinct cultural and societal identity, is a vital part of Canada, and should remain so. However, the threat of separation should not be used to extort Quebec-friendly decisions from the federal government.
In the event of Quebec secession, federalist areas, especially the Aboriginal-dominated north, must be given the option to remain in Canada.
The current arrangement whereby First Nations people pay no taxes to the Canadian government should be amended to include an exception for taxes on alcohol and tobacco.
The current system of relations between the governments of the western hemisphere and the indigenous people of the Americas is unacceptable as a long term solution. Alternatives and modifications should be explored.
Corporations, lobby groups and unions should not be allowed to contribute to political campaigns. Only citizens should have that right, and the maximum individual donation should be capped.
Israel should have the right to exist peacefully, within its 1967 borders except where demographics make this illogical, and provided it provides gradual right of return for Palestinian refugees and their first-generation direct descendants.
Existing alongside Israel should be a democratic and peaceful Palestinian state, comprising the West Bank and the Gaza Strip, as well as a connecting thoroughfare.
The Old City in Jerusalem should ideally be a democratically governed, sovereign city-state that provides for the worship of all faiths. Its current citizens should have the option of Israeli, Palestinian or Jerusalem citizenship at the outset.
Researchers should have license to use stem cells in projects designed to enhance medical knowledge and treatments, or other worthwhile scientific goals.
Those people who are able to work, and refuse the opportunity, should not expect financial support from the government.
Abortion should be available on demand at any point before the fetus reaches viability.
States should have the right to limit immigration based on their economic needs, and discriminate based on the skills of applicants.
In densely populated areas, it makes more sense to group students in schools based on their needs rather than their location.
The legalization of marijuana, subject to the same restrictions and taxes as tobacco, would divert revenue from drug dealers to the government, and would likely decrease, rather than increase, usage.
I support Canada's current gun laws, with the exception of the long gun registry, and think they strike a good balance between individual rights and public safety.
I agree with Stephen Harper's statement that the Senate must either change, or face extinction.
The concept of offering prizes to private groups for certain technological innovations has proven to be successful in stimulating innovation and should continue.
Fission power, though imperfect, should be a part of the short-medium term energy strategy of developed nations. The development of fusion power should be a focus for nuclear policy.
I do not believe in capital punishment. However, I believe that inmate work policies can help to reduce the cost of the prison system.
Canada's policy of official bilingualism is a good one. On the other hand, parts of Bill 101 in Quebec should be modified, as they are discriminatory.
Canadian troops should remain in Afghanistan for as long as it takes to establish a peaceful, democratic state.
Education systems should be designed around a uniform curriculum, supported by subject-specific standardized testing, consistent throughout both public and private schools.
Special-needs students should have the option to attend private schools which better serve their needs, and should receive some financial support to this end. School voucher programs for non-special needs students are unnecessary in Canada.
Government funding for amateur sport should be increased, and divided more evenly among internationally prominent sports.
A great strength of Canada is our ability to create consensus out of disunity, to find solutions that may not work out in theory, but that work just fine in practice. We should apply this strength through increased involvement in global problems.
Canada should not be afraid to engage enemies as well as friends diplomatically. There is rarely harm in talking.
Canada should view the United States as a great friend and partner, but not as a model for development, and not as a superior whose wishes should be complied with unconditionally.
Immigration to Canada should be evaluated based on the skills of the applicant (compared with Canada's economic needs), and their potential contribution to Canadian life, rather than how long they have been waiting or what country they are from.
Proportional representation in the House of Commons is not the answer to calls for Canadian electoral reform. Perhaps it would be better applied to the Senate.
Some kind of carbon-reduction program, be it a carbon tax or a cap and trade system, is likely necessary in the fight against climate change. Any such program must not be used to redistribute wealth among regions, as the current Green Shift program would do.
I'm sure more issues will arise and some of my opinions may change. Nonetheless, every journey has a beginning...
Blair's Manifesto circa 2008:
The ultimate goal of all governments should be to act in the best interest of humanity.
The process of globalization should be directed as much as possible toward enabling the creation of a sustainable, global and democratic meritocracy.
Program spending should never exceed revenues in developed countries except in times of national crisis.
Governments should try to avoid over-regulation and keep themselves as small and efficient as possible.
The world's democracies should work tirelessly to spread liberal democracy to other nations, and defend any liberal democracy attacked by a non-democratic state. Israel is a liberal democracy and deserving of our support against its authoritarian enemies.
True free trade is a non-zero sum game: all parties benefit and therefore its development should be advanced as much as possible.
The current system of international trade disproportionately benefits developed countries and can be improved.
The European Union provides a useful, if imperfect, model for a future global federation. I therefore strongly support its continued development.
National and ethnic identity is an important cornerstone of human culture, and should be encouraged and maintained. This should not be seen as inconsistent with political integration.
Nationalism and international competition have the potential to foster great achievements and should be fostered. Again, I don't believe there is inconsistency here.
The long term exploration and eventual colonization of space is ultimately necessary to secure humanity's survival and should be supported accordingly.
The UN is currently a mostly irrelevant international body. A complete overhaul is necessary for it to survive.
Homosexuality is naturally occurring and is not wrong in any way. Equal rights must be afforded to GLBT's, including the right to marry, adopt, and pursue any career they wish without discrimination.
Affirmative action programs that are based on barriers that restrict an applicant's ability to achieve the otherwise necessary qualifications (primarily poverty or socioeconomic status)are good because they promote equality of opportunity. Racially, ethnically or gender based programs aimed at atonement do not have the same effect.
The current procedures for creating GMO foods do not pose a significant risk to health or the environment. GMO's should continue to be used to increase agricultural effectiveness.
Health care of the highest standard should be available free of charge to all citizens. Exceptions should be made in cases where personal choice places undue burdens on the system (smokers who get lung cancer should have to foot their bill).
With regard to non-urgent medical procedures, people should be able to pay at private clinics to lower wait times. This is a win-win situation as it shortens lines at public facilities as well.
It is a great irony that societies who value freedom and democracy so highly have so many citizens who spend a majority of their waking hours operating in a authoritarian environment at work. Increased transparency, accountability and democratization of corporations should be encouraged, and tax incentives should be given for the development of cooperative enterprises.
Climate change will have severe negative consequences for the earth, and the current warming has, at the very least, been exacerbated by human activity. It is of vital importance to limit the production of greenhouse gases in order to mitigate these effects.
Humanity is close to reaching a peak in oil production capacity. The peak for conventional sources will probably occur by 2020, and the overall peak a few years afterward. With growing demand, this will present severe problems, and will necessitate a shift away from fossil fuels.
The majority of resource wealth should be invested in programs that will provide long-term economic security to their region, so that stability can be maintained once the resources run out.
Protection of the earth's biodiversity will continue to be a key challenge for humanity. Programs that reduce land use should be pursued, with the eventual goal of providing for stable populations of all animals and plants.
Generally, I support tax policy that tends toward the taxation of negatives, like consumption and pollution, and tends away from taxing positives, like income.
I would support a heavy estate tax on estates valued above a certain amount, with exceptions for owners of family businesses and farms. I would not be averse to offsetting revenues from this tax by making income tax less progressive, allowing people to have more of what they legitimately earn.
Government is more effective when it is more participatory, and with new technologies this is easier than ever. Soliciting ideas and opinions with regard to public policy can provide a good starting point for policymakers.
Governments should provide incentives for couples to have relatively small families, especially in developing countries.
Quebec, although it has a distinct cultural and societal identity, is a vital part of Canada, and should remain so. However, the threat of separation should not be used to extort Quebec-friendly decisions from the federal government.
In the event of Quebec secession, federalist areas, especially the Aboriginal-dominated north, must be given the option to remain in Canada.
The current arrangement whereby First Nations people pay no taxes to the Canadian government should be amended to include an exception for taxes on alcohol and tobacco.
The current system of relations between the governments of the western hemisphere and the indigenous people of the Americas is unacceptable as a long term solution. Alternatives and modifications should be explored.
Corporations, lobby groups and unions should not be allowed to contribute to political campaigns. Only citizens should have that right, and the maximum individual donation should be capped.
Israel should have the right to exist peacefully, within its 1967 borders except where demographics make this illogical, and provided it provides gradual right of return for Palestinian refugees and their first-generation direct descendants.
Existing alongside Israel should be a democratic and peaceful Palestinian state, comprising the West Bank and the Gaza Strip, as well as a connecting thoroughfare.
The Old City in Jerusalem should ideally be a democratically governed, sovereign city-state that provides for the worship of all faiths. Its current citizens should have the option of Israeli, Palestinian or Jerusalem citizenship at the outset.
Researchers should have license to use stem cells in projects designed to enhance medical knowledge and treatments, or other worthwhile scientific goals.
Those people who are able to work, and refuse the opportunity, should not expect financial support from the government.
Abortion should be available on demand at any point before the fetus reaches viability.
States should have the right to limit immigration based on their economic needs, and discriminate based on the skills of applicants.
In densely populated areas, it makes more sense to group students in schools based on their needs rather than their location.
The legalization of marijuana, subject to the same restrictions and taxes as tobacco, would divert revenue from drug dealers to the government, and would likely decrease, rather than increase, usage.
I support Canada's current gun laws, with the exception of the long gun registry, and think they strike a good balance between individual rights and public safety.
I agree with Stephen Harper's statement that the Senate must either change, or face extinction.
The concept of offering prizes to private groups for certain technological innovations has proven to be successful in stimulating innovation and should continue.
Fission power, though imperfect, should be a part of the short-medium term energy strategy of developed nations. The development of fusion power should be a focus for nuclear policy.
I do not believe in capital punishment. However, I believe that inmate work policies can help to reduce the cost of the prison system.
Canada's policy of official bilingualism is a good one. On the other hand, parts of Bill 101 in Quebec should be modified, as they are discriminatory.
Canadian troops should remain in Afghanistan for as long as it takes to establish a peaceful, democratic state.
Education systems should be designed around a uniform curriculum, supported by subject-specific standardized testing, consistent throughout both public and private schools.
Special-needs students should have the option to attend private schools which better serve their needs, and should receive some financial support to this end. School voucher programs for non-special needs students are unnecessary in Canada.
Government funding for amateur sport should be increased, and divided more evenly among internationally prominent sports.
A great strength of Canada is our ability to create consensus out of disunity, to find solutions that may not work out in theory, but that work just fine in practice. We should apply this strength through increased involvement in global problems.
Canada should not be afraid to engage enemies as well as friends diplomatically. There is rarely harm in talking.
Canada should view the United States as a great friend and partner, but not as a model for development, and not as a superior whose wishes should be complied with unconditionally.
Immigration to Canada should be evaluated based on the skills of the applicant (compared with Canada's economic needs), and their potential contribution to Canadian life, rather than how long they have been waiting or what country they are from.
Proportional representation in the House of Commons is not the answer to calls for Canadian electoral reform. Perhaps it would be better applied to the Senate.
Some kind of carbon-reduction program, be it a carbon tax or a cap and trade system, is likely necessary in the fight against climate change. Any such program must not be used to redistribute wealth among regions, as the current Green Shift program would do.
I'm sure more issues will arise and some of my opinions may change. Nonetheless, every journey has a beginning...
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