Waterworld

10/31/2014 , , , , , , 0 Comments

No, this post is not about the movie from 1995 starring Kevin Costner in the role of a mutated mariner. Although there is much attention in mainstream media on global sea level rise it is probably not the most serious issue we face from climate change. Instead, it's the scarcity of freshwater that concern many scientists and farmers.

Water scarcity

We live on a water planet and life itself depend on water. Freshwater resources are fundamental for maintaining human health, agricultural production, economic activity as well as critical ecosystem functions. Currently, 780 million people, about 1 in 9, lack access to clean drinking water and 2.5 billion people don't have access to a toilet (water.org). As population and demand grows, new constraints on water resources are appearing, raising questions about limits to water availability and its potential consequences. 

Global groundwater crisis
Groundwater supplies in the world's driest regions are approaching the point of crisis according to a recent commentary in the journal Nature Climate Change. Famiglietti (2014) at the NASA Jet Propulsion Laboratory shows satellite data confirming that the amount of water stored in seven of the world's major aquifers declined drastically since the early 2000s (see chart). Many of these regions are grappling with drought. Californian farmers are facing unprecedented water cutbacks (Greenwire) and in September a new bill was passed concerning management of groundwater on a statewide basis. Northern China is in the midst of its worst drought in 60 years and armed bandits are institution illegal "water taxes" on small villages in India (Greenwire). Famiglietti says that "It's worse than people realize in part because declining groundwater reserves don't normally get included in assessments of drought" (Climatewire). While reversing climate change is not a possibility, managing our groundwater is. 

Big global aquifers have headed in one direction in recent years: down

Source: Famiglietti (2014).
Management
A key factor in groundwater depletion is that water laws do not do much to manage aquifers. Active water management requires collaboration across institutional levels and public debate on how to allocate and preserve the remaining water ecosystem so it benefits all parties. Groundwater monitoring and management has been very neglected in most parts of the world where aquifers serve as a crucial source of supply for irrigated agriculture and cities. If not handled properly, the results will likely be rising food prices that in worst case scenario could lead to hunger and civil unrest (NECSI).

 Conflict
World Food Program, 2009
Conflict over water is not a new phenomena but it may become more common as climate change and population growth increases pressure on fresh water resources. Some argue that there has been an increase in water-related violence globally, in relation to development projects and economic activities (Pacific Institute). The devastating civil war that began in Syria in 2011 had a direct link to water scarcity and climatic conditions, six year drought, that played a role in the deterioration of Syria's economic conditions and led to mass migrations of rural communities into cities (Gleick, 2014). In 2012, scientists from New England Complex Systems Institute warned about the risk of rising food prices, FAO food price index above 210, leading to civil unrest and riots across the globe. 

Food prices (black line) and food riots and the Arab Spring (red lines)
Source: M. Lagi, K.Z. Bertrand, Y. Bar-Yam, 2011

Conclusion
Climate change redistributes water around the planet, with dry areas becoming dryer and wet areas getting wetter (i.e. droughts and floods become more common). This puts extra stress on fresh water ecosystems and reservoirs. Combined with population growth and water mismanagement this can lead to a water crisis that puts extra pressure on a society and in combination with other factors contribute to full scale conflict, especially in cases of trans-boundary water resources. Countries with little resilience to such shocks are thus most vulnerable to a changing climate. This subject area is poorly understood and needs to be researched further as we head into uncertain times.

0 kommentarer:

TTIP trade deal and it's impact on democracy

10/27/2014 , , , , , , , , 0 Comments

Trade agreement being negotiated behind the scenes

In my last post I had a critical look at the trans-pacific partnership (TTP). And so to be fair and also bring this issue closer to home I will in this post have a look at the Transatlantic Trade and Investment Partnership (TTIP). TTIP is very similar to TTP, a proposed regional free-trade agreement, but between the European Union and the United States. Proponents of TTIP argue that it would result in multilateral economic growth, while critics argue that it would increase corporate power and make markets more difficult to regulate for public benefit. Like TPP this trade agreement has been delayed by leaked draft documents, due to it's secretive nature, but could be finalized by the end of 2014.

Corporate Control

Similar to the case of TTP a very controversial clause in the TTIP is the Investor-state dispute settlements (ISDS). The ISDS would allow corporations to sue governments, for any government action (at any level, including local government level) that limits a corporation's future profits. One example of how the ISDS clause in TTIP would impact countries can be found in the case of the Swedish, part state owned, energy company Vattenfall suing the German government over the issue of terminating nuclear power plants. Vattenfall demands payouts of 4,7 billion euros (Der Spiegel), and has caused outrage in Germany. Other examples includes tobacco companies suing the Australian government over health labeling of cigarettes, and fracking companies suing the Canadian government over environmental protection. The original justification for introducing ISDS in trade agreements was for trade deals with countries where the judicial system was weak in protecting foreign investors. But this is not the case with either the EU or the US. According to the latest UN report on the topic, ISDS cases has increased from 0 in 1992 to 514 in 2012.

Responses by civil society

There is now a growing civil society resistance to TTIP and ISDS inclusion in the TTIP negotiations. Last month there were 450 protest actions across 24 member states (The Greens Europe). The European NGO Finance Watch writes about ISDS that "the very principle of such a mechanism is anti-democratic, because it allows investors to challenge legitimate regulations and other rules that have been created and voted by democratic institutions with a view to protecting their citizens". Corporate Europe Observatory (CEO) has reported that of 560 lobby encounters that the European Commission trade department held to prepare the negotiations, 520 (92%) were with business lobbyists, while only 26 (4%) were with public interest groups (CEO). That must be considered corporate capture. A large number of European scientists have also voiced concern over ISDS legal nature, quote "there is little evidence linking the conclusion of the Treaties to increased flows of foreign direct investment, and there is little evidence that they contribute to other development goals, such as encouraging good governance" (University of Kent). And a recent study from Tufts University has concluded through modelling that TTIP could lead to: net loss in exports for the EU, a net loss in GDP, and a loss in employment of some 600 000 jobs, and the author conclude by stating that "In the current context of austerity, high unemployment and low growth, increasing the pressure on labor incomes would further harm economic activity" (Capaldo, 2014).

Impact on environment, health and food standards

Many environmental organisations fear that the TTIP will ignite a "race to the bottom" regarding environmental regulations in the EU, so that they come to resemble the US far weaker regulatory system. Most likely the TTIP will accelerate the privatization of public goods and services such as National Health systems. This could have tremendous effects on public health. And many analysts agree that TTIP would allow big food corporations to avoid food safety regulations and undermine sustainable agricultural practices in the rush for profits and trade. For example, the US has much weaker standards on animal welfare, ecosystem protection and GMO labeling. These are serious citizen concerns that has not been sufficiently addressed by governments wishing to take part of the TTIP.


Conclusion

Trade unions, consumer groups, environmentalists and digital rights activists are opposed to increasing corporate rights over sovereign nations. Almost all (centre-)left groups in the European Parliament have voted against ISDS. So have the French Assemble and the Dutch Parliament. In Sweden, however, both the moderates (M) and social democrats (S) are positive to the TTIP (ETC, 2013). The current prime minister, Stefan Löfven, has stated that he welcomes the TTIP but that "social justice issues should be included" (ibid). This is a paradox since the (S) representative Mikael Damberg in a leaked document to Cecilia Malmström, the EU commissioner for trade, has signed a letter pushing for ISDS inclusion in TTIP (TTippen.se). The most troubling issue is perhaps how much of the negotiations have been kept secret from public and governmental scrutiny, similar to the TPP. Moreover it seems that countries have become so desperate for economic growth that they are willing to throw everything they worked for, in terms of environmental and health regulation, out the window. I am also surprised that conservatives don't seem to react to this issue as much as the left, one might think that they should be even more concerned with national sovereignty.   

0 kommentarer:

A critical view of the TPP

10/26/2014 , , , , , , , , , 0 Comments

Trade agreement that upsets

The Trans-Pacific Partnership (TPP) is a regional free-trade agreement between the United States and some pacific countries. It threatens local economies self-determination over big corporations and any hope of a green trade deal that could ultimately do more to reduce carbon emissions. Critics have described the TPP as NAFTA on steriods (stoptpp.org) because of its focus on giving legal power to multinational corporations over nation states and their citizens. The proposed TPP is now, however, running into difficulties as the public learns more about it.

What is TPP?
TPP is a proposed regional free-trade agreement that as of 2014 includes twelve countries throughout the Asia-Pacific region (see map below). These countries combined represents an economic power of more than 40% of the worlds GDP, making the TPP the largest economic trade agreement to date. The agreement started with discussions in 2005 and should have finished by 2012 but was delayed because of major controversies and outrage due to leakages of secret documents around Intellectual Property and Environment Chapters in the proposed agreement by WikiLeaks. The push for this kind of an trade agreement probably started as a alternative way to WTO negotiations after 12 years of stagnation, partly due to well-organized public resistance in many countries. At the moment U.S. corporate interests are driving the agenda of the TPP (The Guardian).  It is according to many commentators no coincidence that leftist Latin American governments and China has been left out of the agreement.




Controversy
There has been extremely little transparency regarding the TPP negotiations. Few people have had access to the draft agreement and outermost secrecy has been in place. Large corporations and lobbyists, however, have been able to see chapters of the document. Thus when WikiLeaks first revealed parts of the TPP draft in November of 2013 many people and citizens rights groups got very upset. One part of the TPP which consist of giving corporations the right to directly sue governments for regulations that infringe upon profits or potential profits may explain why the TPP negotiators tried to hide the details from public awareness (Guardian, 2013). Because they knew it would evoke strong opposition, given the value people place in national sovereignty. Other parts of the draft, which have been leaked, includes:

 Intellectual Property (IP) Chapter
The IP Chapter covers topics from pharmaceuticals, patent registrations and copyright issues to digital rights. Experts say it will affect freedom of information, civil liberties and access to medicines globally. The latest 77-page document is a working draft from the negotiations in Vietnam, dated 16 May 2014. The IP chapter of TPP would, if signed, effectively let corporations monitor citizens online activities, cut off peoples Internet access, delete content, impose fines and pursue stronger criminal regulations related to online copyright (ComputerWorld). It would end up instituting very controversial laws such as SOPA and PIPA that would restrict internet freedoms and free speech to the benefit of corporations. Overly protective patent laws on medicines and biological seeds etc. would also increase health care costs and farming practices and thus have a major impact on public health and food security, especially in poorer nations. 

 Environment Chapter 
The environmental chapter in the TPP does not require nations to follow legally binding environmental provisions or other global environmental treaties. Pollution controls could vary depending on a country's domestic circumstances and capabilities. The chapter shows how trade above all is promoted, beyond environmental goals and values, basically stating that local environmental laws are not to obstruct trade or investment between member countries. Furthermore there is an emphasis on “...flexible, voluntary mechanisms, such as voluntary auditing and reporting, market-based incentives, voluntary sharing of information and expertise and public-private partnership”, but that even such measures should be designed in a manner that “...avoids the creation of unnecessary barriers to trade” (WikiLeaks). At a time of worldwide environmental challenges (including species die-offs, dangerous pollution of the oceans and climate change) people would expect that trade could be a tool to protect the planet, not hasten ecological collapse. 

 Conclusion
According to Noam Chomsky, the MIT professor, the TPP is not about "free trade" at all. He says “These are extreme, highly protectionist measures designed to undermine freedom of trade. In fact, much of what’s leaked about the TPP indicates that it’s not about trade at all, it’s about investor rights” (Huffington Post). Simply put, this proposed agreement protects corporations over citizens and profits over the environment. If signed, this agreement could further exacerbate economic inequalities and environmental degradation in many nations.

0 kommentarer:

Crude awakening?

10/24/2014 , , , , , , , , 0 Comments

Oil market in turmoil

There seems to be a lot of confusion regarding the recent behavior of the world oil market. After five years of relatively stable oil prices, a barrel of WTI crude has dropped from around 110 to 81 dollar (see chart below). I have been following a discussion in the opinion-pages of Svenska Dagbladet clearly displaying this confusion. The discussion started with an article from Kjell Aleklett, a physics professor in global energy systems at Uppsala University, arguing that falling oil prices may signal the start of a global economic downturn. After which Magnus Grill, a political representative of the Peoples Liberal Party (Fp) and energy businessman, replied by arguing that Aleklett did not understand economic theory and that we instead more likely will see an economic upswing in the close future. So how come these two prominent people get to totally different conclusions? While this is a very complicated subject, fraught with international politics, there are some key points I would like to make from the natural resource dynamics and economics perspective.

Source: U.S. Energy Information Administration

Geological point of view

First of, Grill makes a fundamental mistake when he writes that the concept of peak oil is about running out of oil resources. Peak oil simply refers to the peak in production of oil, as opposed to demand which is generally assumed to increase. The concept is mainly useful for understanding that there are geological conditions/limits to oil extraction which makes oil increasingly expensive and harder to extract, leading to higher capital expenditures (i.e. diminishing economic returns). Peak conventional oil is according to many system scientists not some fuzzy academic concern but a reality, for the US in 1970 and for the world since about 2005-2008 (e.g. Hall, 2010; Turner 2014). Even the conservative IEA has warned about peak oil. The issue is not really about how much oil there is in the world, since there are surely untapped reservoirs, but rather how much effort we can afford spending trying to get to those oil resources. The harder we have to work for getting more oil (e.g. tar sands, fracking, and deepwater drilling) the less net energy we produce for society. In the 1970s every one barrel of conventional oil in form of energy input yielded about 30 barrels of energy in output (i.e. 30:1). Today that relationship is somewhere around 18:1 (Hall, Lambert and Balogh, 2014). Since oil is still the largest source for global energy use (~33%) this has significant implications for the overall economy. 

Economic point of view

Whether or not you buy in to the fact that non-renewable resources are finite and has a depletion function, or maximum yield curve, there are simple economic factors connected to oil which impacts growth. We also have to think about that oil is subject to supply and demand. So while Saudiarabia may have released some reserves, as they are the price setters, there are other more long-term trends influencing the market. Conventional oil production has been stagnating while the production of unconventional oil, especially shale oil in the US, has compensated for the decline and allowed for a small production increase. However, at the same time, many of the major economies are in recession and reducing their energy demand. For example, Italy has lost 25% of its oil consumption over the last five years (Bardi, 2014). And many other economies are in trouble, now even perhaps Germany. So if there is a increase in supply while demand is falling the market may eventually determine that oil prices should go down. Here, the role of financial operators perceptions play an important role. How low prices will go depends on several factors, but short-term the markets confidence in oil can influence large swings, such as the drastic drop witnessed in 2008-2009. And Saudi oil policy also matters. In the long term, however, oil prices are likely to rise. Secondly, Grill argues that lower oil prices is a good thing that could lead to economic upswing. That depends, if you are an importer or exporter. Sweden is dependent on oil imports, mainly for transportation. So for us it is perhaps beneficial but may also deter our society to shift from oil to other liquid fuels. But, lower oil prices hurts economies dependent on oil exports and non-conventional oil drillers dependent on a high oil price (around 75-90/barrel) to break even (Forbes). If oil prices stay low for any longer period industry will probably produce less oil. Thus, lower oil prices in a resource constrained world does not necessarily imply increases in global growth. 

Conclusion

This is in essence what peak oil means. Peaking does not mean running out of oil but rather that producing more oil becomes much harder/expensive than before. It is therefore possible that oil will cost less in the future, but that we won't have the money to pay for it. So the real question is, up to when are we able to afford further production? And the crucial point is that when a society's economy is based upon non-renewable energy resources there are limits to growth. It is just how nature works, the laws of thermodynamics, and there is no point in trying to argue with nature. There is however a point in arguing with Magnus Grill since he doesn't seem to understand the complex relationships between ecological and social factors influencing resource extraction and energy availability.

0 kommentarer:

EU members positions on climate and energy targets 2030

10/19/2014 , , , , , 0 Comments

Climate targets 2030


European member states are soon to vote for binding targets on greenhouse gas emission reductions and energy targets for 2030 (See last paragraph for update). Below are three maps that can be found on the energy in demand blog that display how EU members have positioned themselves in terms of voting for or against 40% greenhouse gas emission reduction targets, 30% increase in energy efficiency and 30% target for renewable energy by 2030. 

The new coalition government in Sweden seems to have decided to vote no for a binding target for 40% reduction in greenhouse gasses. Some say that the red/green majority got their proposal for higher targets (50%) voted down by the conservatives (M and SD). They may end up having to settle for a 40% reductions target. I'm not sure about the reasons behind the lower targets, no clear information or statements have been given on this issue and many commentators seem confused (Supermiljöbloggen). On the topic of energy efficiency and renewable energy Sweden still shows undecided but my guess and hope is that we will be in favor of the binding agreements as shown below (see in yellow "yes"). 

By the look of it European members are not really showing any strong leadership the year before UN Climate Change conference in Paris (2015). To reach the international goal of staying below 2 degrees warming the world's greenhouse gas emissions has to drop 80 % by 2050 (compared to 1990). Some environmental experts, such as Johan Rockström, argue that to even have a chance of reaching that goal the EU needs to have a target of at least 60% reduction in greenhouse gasses emissions by 2030. Decisions are to be made next week at the European Council. There is still time to take action! Below are two petitions you can sign to show your support for stronger European climate targets.

--> Demand European Climate Action - Act Now
--> EU: give children the future they want - Avaaz
Shows countries leaning towards 40% reduction in greenhouse gasses
Shows countries leaning towards 30% energy efficiency
Shows countries leaning towards the goal of 30% renewable energy

UPDATE! 24th October

The European Council decided Europe's climate future yesterday. The results are lower than many environmentalists and scientists hoped for, set at targets of 27% energy efficiency, 27% renewables and 40% GHG emissions to be met by 2030 (Supermiljöbloggen). The European Environmental Bureau (EEB) condemned last nights outcome which escalated into a race to the bottom. Jeremy Wates, EEB Secretary General, said that “With this abysmal result, Europe’s leaders have failed their citizens and failed the world. More and more extreme weather events such as flooding and wildfires are already hurting people and their communities all across Europe. Adopting a set of targets to cut energy waste by 40%, roll out sustainable renewables to 45% of the energy mix and cut emissions by 60% is what the science of climate change demands, and is also what will help Europe get on its feet.” (EEB Press release). Others say that it is a first good step, showing other regions of the world that Europe has ambitions to lower greenhouse emissions. However, any final decisions about targets may change in accordance with the UN climate summit in 2015. The Swedish representatives failed to reach higher targets and seems to have focused most of their energy on voting each other down. The conservatives voted down red/greens higher targets, after which S made up some new much less ambitious target that in the end only got the support of SD.

0 kommentarer:

Storytelling drives change

10/14/2014 , , , , , 0 Comments

Facts don't drive change

Facts are of course very important to making the right decisions in regards to environmental problems and potential solutions. But facts alone, don't engage people and drive change on a larger scale. For that to happen a wider cultural conversation is needed. Telling a story is a more effective way to send a complex message and start a dialogue. It goes through emotions and connects with logic, giving real examples of change.
Source: Story of stuff
Storytelling and adapting messages to specific target groups
Psychology plays an important role in how we humans view information and act based upon new facts. Environmental communication needs to understand this and focus on how to inspire people, rather than scare them. In this case, storytelling can be a successful way of communicating sustainability concerns and visions to the broader public or a specific target group. Communicating a coherent story is something many companies are good at but environmental organizations have only just begun using this strategy for outreach. Creative initiatives like the Story of Stuff have started to do this by helping to shift the conversation from the buying of more stuff to having less, but better, stuff. 

What makes a good story?
To help friends, colleagues and your community become more aware of environmental issues and sustainable development, use stories. The model suggested below can be applied as much to articles (e.g. blogs, newspapers) as to videos, podcasts, oral presentations or other media. Key ingredients for a good story include:
- It gets noticed!
- It tells a story of real people and/or real situations
- It gives a living example of the broader, more abstract message you wish to convey
- It expresses a single, main idea
- It adopts a tone (e.g. sad, happy, excited) to go with the issue
- It touches emotions by speaking to universal values (e.g. love, fear, bravery)
- It uses rational arguments, appealing to logic (e.g. using numbers and placing the issue within a broader context)

 Nature is speaking
Another interesting example of attractive storytelling can be found in the project natureisspeaking.org by Conservation International (CI). In this collaboration between companies (Virgin, Radical media, hp etc.) and CI, famous actors and actresses take on the voices of different parts of nature such as the oceans, the soil, and the rainforests. With stunning images, nature sounds and famous narrators this campaign makes for a compelling story about the human-nature relationship and our dependence on nature. 
Source: Nature is speaking

0 kommentarer:

Growth in what?

10/12/2014 , , , , 0 Comments

Redefining Capitalism?

More and more organisations are waking up to the fact that growth in GDP in itself is not a sufficient condition to make a country more prosperous. Something that many ecological economists have been saying for decades. Because many western countries economies are now contracting or struggling to simply stay put, while inequalities are growing, conventional economists are having to admit to capitalism's dark sides. In a recent article, on McKinsey's website, Beinhocker and Hauer (2014) confirms the faulty equilibrium model that neo-classicists have based their theory on. The economy is, as many non-conventional economists have argued, a complex, dynamic, open, and nonlinear system. Similar to that of an ecosystem. And moreover the economy is only a part of larger system. These insights have fundamental implications for how people think about the nature of capitalism and prosperity.

Different types of capital
It is not simply that the economy is a networked system of interacting agents with flows of resources and complex behavioural rules. The economy has to be further understood as  a subsystem of our societies and the biosphere. Meaning that there is not only one type of capital (financial) that matters to the prosperity of a community, city or nation. Social capital (e.g. trust, equality, transparency), natural capital (ecosystem services) and knowledge capital (education, research etc) are part of the overall wealth equation too. Without much natural capital the resource base for providing primary goods such as food, drinking water, fuel, clothes and homes is poor and makes societies less able to withstand shocks from natural variabilities (e.g. floods, droughts) and climate change. This in turn effects the overall economy as, for example, natural resources becomes more expensive - prices goes up and people won't afford to spend as much on secondary goods. In a society where there is little trust and transparency, transaction costs are high and investments low. Social capital is the glue which keeps a society together, that enables cooperation. Without it, a society becomes unstable and could lead to political turbulence. This is why inequality is such a major problem, also from an economics perspective. Research and eduction also greatly affects an economy's long-term success. Without knowledge capital there would be little innovation and few new industries or areas of expertise offering comparative advantage. 


Figure 1. Ecosystems sustain societies that create economies and generate knowledge
Source: Living Planet (2014)
Growth in what?
Now that we know that there are several aspects which are important to the overall wealth and stability of a nation, what is it that we want to grow? Achieving a prosperous society ought to entail keeping a balance between the different forms of capital so to ensure resilience of the overall economy. Moreover, by understanding that the economy is a complex adaptive system we can analyse its pathway from a different perspective. Once again making the economy to just a tool for achieving something larger than just GDP growth in and of itself. If you look at most societies, values and policies that rank as most important include: low unemployment, safety, free speech, fair wages and elections, education, health and equal opportunities to all spheres of social life. So what is it that we want more of, that should grow? Well, in many western societies we want to grow our social, natural and knowledge capital! And not the other way around, as we are doing now, degrading these forms of capital based on the misconception that it is the financial capital that makes for the wealth of a nation. 

References and reading tips:
Beinhocker, E. and Hanauer, N. (2014). Redefining capitalism. McKinsey Courterly.
Dean, B (2014). Greens face problem with economic ‘growth’ framing. Open Economy.
Jackson, Tim (2009). Prosperity without growth? - the transition to a sustainable economy. Sustainable Development Commission UK, Report.
WWF (2014). Living Planet Report.

0 kommentarer:

The tragedy of the science commons

10/09/2014 , , , , , , 0 Comments

How to communicate climate change science

One of the major problems to curbing greenhouse gas emissions in the United States, and thus to some extent globally, is the fact that a large fraction of the American public is skeptical about the proposition of human-induced climate change. According to a multiple-country study by Resources for the Future (RFF) released in 2010 only 40% of the American public think that environmental improvements should be a priority. This is in comparison to 77 % of the Chinese public and 62% of the Swedish public  (figure 1). Dan Kahan, a professor in law and psychology at Yale University, has studied this phenomenon which he calls the science communication problem, referring to “the failure of sound, widely disseminated science to settle public controversies over risks and other policy-relevant facts that admit of scientific investigation” (Kahan, 2012). This post will deal with the topic of understanding different cultural/group attitudes towards scientific information.

Figure 1. Source: Resources for the future
Ever since the 1970´s there have been many suggested reasons to why science has not been able to settle debates about e.g. climate change, gun control, and nuclear power in the U.S. and elsewhere. One common thesis is the so called "science denialism" which posits that we see disputes over risks because there is a significant portion of the population that doesn't accept the authority of science as a guide for policy-making. Suggested solutions related to that type of reasoning has thus been to promote more education and outreach. However,  Kahans research on this topic in the case of the U.S. shows that no cultural group favors policies that diverge from scientific consensus on climate change, for example. Rather, due to identity-protective cognition, groups are culturally polarized over what the scientific consensus is on those issues. 

A second common explanation is the "misinformation" thesis. Although there is plenty of misinformation on topics such as climate change Kahan argues that it may not be the case that misinformation is actually causing public controversy but rather that causation runs the other way. Meaning that people tend to find evidence supportive of erroneous but culturally supportive beliefs which in turn can set of a cascade of misinformers who benefit from this viewpoint being promoted e.g. coal industry. 

The third explanation comes from economics and is called "bounded rationality". To some people, controversy over climate change can be explained by deficits in the public's reasoning capacities. According to this view, ordinary members of the public know too little science and can't understand it anyway because they use faulty strategies for interpreting risk information. Although it's plausible Khan argues that even this explanation is wrong. He does so on the basis of evidence from his studies that higher levels of science literacy and quantitative reasoning ability did not lower the cultural polarization on climate change, but rather magnified it. This seems intuitively wrong to most people who would have guessed that with greater science literacy also comes increasing awareness of scientific truths. But Kahn explains this phenomena in terms of that people who are motivated to form perceptions that fit their cultural identities can be expected to use their greater knowledge to further facilitate erroneous beliefs about societal risks.

The fourth and last, less common but increasingly mentioned, explanation for why science has not been able to settle the public debate on climate change in the U.S. is termed "authoritarian personality". This explanation method posits that personality traits such as closed-mindedness on the one hand and conservative ideology on the other correlates, and that this would indicate differences in e.g. republicans and democrats positions on climate change. However, as Kahn shows in his cultural cognition studies, both republicans and democrats tested equally protective of their cultural beliefs whether they were wrong or not and open-mindedness did not matter as a factor. Moreover, the subjects most inclined to employ reflective reasoning were also the most prone to identity-protective cognition, agreeing with findings in disproving the third explanation mentioned above. This means that in the case of the U.S., at least, cultural cognition and group identity is a major problem to people trying to achieve a truthful and effective science communication. Different cultural and ideological values shape peoples risk perception on issues such as climate change as demonstrated in the figure below.
Source: adapted from Cultural Cognition 
The tragedy of the science commons
According to Kahn these results indicate that indentity-protective cognition is the problem to why science has not been able to settle certain debates such as climate change. It affects groups of all ideologies and interferes with the judgment of even the most scientifically literate and reflective citizens. The public space for debate can be defined as a common good. For this public space to benefit society at large, and not only certain cultural groups, standards has to be put into place to protect this common good. This would include not allowing pollution in form of erroneous but culturally protective beliefs to take over the space. Kahn thus suggests that there needs to be a separation between meanings and facts, allowing for a public space were discussions about policy-consequential facts can be fruitful. Leaving all that has to do with meanings outside of the science debate so to protect democratic societies from that which makes the science communication environment toxic. But to do this one also needs to understand how such meanings are formed, which today is still poorly understood.

References:
Carlsson et al. (2010). Paying for Mitigation: A Multiple Country Study. 
Kahan, D (2010). Fixing the Communications Failure. Nature 463, 296-297

0 kommentarer:

Money and Sustainability

10/05/2014 , , , , 0 Comments

Understanding the monetary system

We live in world where systemic crisis seems to be ever more present, especially in the areas of ecology and finance. Understanding the instabilities in each system is important of course, but to have creative new ideas about potential solutions one also needs to understand the connections between different sectors. Since “finance rules the world” some basic facts and myths need to be understood by people wishing to see a more sustainable future society. This post will deal with the link between money (finance) and ecology (sustainability). 
Ecological creditors and debtors
Source: Footprint Network, 2011

What is money? how is it created? and who governs the money flow?
All economic textbooks defines money by what it does, not by what it is. Money is really just an agreement within a community to use something standardized as a medium of exchange. Most money, around 96%, is created through the checks and balances of banks when a new loan is made. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it typically credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created (Bank of England, 2014). This means that there is corresponding debt to the money in circulation, an important fact that most people seem to not understand of forget. The amount of money created in the economy ultimately depends on the monetary policy of the central bank. Central banks normally control this by setting out interest rates, but lately they also do it directly through purchasing assets (quantitative easing).

Systemic Monetary Instabilities
Since the 1970s, the International Monetary Fund (IMF) have identified 145 banking crashes, 204 monetary collapses and 72 sovereign debt crises (Lietaer, 2012). This clearly points to structural instability in the financial system. Underlying this increased instability, building up over the last 30 years, is a regime change from productivity growth to consumptive growth fuelled by low interest rates, financial profits and explosive debt (Fig. 1). The result has been a succession of bubbles and crashes all leading up to the climax of 2008, which brought our financial system close to collapse (Fig. 2)


Fig. 1 Wages and  private consumption as % of GDP for the U.S., the EU and Japan.
debt increase due to lower wages and higher consumption
Fig. 2 The global bubble.
financial bubble 2008
Source: Sornette and Cauwels, 2012
Money and Sustainability
By now it should be obvious to most observers that there are many problems with our current monetary system, but how does it relate to sustainability? In the Club of Rome report “Money and Sustainability the missing link” (2012) Bernard Lietaer summarizes five elements that make the present monetary system incompatible with sustainability, including:
Global wealth inequality

- Amplifies boom and bust cycles
- Produces short-term thinking
- Requires unending growth
- Concentrates wealth
- Destroys social capital

The report is 200 pages long so I won’t go into all of the points above more than to give some short comments. For example, investment may be the single most important element of promoting a more "green" economy since it embodies the relationship between the present and the future. Today a large part of private investments are simply circling around in the financial system without contributing to any solid physical, social or environmental assets. Another large part of investments made by sovereign wealth funds and pension funds goes into fossil fuels and mineral extractions. But in order to avoid the worst scenarios of climate change massive investments are needed now. The international energy agency (IEA) said this June that the world needs 48 trillion dollar in investments just to meet 2035 energy needs. At the moment University students around the world are campaigning for divestment in fossil fuels and I think many people and small businesses around the world are desperately trying to find alternative financing due to the credit crunch.

Are there any alternatives?
To solve the systemic instabilities there are a couple of suggestions. Researchers at the IMF has suggested some form of the Chicago Plan, whereby money creation is moved from the hands of the banks to the state (Benes and Kumhof, 2012). This solution could perhaps go a long way but would not solve the issue of having a currency monopoly of bank-debt money (i.e. monetary collapses could still occur). Moreover, it seems unlikely that any government would adopt this type of policy since it requires a total restructuring of the financial system. Another suggestion is to promote complementary currencies as this could increase societal resilience to financial crisis and help match unmet needs with unused resources. With modern digital technology this would be perfectly feasible and would not require any major governmental intervention, only approval. The claim goes as follows. Monetary systems are a type of complex flow networks, and as such there needs to be a balance between optimization for efficiency and resilience (Fig. 3). A monopoly is very efficient but increases systemic risk over the long term. By increasing the diversity of currencies one could thus enhance resilience to systemic instabilities originating from bank-debt money creation. This is because complementary currencies behaves counter-cyclically with the mainstream economy.
Fig. 3 Today's monetary system is significantly overshooting the optimal balance for maintaining stability. 
Source: Lietaer, 2010
Examples of complementary currencies:
- Time banking: US community services, Japan elderly care, UK unemployment 
- WIR bank: business-to-business lending Switzerland
- SoNantes: promotes local business in France
- Torekes: community services in poor neighborhoods in the Netherlands 
- Bristol pound: promoting community businesses
- Tradecoin: business-to-business 
- Bitcoin: p2p global network
- E-portemonnee: promotes environmentally friendly behavior in Belgium 

Conclusion
There are many misconceptions about our current monetary system, for example that modern money is a neutral medium of exchange. And with such an awful track record we should at least start thinking about alternative ways of promoting mediums of exchange that does not only take into consideration maximization of profits, but also promotes societal beneficial activities such as education, elderly care, employment, energy efficiency, carbon reductions etc. With modern information technology, spread and use of complementary currencies is very feasible and to low costs. Complementary currencies could act as support systems, especially in times of crisis, enhancing system resilience. In cases where our current monetary system does not promote certain social behavior that would otherwise be beneficial to our communities, complementary currencies could act as enablers of such behavior. 

References:
Benes, J., and Kumhof, M. (2012). The Chicago Plan Revisited. IMF working paper 12/202
Lietear, B (2012). Money and Sustainability - the missing link. Club of Rome report. 
Sornette, D. and Cauwels, P (2012). The Illusion of the Perpetual Money Machine. arXiv:1212.2833 

0 kommentarer:

Understanding Complexity

10/04/2014 , , , , 0 Comments

“We are seeing an extraordinary failure of our current political and economic system” - Geoffrey West, Santa Fe Institute

A systems view of the world

We live in a highly globalized world, where people and places are becoming increasingly interconnected. Our social, economic, technical and environmental systems are therefore becoming more complex. With it follows new opportunities but also major challenges. For example, complex systems give rise to new types of problems which often are systemic in nature, including: Financial, economic and debt crisis, Social and political instabilities, Environmental degradation and climate change, Organized crime, cyber-crime and Quick spreading of emerging diseases. A major challenge is thus how to organize ourselves in the best possible way to achieve both individually and socially beneficial outcomes. Both free market radicalism and dictatorial state control have failed us utterly. We need another way of studying and managing social, financial and environmental systems in an increasingly complex world. “Business as usual” is no longer an option.

Complex systems

Complex systems is a field of science studying how parts/actors of a system give rise to the collective behaviors of the system, and how the system interacts with its environment. Complex systems behave qualitatively different from old world simple systems. Complex systems are dynamic and behave in non-linear ways, giving rise to abrupt changes which can in worst case scenario lead to collapse, sometimes irreversible e.g. fish stock collapse. Complex systems often give the illusion of control because of this feature. For example, many economists believed that they had eradicated depression type crises with their neo-liberal free market policies from the 1980s onward. When in reality, all they had done was to build up a major instability in the system (built on debt) which took a long time to mature, then when a shock hit the system it suddenly collapsed. In complex systems it is the interactions between different parts/actors of the system which are important, giving rise to emergent behavior of the overall system. Studying parts of the system separately will therefore not tell you anything about the system as a whole e.g. studying banks but not in relation to the rest of the economy. Attempts to “control complexity”, i.e. to force a complex system to behave in a certain way, are often counter-productive, ineffective and costly. This is why central planning always fails. Design principles such as rules, norms and incentives which influence actors collective behavior are key to understanding and influencing many complex systems.

Fig. 1 Evolution of civilizations: organization and control structure
typology of civilizations organizational structure
Source: New England Complex Systems Institute

Building more resilient systems

Because there is a poor understanding of complex systems, attempts to only optimize for efficiency often leads to a loss of resilience i.e. increase in systemic risk. Other common drivers of systemic risk include: loss of redundancy, loss of diversity, more networking, and faster dynamics. Building more resilient systems will be key to avoiding major crises and ensuring future development and well-being. Ways of enhancing resilience includes:
- Increase redundancy: have reserves, alternatives, plan B
- Simplify: limit system size
- Lower connectivity: decoupling strategies
- Increase diversity: having a multitude of species or assets
- Real-time monitoring: adaptive feedbacks, self-regulation
- More transparency and awareness: more data and analysis
- Suitable incentives: norms and rules governs actors behavoir from the bottom up

Governance

The need for more participatory systems follows from the need to move towards more distributed control and decentralized management of increasingly complex systems. In a rapidly changing world, politics and business becomes increasingly similar to disaster response management. From top-down control towards bottom-up response (Fig. 2). The trend to decentralized, bottom-up approaches is growing because it is more efficient and enhances resilience in a complex world. Examples include: self-controlled traffic systems, peer-to-peer lending, peer review systems, Uber and self-driving cars, intelligent swarms, and self-generation of electricity.

Fig.2 From top-down to bottom-up control
rigid system controlflexible management


Comparing three common ways of trying to organize complex systems

The most common but outdated way of trying to organize a complex system is through a) top-down control, but this way is very inefficient (costly) and reduces resilience (Helbing, 2013). The second way is to allow individuals to b) self-organize from the bottom-up with a focus on self-interest, which is efficient but often lead to “tragedy of the commons” problems (e.g. overfishing, climate change, pollution). A third way is to allow c) bottom-up regulation but with a focus on other-regarding preferences and coordination with neighbours, which is resource-efficient and promotes resilience. The differences in options is made visible in Fig. 3. According to recent research, option c) is the best choice when trying to organize complex systems given proper design principles. Reputation systems and meritocratic matching can provide institutional frameworks to overcome “tragedy of the commons” and create societal benefits.

Fig. 3 Table highlighting the differences between governance options, including difference in system dynamics and outcomes.
a)
b)
c)
homo socialis, the new market based society
Source: Helbing, 2013.
This kind of research is very important as it clearly shows that there are alternatives for how to organize and govern a market based society. Old ideologies and ideas about human nature should be disregarded in favor of science-based knowledge about how our modern world actually works. Moreover, with our new digital tools and big data a more participatory and self-regulating society is truly possible. And it is needed as we are entering a world full of complexity. Setting up simple systems that enables real-time feedbacks can lower costs and enhance resilience of any complex system such as a society, a company or a market place.

0 kommentarer:

Subscribe to: Posts (Atom)