Thursday, January 28, 2010

To Understand the State of the Union –Understand the State of Our Relations with China

If last night's State of the Union speech should remind us of anything it is that we are in a time of crisis. A political system in Washington still deadlocked along partisan lines, still the plaything of special interests and mounting deficits that it will take generations to pay down. The President of course tried to put the bravest possible face on it all and appealed in that slightly corny Reaganesque way to the American can do spirit to get us through.

But for those of us who are concerned about the deeper structural reasons as to how we got here—we must be prepared to look globally beyond just the bank bail outs and the the crazy version of casino capitalism that led up to the fiscal meltdowns. If we want to know why insurance companies like AIG could leverage half the planet in speculative deals—we need to examine our relationship with China. At the core of the key issues facing the US is our unbalanced relationship to that country that used huge surpluses to chase ever higher interest rates after Fed Chairman Greenspan decided to keep borrowing rates low. We also need to understand that although China (as are many Asian societies) more savings than consumer led economies-- the Chinese rate of domestic spending and investment is extremely low. Other Asian societies are much stronger than China on the consumption index—and as James Surowiecki pointed out in the New Yorker several weeks ago during the 1980s China was consuming 50 percent of GDP—it is now down to 35 percent,and as Surowiecki points out the price for keeping the value of its currency low is that Chinese consumers find it tough to find credit and outside of that countries' largest cities there are few stores and products available for sale. There is also an irony in a society that supposedly is still Communist there is no health insurance, unemployment benefits, moreover, Chinese workers can look forward to small pensions, few student loans No wonder the Chinese save so religiously--it is more a survival instinct than a choice. As in the west wages during their economic boom wages were kept low and GDP gains have gone into the pockets of relatively few. Something like one third of our debt is held by the Chinese who arguably now have an effective veto over our foreign policy—witness the extreme reluctance for the Chinese to back UN sanctions against Iran.

What needs to happen? We are in a strange dance with an enormous power that will only gain in economic strength over the next decades. Dance partners do not have to be locked together their entire lives however and there clearly needs to be a debate about the future of this relationship and strategies devised by which China can be persuaded to invest more in its people and their quality of life. China is a late 19th century version of the US—and the UK—poor social conditions for the masses of working people, environmental damage all under-girding the mask of success-- enormous economic power. Rather than maintaining our passive business as usual stance--we need to look at our own crisis as partly a function of the dysfunctional relationship. If we fail to do this could be on a collision course. There is only so much of our debt that the Chinese will buy and only so much unemployment we can politically tolerate. We cannot keep expanding a consumerist and carbon hungry economy. It is time to put this discussion front and center and avoid the tea party distractions and the usual run of celebrity scandals.

Saturday, January 23, 2010

What It Will Take to Move to a Greener Planet?

The planet as we know is in crisis but the question I have coming out of a three day conference held in Washington DC by the National Council for Science and the Environment entitled "The New Green Economy" is what is the reason why our action has been so slow and relatively unresponsive to climate emergency we face?

We have already chopped down a pretty forest in terms of reports written documenting the facts of the emergency--that the current use of resources is unsustainable, that unless we cut carbon emissions dramatically, starting today we and more particularly our children and grandchildren will reap quite a whirlwind.

One of the stars at the conference-- Van Jones, award winning pioneer in the clean energy field and the author of The Green Collar Economy talked in an opening plenary session about the way that hope was assassinated in 1968 with some terrible consequences for the US and the world and we cannot afford a similar loss of confidence concerning the ability of the US to face the climate emergency.

It was hard to avoid the conclusion that the situation is a little less than optimistic:

1) The Massachussetts election means that any potential post Copenhagen Climate treaty is dead in the Congress.
2) We face a worsening economic emergency that has forced the climate crisis on the backburner.
3) Widespread public ignorance and confusion regarding the climate crisis means that potential large scale action is limited.

The workshops yielded many creative ideas:

i) The President has to lead to set a vision as to what a new green sustainable economy looks like. So far we have a hazy idea and it means for too many people threatening changes to their consumer driven lifestyles. The discussion needs to include how life can be richer in a culture that values time over money, services over products, simple pleasures over carbon intensive ones. The President needs to outline how the new jobs that have to be created can only really come if we invest in green energy. The President can give this all a boost by having the federal government give preferences to green energy suppliers and reversing the historic subsidies to carbon energy and polluters and instead provide such government help to the fledgling green energy producers.

ii) We all need to go to school on climate change--understand the complex interaction of factors that will shape our planetary realities if, as expected, we experience a 2 -4 degree rise in global warming and help students understand what skills and knowledge will be in demand as we accomodate to certain changes and try to prevent others. We need to help a new generation of citizens and leaders understand what we mean by sustainable economies and lifestyles. All institutions from schools on up should model sustainable approaches to living.

iii) We need a well funded public awareness campaign to get the $5 billion energy efficiency (weatherization funding) used and the jobs that the funding seeded
to be sustainable. Middle class home owners don't quite understand that two thirds of the energy we produce is wasted-- going out of windows, chimneys etc--the reason why this ignorance continues is that it is not in the utility companies' interest to explain this--and to develop the market for energy efficiency.

iv) Agriculture needs a revolution so that its addiction to nitrogen fertilizers and wasteful forms of production that creates a massive amount of carbon dioxide is changed to efficient organic farming.

Bill Gates has come to the debate as well because a missing element (although touched upon many times) was the need for a focus on innovation. It is Gates' belief that we will not be able to tackle the current crisis without getting transportation and electricity emissions down to zero --his thoughts on this are available on his new blog, The Gates Notes. The core of his argument is that the savings necessary will not be gained simply through insulating homes or reducing wasteful uses. Gates' states that "the world is distracted from what counts on this issue in a big way."

Gates' ideas make sense and need a place in the discussion--particularly in the area of how the necessary necessary R&D can be managed. Given the difficulty of passing a climate change treaty his voice on this issue will count for more. But if we wait around for the kind of silve bullet solution that Gates is calling for it can also be too late. We must do both right now and following this conference, a lot more aggresively than in the past.

The challenge to help the world understand the urgency and the complexities of the issues could not be greater. The elites as we have discussed in a previous blog are not capable of leading us in this area by themselves. A popular movement needs to develop to call for sustainable living policies that align the planet's needs with the kind of economic and sustainable growth that only green energy policies can give us. I am even more convinced following the statistical and other evidence offered at the conference that the other kind of growth--mindless capitalism with a production of more consumer items, more low wage jobs overseas, loss of community as well as the over production of chemicals toxic to people and planetary health is a route to disaster. A brighter future awaits us --but we will have to work for it. The first step is education and awareness--and everyone has to do their bit to get that started.