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Archive for the ‘Events’ Category

I had the pleasure of speaking at an event about alternative economic models in Edinburgh this week, but I was as studious as the rest of the audience listening to Ian Johnson, Secretary General of the Club of Rome. Next time someone suggests economics is part of the problem of sustainable development, but can’t contribute to the solution, I’ll refer them to this… He laid out 6 challenges:

  1. Loss of ecological capital (biodiversity, climate, fisheries, forests).
  2. Unemployment and underemployment.
  3. Fiscal and banking crises, linked to inadequate regulation.
  4. Food crises, of which there have been 2 in the last decade
  5. Poverty crisis, including rising inequality in developed and developing countries.
  6. Security threats to social cohesion.

The root causes of these are linked to the underpinning value system, economic growth paradigm, and inadequate institutions and governance systems. He highlighted some economic faults in particular:

  • That growth (in GDP) is not growth in wealth, as it ignores the depletion of natural capital, social costs of unemployment and distributional issues.
  • The need to internalise more externalities, not just re: non-market goods, but also the public benefits of market goods.
  • Discount rates need to be rethought, as they discriminate against future generations.
  • Uncertainty and non-linear events need to be handled better.
  • Financial markets are now divorced from the real economy.

Finally, some suggestions to change for the better:

  • Formal incorporation of natural capital into economics.
  • Decouple unemployment from growth, and wellbeing measures from material flows, leading to new measures of welfare (new GDP).
  • Include the price of carbon in energy and start adapting to 2ºC warming.

Leaves you wondering why we aren’t more open to alternatives to GDP, or is this a problem that is too complex for people to grasp?

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Films from the event are now online and can be viewed on the Youtube channel.

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I recently attended the ZSL symposium on “Economics as if life mattered: Can we shape economic policy to save species”.  It was an enjoyable event that raised some interesting points of discussion. Robert Alexander’s talk on the Pros and Cons of Trade Bans was a particular highlight. An economic approach to wildlife conservation and bans that argued for tackling the root causes of biodiversity loss.

A general theme of the day was criticism of mainstream economics/economists. Although I would not bracket myself as a ‘mainstream’ economist, the criticisms focused on some egregious examples of economic thinking while ignoring the benefits that market economies have brought the world. A coherent alternative to market economies was not discussed.

Yes, the current market  system we have has resulted in huge environmental and distributional problems and some assumptions of economic theory are highly improbable. But an economic system based on markets is likely to be in place for the foreseeable future even if there is a bigger role for the state (See this Anatole Kaletsky interview for some thoughts and recommended reading). As environmental/ecological economists we try to shift this system in such a way that recognises the importance of the environment.

Valuation came in for some stick on the day, some of the concerns were understandable. There are moral and methodological concerns that arise out of environmental valuation. But to quote Ice T “Don’t hate the playa, hate the game”. Policy makers all value the environment in some shape or form, and to echo political quote mentioned in the conference “if you are not at the table you are on the menu”. Valuation helps bring the environment to the table and gives it a voice amongst development threats.

I took away from the conference that environmental economists need to communicate more clearly, but also with a mind to allay the scepticism and fear surrounding economics.

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Spoke to the Institute of Chartered Foresters annual conference in London this week, an event where people think very hard about trees. The UK is a pretty small island in forestry terms. One Canadian Speaker said “stick to gardening” (he was joking a bit) and I got an insight into the realities of biomass-fuel.

As well as being one of the UK’s biggest CO2 polluters, Drax power station is also our biggest renewable energy source, as it now mixes dried biomass pellets into the coal it burns. This relies on large-scale imports of biomass (UK timber resources are too small and thinly spread), which mirrors the plant reliance on large-scale imports of coal (after extraction, similar supply chain logistics are involved).

That’s not to say we should give up on the UK’s woodfuel, but it needs to supply smaller local markets. Community buildings, communities and homes are all looking to burn more wood. The UK has under-managed small woodlands that could supply this resource, giving energy and ecological benefits.

Furthermore, our future energy deficit is going to be big enough that we’ll need both sources of biomass energy: large-scale importers like Drax, and utilisation of our domestic resources in smaller-scale generation. And more energy efficiency too.

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Limu and Betsy attended the Rio+20 Business Summit organised by the Aldersgate Group which took place last night. Thoughts from both are below:

Limu:

A fantastic Aldersgate Group event was held on Wednesday evening, featuring a ‘dragons den’ of business ideas for Rio+20. The panel included Secretary of State for the Environment Caroline Spelman, who gave creditably informed responses on the ideas proposed by nine business representatives.

Global food security ‘won’ the vote on the best idea, but the most interesting fact of the evening came from hosts PWC. Giving an insight into their ‘pulse survey’ of global CEOs pre-Rio, they said 70% were ready to substantially increase their sustainability commitments if decisions in Rio led the way. The business world is getting ready to act on sustainability, politicians in Rio need to be able to trust them.

Betsy:

The Rio+20 Business Summit was an interesting setup whereby the representatives of 9 companies had 100 seconds each to sell to the audience and a panel of experts (a Dragon’s Den including Caroline Spelman, our Secretary of State for the Environment) their ‘business pitches’ for how businesses will be involved in obtaining goals that will come out of Rio+20 (the United Nations Conference on Sustainable Development taking place June 20-22 in Rio de Janeiro, marking the 20th anniversary of the 1992 United Nations Conference on Environment and Development). At the end of the night the audience had to vote and prioritise each of the pitches.

Rio+20 has two main themes: 1) a green economy in the context of sustainable development poverty eradication; and 2) the institutional framework for sustainable development. The business pitches we heard last night were for ideas that businesses hoped would make their way into the institutional framework for sustainable development.

To anybody interested in the environment these ideas weren’t new, but it was interesting to see which businesses were focusing on which ideas. The ones put forward were:

1) Natural Capital – Value and maintain the Earth’s natural capital with a commitment to no net loss, holistic policy frameworks and national action plans (B&Q, Matthew Sexton)

2) Sustainable Development Goals – Governments must work with business to secure a commitment to Sustainable Development Goals (Unilever, Karen Hamilton)

3) Circular Economy – Programmes on sustainable consumption and production should provide new leadership on circular economy (Siemens, Ian Bowman)

4) Sustainability Reporting – An international convention to require companies, on a ‘comply or explain’ basis, to integrate sustainability issues in their Annual Report and Accounts (Aviva Investors, Steve Waygood)

5) Information Technology – We need to harness the power of ICT to turn data produced across various systems like buildings, transportation, energy grids, water and air quality, ocean health, corp yields, human health implications of pollution – into actionable solutions and results (Microsoft, Josh Henretig)

6) Transport Strategy – A clear strategy for access to sustainable energy solutions which recognises that transport is essential for linking societies and markets, within and between developed and developing countries (Virgin Atlantic, Sian Foster)

7) Food Security – Governments must place the challenge of feeding over 9 billion people on a sustainable, healthy and affordable diet, top of the agenda (ASDA, Paul Kelly)

8) Energy Efficiency – Governments need a longer-term financial view when investing in green technologies and to lead by example – committing to making public sector assets energy efficient. (Philips, Jayson Otke)

9) Water Security – Governments should commit to working in partnership with the private sector and others to respect, protect and fulfil the right to water and sanitation by 2020 in a way that is compatible with climate and food security goals (PepsiCo, Andrew Slight)

As you can see, many of these 9 pitches are in fact interconnected. For example, including natural capital into national and business accounts will help achieve sustainable development goals. Sustainable development goals can also be helped along by the three enabling pitches (4-6). Food and Water security must go hand-in-hand. So it was quite difficult at the end of the evening, to separate these out when it came to the audience voting (by ranking the pitches for which should be the highest priority).

We did anyway and the results were interesting – I unfortunately wasn’t able to get them all but I’m sure we will see some of the results from Aldersgate soon. I did catch the highest and second highest ranking pitches though – and they were Food Security and Natural Capital respectively. It is refreshing to see Natural Capital being given such a high ranking in priorities, particularly once we saw the breakdown. More of the audience from business had voted for Food Security while more of the audience from NGOs had voted for Natural Capital!

Of course it is a bit unnatural to be comparing these ideas against each other when many go hand in hand, and they address entirely different ways of how we could be working towards sustainable development. But I still have those days where I have to explain the practicalities of environmental economics to environmentalists who vehemently disagree with the idea (and yes I encountered a couple in networking after!) and we even had that sadly misinformed article from George Monbiot, so it is good to see that the NGOs understand us and are on our side. Natural Capital got a large chunk of the business vote too – just not as much as Food Security did. And again, these two ideas are hardly comparable – they can both be implemented and inform each other. But at the end of the day it is heartening to know that environmental economics is going more mainstream and an increasing amount of people from all spectrums of life are engaged with how environmental economic concepts can help them pave the way to sustainable development.

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I recently attended the TEEB 2012 conference in Leipzig titled:  Mainstreaming the Economics of Nature: Challenges for Science and Implementation.  A huge variety of presentations were given, too many to begin to catalogue here but the standouts included:

  • An IUCN analysis on whether MPAs can improve the livelihoods of local communities.  The impacts were far from clear and hadn’t received much attention, but I took away from the presentation that distributional impacts are key.
  • Earth Economics’ encouraging story of providing environmental economics and ecosystem services concepts and analysis to local communities who were threatened with a copper mine. The community used the analysis to overturn the decision to mine.  A rewarding presentation if not commenting on displacement effects or the immovable force that is copper demand.
  • Stephen Polasky’s talk demonstrating the trade-offs between environmental protection and growth.  It was nice to see production possibility frontiers (a graph that represents the trade-offs between two commodities for a fixed level of resources), that I haven’t seen since my degree days being  used in an applied setting.

Without being in four different sessions at the same time for the duration of the conference it was difficult to draw out key themes. But luckily members from Helmholtz Centre for Environmental Research UFZ were in each and every session and were able to report back at the end of the conference.  My key findings…of UFZ’s key findings were:

  • Application is key. The TEEB ‘community’ believes in the TEEB process as a part of a solution to the natural environment crises currently faced, with this belief comes an urgency to see it begin to take hold in policy. For this reason TEEB and the research surrounding it must ask clear policy relevant questions.
  • Inter-disciplinary work and a common language is required. Not everyone is yet on-board with the TEEB process, or the concepts behind it. TEEB must get allies in all disciplines, for this reason the language adopted must be clear and unambiguous.
  • Mainstreaming was an apt subtitle for the conference and the next challenge for TEEB and environmental economics.

It was an encouraging conference, meeting people from around the world using TEEB concepts in different environmental settings, but there was a sense of preaching to the converted. TEEB ideas need to spread further in order to achieve the desired environmental outcomes.

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Though not officially announced, the news on the grapevine is that after days of disagreements the coalition government will agree to implement the recommendations set out by the Committee on Climate Change to meet a target of a reduction of 80% of carbon emissions in 2050 compared with 1990 levels (590Mt), with an intermediary target of 60% by 2030 [1, 2].  The UK CO2 emissions for 2010 have been provisionally estimated at 492 Mt (a reduction of 17% from 1990 levels) [3].

Reaching these targets will involve substantial changes to the UK electricity source and coincides with the EU Renewable Energy Directive, which states that the UK must generate 15% of energy through renewable sources by 2020 [2, 3].

Other ways to reduce emissions will include reducing carbon intensity in the transport sector, which is also covered by the EU’s Transport Policy which aims to reduce conventionally (petrol and diesel) fuelled cars  by 50% by 2030 and eliminate them altogether by 2050 [4] and increasing energy efficiency in homes and work places.

This target is great news and, as it was first proposed by the Labour government [5] and will now be accepted by the Conservative/Liberal Democrat coalition, is unlikely to be overturned in the near future by a change in government.

Things to look out for:

1)      The incentives the government must put in place to ensure that the UK achieves its carbon targets. As the UK is not a command and control economy, government cannot simply dictate that emissions be dropped. Instead, incentives and disincentives must be put in place in order that industry will move themselves towards these targets. Examples include subsidies (including tax breaks) and taxes.

2)      Will carbon trading be part of the agreement? Will the government allow targets to be achieved through buying carbon offsets (paying for carbon reductions) in other countries? Whether this is allowed or not will affect how this deal changes the UK economy and infrastructure. Insisting that all carbon reductions be made within the UK will have a considerable impact on the UK economy and infrastructure and could pave the way for the UK to lead the way in green technology. Allowing for emissions to be offset in other countries will mean that only immediately cost-efficient changes to the UK economy and infrastructure will be carried out.

3)      Unaccounted exported emissions. A frequent argument against the claim that the UK has reduced carbon emissions since 1990 is that we have outsourced our emissions by importing products produced in developing countries such as China – production emits greenhouse gases and often times the production process is more carbon intensive than it would be in the UK.  It is unlikely that this will be included in the UK official carbon count, but we should all keep this in mind [6].

Read more:

[1] Coalition commits Britain to legally binding emission cuts – Toby Helm and Robin McKie, The Guardian

[2] Committee on Climate Change – Renewable Energy Review

[3] DECC – UK Emissions Statistics – 2010 UK Provisional Figures

[4] THE EU HAVE MADE ANOTHER COMMIE DECISION AND THE SKY IS FALLING!!! – Cowburps

[5] Heat and energy saving strategy consultation – DECC

[6] UK’s total emissions set to rise: new data obtained by PIRC – Guy Shrubsole, ClimateSafety

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It seems as environmental economists that a lot of our work involves translating carbon into monetary terms. What is the value of avoiding the emission of a tonne of carbon? Should we value it by the damage it would cause or by the opportunity (of the actions of which carbon is a byproduct of) lost by not emitting it?

Last night I went along to the launch of The DoNation – a very interesting concept that does almost the opposite – it provides a service for people to ask their friends to sponsor them – not with money, but through changing their behaviour over a period of time to reduce carbon. Examples of this include air drying your clothes instead of using a tumble dryer, going vegetarian a few days a week and cycling to work.

I ‘sponsored’ the London to Morocco bike ride that kicked off the first incarnation of the website by going vegetarian for 4 days a week. Last night we learnt that collectively we had saved 16 tonnes of carbon – enough to fly from London to Morocco every day for each day of the bike ride! Even better, many are still continuing their actions, leading a lower carbon lifestyle (although I have gone back to omnivorous ways most days of the week).

This concept to me is beautiful in several ways:

  1. Those who are concerned about climate change can ask their sponsors for something they actually want – and not through a roundabout way of asking for money and then buying carbon credits.
  2. It motivates people to change their behavior – from people who would never have changed their behavior otherwise to people who have already realised it would be a good idea but never got around to doing it; and
  3. It employs one of the biggest motivators to engender that behavior change – friendship (it has also, for me, kickstarted other friendships with its capacity as a great conversation starter – “I’m eating vegetarian today because this girl I know is cycling to Morocco…”).

To check out The DoNation and start Doing, head on over to www.TheDoNation.org.uk

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Sooner or later

“Sooner or later, we will have to recognise that the Earth has rights, too, to live without pollution. What mankind must know is that human beings cannot live without Mother Earth, but the planet can live without humans.”  – Evo Morales, President of Bolivia [1]

Like that tiny voice at the back of your conscience, Bolivia* stood alone in the close of the talks in Cancun, insisting that the outcome of the negotiations simply was not enough.  Bolivia were pushing for a cut in emissions that would ensure a high probability of a maximum global temperature increase of 1ºC, while the current negotiation text was looking at a high probability of a global temperature rise of 4 ºC.  Friends of the Earth called the agreement “a slap in the face of those who suffer from climate change”.

But is it all bad news?  While Bolivia made its stand, all other countries celebrated the agreement with “rapturous applause”.  For the fist time in history, all major economies have committed to reducing their emissions, and it was acknowledged that developing countries are and will continue doing their part too. In the UK climate change secretary Chris Huhne’s words, “This is a significant turning point” [2].  The negotiation text agreed that we must keep warming below 2ºC, and emissions should ‘peak’ (the level of emissions should stop rising). The fund to help developing countries mitigate and adapt to climate change was established, and countries agreed to implement a ‘payments for ecosystem services’ deal that sees developing countries being paid for reducing deforestation and degradation and improving conservation (REDD+). However, again, emissions targets are left up to the individual countries.

There is no doubt that this is good progress, and it is crucial that we have all countries in consensus before we move along at full speed.  It would also have been difficult to get countries to agree to more than they currently have. In a way, the UN’s response to Bolivia has been “not now”. Hopefully this becomes “not now but soon”. For the past 10 years we’ve been heralding “good start and good progress”es as we manoeuvre incrementally into place.  I found it extremely difficult to write this post because I was trying to differentiate the agreements from the ones I wrote about Copenhagen.

I suppose with the entire world trying to come to a consensus the process probably must be long and arduous.  I mean most, if not all countries agree that emissions must be reduced, but nations all want to make sure that the other nations will be doing their part, and of course most nations would like to get away with as much as possible (if you are interested in a more practical understanding of this, you should try to play Milinski’s Climate Change Game, a variant on a well-known game theory game called the Nash Bargaining Game).  We would, of course, like for them all to say that they would lower their emissions as much as they can, but there are at the end of the day trade-offs between lower greenhouse gas emissions and growth.  However with burgeoning green-sector technology, I wonder how necessary these trade-offs are.  Chris Huhne seems to think that the UK can actually profit from lowering emissions through starting a ‘third industrial revolution’ in green technology.

Perhaps by Durban we can get off the starting blocks and I won’t write the same post for it and loose further hope. For now, I still believe, sooner or later, we will fix this.  It’ll be a large gigantic learning experience, perhaps helpful for some future other catastrophe, but human civilization can and will curb emissions and bring greenhouse gas levels down to a more manageable level, and perhaps Mother Earth will tolerate us on her surface a little bit longer. Sooner or later.

* On a side, but relevant, note, we do know that Morales and his ambassador Solon do not believe in anything to do with environmental economics and hate the idea of markets such as REDD+.  But we believe that is only because they haven’t had anyone from the pasture explain it to them!

[1] Vidal, John. Bolivia’s defiant leader sets radical tone at Cancun climate talks – The Guardian, 11 December 2010 http://www.guardian.co.uk/environment/2010/dec/11/cancun-talks-evo-morales

[2]Vidal, John and Suzanne Goldenburg. Deal is reached at Cancun summit – The Guardian, 11 December 2010- http://www.guardian.co.uk/environment/2010/dec/11/mexico-cancun-environment-climate-summit?intcmp=239

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The build-up to Copenhagen last year was immense, and the result – mixed.  There were a few who were happy, but most were not.  US President Barack Obama described the talks as an “unprecedented breakthrough”[1], Ed Miliband, the climate change secretary in 2009 at Copenhagen (and current Labour leader), called the talks “…chaotic, at times farcical”[2] but remained hopeful with the results from Copenhagen. George Monbiot, journalist and activist called it “chaotic and disastrous”[3], and Oxfam International called it “a triumph of spin over substance”[4].

The interesting thing is that these very different viewpoints all stem from left-winged institutions and individuals concerned with the environment, but with obviously different ideas about how far an international, high-profile conference of parties, such as Copenhagen, can go.

So what did the various nations agree to last year in Copenhagen, and what are we hoping will come out of this year’s talks in Cancun?

Copenhagen

The agreements can be split into two types: agreements on mitigation (slowing down or stopping climate change altogether through reducing greenhouse gas emissions) and adaptation (adapting to the effects of climate change – particularly as a provision given by developed countries to developing countries).

Mitigation

The countries agree that “deep cuts in global emissions are required… with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius”[5]. But they don’t tell us when/how they will do this, how to ensure that everyone is doing their part, and what happens to the nations that don’t do their part. Annex I (developed countries) committed to implementing emissions targets, but were allowed to set their own[6]!

There is also provision for “Scaled up, new and additional, predictable and adequate funding as well as improved access… to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation, adaptation, technology development and transfer and capacity-building” to developing countries from developed countries. This is quantified at US$100 billion a year by 2020. However there are no assurances that the US$100 billion will be additional to existing aid commitments.

Adaptation

The countries also agreed that developed countries would “provide adequate, predictable and sustainable financial resources, technology and capacity building to support the implementation of adaptation action in developing countries”[5]. Here, quantity is again not mentioned.

Cancun

So what do we hope to come out of Cancun?  Basically, following on from the vaguely worded Copenhagen accord, talks at Cancun are expected to hammer out the details and framework of how mitigation and adaptation will be achieved, hoping to put in place a new (strong) treaty before the Kyoto protocol (the result of the 1997 climate change conference of parties) expires in 2012.

What we don’t want is a weak treaty – one that doesn’t do enough, that nations refuse to sign, and lets others off the hook. We’ll be keeping an eye (or 14) on proceedings.

[1] A meaning and Unprecedented Breakthrough Here in Copenhagen – Jesse Lee, The White House Blog

[2] The road from Copenhagen – Ed Miliband, The Guardian

[3] Copenhagen negotiators bicker and filibuster while the biosphere burns – George Monbiot, The Guardian

[4] Historic moment, historic gathering, historic COP out – Oxfam International

[5] Copenhagen Accord

[6] Appendix I – Quantified economy-wide emissions targets for 2020 – Copenhagen Accord

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While much of the public knows of various campaigns to protect certain species or habitats, rarely does the maintenance of rich biodiversity as a whole get much attention. 2010, however, has been an important year for raising awareness of the issue: it is the ‘International Year of Biodiversity’, has seen the publication of The Economics of Ecosystems of Biodiversity (TEEB) report, and only last month Nagoya, Japan, hosted the 10th UN Biodiversity summit.

So why should we be worried about a reduction in biodiversity? Well, biodiversity underpins much of how we, as humans, survive; it supports the key ecosystem services that we rely on. These range from cleaning of air, sequestration of carbon and regulating water and nutrient cycles, to the provision of medicine and nutrition. As is the case with many environmental problems, these services are, by and large, not marketed. Their economic value is hidden in the contributions they make to goods and services that have market values or in the costs we incur if the natural services are lost. Looking at these hidden (as well as some market values), the TEEB report calculated the global value of biodiversity at between US$2 – 4.5 trillion annually, which is up to 7.5% of global GDP.

The Nagoya summit attempted to address these issues, and has since been hailed as a success by many. A pledge to at least halve the loss of natural habitats was made, and there was also a commitment to widen the coverage of nature reserves and marine protected zones, so they will have a hold on a higher proportion of the world’s surface than ever before. All signatories will also have to draw up national biodiversity plans. Furthermore, a new treaty was adopted – the Nagoya Protocol – which outlines how separate nations should cooperate with regards to accessing and sharing the benefits of genetic resources. A part of this will include payments to developing nations for the current use and sale of tradition medicines and medical knowledge that was collected in the past.

Some, however, have questioned how this is all actually going to work. The funding pledged by developed nations has disappointed some, while others are concerned that some of the targets are not really binding, or in fact simply act to distract attention away from attacks on biodiversity in their own countries (whales and Japan comes to mind). Indeed, George Monbiot noted last week that “The evidence suggests that we’ve been conned. The draft agreement, published a month ago, contained no binding obligations. Nothing I’ve heard from Japan suggests that this has changed. The draft saw the targets for 2020 that governments were asked to adopt as nothing more than “aspirations for achievement at the global level” and a “flexible framework”, within which countries can do as they wish. No government, if the draft has been approved, is obliged to change its policies.[1]

What has been seemingly agreed upon at Nagoya is a step in the right direction, with the new Protocol in particular having some promising aspects to it. However, there are two serious problems that must be addressed. Firstly, if these agreements really aren’t binding, then the targets themselves are meaningless; and secondly, even if governments are compelled to act, the distinct lack of any real mechanism to facilitate it implies significant delays as arguments erupt over where the funding will come from. The real issue in the coming months may be maintaining biodiversity and the Nagoya summit as relevant to the media and the public, so any attempts to renege on promises made do not slip through unnoticed.


[1] We’ve been conned. The deal to save the natural world never happened. – George Monbiot, The Guardian, 1 November 2010

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