Category Archives: Economics

System Change

It is clear we need to stop burning fossil-fuels and switch to renewables, change from a wasteful, throw-away society to a pollution minimizing one, from a linear to a circular economy and from an extremely unequal world to a very much more equal one.

On this blog I have frequently talked with great enthusiasm about various renewable energy projects and technologies. They are very useful, but only if we can also rein-in total energy demand. Today Ember have just issued a damming report that shows global carbon emissions rising during the first half of 2021 despite a healthy increase in renewable energy generation. In the UK and globally the response to the pandemic has often used the slogan ‘Build Back Better’, but the reality is that we’ve been building back with the same or worse energy wasting projects, so although generation from renewables has increased, so too has electricity generation from coal. The main increase has been in China, and many politicians are keen to blame the Chinese, but this increase in emissions has been fuelled by the west’s insatiable demands for ever more Chinese made goods.

For decades we’ve been encouraged to recycle stuff and to make minor lifestyle changes that often only result in annual carbon reductions of a few grams, and those of us who care about such things have made efforts to live as ethically as we can. However it is all pretty pointless if the emissions of those millions of high emitters who simply do not care can carry on emitting. The American economic anthropologists Richard Wilk and Beatriz Barros have calculated the personal carbon emissions of many billionaires and found they each emitted over 1,000 tonnes, and some, such as Roman Abramovich emitted a staggering 33,859 tonnes. A report from Oxfam stated that the carbon emissions of the richest 1% are more than double of the emissions of the poorest half of humanity. To reduce emissions to avert climatic catastrophe we need everybody, every country and every industry to reduce emissions rapidly, and obviously the most important place to start is with the biggest emitters. That implies curtailing some industries from air travel to advertising, and limiting the rights and privileges of the most wealthy and wasteful people.

This week Extinction Rebellion are protesting again on the streets of London and many other cities. I support their actions and am with them in spirit, but not in person. Those who are on the streets protesting represent the many millions of people who cannot be with them, but support them in spirit.

Worldwide people are demanding system change in order to avert climate catastrophe. The Millichap Peace Fund have invited me to give a talk which will go out live via Zoom on 22nd September and be available online thereafter. I shall be asking the question ‘Is a better future possible?’ Given the scale of the many interrelated crises we face to even ask such a question can seem a travesty. In the talk I shall try and convey my vision of what system change might look like and how we might achieve it. This talk is a brief synopsis of a book I hope to have published by spring 2022. I’ll post more details about the talk and how to register to get the Zoom link nearer the time. There will be an opportunity to ask questions. More details on the talks and classes page.

Carbon Emissions: Billionaires & the BBC

Last summer I wrote a blog about the carbon emissions of billionaires. This week an interesting article was published in The Conversation where two economic anthropologists from Indiana University looked in more detail at the individual carbon footprints of twenty of the richest people on the planet. Their findings reveal that the individual carbon footprints varied from Michel Bloomberg’s 1,782 tons to the staggering annual emissions of Roman Abramovich at 31,199 tons. In my blog I’d estimated the carbon emissions of all, or nearly all, billionaires to be over 1,000 tons. I’d also implied that their average would be even higher than this, and some individuals would be almost unimaginably high emitters. This new data backs up my previous blog.

Global average carbon emissions are currently something around 5 tons per person. Many people have miniscule carbon emissions, of perhaps a few kilograms or even just a few grams. The vast majority of such people are small scale African or Asian subsistence farmers. Some people who are doing ecologically regenerative farming systems will have negative carbon footprints, meaning that the carbon they are sequestering in the soil is more than that they emit in other ways. I follow lots of African climate activists of Twitter and many of them are doing amazing projects setting up tree nurseries, clearing up plastic pollution, educating about ecology and setting up ecologically restorative farming systems.

Meanwhile BBC Radio 4 is broadcasting Bill Gates’ book ‘How to Avoid a Climate Disaster’. It is a pretty awful book, concentrating entirely on technological innovation and ignoring the vital aspects of social innovation and climate justice. Last week I reviewed Jason Hickel’s book which focuses on the absolute need to move to a post capitalist economy to combat the climate and ecological emergency. I could recommend dozens of other books, maybe hundreds, that are much better than Bill Gates’ one. So why are the BBC reading his one? Is it because he is a billionaire, and the BBC really has become a mouthpiece for the greedy global elite? As the figures published in The Conversation reveal Bill Gates’ personal carbon emissions are 7,408 tons. Rather than write a book his time might have been better spent looking at his own carbon footprint.

Last month I posted a blog about the people who have inspired me over the last year, and I named three young women activists from Africa who all are doing great work on climate, ecological and social justice: Patricia Kombo from Kenya, Kaossara Sani from Togo and Oladosu Adenike from the Lake Chad Region. I could have added many more names to this list. Africa is bursting with great climate activists. Why does the BBC focus on Bill Gates? Is it because he is a rich white man from America and not a poor black women from Africa?

There are many great books and ideas about how to adequately address the climate and ecological emergency. Most call for some pretty radical changes implying huge social, economic and political change as well as technological change. Why do none of them get coverage on the BBC? Is it because the BBC has become too deeply embedded in the present social, economic and political system that they cannot contemplate any challenge to this system, even when it is glaringly obvious that this needs to happen to avert climate, ecological and social breakdown?

Jason Hickel: Degrowth

Jason Hickel’s book ‘Less is More, How Degrowth will Save the World’ is I think the best yet critique of growth and of capitalism. He draws on ecology, economics, history and many other disciplines to chart how this pervasive and destructive ideology came into being and how it spells disaster for humanity. In the light of the Climate and Ecological Emergency the need to rapidly and radically change direction could not be more urgent. Hickel makes only general indications about what a post growth and post capitalist world might look like, but he does give us at least a glimpse of that possible future. (The book I am writing is much more detailed on that front.)

Economic growth, as measured by GDP, is the fundamental goal of nearly all governments. For most of our politicians and media it is taken as a ‘good thing’. It is the bedrock upon which capitalism as a system has been built, and without continuous growth capitalism would collapse. Because capitalism is so ubiquitous it is taken for granted without really being understood as a system and Jason Hickel is particularly strong in outlining exactly what capitalism is and why it is so destructive. People often think of capitalism as the right to trade and to use markets, but trade and markets pre-date capitalism by thousands of years. What emerged about 500 years ago was a system predicated on extracting value from trade to reinvest in ever larger scale trade. Value had to be continually extracted from the natural world and from people in order to have ever larger sums to invest in ever larger enterprises. Profit acquisition for investment replaced the earlier system of trade to acquire things for their usefulness. Stock markets grew and they depended upon profits to pay interest and attract investors in an endless cycle of continuous growth.

Questioning growth as a goal goes back decades, certainly to the early 1970’s, with Herman Daly’s ideas of a ‘Steady State Economy’, Donella Meadow’s ‘Limits to Growth’, ‘Blueprint for Survival’ and many others. Where Jason Hickel is particularly strong is on the insanity of constant growth projected very far into the future, given the impossibility to completely decouple growth from the material through-put of the economy and the associated waste and pollution. He is also very good in his connecting capitalism’s need for growth with its never ending need to colonize and exploit ever more aspects of people’s lives and of the natural world.

I wholeheartedly recommend this book. It is one of the best books I’ve read in years. The hardback edition came out last August and a paperback version is due to be published in a week or so, on 25th February.

There are writers such as Mark E Thomas, of the 99% organisation, who are still in favour of growth as an overall objective, but who distinguish between good growth, growth that is irredeemably bad and growth that can be transformed from bad to good. Other writers, such as Kate Raworth, author of Donut Economics, describe themselves as growth agnostic. What I’d love to see, and to participate in, is a debate between them. I think we would all agree on what sectors of the economy need to contract, which ones still need to grow and which ones can be transformed. The trouble is any discussion of radical economic contraction of any sectors of the economy is still taboo for most politicians and the media. That needs to change, as a matter of extreme urgency. As Greta Thunberg keeps reminding us, we are in a crisis, and it is about time we started treating it as a crisis. The obsession with endless economic growth on a finite and fragile planet is perhaps the greatest challenge, and the greatest opportunity. If you are not convinced then do read this excellent book by Jason Hickel and judge for yourself.

Life After Fossil Fuels

Oil: do we need it to keep modern civilization running?

Oil: do we need it to keep modern civilization running?

A decade or so ago I started running evening classes called ‘Global Problems: Global Solutions’. We tried to envisage solving multiple mega problems simultaneously, from climate change to hunger and poverty. It still seems to me the possibilities of creating a better future are almost limitless.

One of the key concerns of people coming to these events was how life might look without fossil fuels. Some people were most worried from a resource scarcity angle. They saw Peak Oil as a big problem. Others were more worried from a planetary pollution perspective, and for them Climate Change was the biggest worry. Many people seemed to think that as oil is the basis of so much of our global economy we would have to do without many of the oil derived products, and much of the productivity and prosperity that oil has made possible. Many of these people thought that it would be the horse and cart that replaced the car, that global food supplies would massively decrease and that cities would collapse due to lack of food and energy.

I tended to put forward the case that the transition to virtually 100% renewable energy for all humanity’s electricity, transport, heating and cooling would be possible, and that recycling and resource substitution would be possible for most types of industrial production. We could at least in theory move to a circular economy where pollution was minimized and efficiency maximized, and for it all to be based on renewable forms of energy.

Looking back over the last decade it seems to me that the improved technology has led to falling costs of renewables to such an extent that this transition should be even easier than even I predicted. What we didn’t see coming a decade ago was the re-emergence of overt racism, ultra-nationalism and fascism. The likes of Trump, Orban and the Brexiteers care not a jot about climate change, the plight of the poor or any of the other problems we considered in our evening classes. They represent a denial of scientific reality, and simple human compassion, on a scale I’d never have envisaged seeing in any democratic state. They act to protect the ultra rich and the fossil fuel industries.

Now we have the rather bizarre situation of much of the global financial community understanding the risks associated with climate change and backing a lot of ideas put forward by Green activists and environmentalists, most of whom are quite critical of the concepts like capitalism and endless economic growth. Opposing them are a lot of right wing politicians who in theory support capitalism and growth, but who now endlessly have to intervene in the market to protect the economic interests of those who profit from the pollution.

Tax & Survival

rough sleepers

Rising numbers of homeless reflect the collapse of the public sphere

The number of people sleeping rough in UK has risen 169% since 2010. The NHS, education and all manner of council services are all in crisis due to chronic underfunding. As the public sphere collapses, excessively rich individuals take an ever greater share of the wealth. Meanwhile the natural world is being trashed at an unprecedented rate. Globally pollution now kills three times as many people as Aids, malaria and tuberculosis combined.

As I said in a blog in October ‘We need a pollution minimizing way of maximizing the benefits of a modern global economy that can bring prosperity to all humans while allowing biodiversity to flourish.’ That socially inclusive and ecologically sustainable goal can be achieved. The technological options are already available. The missing ingredient has been political will. Since the Thatcherite revolution of 1979 there has been a quasi religious belief in market forces and low taxes. It is time to challenge this.

Now might be the time to bring back big government, but in a radically reinvigorated manner. I would like to see the top rates of income tax raised to 100%, top rates of stamp duty and death duties increased, tax loopholes and tax havens closed. Corporation tax should be increased. The basic rate of income tax could also be raised by a few pence. Taxes on all forms of pollution should be set in order to force whole industries out of existence. All forms of advertising should be heavily taxed. Also many areas of government funding should be cut, from subsidies that promote unsustainable farming practices to oil and gas exploration. Many costly projects such as Trident, Hinkley C and HS2 could all be abandoned.

With this vastly increased revenue a lot of vitally important work should be done. A universal citizen’s income could be introduced. Funding for the NHS and education should probably be doubled. Political power needs decentralizing. Local government funding could be increased perhaps fourfold and many new responsibilities could be transferred from national to local government. Funding for socially and ecologically innovative projects would be available.

The conservative party once had a reputation for sound financial management, yet the national debt has massively increased under this incompetent Tory government. I think we could quickly reduce the national debt while creating a paradigm shift towards a socially fair and ecologically sustainable future. The health, education and wellbeing of people now and in the future needs investing in, and to do that we need to raise a lot more taxes.

China gets serious about pollution

Air pollution in Beijing

Air pollution in Beijing

This week China has shut down about 40% of all its factories, approximately   80,000 of them. Some may be shut down permanently, some just until they can clean up their act. The early evidence is that fines are being strictly imposed as the tax bureau acts in tandem with the pollution inspectors. Some factory managers and owners may well be sent to jail. There will be disruption in global supply chains. The price of Chinese made things, from clothing to car components will increase a bit in the short term. A few percentage points may be knocked off Chinese GDP figures. However all these things seem a small price to pay for the benefits at stake.

China has a public health emergency in terms of local pollution. In rapidly reducing this local pollution many macro ecological threats from climate change to ocean acidification can also be mitigated. In a blog a couple of weeks ago I wrote about the need to create a pollution minimizing way of maximizing the social and economic benefits of a modern economy. By shutting down obsolete and dirty factories cleantech innovation will be stimulated, leading to more sustainable forms of prosperity. Just in purely economic terms China will probably benefit in the longer term.

Over the last sixty years or so successive legislation has helped clean up most of the rivers of Europe and North America. London’s air quality improved rapidly after the 1956 Clean Air Act. Cleaning up pollution always requires strong government leadership. This week Sadiq Khan introduced the new £10 toxicity charge for bringing older more polluting cars into the centre of London. Although this is to be welcomed, it is too little, too late. The pace of shifting to a cleantech economy needs to speed up dramatically.

The medical journal, The Lancet, estimates that 50,000 people in the UK, and 9 million globally, die each year due to poor air quality. It is time governments the world over took more radical steps to tackle pollution. It will mean shutting down thousands of businesses. This needs to be managed in ways that create greater social and economic security while cleaning up the mess. To me this seems quite doable. Stop subsidies to polluting industries, introduce hefty fines on all forms of pollution, introduce a universal basic income and incentivise cleantech innovation.

In numerous blogs I’ve sounded an optimistic note that China’s carbon emission might plummet over the coming decade. These factory closures will contribute to that goal, and they will also help ensure China is a leading economic powerhouse in the future. As USA under Trump and Britain under the quagmire of Brexit both look back to a fantasy of past glory China is forging ahead, creating the kind of economy which will typify the post fossil fuel age. China has a long way to go to reduce its horrendous pollution, but it is making a very bold start, and that is to be welcomed.

Snowdonia & Hafod y Llan

660KW hydro at Hafod Y Llan

660KW hydro at Hafod Y Llan, with me peeking out from behind it.

Hafod y Llan is a farm covering over 2,600 acres of the south-eastern slopes of Snowdon. I’ve just got back from holidaying in the area and was very impressed by how the National Trust, who own the farm, are managing it. 60,000 people climb the Watkins path across the farm and up Snowdon each year. The National Trust run a lovely campsite on the farm and maintain the footpaths and in other ways welcome the many people coming to this magnificent scenery. They are also managing the land to increase its biodiversity by reducing sheep numbers, introducing Welsh Black cattle, and employing a couple of shepherds to focus the grazing animals onto those areas that need it and away from the sensitive ridges where grazing might be detrimental.

Three years ago I wrote about how the National Trust is working to produce half their energy needs by developing local on-site renewables, and also to reduce their energy needs by 20% by 2020. Then I wrote about the impressive marine source heat pump they had installed at Plas Newydd on Anglesey. Last week in Snowdonia we were very lucky to meet the very knowledgeable Wynn Owen who works at Hafod y Llan and who showed us two of their recently installed hydro electric systems. They had integrated the work into the landscape in a very sensitive way. One of the systems is a small 15KW turbine, the other, pictured above, is a 660KW system, which, as far as I’m aware, is the National Trust’s biggest renewable energy project to date. They also have a couple of other hydro systems, including the Gorsen 18KW at Hafod y Llan and a 45KW system on the neighbouring 2,100 acre Gelli Iago Estate, also owned and managed by the Trust.

The extensive farmhouse and buildings at Hafod y Llan house National Trust staff and volunteers, a holiday cottage and the campsite with its showers, washing machine and recharging point for an electric car. On site they have a range of other renewable energy projects, apart from the hydro systems, including a good sized photovoltaic array on a barn roof, ground source and air source heat pumps, 18KW wood pellet boiler and are hoping to develop a number of other projects in the future including an anaerobic digester.

So far most of the electricity that the National Trust generates has been sold to Good Energy, and as we are Good Energy customers it is nice to think that some of our energy is coming from them. Recently the National Trust has started selling some of its electricity directly to local people which is both more profitable for the Trust and cheaper for the local energy consumers as it cuts out the middle man.

The way the National Trust is managing Hafod Y Llan successfully combines tourism, biodiversity, renewable energy generation into a productive organic farm and has increased on-farm employment. It shows how land can be managed in ways that are good for ecology and for the economy at the same time.

Thanks to Keith Jones and Wynn Owen for providing useful information for this blog.

Can Companies Change?

Race Bank_ First Blades

The first wind turbine blades leave Siemens Hull factory for DONG’s Race Bank Offshore Wind Farm

A few days ago I posted a blog about the Norwegian oil company Statoil developing and deploying the world’s first commercial scale floating wind turbines. Statoil is changing its business model. Climate change, ocean acidification, air and water pollution are all largely driven by humanity’s addiction to fossil fuels. Technological innovation and falling prices have made the case to switch from fossil fuels to renewables an economically smart move, as well as being a macro ecological imperative and an absolute necessity for humanity to continue to flourish. The cleantech revolution is happening and is being driven mainly by small start-up companies. What future do the big incumbents have? Will they change with the times or struggle to keep the old polluting economy going? Peabody and DONG provide the most extreme examples of this choice.

The name DONG stands for Danish Oil and Gas. In 1972 it was set up by the Danish government to develop North Sea oil and gas fields. It expanded into electricity supply and owned coal fired power stations. Fossil fuels were its core business. As it has grown it has transformed itself into a cleantech pioneer. It is now the world’s largest builder and owner of offshore wind farms. 80% of its capital is employed in the wind sector and just 4% in oil and gas, and it has said it will sell off this vestigial side of the business while investing heavily in more offshore wind. Last week the first wind turbine blades left Siemens new Hull factory for DONG’s Race Bank Offshore Wind Farm. DONG has also invested in the Cambeltown wind tower factory in western Scotland, owned by Korean company CS Wind. DONG is also now developing some interesting waste to energy projects such as the REnescience project at Northwich, Cheshire. It is creating lots of useful jobs helping develop the technologies that will help combat climate change.

Peabody is a much older company, founded in 1883 in Chicago, USA. It was and remains focused overwhelmingly on coal. To quote Wikipedia ‘Peabody has been an important actor in organized climate change denial.’ It has totally failed to make the transition to a cleantech future. It filed for Chapter 11 Bankruptcy in April 2016. The day after the election of Donald Trump its shares shot up by 50% and in April 2017 it emerged from bankruptcy. It still owns vast coal reserves. If this coal is ever going to be exploited then Peabody has economic value, but if, as climate change and the cleantech revolution show, these assets are just worthless liabilities then a return to bankruptcy seems inevitable.

Most of the world’s huge oil companies, such as Exxon, Chevron, BP and Shell, are still dominated by their oil interests. Most of them have dabbled in renewables but their main capital resources are still overwhelmingly in oil. Will they make the change and fully commit to the post fossil fuel future or will they cleave to the old polluting past? My hunch is that most of them have left it too late: cleantech start-ups will grow exponentially and squeeze them out of the energy market. Their stock market values are likely to plummet as the realization that the reserves they own and that underpin their stock market valuations are worthless. Oil and coal will follow flint from being key economic assets to interesting geological curiosities. When in 1991 the first offshore wind farm opened at Vindeby in Denmark many in the global energy industry thought offshore wind a ludicrous idea. Nobody would say that now. A lot has changed in the last 26 years: much more will do so in the next quarter century as the pace of change inevitably quickens.

The end of Neo-Liberalism?

Grenfell Tower

The Neo-Liberal obsession with cutting ‘red tape’ (fire regulations, building regulations, building inspectors etc) contributed to the disaster at Grenfell Tower.

Since the Thatcherite revolution of 1979 a neo-liberal ideology has dominated politics. Rolling back the state, low tax, low regulation unrestricted capitalism have been the central tenets of this worldview. Wealth has trickled up, further enriching the very rich while the majority have seen living standards stagnate or fall. Levels of inequality have risen dramatically. It was an ideology that was especially dominant in UK and USA, and Trump, May and the Brexiteers are the real extremists of this policy direction. The tide seems to be turning. The need to build stronger social and environmental legislation seems more apparent than ever.

The Grenfell tower block fire has brought into sharp focus several of these issues. The obsession with cutting red tape included watering down fire regulations and cutting back on building inspectors and other council services. The fact that flammable cladding materials were used rather than fire resistant ones just to save a tiny amount of money has cost the lives of many people. David Lammy and Jeremy Corbyn have shown empathy and leadership entirely lacking from May and her cabinet.

Poor air quality causes much illness and death and it is an issue which can be greatly helped with the right legislation, but this government continues to drag its feet and is only spurred into action by the legal challenges of ClientEarth and the European Union. The same can be said for the banning of dangerous agricultural chemicals such as glyphosate and the neonicotinoids where this government seems to be on the side of corporate interests at the expense of public safety. On climate change Trump, May and the neo-liberal extremists always line up on the side of the fossil fuel industry and against the interests of people and planet.

Many cities, regions and countries are realising the benefits of stronger environmental, safety and human rights regulation in stimulating a new cleantech economy which prioritises the needs of the many and not the few, the planet and not the polluter. A new worldview is emerging that has not yet got a name. It is pluralistic, pragmatic, cooperative and collegiate, socially and ecologically responsible. Corbyn taps into a part of it, Macron and Merkel to other aspects of it, perhaps in many ways the Greens fit best, but no one group has all the answers: we must work together to overcome the destructive dominance of neo-liberalism and create something very much better.

In much of Europe, particularly in Scandinavia, neo-liberalism never held such dominance, and they have more socially and ecologically responsible governments. We should withdraw article 50 and remain in the EU. Together we can repair the damage that 38 years of neo liberalism has created and that the Brexiteers will only make worse.

Citizen’s Income

De Koffie Pot

De Koffie Pot, home to the excellent ‘Politics, Environment & Ethics’ weekly workshops, every Wednesday

Last night in Hereford we had an excellent evening discussing Citizen’s Income. Perry Walker of Talk Shop chaired the session and Dr Malcolm Torry from the Citizens Income Trust led a fascinating talk and discussion. To quote from the Citizen’s Income Trust introductory pamphlet ‘A Citizen’s Basic Income is an unconditional, automatic and nonwithdrawable payment to each individual as a right of citizenship.’ The Trust’s work focuses on the practical possibilities of implementing such a scheme in the UK. Related organisations exist to promote the concept in other countries, and indeed on a global scale. I’d long supported some kind of global scheme, but in the current political climate this seems unlikely to happen any time soon. Some interesting short term (usually 2 years) and local (just covering a few villages) experiments in Citizen’s Income have been tried in Namibia, India, Canada, Finland and elsewhere over the years. The Namibian example in particular looked to be a very successful way of improving the lives of the some very poor people. In an analysis of the scheme the Basic Income Earth Network make clear that the scheme was not extended due to corporations who want to keep labour cheap and people disempowered. To some extent this may be the case everywhere, but possibly things are beginning to change for a number of reasons.

In UK and elsewhere as more people juggle multiple very short term and insecure jobs with means tested benefits this becomes ever more costly and complex to administer. The system’s complexity disincentivises claimants from telling the truth and keeps them stuck in welfare dependency. Couple this with the rapid expansion of automation, artificial intelligence and robotics and the number of jobs available is liable to plummet. The right wing Putin/Trump/May/Global Corporate line seems to be to create a new class of serfs or insecure day labourers harking back to early 19th Century work patterns. The emerging alternative supported by Green and left leaning parties around the world seeks to promote equality and develop the possibilities for personal growth in a more leisured society, by shortening the normal working week and a host of other measures, a key part of which is the implementation of Citizen’s Basic Income. Many on the right now see a Citizen’s Income as increasingly necessary and the only way to tackle welfare dependency. Last night’s talk convinced me of the importance of more people joining the Citizen’s Income Trust and helping in whatever way they can to get this sensible and practical policy implemented as soon as possible.

Last night’s session was part of the ‘Politics, Environment & Ethics’ sessions at De Koffie Pot. Every Wednesday: highly recommended, free admittance, very friendly and empowering. If you’re in the area why not join us? Check-out the website to see what’s on.