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human activity and the destruction of the planet


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Climate change affects the German economy

This blog is taken from:

https://politicalcleanup.wordpress.com/2019/08/28/the-shape-of-things-to-come-climate-change-affects-the-german-economy/

with acknowledgements and thanks to a colleague who runs the political clean up website.



In 2018, one of the longest dry spells on record left part of the Rhine in Germany at record low levels for months, forcing freighters to reduce their cargo or stop using the river altogether. Some inland ports lay idle and it is estimated that millions of tons of goods had to be transported by rail or road, raising costs significantly – twice or three times as much by rail and around five times as much by road, according to Handelsblatt Today.

The Rhine is vitally important to life and commerce in the region. Roughly 80% of the 223 million tons of cargo transported by ship in Germany each year travels the Rhine, which links the country’s industrial heartland to Belgium, the Netherlands and the North Sea. Parts of the Danube and the Elbe – Germany’s other major rivers – were also drying up.

The slump in the river’s water levels dented Germany’s economic growth by 0.4% in the final quarter of 2018 and by 0.3% in the preceding three months, according to estimates from JPMorgan economist Greg Fuzesi in January. Fuzesi said at the time he anticipated a 0.55% contribution to GDP in the first quarter of this year as the river’s water levels normalize. At least 0.7 percentage points had been shaved off economic growth last year, adding to a series of shocks that almost tipped the nation into a recession.

Problems included:

  • Ships carrying the large and heavy components of a wind farm could no longer reach Kubler’s Mannheim terminal.
  • Because they cannot be carried on rail, or for more than a couple of miles on roads, Kübler’s storage area at its terminal lay empty.
  • This stopped the building of the wind farm.
  • A trade group in Germany put farmers’ losses at several billion dollars.
  • The German chemical giant BASF had to decrease production at one of its plants because the Rhine, whose water it uses to cool production, was too low.
  • Gas stations in the region that relied on tankers to deliver from refineries in the Netherlands ran out of fuel.
  • About half of Germany’s river ferries stopped running, according to the Federal Waterways and Shipping Administration
  • River cruise ships had to transport their passengers by bus for parts of their journey.
  • Thousands of fish in the Swiss section of the river died because of the heat and low oxygen levels.
  • In November, natural gas prices increased 13% throughout Europe as coal barges could not reach coal-powered plants.
  • The world’s largest chemical company BASF, which operates the world’s largest integrated chemical plant on the western bank of the Rhine, said the overall cost of 2018 dry season was $285 million.
  • Steel maker ThyssenKrupp could not receive raw materials to one of its mills in Duisburg, forcing the company to delay its shipments to customers including automotive giant Volkswagen.
  • Contargo, which usually moves approximately 50,000 containers a month on around 40 barges, was forced to reduce its operations to three barges. Its statement noted the situation had become so extreme that barges could no longer navigate the Middle Rhine without danger.
  • Tourism was among the hardest hit sectors since the river is frequently used by boats cruising up and down the Rhine to visit castles, vineyards and other sights.

De Hoop

The wreck of De Hoop, a Dutch freighter that sank after an explosion in 1895 and is normally submerged, lay exposed on the Rhine’s banks – and wild tomatoes grew in the Rhine riverbed in Bonn.

In January and February this year, Rhine barge operators introduced a low water surcharge on exports and imports, as – we noted – did Montreal shipping companies, when, due to the lower water level of the St Lawrence river, ships had a limited loading capacity and fewer containers could be loaded on board,.

Bloomberg reported that water levels at many Rhineland locations were now back to normal for the time of year and barges that handle hundreds of fuel shipments up and down the river each year were able to reach all destinations fully loaded — something they had not been able to do for months, according to Rotterdam-based broker Riverlake Barging.

BASF’s CEO Martin Brudermueller is calling for new locks and dams to be built to keep the river navigable in dry season. The shipping lane could be made deeper, but that would take years, if not decades, and would cost millions.

“Our research shows an increase in instability,” said Hagen Koch, who studies rivers at the Potsdam Institute for Climate Impact Research. “The extremes are going to happen more often.” The Rhine’s flow relies not just on annual rainfall, but also on enormous long-term reserves of water in the Alps. Melting snow and glaciers, as well as Lake Constance, feed the upper parts of the river, but with climate change, those reserves are lower. There are reasons to believe such weather will become more frequent with a warming climate.

Sources include:

https://theloadstar.com/port-of-rotterdam-expansion-sparks-call-for-urgent-expansion-of-rhine-freight-corridor/

https://www.handelsblatt.com/today/companies/low-water-dwindling-rhine-paralyzes-shipping-transport/23695020.html?ticket=ST-4247374-9jmn5gssgio4lWFhMoFL-ap6

https://theloadstar.com/barge-operators-hit-new-charges-rhine-water-levels-sink-new-lows/

https://theloadstar.com/shippers-face-surcharges-boxes-barge-summer-heat-hits-rhine-water-level/

https://www.dailysabah.com/economy/2019/01/19/decreasing-water-levels-significantly-affect-europes-main-waterway-rhine

https://www.nytimes.com/2018/11/04/world/europe/rhine-drought-water-level.html

https://www.bloomberg.com/news/articles/2019-03-13/finally-some-good-news-for-german-growth-as-river-rhine-refills

https://www.bloomberg.com/news/articles/2019-01-23/germany-s-dried-up-rivers-cut-growth-but-the-rebound-is-coming

https://www.embassyfreight.co.uk/news/montreal-low-water-surcharge-lws/



 


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Rising Up: Action begins for Extinction Rebellion

Many people across the globe recently joined the “Rise for Climate” demonstrations against climate change.  Now, a similar movement in the UK is calling upon people to do more.  They are organising a number of actions of non-violent civil disobedience over the next few months.

https://risingup.org.uk/XR/

Their website states the following reasons, as follows:

“HOPE DIES:ACTION BEGINS

We are facing an unprecedented global emergency. Our children and our nation face grave risk.

The planet is in ecological crisis, we are in the midst of the sixth mass extinction event this planet has experienced. Scientists believe we may have entered a period of abrupt climate breakdown.

The earth’s atmosphere is already over 1°C warmer than pre-industrial levels. The chance of staying below the 2°C warming agreed upon in the Paris agreement are tiny.

Recent projections show we are on course for 3 degrees of warming and potentially much higher.

Children alive today in the UK will face unimaginable horrors as a result of floods, wildfires, extreme weather, crop failures and the inevitable breakdown of society when the pressures are so great.

We are unprepared for the danger our future holds.

The time for denial is over – we know the truth about climate change and we know the truth about current biological annihilation.

It’s time to act like that truth is real.

What does living with this truth call us to do? Will you die knowing you did all you were able to?

REBEL “

Joining the organisation provides details of the events that are being organised, many of them having similarities to the suffragettes campaigns a century ago.

Another statement on the website:

“From the 31 October citizens of this country will commit repeated acts of disruptive, non-violent civil disobedience. There will be mass arrests.

We demand the UK declares a state of emergency, takes action to create a zero carbon economy by 2025, and creates a national assembly of ordinary people to decide what our zero carbon future will look like.

We are willing to make personal sacrifices. We are prepared to be arrested and to go to prison. We will lead by example, to inspire similar actions around the world. This requires a global effort but we believe it must begin in the UK, today, where the industrial revolution began.

We will not be led quietly to annihilation by the elites and politicians. We will fight their genocidal behaviour with honour, resilience, and peace, in the spirit of all those who fought for our freedoms before us. We call on everyone, regardless of your political beliefs to join us in fighting for our nation and life on earth.”



On a similar note, George Monbiot has written an article condoning this approach, published in The Guardian on 17th October 2018 and entitled “Rebelling against Extinction”.  He gives the rationale behind the decision that now is the time for action. Governments have promised much on climate change but have done little, mainly because of vested interests in the fossil fuel industry.  His article can be read in full on his website:

https://www.monbiot.com/

Also on his website is an earlier piece, entitled “Deathly Silence” which starts:

“We’re getting there, aren’t we? We’re making the transition towards an all-electric future. We can now leave fossil fuels in the ground and thwart climate breakdown. Or so you might imagine if you follow the technology news.

So how come oil production, for the first time in history, is about to hit 100 million barrels per day? How come the oil industry expects demand to climb until the 2030s? How is it that in Germany, whose energy transition (Energiewende) was supposed to be a model for the world, protesters are being beaten up by police as they try to defend the 12,000-year-old Hambacher Forest from an opencast mine extracting lignite: the dirtiest form of coal? Why have investments in Canadian tar sands – the dirtiest source of oil – doubled in the past year?

The answer is growth. There might be more electric vehicles on the world’s roads but there are also more internal combustion engines…….”

https://www.monbiot.com/2018/10/01/deathly-silence/



Action has already begun in Stroud, Gloucestershire, as shown by the newspaper cutting below:

Stroud1a

Stroud2



Extinction Rebellion had a meeting in Parliament Square on 31st October to launch their movement.  There were some significant speakers there:

Molly Scott Cato, Green MEP, Former leader of the Green Party, Caroline Lucas, MP and George Monbiot, Guardian Journalist.  His speech can be seen here:


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An obsession with GDP and economic growth is acting to worsen climate change

An obsession with GDP and economic growth is acting to worsen climate change.

A number of progressive economists have been pointing out the facts relating to this statement for the last few years.  Yet, political leaders across the world still seem to be deaf to their words and obsessed with a need to find ways to fuel economic growth through a market economy and promoting austerity, and then praise themselves for doing it, even though their austerity measures affect the poorest in society and damage the environment.  It is part of an adherence to a competitive world, in which one’s own country must come out on top.  This blinkered approach encourages the manufacturing industry, much of which uses fossil fuels, and trading across the globe, in order to balance the difference between imports and exports – what is termed ” a balanced economy”.  I deal with the issue in Chapter 7 of my book, which can be found elsewhere on this website.

fioramonti

In the UK, this approach was perhaps pioneered by Margaret Thatcher and her crony in the US, Ronald Reagan.  But it was later picked up with enthusiasm by Tony Blair and developed further, until it became an obsession with economists.  According to George Monbiot, they are using the wrong mathematics and this approach is both outdated and harmful to the environment. See:

George Monbiot (2015) Guardian 24th November 2015.  “Consume more, conserve more: Sorry but we just can’t do both.”

A number of progressive economists have been saying a similar thing for a number of years.  Perhaps the late Richard Douthwaite was the first to say this in his book “The Growth Illusion” (1999) but there have been others too:  Molly Scott Cato MEP (“Green Economics”), Kate Raworth (Doughnut Economics and also “Old economics is based on false ‘laws of physics’ – new economics can save us” Guardian 6th April 2017), Ian Fletcher (“Free Trade Doesn’t Work”), Paul Krugman  (“How did economists get it so wrong?” in the New York Times), Pat Conaty and the New Economics Foundation among others (full details of each in my references section on this website).

The current UK Shadow Chancellor, John McDonnell MP, also wrote a booklet about this in June 2007, whilst a member of Tony Blair’s “market economy party”.  It is entitled “Another World is Possible” and shows amazing foresight about the consequences of market economy politics, which we are living with now. He was courageous to write this, at a time when Blair was pursuing another path.

AWIP

“Another World is Possible”  (2007) is published by the Labour representation Committee, PO Box 2378, London E5 9QU.  ISBN 978-0-9555771-0-9.

This excellent booklet includes a section entitled “A Planet Plundered for Profit” in which McDonnell states that “we cannot tackle climate change unless we address the system which has caused it…….the wasteful consumption of the wealthier nations has brought environmental impacts, which…. disproportionately affect the poorest countries….The UK has a wealth of natural resources that lend themselves to renewable energy production which, once set up, are low cost to run and cause no pollution… a programme of investment in renewable would not only create thousands of jobs in engineering and manufacturing sectors that have declined in recent years….”

According to Kate Raworth in her Guardian article, “Things are not going well in the world’s richest economies. Most OECD countries are facing their highest levels of income inequality in 30 years, while generating ecological footprints of a size that would require four, five or six planet Earths if every country were to follow suit. These economies have, in essence, become divisive and degenerative by default. Mainstream economic theory long promised that the solution starts with growth – but why does that theory seem so ill-equipped to deal with the social and ecological fallout of its own prescriptions?”

In May 2017, Lorenzo Fioramonti*, Professor of Political Economy, University of Pretoria, wrote an article for The Conversation, republished in Quartz. He opens: “GDP as a measure of growth fails to account for damages caused to the environment by industrial activity”. In his new book “Wellbeing Economy: Success in a World Without Growth” he points out that the “growth first” rule has dominated the world since the early 20th century. No other ideology has ever been so powerful: the obsession with growth even cut through both capitalist and socialist societies”.  He asks the question, “What exactly is growth” and further expounds the idea that it is not a silver bullet to success.  Further details of this concept in his book are summarised in:

https://britain2020.wordpress.com/2017/07/04/fioramonti-growth-is-dying-as-the-silver-bullet-for-success-this-may-be-good-thing/

Kate Raworth has also circulated her latest blog, which contains a video, which tries to explain the issue in easily understandable terms, using puppets.  She hopes that this will be used in secondary schools and in teaching economics undergraduates that the GDP/growth model does not work:

Economic Man vs. Humanity: a puppet rap battle

by Kate Raworth

An economist, a songwriter, and a puppet-maker walked into a recording studio. What do you think came out?. . . An economics puppet rap battle, of course.

One of the most dangerous stories at the heart of 20th century economics is the depiction of humanity as rational economic man. In my book Doughnut Economics I decided he needed a portrait so I drew him, standing alone, with money in his hand, ego in his heart, a calculator in his head and nature at his feet. He hates work, he loves luxury and he knows the price of everything.

Now here’s the most fascinating (and unnerving) thing I discovered while researching the history and influence of this character. The more that economics students learn about him – from Year 1 to Year 2 to Year 3 of their studies – the more they say they value traits such as self-interest and competition over traits such as altruism and collaboration.

The implication? Who we tell ourselves we are shapes who we become.

Over the past year I have been contacted by many economics teachers around the world – especially those in secondary schools – who want to encourage their students to critique this text-book model and offer them a far more nuanced understanding of human behaviour.

So that got me thinking…

I teamed up with the brilliant puppet designer Emma Powell and the ingenious musician Simon Panrucker and, with funding from the Network for Social Change (big thanks, folks!), we created this video – Economic Man vs Humanity: a puppet rap battle.

We’d love to see it in use in classrooms, conferences, reading groups, community groups, and shared widely on social media, on web platforms, on teaching resource sites.

If you are a teacher, please do use it to start a debate in your classroom (the video ends with a question for that very reason). Download the complete lyrics of the rap, and if your students want to dive further into the back story and future possibilities of Rational Economic Man, then I recommend Chapter 3 of Doughnut Economics, which was the basis for the whole project.

If you are a student, please do share the video with your fellow future economists, get your teacher involved, and help kick off a much-needed discussion.

And if you host a web discussion, a new economics resource site, a community network, or a teachers’ forum, you are very welcome to feature the film on your site – we’d love to hear what you do with it.

So sit back and enjoy the Puppet Rap Battle – sing along, pass it on, and let’s say farewell to Rational Economic Man. Today’s students know that it’s time to create a better portrait of who we are for 21st century economics.”

Kate Raworth | 5 September 2018 at 10:14 | URL: https://wp.me/p3sUHn-Bb

 

And yet, despite all of these highly knowledgeable progressive economists writing at length about it, the old way of seeking “growth, growth and more growth” still persists. The present conservative government in the UK has used this maxim extensively over the last 10 years, and even used it as a hammer to batter the opposition with – that they are weak on the economy – a deceitful myth that a gullible public unwittingly believed, when voting at the ballot box – until June 2017, that is.  And the present Chancellor constantly brings statistical data to parliament, in an attempt to show that their economic austerity policies are working.  What he does not say is that they are contributing to climate change, as well as making many marginalised people much worse off.  Indeed, they seem to have abandoned any pretence of working towards attaining the targets set by the Paris Agreement in 2015.  George Monbiot has slated their 25-year environment plan, as “A Grand Plan to do Nothing”. See: http://www.monbiot.com

This last year, we have seen some of the extreme consequences of climate change:

  • excessive heatwaves this summer;
  • a prolonged unusual freeze-up last winter;
  • last year having the most violent and numerous hurricanes;
  • island nations losing some of their territory due to sea level rise;
  • the last few years, global temperatures being the hottest ever on record.

Some of these issues have been described in more detail in other recent blogs on this website.

Just recently, I have read an article by Alan Cottey, a member of Scientists for Global Responsibility: “Environment change, economy change and reducing conflict at source”, just published in AI & Society, where he sets out alternatives.  Here is an extract from the Abstract:

At a time when fossil fuel burning, nationalism, ethnic and religious intolerance, and other retrograde steps are being promoted, the prospects for world peace and environmental systems stability may appear dim. Exactly because of this is it the more important to continue to examine the sources of conflict. A major obstacle to general progress is the currently dominant economic practice and theory, which is here called the economy-as-usual, or economics-as-usual, as appropriate. A special obstacle to constructive change is the language in which economic matters are usually discussed. This language is narrow, conservative, technical and often obscure. The rapid changes in the environment (physical and living) are largely kept in a separate compartment. If, however, the partition is removed, economics-as-usual, with its dependence on growth and its widening inequality, is seen to be unsustainable. Radical economic change, for better or worse, is to be expected. Such change is here called economy change. The change could be for the better if it involved an expansion of the concept of economics itself, along the lines of oikonomia, a modern revival of a classical Greek term for management or household. In such an expanded view, not everything of economic value can be measured. It is argued that economics-as-usual is the source of much strife. Some features are indicated of a less conflictual economy—more just, cooperative and peaceful. These features include a dignified life available to all people as of right, the word ‘wealth’ being reconnected with weal, well and well-being, and ‘work’ being understood as including all useful activity.”

The whole article can be found at:

https://link.springer.com/article/10.1007/s00146-018-0816-x


I think that many of us have stood on the sidelines of this issue for long enough now.  It is time for the progressive economists I have named above, and those cited in Cottey’s article, to come together, in formulating together a new economic theory, with a clear structure, that takes care of the environment, does not increase the gap between rich and poor, and which reduces conflict and competition between nations.  They have written separately for too long.  Now, we are looking for a new partnership, a new structure – a really new economics, based on compassion and equality, not austerity, which will also work towards reducing the damaging effects of climate change.


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Trading Systems, Deficits and the Concept of Growth

CHAPTER 4

International trade has become so much a part of our lives that there is a tendency to take it for granted, as a normal and essential part of modern society and that of the countries of the world with which we trade.  Politicians particularly focus on it, as it is seen as a means of balancing the economy; they particularly encourage the export of British goods and turn a blind eye to all the stuff that we import.

The industrial revolution and its continuum and the development of trading systems

Historically though, trading systems as we know them today were first developed alongside the Industrial Revolution. And again, the UK was a forerunner in developing these new trading systems, as they sold the goods produced in their factories to other countries across the world, particularly to members of the British Empire, such as through the East India Company in India.  This change from the local exchange of goods to the export of goods across continents and the world has had such a great impact that its influence now affects, and influences, the whole world’s economy. The nations of the world have become so inter-connected through trade that, if one country goes through economic difficulties, then all the others are affected by it too. Because of the strong link between trading and the industrial revolution and its continuum, I have to consider it, and its effects, as one of the major interconnections that has led us globally to the situation in which the future of our planet is at risk.  Indeed, I believe that free trade is at the centre of it all.

The Industrial Revolution ended more than a century ago but the effects of it, the trading systems that were developed alongside it and the IR Continuum, still have a  growing global impact.

The effect of the IR Continuum on global trading systems has seen the rise of multi-national companies (mostly of American origin), not only trading with other countries but also setting up business abroad, in order to cut costs, employ cheaper labour and to avoid national tax tariffs.  It is not unusual now to see MacDonalds, Kentucky Fried Chicken, Monsanto and other multi-national outlets in most capitals of the world.  This is sad because the setting up of food and clothing outlets selling goods that promote the American way of life has the effect of damaging indigenous cultures and their traditions.

We also see locally produced goods transported across oceans and continents in order to trade with partner countries many thousands of miles away.  In the UK, for example, we import apples from New Zealand and Chile, fruit from South Africa, fish from Japan and Argentina, clothing and digital goods from the Far East, vehicles from Europe and so on.  The invention of the refrigerator has played its part in preventing perishable goods from decomposing whilst in transit.

Image result for McDonalds in Japan

Fig. 34  A multi-national outlet for the USA in Japan (from: blog.getchee.com)

Changes in trading patterns across the world since the industrial revolution can also be contentious.  For example, when I lived in Australia during the early 60s, the UK was considering whether it would join the European Common Market (now the EU).  This was very unpopular with Australians, as they had a special trading relationship with the UK, as part of the British Commonwealth.  However, Britain did join the EU and so Australia had to develop other markets, closer to home, and were able to survive this change.  But the resentment it caused in some Australians towards the EU, and the British, is still present today, as seen by the anti-EU stories constantly being peddled to the UK population, through the Australian-owned media magnates.

There has been a big change in Britain’s trading patterns as, during the 1940s-50s, about 40% of our trade was with Commonwealth countries but this is now down to 10%, as the EU has become our major market.

Large Companies and Climate Change Denial

The largest company in the world, ExxonMobil, produces oil and gas and a recent article by Shannon Hall, in Scientific American32 reports that this company was aware of climate change as early as 1977, before it became a public issue.  The company then spent decades refusing to publicly acknowledge climate change and even promoted climate misinformation.  Hall likens this approach to the lies spread by the tobacco industry regarding the health risks of smoking.  Exxon became a leader in campaigns of confusion and helped create a Global Climate Coalition to question the scientific basis for concern about climate change.  It also lobbied to prevent the USA from signing the Kyoto Protocol in 1998 (to control greenhouse gases), also influencing other countries, such as China and India, not to sign as well.  It has spent $30 million on think tanks that promote climate denial, according to Greenpeace. Hall’s article provides data that suggests that half of the greenhouse gases in our atmosphere have been released since 1988.  If ExxonMobil had been upfront about the issue in those early years, there could have been so much more progress on climate change than there has been.  The company obviously had vested interests in opposing the scientific evidence but they now have a lot to answer for. And there are now rumours that Shell is under investigation for doing a similar thing.

It has recently been reported that one of the major American charitable foundations (Rockefeller Family Fund) has announced that it will cease to invest its funds in fossil fuels and, in doing so, made the following statement: “We would be remiss if we failed to focus on what we believe to be the morally reprehensible conduct on the part of ExxonMobil”.33

Table 3 shows that there are three energy companies amongst the 10 largest companies in the world and the top British company, BP, is the 17th largest in the world.  Energy companies obviously have much to lose once the issue of carbon emissions is properly dealt with by global agreements to reduce them.  ExxonMobil would have better spent their $30 million researching into new forms of renewable energy; it is currently worth more than $300 billion.

Table 3: Largest 25 companies in the world (from google images and http://bespokeinvest.typepad.com/bespoke/2009/04/largest-companies-in-the-world.html)

25biggest

Carbon Majors – the companies who emit the most greenhouse gases

90 carbon majors have been identified as being the major emitters of the greenhouse gases that are primary drivers of climate change.  Since 1751, they have produced 65% of the world’s total industrial carbon dioxide emissions according to a study by Richard Heede of the Climate Accountability Institute34.  The 90 majors include 50 private companies, 31 state-owned companies and 9 nations. Twenty-one are based in the US, 17 in Europe (five in the UK), six in Canada, two in Russia and one each in Australia, Japan, Mexico and South Africa. Of the state-owned companies, Saudi Aramco has the highest emissions, followed by Gazprom (Russia), National Iranian Oil Company, Pemex (Mexico) and British Coal. The top 10 carbon majors are:

Chevron USA, ExxonMobil USA, Saudi Aramco Saudi Arabia, British Petroleum (BP) UK, Gazprom Russian Federation, Royal Dutch Shell, National Iranian Oil Company Iran, Pemex Mexico, British Coal Corporation UK and ConocoPhilips USA  For full details of these companies, and where they rank, are given by Greenpeace35.

Last September Greenpeace Philippines were so concerned about the devastation caused in their country by a major typhoon, that they filed a human rights complaint to the Commission of Human Rights, against the 50 largest multi-national private companies36.

The Volkswagen deception

ExxonMobil has not been the only large corporation to deceive the public on the issue of carbon emissions.  Just recently, it has come to light that the large German car-manufacturing company, Volkswagen, has tried to avoid green regulations and tests by fitting its cars with devices to cheat the emissions tests carried out on vehicles. The scandal has resulted in Volkswagen shares falling by 40%.  This deception is akin to the deception propagated by ExxonMobil, described earlier, where large and successful companies have used their trading links to make money for themselves at the expense of the health of the planet.  One wonders how many more companies will come to light which are carrying out similar deceptions for selfish reasons.

Earlier this year, a new independent organisation was set up in London (InfluenceMap.org), to map, analyse and score the extent to which corporations are influencing climate change policy. An article in ExaroNews37 published in 2015, reported that research from InfluenceMap has demonstrated that car manufacturers (especially those in Germany) have been lobbying strongly against climate-change policy, especially those who have made little progress in complying with future standards for emissions of CO2 in the EU and US.  The InfluenceMap article ranks car makers according to their compliance with the 2020 standard on emissions, with Nissan coming top, followed by Honda, Renault and Peugeot.  According to the report, the world’s 12 biggest car manufacturers would be facing fines of $35.7 billion if the 2020 rules on emissions were to be applied now, with Volkswagen paying more than any of them, at $9.5 billion. Car manufacturer Mercedez-Benz has admitted that meeting the 2020 emission standards poses a technological strain (also reported in ExaroNews).  One wonders why none of them have acted sooner to develop greener cars, as some of the Japanese manufacturers have done.

Trade and Competition 1

The problem is that trading evokes a competitive spirit, even in the largest and most affluent companies, and the temptation to cheat can be persuasive.  As well as the deceptions already mentioned, there has been the development of parallel economies, in which companies try to evade taxes and tariffs by investing their profits in offshore accounts.  There are many people throughout the world who try to avoid national taxes by setting up their own parallel economies.  They contribute to an underground economy or “black market”, which is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided.  It includes many multi-national businesses, as well as those involved in the growing and selling of illegal drugs.

Because trading has become an endemic part of the global economy, embargos on goods are often used as powerful political weapons to bring other countries “into line”.  Examples of this are the embargos on South African goods during the apartheid era and that currently being imposed on Russia because of its occupation of the Crimean region of the Ukraine.

The competition for markets associated with trade has far-reaching effects across the globe.  Politicians talk about it as being a vital part of the economy and in so doing, they encourage this competitive spirit.  Its linkages into the economy and how trade-associated competition is making global warming and climate change worse, will be discussed later in this chapter and in chapter 7.

The whole trading scenario reaches into many aspects of life and plays just as important a role in the development of climate change, as the industrial revolution has done.

OIL

Oil has also come to dominate global trading systems, with prices being hiked by the oil-producing countries, with non-oil-producing countries being held to ransom.  Most governments fear that having no access to oil will impair their ability to manufacture and to trade, and thus impact on their national economies. The fear of losing access to oil has had a huge impact on national decision-making and the willingness to go to war to wipe out regimes who have large oil resources and who are not friendly to the western world.  All of these fears, and the actions associated with them, are futile really because, if we are to save the planet, we need to stop using oil and other fossil fuels, by leaving them in the ground, and to replace them with renewable forms of energy.  Perhaps ExxonMobil and BP and other oil producing companies still need to learn this.

Image result for oil well

Fig. 35  An oil well

Further details about the movement of oil around the world (in terms of imports and exports) are shown on the Carbon Brief website38, which appears to show that exports of oil were still increasing in 2014, compared with 2004.

At present, oil-producing countries have the upper hand but I do not see this as lasting, as there is a move to using non-carbon-emitting forms of energy, such as solar panels and wind, tidal and water-based energy.  This could completely change the whole dynamic of global trading.  If they seize the opportunity, some African countries in Saharan and sub-Saharan regions, could move from being poverty-bound regions, to replacing the oil-producing countries in the pecking order, by becoming leaders in producing and supplying cleaner forms of energy, such as solar power.  Chile has already made a start by building a “farm” of solar panels in a desert area; this already supplies enough energy for one of their largest cities.

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Fig. 36 Solar power farm in Chile 

 The trend towards renewable forms of energy has put some of the multi-national energy companies into a panic, as they search frenetically for oil and/or gas in more and more remote places, such as the Arctic.

There is a saddening history of how oil has damaged the environment and some animal and bird species, through oil slicks and spillages, yet the competitive urge to find new places to drill for oil and other gases continues unabated.  The following three photographs show some of the consequences of oil spillage.

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Fig. 37  

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Fig. 38

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Fig.39

Another area of concern is the new practice of fracking where licences have already been obtained to carry out this practice, which releases natural gas from under the ground in areas very close people’s homes.  Further information and an interactive map of the areas of the UK and Ireland affected by this can be found at the website:
http://frack-off.org.uk/extreme-energy-fullscreen/.

News stories from Canada and America suggest that fracking there is linked to significant earthquakes

News stories from Canada and America suggest that fracking there is linked to significant earthquakes.

 Market Economies

The major change in trading systems across the world, since before the industrial revolution, has impacted substantially on the way of life and the economies of most nations of the world, so that whole economies are now based on trading patterns, potential markets and import/export ratios.  Indeed, the description of a market economy is considered by some to be a progressive form of government.  It is based on the concept of demand and supply, where governments encourage those companies in their trade who are meeting an overseas demand for their goods.  The income they receive from overseas is seen to help the balance of payments and to bring about economic growth.

What a market economy fails to do is to analyse, and meet the needs of, its own people, especially those who are in poverty, with no goods to sell. The excuse for failing to help those in most poverty is that there will be a trickle-down effect; in reality this rarely happens.

What does happen is that the rich get richer at the expense of the poor.

Market economies are based on the encouragement of free trade, which is thought by 93% of economists to be a good thing (Ian Fletcher (2010)39 but, as argued by Fletcher, it has led to a situation where some developed nations have huge trade gaps, or deficits, Britain being one of them. This has occurred mainly because some of the developing nations pay much lower wages to their industrial workers and can therefore produce and sell their goods at more competitive prices than those of the developed nations. In 2014 the trade deficit of the U.S.A. was $508,324 billion.  Fletcher makes a case for rethinking and reforming current trade policies, by debunking some of the cherished assumptions held by mainstream economists. In the UK, the trade deficit for manufactured goods is higher than that of most other European countries but, in the past, politicians have worked to reduce the deficit by implementing austerity measures, rather than by rethinking our trade policies altogether, introducing localisation policies and making the reduction of carbon emissions a priority.

The UK Office for National Statistics (ONS) provides data which shows that the balance of trade in goods in the UK has shown a deficit in all but six years since 1900.  They recorded net surpluses in the years 1980 to 1982, largely as a result of growth in exports of North Sea oil. Since then, however, the trade in goods account has remained in deficit (see Figure 40).

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Fig.40

The trade deficit in the UK – from the Office of National Statistics

Figure 41 shows that Britain’s trade in services is doing much better than its trade in goods.

fig41

Fig.41 – From the Office of National Statistics

The trade deficit also impacts on crops and foodstuffs produced by our farmers.  In 2002, Dr Caroline Lucas, a Green MEP, wrote a report40 entitled “Stopping the Great Food Swap: Relocalising Europe’s Food Supply”. It was based on background research and support provided by Andy Jones and Vicki Hird of Sustain and from Colin Hines, author of “Localisation: a Global Manifesto, published in 200041.

Lucas’s report provides some astonishing data:

  • The UK imports 61,400 tonnes of poultry meat from the Netherlands and, in the same year, exports 33,100 tonnes of poultry meat to the Netherlands;
  • The UK imports 240,000 tonnes of pork and 125,000 tonnes of lamb while exporting 195,000 tonnes of pork and 102,000 tonnes of lamb;
  • In the UK in 1997, 125 million litres of milk was imported and 270 million litres exported;
  • In 1996, the UK imported 434,000 tonnes of apples, 202,000 tonnes of which came from outside the EU. Over 60% of UK apple orchards have been lost since 1970.

Thus, we are importing more agricultural goods than we actually export, and importing goods which we produce ourselves, yet our own farmers struggle to make an income. I have also come across figures which show that 46% of the food we eat is imported.

The report stated that trade-related transportation is one of the fastest-growing sources of greenhouse gas emissions and is therefore significant in terms of climate change.

 In 2011, Rianne ten Veen, of GreenCreation, updated the Lucas report, providing more recent data, with three case studies on meat, milk and fruit, for the Counting the Costs series of reports42.

 The EU Common Agricultural Policy has been accused of creating a situation in which damage is caused to the environment and to rural livelihoods, by encouraging larger, more intensive farms at the expense of smaller, more sustainable ones and leading to the inhumane treatment of farm animals.  There is evidence that the transport of livestock and meat across Europe has led to diseases such as Foot and Mouth Disease and BSE being passed from one country to another. The system has led to an absurd situation, which rewards a few, very wealthy farmers, the supermarkets and multinational food companies at the expense of small and medium-scale farmers. It makes no economic sense.

Further data is available in the report, which concludes that this destructive globalisation needs to be replaced with a localisation that protects and rebuilds local economies across the world.

The organisation, Local Futures, has recently released a 16-page action paper, entitled Climate Change or System Change?43 which argues that globalisation (the deregulation of trade and finance through an ongoing series of “free trade” treaties) is the driving force behind climate change.  The document makes the case for an international move towards localisation and provides a list of the pro’s and con’s for both systems, showing that the advantages of localisation far outweigh the advantages of globalisation.  It provides evidence to demonstrate that globalisation:

  • Promotes unnecessary transport;
  • Promotes rampant consumerism;
  • Is making the food system a major climate-changer;
  • Replaces human labour with energy-intensive technologies;
  • Promotes energy-intensive urbanisation.

A recent book by Colin Tudge44 proposes a complete rethink of our approaches to farming, through “enlightened agriculture”, without wrecking the rest of the world.

Economic Growth

Economic growth is defined as an increase in the capacity of an economy to produce goods and services, compared from one period of time to another.  It is the long-term expansion of the productive potential of an economy.  The problem with this is that this type of growth (as with so-called progress) is dependent upon relying on producing more and more manufactured goods and finding overseas markets to sell them.  It all feeds into the IR Continuum, thus adding to further carbon emissions.

Growth is seen as a good thing by economists and politicians but, as with “progress”, it can’t be good if it is adding to carbon emissions and the destruction of the planet.  At present, success in national economies is measured using an index called the GDP (gross domestic product).  At the time of writing the growth in the GDP in the UK was 0.5% and, in the USA it was 1.5%.

In his book, “The Growth Illusion: how economic growth has enriched the few, impoverished the many, and endangered the planet” (1999), Richard Douthwaite5,45 sets out how a capitalist system can be redirected to fulfil society’s hopes by restructuring economies to be based on local rather than global imperatives.  Some of his ideas will be looked at further in a later chapter.

Social Businesses

The Nobel laureate, Muhamad Yunus has promoted the concept of social businesses, which are businesses with social objectives (Creating a world without poverty: by Muhammad Yunus, 2007)46. He believes that we need to recognize the real human being and his or her multi­faceted desires. In order to do that, we need a new type of business that pursues goals other than making personal profit – a business that is totally dedicated to solving social and environmental problems.  He gives three examples of social businesses:

  • One that manufactures and sells high-quality, nutritious food products at very low prices to a targeted market of poor and underfed children;
  • A social business that develops renewable-energy systems and sells them at reasonable prices to rural communities that otherwise can’t afford access to energy;
  • A social business that recycles garbage, sewage, and other waste products that would otherwise generate pollution in poor or politically powerless neighborhoods.

It may be owned by one or more individuals, either as a sole proprietorship or a partnership, or by one or more investors, who pool their money to fund the social business and hire professional managers to run it.

A social business might be defined as a non-loss, non-dividend business. Rather than being passed on to investors, the surplus gener­ated by the social business is reinvested in the business. Ultimately, it is passed on to the target group of beneficiaries in such forms as lower prices, better service, and greater accessibility. Not only does the investor get his money back, he still remains an owner of the company and decides its future course of action.

It is not known whether a social business feeds into the IR continuum as much as traditional businesses do but, because there are social and/or environmental objectives, one suspects that the carbon footprint will be much reduced because those who run the business are not there to make profit for themselves but to improve society.  The Fair Trade movement also has social objectives.

The Organization for Economic Co-operation and Development

oecd

The OECD is a forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development.

In recent years there has been an OECD move to start measuring economies according to their green growth.  In June 2009, ministers from these 34 countries with market economies signed a Green Growth Declaration47, declaring that they will: “Strengthen their efforts to pursue green growth strategies as part of their responses to the crisis and beyond, acknowledging that green and growth can go hand-in-hand.” They endorsed a mandate for the OECD to develop a Green Growth Strategy, bringing together economic, environmental, social, technological, and development aspects into a comprehensive framework. The Strategy was published in 2011 and formed part of the OECD contributions to the Rio+20 Conference in June 2012.

The strategy identified the following as being the most polluting industries with the greatest CO2 emissions:

  • Air transport;
  • Water transport;
  • Electricity, gas and water;
  • Coke, refined petrol and nuclear fuel;
  • Land transport;
  • Basic metals;
  • Non-metallic mineral products.

The document outlines ways to achieve international co-operation on the strategy and ways to monitor green progress.  It is a significant document47.

I would support the introduction of a new measure – a green GDP – which assesses only productivity associated with products which do not add to the total global emissions of CO2 and other pollutants.  Thus countries’ outputs could be compared using both metrics:

  • The normal GDP
  • The green GDP

The OECD suggestion of monitoring the green GDP would give incentives to nations to lower their carbon emissions and to focus on developing products which run on clean energy or which can be manufactured with minimal emissions.

 Another form of trading of the last few decades is in world currencies and commodities.  National currencies vary from day-to-day, according to the world economic situation, and some people speculate in buying and selling currencies, like a kind of international casino.  It is a form of risk that titillates the human need for excitement and intellectual entertainment, as does speculation on stock markets and commodities. But it can also help an individual to make money at the expense of some countries with fragile economies.

National Self-Sufficiency

So, what the industrial revolution and its continuum has done, is to set into place trading systems, and a merchant culture, that it will be difficult to reverse.  The most stable system would be for each nation to provide for itself – to become self-sufficient, only buying from overseas those products which cannot be sourced at home – but we are a long way from that ever becoming a reality. It is said that the UK at the moment can only produce goods that meet 60% of its needs.  Is self-sufficiency a realistic target to aspire to?  Could it be reached within the three generations that we have left?

fig42

Fig.42

A local farmer’s market (From clipart)

Britain’s Responsibility

As with the Industrial Revolution, Britain is again responsible for setting into play an international trading system that now runs out of control, feeding the IR continuum, and contributing to increasing levels of carbon emissions.  Britain started it off but, because it is a small country with limited resources, it has long been left behind by the larger countries with vast resources of mineral and fossil-fuel wealth.  Britain tries to keep pace with the larger, resource-rich countries but is really fighting a losing battle.  It would be much better placed in leading the world in finding ways of becoming self-sufficient, supporting its own farmers and reducing carbon emissions.  And by modifying its economy to support those in most need and in developing green products.

Recently in the news has been the collapse of the UK Steel industry, due to cheap imports from China.  Rather than trying to shore up outdated plants, which use fossil fuels to make steel, Britain would be better off using governmental investment to lead the world in developing a carbon-free steel.

Trading and Competition 2

I mentioned earlier in this chapter the competitive spirit that trade engenders.  I admit that Britain started trading in this way in the nineteenth century, by making use of its empire links, because it wanted to get a competitive edge over other nations.  Other countries, who have followed suit and come to dominate trading systems, have also done so for competitive reasons.  Indeed, it is almost impossible to separate the concept of a market economy from the concept of competition and rivalry.  But, unless, the nations of the whole world stop competing with their neighbours and reinforcing the IR Continuum, then we will no longer be here to compete against each other.

Global co-operation is what is needed at the moment, not competition; Britain needs to join forces with its neighbours to save the planet.

In a recent TEDx speech,”Why We Need to rethink Capitalism”, Paul Tudor Jones II48, formerly from big business himself, talked about a profit-led emphasis (to the exclusion of all else) that has led to a situation in which the concept of humanity has been removed from the corporate world.  He said that profit margins, at 12.5%, are currently at a 40-year high and that higher profit margins exacerbate income inequality, with the US having the greatest levels of inequality in the world. He demonstrated a strong link between income inequality and a series of social health metrics. He described a new way of corporate behaviour (The Just Index), in which the public are given a voice.

The Transatlantic Trade and Investment Partnership (TTIP)

TTIP is a series of trade negotiations being carried out mostly in secret between the US and the EU.  It is a bi-lateral trade agreement and is about reducing the regulatory barriers to trade for big business and includes things like: food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations.  The Independent49 lists six reasons why we should oppose TTIP:

The British NHS, as a public institution, is at risk, as one of the aims is to open up Europe’s public health, education and water services to US companies, which could mean the privatisation of the NHS;

  • Food and Environmental Safety: the TTIP’s agenda is to seek to bring European standards on food and the environment, closer to those of the US. But US regulations are much more lenient, with 70% of processed food sold in US supermarket containing ingredients that have been genetically modified. The US also has very lax laws about the use of pesticides and the feeding of growth hormone to cattle;
  • Banking Regulations: it is feared that TTIP will remove current restrictions on banks imposed after the 2009 financial crisis;
  • Privacy: after a huge public backlash, the European parliament did not agree to an anti-counterfeiting trade agreement (ACTA), which would have allowed internet service providers to monitor people’s on-line activities. It is possible that TTIP may bring this back.
  • Jobs: the EU has admitted that TTIP may bring in unemployment, as US has weaker labour standards and trades union rights.
  • Democracy; this is the greatest threat that would be brought in with TTIP, as it will allow companies to sue governments, if those governments’ policies cause a loss of profits.

It would appear that TTIP will allow the big US corporations, already responsible for huge emissions of CO2, to be given a free reign to wreak havoc in Europe as well.

 The Merchant Culture

In the End Piece to my first book and the introduction to this book, I stated that the world had been taken over by merchants – people who trade in all kinds of goods for their own benefit – and how this was destroying the world.  I still hold this opinion, 22 years after first making the observation.  The world is still controlled by merchants, as well as the greed and acquisitiveness that often accompanies this merchant culture. Unless this is addressed, many of the measures described in this chapter and elsewhere in this book, will make no difference to the domino effect this merchant culture is having on the stability and sustainability of the planet.

A Downturn in Global Trading Systems?

A recent joint publication from the Centre for Economic Policy and Research and The Robert Schuman Centre for Research Studies50 suggests that there is currently a global trade slow down.  The document contains 20 properly scrutinised research papers, which all come to the conclusion that there is a downturn in global trading patterns. Various conclusions are drawn from this; for example, a rise in protectionism, another impending collapse of global markets etc.  Economists are obviously worried about this, as they think it will impede economic growth.  However, it may herald a worldwide trend in consumers realising there is a climate change crisis and subsequently reducing their consumption of imported goods, deciding not to adhere any more to a throw-away culture.

According to the World Bank, a brief review of the evidence suggests that both cyclical and structural factors have been important in explaining the recent slowdown in global trade51. With high-income countries accounting for some 65 percent of global imports, the lingering weakness of their economies five years into the recovery suggests that weak demand is still impacting the recovery in global trade. But they feel that weak demand is not the only reason as trade had become much less responsive to income growth, even prior to the crisis. There is some evidence to suggest that part of the explanation may lie in shifts in the structure of value chains, in particular between China and the United States, with a higher proportion of the value of final goods being added domestically—that is, with less border crossing for intermediate goods. In addition, the post-crisis composition of demand has shifted from capital equipment to less import-intensive spending, such as consumption and government services.

I personally do not think that the downturn in global trade is a disaster; indeed, it may herald a new way forward, which has a glimmer of hope of saving the planet.

This whole issue is discussed further in chapters 5 and 7.