domingo, 30 de marzo de 2008

Iraq and Global Warming

(Part 1)

It is a fact that the only thing that moves humanity is money; power and other accessories come with it. Therefore, money is the final answer to every conspiracy theory out there -about anything.

This pops up the most important question that the world faces right now. How do we stop Global Warming from destroying our planet? It also helps to answer a key question about George´s impulse to invade Iraq despite the lack of evidence against Saddam Hussein. Why did he do it?

Two hypotheses will be analyzed as I try to explain how money is the only determinant behind failed policies and also unprovoked wars.

First hypothesis: The only factor that will function in the race against Global Warming is taxes on everything that emits pollution.

Second hypothesis: The only reason why the United States attacked Iraq was money.

Just in case that you don’t find any connection between this two hypotheses learn this. The Iraq war is running at $5000 a second, according to Nicholas D. Kristof of the New York Times, but it is finance with debt, not with taxes as it should had been. If you tax people they will complain and the support for the war would had fallen years ago. So it is universal that if you want to change people’s behavior -as a government- you have to do it by affecting everybody´s income. That is why if you are talking on real terms about Global Warming, you need to tax polluters. This is a caveat that we need to address seriously, otherwise we will continue to hear Al Gore from years to come.

First of all we need to assume that there is Global Warming and that this is caused by man, we will leave other theories out because even if there is no Global Warming, and even if it is not caused by men, we need to acknowledge that our present level of contamination is bad enough on itself.

Let’s put Global Warming on a single person perspective. On your work place you see a lot of waste by most of your co-workers. They print too many things on new paper, they don´t recycle, they don’t turn their computers off after work, lights are usually on even when they are not needed, heating systems, cooling systems, and any other artifact that keeps the temperature as you want, are unnecessary set to high standards.

And that is just with things that are part of your working experience –feel free to add any other wasteful act or to demostrate that attitude. But if we go forward to a more expanded network of activities we see that our companies in general, are enclave in part of some serious natural damaging businesses.

Look at you production lines (not good examples of thrift) and try to come up with every item that pollutes in great scale some part of your environment. If you are into developing software, do you care if your computes will be recycled after you are done with them? If you export flowers, do you care if the boxes and paper that cover them will be recycled by the florists? If you work at a newspaper, do you care what happened to the millions of papers that you print every year? The examples could be infinite.

This is going forward in your business, what about going backward. Do you know where the paper that you use at the office comes from? What about the light that is provided to your company, or the new laptop that you bought? Is is part of your concerns to focus on where those new wooden desk come from? Were those trees planted specifically for industrial purposes? Or were those trees cut from a natural reserve forest?

A troubling study found out that Global Warming has a exponential effect –I will not get too much into technical details that you can easily research- on how it acts over delicate ecosystems. The study “quote needed” found that when trees are under extreme conditions of heat they stop emitting oxygen. This pose an uncontainable problem, if trees are located in extremely warm places in the world, they won't help in absorbing carbon dioxide but instead they will contribute to the already excessive pollution. Scared already? If they don’t convert carbon dioxide into oxygen the heat on the planet accelerates even further.

A separate study on the Arctic – by NASA- found that “emissions of black soot alter the way sunlight reflects off snow”. Therefore, energy that the sun emits to that particular place is absorbed, warming up the zone even more. So when the ice cap melts, the consequences are disastrous. There is no way to stop the sun from reaching those places, there is no way in the first place to keep that ice cap from melting. And you know what comes after this. The ice melts, it warms up the ocean, the sea level increases, the currents are altered and the extreme weather developments after this, run rampant tearing down the planet. It makes you begrudge the past or at least our present when you think about this perspective; billions of people that live in low areas will be affected by flooding, coastal areas will be swallowed by the ocean, and let’s not even talk about the increase of hurricanes, droughts, heaving rain, extreme weather conditions (torrid areas absorbing thousands of kilometers). What will happen to our offspring?

There are important questions to ask. Is it too late to stop the earth from overheating? What if we control the emission of green house gases, would that help? or could that only decelerates the inevitable? What if what we need to do is not just stop the current warming of the planet, what if we need to cool it down?

As far as we can see if our ice age is over and the uncontainable warming of the earth is not just a product of our human irresponsible behavior, any action that we take right now won’t stop the planet from getting hotter, it will probably just delay that. This doesn't mean that we should act as if the inevitable death is a blank check on our acts. As Robin Williams said when he played the role of Patch Adams in the movie with the same name. "Our job is improving the quality of life, not just delaying death”.

The main actions, thought comes to the inevitable. If we are to maintain our standard of living, we need to take serious improvements in our wanton behavior. If you have to pay too much for a specific service you have two options. The fist one is keeping your present consumption as if nothing has changed, the second one will be to lower your consumption.

But this will only work if we believe that man is driving the temperature to records high.

Let’s assume that this is the case, the green house gases that are thrown into the atmosphere are the only cause of global warming. So in order to stop global warming we need to stop emitting those green house gases. Industries don't have any reason to do that if there is no serious consequence on their actions, common citizens are unwilling to change their behavior for a good cause. That is why taxes come as the only predictable solution in the table -any other proposal is sophomoric.

Changing from fossil fuels to biofuels is not right either, on a Newsweek article Michael Grunwald talks about the enormous threat that this poses on the Amazon where deforestation is destroying the entire ecosystem. We are not only losing trees, as the Amazon is deforested carbon is free into the atmosphere, this has made Brazil “fourth in the world in carbon emissions”, according to the same article. The Amazon is being killed because as we embrace biofuels, they turn into a lucrative business that expands at a fast rate. Since there is no other place where you can grow crops to produce biofuel, the agriculture expansion has no other way to go but into the Amazon, which lost in the second half of 2007 a chunk the size of Rhode Island.

A way to change this is by enacting laws that punish people who are destroying the environment, it is also important to drive the international community to assume the responsibility of paying countries like Brazil so they can protect the Amazon. To do this you need political will, but this will is tie to electability, so members of the United States Congress –in general- won’t take their chance if this is not supported by the constituencies. This is why the whirlwind war in Iraq could be the best foreign policy decision that George has taken, even when the consequences are different from the original ones.

The fact is that when the war helped out to an unprecedented increase of the price of oil tied up to the devaluation of the dollar, people started taking serious steps in order to reduce oil consumption. This being the case, much of the next important inventions will be driven by energy promoted investigations, hybrid cars, cities run by renewable energy, thousands of solar panels, millions of wind turbines, etc. Which may end up provoking a radical change into our lives. Who gets this right will be the power of this century, too bad for China as it struggles with Tibetan monks while their water supplies are disappearing completely -and they don't even shudder-.

Such improvements won’t have enough resources unless governments keep the price of oil at the current level. What can be done is, as Thomas L. Friedman said before, tax oil consumption. This will mean that no matter what happens in the coming future, people will always pay high oil prices. So any other energy source will substitute petroleum without having to be competitive on regular basis. On the other hand this is also a much needed energy independence policy. Global markets won’t panic if the fact that middle east is at war, or if Chavez claims that the empire won’t get his oil, or if Russia threatens to cut gas supplies to Europe, or if Africa sums into a continental genocide.

Taxing just oil is not enough though. What needs to be done is to complement the global fight on high temperatures by reducing emissions in every direction possible. This means that companies should be more energy efficient, take for example what Texas Instruments did when it built its new eco-friendly plant (RFAB).

The transformation of our black world to a green world may take decades to complete, however, this may include side effects too. If you think that ethanol is the next big thing, there are thousands of considerations that you need to take. If the final product uses less energy than it produces, if the products where it comes from (corn for example) is threatening the food supply for millions -take what Jean Ziegler said to reporters in New York, “that converting crops such as maize, wheat and sugar into fuels was driving up the prices of food, land and water”, according to the UN News Center. If you go for nuclear energy, what about the threat of nuclear waste, where will you storage those? Solar power could be the answer, only if you have enough materials to make it true. Wind power will face the same consequences. The best solution could be to adapt them to every specific situation in each region, or to combine the best of them.

This development will only be expanded to the masses if the price is competitive. With the surge of India and China, followed by many other third world countries the balance between what is produced of oil and coal and what is consumed is negative. In the years to come what the price will do is to go up even more, destroying the economies that depend too much on it and also empowering undemocratic regimes all over the world.

To give you an idea of the scenario is the current China-Darfur situation. China gets oil from Sudan where it has heavily invested, which means that Sudan is protected by a superpower that will look to the other side when it agrees to its interests. Sudan will maintain its power as long as it holds large amounts of petroleum. The same will apply to Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, etc. All this petro-states will not have the wiliness to invest in alternative sources of energy as long as the price of oil is high. So the principal source for global warming will be there at the current level.

This is an important point to take into account when you try to understand how natural resources will be handled in the future. If it is settled that the current level of pollution will threaten the world, we need to reduce the amount of pollution, simple isn't it? But since the scenario will look like what was described above, the reduction can’t be a reality. Here is why:

Even if the United States, Europe and Japan lower their green house emissions, the rise of every other nation in the world and the incremental amount of resources and energy that they consume will overcome the reduction of emissions from this powers. Places like China will continue to rely on oil and coal to supply its much needed energy. Sudan and Nigeria will have the same autocrat governments repressing its own citizens with no serious punishment from the international community. What this means to the environment is that while much of the world will be transforming their current predator behavior, some other part of it will engage in just that.

What taxes could do on this case is to keep the price of oil high enough to make new developments available for the masses. So, my hope is that the United States and Europe set high standards to their industries, tax polluters and encourage entrepreneur spirit, therefore, at some point in the future the rest of the world will have cheap alternative sources and can detach itself from oil and coal.

This may not be enough, as I said before the chances that stopping our current levels of pollution won't horten the Armageddon. The earth is already feeling extreme heat and cold weather on diverse parts of it, simultaneously. A startling drought in the Amazon could destroy millions of trees turning green areas into desserts and vaporizing 20 percent of the global supply of oxygen. The discovery of alternative energy sources that replace entire lands of crops will starve millions of poor people. Our only hope? That our scientists are wrong and we still have time to change the future of the planet.

On the second part of this article I will analyze how the war in Iraq allocated billions of dollars that could had been used to improve the life of Americans in incalculable ways, in the hands of few corrupt companies that wasted the unique opportunity of creating a dream society -with élan- in the Middle East. I will also put in perspective the connection of Global Warming, Iraq and our priorities as society. How foreign policy is developed and how we are securing our natural resources.

I hope that for now Global Warming deniers at least take the plethora of opportunities in reducing pollution, even if they don’t believe in the end of the world, as we know it.

5 comentarios:

Jimbo Ar dijo...

Mr. Rivadeneira,
I got a link to this blog from a friend. I hope that after you read my comments on your post we can still engage in a scholar debate, argument, and maybe in the future agreement.
Let me start by congratulating you in having an interest in topics such as the Iraq war and Global Warming. You seemed genuinely derived to achieve a pragmatic solution to different problems that affect the world.
However, I am convinced that your understanding of economic, political, and social matters is inferior and it is not quite connecting and truly understanding long term, unwanted consequences and mostly the reality of the world that we live in.
I am not sure if you are trying to engage in a scholar argument. But if you are, you need to find better sources. Newsweek magazine it is indeed a great magazine but for the average joe.
The Iraq war was an excuse for the US government to create expansionary credit within the national market as a way to increase economic growth. It is true that the argument for invading Iraq was the removal of Sadam Husein. Exporting democracies has never being successful. (Please refer to Chris Coyne's book "After War.")
Democratic governments are not the solution to each country in the world. You may refer to the economic indicators of Somalia that within an anarchic rule force is doing by far better than itself 10yrs ago.
About taxing polluters, it may sound like a great idea. Here once again you lack of economic education. Taxation only creates fake prices and you should always ask who pays those taxes. Consumers will have to pay higher prices for the same good but perhaps in less quantity. The purchasing power of people will decrease. In the long run different companies will close due to a lack of profits; and without companies, society lack of jobs, a lack of jobs forbids economic growth.
You talked about entrepreneurship. However, taxing will send the wrong information (signaling) to entrepreneurs; therefore creating investment but in the wrong place. Economically this is inefficient because you are not allocating resources rightly. You must remember that oil is a scarce resource. And then oil will be too pricey to obtain the market forces will find a cheaper product and source of energy. (aka Hybird fuels)
There is a great wait to overcome environmental disasters. The privatization of public goods through a strong rule of law will help developing countries to prevent problems like deforestation.
Asking the government to intervene and control oil prices is just a way to ask for an economic suicide. When government set price floors you restrict the market to rightly allocate resources and market clearing. (NO ECONOMIC GROWTH)
I hope that these few comments help you in the future to build upon a stronger and more scholar argument of yours.

Yours in liberty,

Jaime Artieda

Roberto Ribadeneira dijo...

Reply to comments on my blog –by Roberto
You may need to read a lot before you comments on things that you may not understand, like taxes on oil in Europe, how Germany is developing its industry –take Siemens for example- read what is happening in Darfur, the crisis in Niger, the trade imbalance of the United States –read what Foreign Policy said about Davos, Global Warming, the effects of pollution in the ecosystem in China –the New York Times run a series about this- the ones in favor and the ones that dispute that man is creating global warming, also try to investigate if high taxes are bad for the economy –this means that you have to give an answer on why with low taxes the US economy felt into recession. The Bush administration is pro business freedom and not much control of the government over the economy. After that, you can give me some examples and show me that I am wrong, in that way I won’t waste my time trying to explain to you things that you can research on your own.

Jaime Artieda –I am spelling your name correctly I hope you do the same in the future with mine- I appreciate your comments on my blog and the sincerity of your expressions. I certainly will like to engage in a debate that could help me understand your observation on what I said on this page –although it seem at certain parts that you just tried to besmirch some ideas as too lightly.

Since Newsweek is a magazine for the “average joe” maybe you could send me some links to articles –or books- that explain what is happening in the Amazon and the deforestation process there, maybe some data about pollution and global warming, that could help reverse my “inferior understanding of economic, political and social matters”

We could copy those to Thomas L. Friedman who is one of the first columnists to propose taxing oil consumption. Or the New York Times is also a poor reference?

No comments on the future of food supply? Maybe I missed a point correlating this and the increase production of agricultural land fields indented to provide fuel to the world, not food. So why tax when we could face famine? Let the economy runs its course.

See some examples of what happened on the housing market´s debacle and how this is affecting the entire economy -do you prefer Bernanke or Greenspan approach to that? This could make a statement on controlling the markets or letting them run entirely free.

Read some information about what the IPCC says about climate change, read also what people like Professor David Legates, Dr. Michael Mann, Sallie Baliunas and Anthony Watts say on the same matter. Then we can have a serious talk on economic consequences of doing something or nothing on our current climate change.

For what I can sense from your comments your intellectual understanding of economy and foreign policy is better than mine, therefore it is probably a typing error your misspelling of “Sadam Husein”, it happens. About your assumption that “it is true that the argument for invading Iraq was the removal of Sadam Husein.” You could read -The Three Trillion Dollar War: The True Cost of the Iraq Conflict, maybe someone from Columbia such as Joseph E. Stiglitz could help you out understanding the true meaning of the war in Iraq, on economical terms –also get some reference from Nicholas Kristof´s column this week where he also mentions the “t” word. The war was an “excuse to expand “credit within the national market? That could be a good point, I will like to know how.

My lack of economic education may be another problem on this subject -taxing polluters- maybe you could give a better answers to the problem of having a lack of energy independence. Why tax oil that is sending billions of dollars to undemocratic governments? Is better to let people pay high oil prices than to use the money that could come from taxes to give the entrepreneurs the opportunity to create an alternative to fossil fuels?

The tax on oil is not to increase its current price, it is too keep it on its current levels –maybe you didn´t understand this- you need to read again the article before you made a bold statement that this could decrease the purchasing power of people. I don´t get your point, we are currently adjusting our pockets because the price of oil is high, and the economy is finally seeing the toll of it.

Taxing other polluters should be in order to protect other resources that are also scarce, you could live without oil, could you live without food, or air or clean water? Yes with no fuel to send products from one place to another will have the same consequences in the end, but the point is that we need to protect our natural resources and with taxes we will make sure that this happens.

You talk about “privatization of public goods”? I strongly disagree with this point, I will like to know if you have fine example that can back this up.

I agree on your economic criticism on my proposal, you are right that too much control damage the market, but the main point is that the market when it runs out of its course it will correct itself, the problem as it is happening now on many levels, is that now that millions of regular citizens are involve in investing on the market, a crisis is maximize, and the corrections made will affect millions in a faster pace than in the past.

My hope is that this could clarify the ideas that may have not been clear to you. We have opposite points on basic matters, but I most welcome your comments. Although I fully understand your economic position, I will like to see some examples that show just how good your argument is.

What worries me is that maybe you have missed the last 15 years of economic troubles; you may not see that the price of oil is at its highest point ever, and the dollar at its lower against major currencies, also during George Bush presidency we had faced two recessions. Read Alan Greenspan latest book and you may see some “regrets” on his pro lower tax and lower interest rate policies. You may have some respect for Greenspan, don´t you?

Jimbo Ar dijo...

Mr Rivadeneira,

I am extremely delighted that you have read my comments. As I said before you seem quiet interested in current world issues. Le me begin by introducing you to some helpful links. Theses links are available online;
www.fee.org
www.mises.org
www.economist.com
austrianeconomists.typepad.com
idunois.blogspot.com
www.cafehayek.com
www.marginalrevolution.com

You may find the above links and books in my just recently blog:
austrianknights.blogspot.com

Regarding Bernanke or Greenspan; I must say none of the above. Both are and were the president of the FED (US Federal Reserve System). The FED even though people think it is not government regulated; it is. The president of the US is the person who appoints the FED chairman. In this regard I think that Greespan is more eloquent than Bernanke. In the housing bubble problem Bernake does not know what is happening in his premises. Goverment intervention within the economy through the FED created the Great depression. (refer to Milton Friedman 'Nobel Laureate' explanation in the Freeman Magazine; here is a link to it
http://www.fee.org/publications/the-freeman/article.asp?aid=8132

About running out of oil. I doubt it. The market will find through entrepreneurial activity or discovery other cheaper sources provided that there is a strong property right system and the correct signaling of prices(only possible when the government does not intervene in the market) This is why you don't find twenty dollar bills on the street. People will pick 20usd faster than they would pick a dime. Lets be reasonable which one has a higher cost on you the 20usd or the dime!

You talk about millions of dollars send to developing countries. It is important to differentiate between foreign aid and foreign direct investment. Well, throughout history foreign aid has not been anything other than a failure. The World Bank and the IMF have not been able to figure it out why?1! But the answer is the Foreign Direct Investment is a quicker path to economic development.

Taxing polluters may not be the answer you are looking for. Here is why
http://www.rri.wvu.edu/WebBook/Garrett/fig2sec2.jpg

You will destroy your economy of you rise taxes. On the other hand politicians adopt tax rises as their last resort. People are not happy when they get tax. They won't elect the same politician. Remember politicians are self interested individuals.

Lastly, I cannot figure you out yet. Are you advocating government intervention within the economy or market self correcting mechanism? You seem to fluctuate in this matter.

Well once again. I have been delighted in engaging in argument with you. I will be happy to explain, show, link, anything that you may feel it is still unclear.

Yours in liberty,

Jaime Artieda

Ian Dunois dijo...

Roberto Ribadeneira,
A few things I thought I would chime in on.
I have to first invoke that you are wrong that it is money that moves humanity. I won't expand this comment further by trying to explain why. I leave it to your curiousity to ponder why and to lead you to the right direction I want to direct you to the question, "What is money?" If you need help in answering this question I point you to Carl Menger's article called On the Origins of Money or to (I can't believe I am referencing this book) Ayn Rand's Atlas Shrugged for her character Francisco's lecture on money.
I thought it best to link the two. This is the Atlas Shrugged speech which Francisco is addressing to individuals who call money the root of all evil.
http://www.working-minds.com/money.htm
And this is the link for Menger's aricle: http://www.mises.org/web/2692

Second, if any government administration says that they are for a free market and then propose that a policy must implemented that tells of what can and can not be traded freely, then that administration is not for a free market.
A free market is simply that. No rules to regulate what can and can not be sold according to the government. A free market is the ability or a producer and a consumer to collaborate with one another upon an agreement without a need of force.

Public Choice is a new system of thought in economics. It is not new in that it was created the past few years, only that it is one of the most recently created fields of thought. It begins with the assumptions that politicians are just like the rest of us; rational and self interested. Knowing this, we can make some assertions towards government policies. They are not necessarily for the good of the economy or the citizens of the nature. What leads to this is the question, what do you believe politicians want? To do the right thing or be reelected? Therefore we find that government merely benefits the few at the cost of the many. (concentrate benefits and disperse costs) There are plenty of readings for this subject such as Mancur Olson's The Logic of Collective Action to the work by Gordon Tullock.
Frederic Bastiat, a frenchmen from the 19th century had promoted many of these ideas before the school of thought of public choice was created. He called the rent seeking behavior legal plunder.
Plunder is the taking by force by another. Legal plunder is the use of government force in order to take and call it just.

Hope my comments are useful in your search for foreign policy.
For a great read check out In Defense of Global Capitalism. It was written by a Swedish economist named Johan Norberg.
http://www.amazon.com/Defense-Global-Capitalism-Johan-Norberg/dp/1930865465/ref=sr_1_3?ie=UTF8&s=books&qid=1209163193&sr=8-3

Also check out this final link for a graph on the amount of hours man needs to work today in comparison with the years before.
http://www.uri.edu/artsci/ecn/mead/INT1/Mac/Measure/Out/alight.gif
Every action we partake on is only to improve our well being from the prior position. If this were not true why would man ever act?
Thus, pollution today is less than it was yesterday, 5 years ago, 100 years ago.

Keep up the studies and can't wait to read some more when I get a chance of your blog.

Ian Dunois dijo...

Jaime Artieda,
I completely agree. We will never run out of oil on our planet, but let us address one issue at a time. Let us address what are the duties of government within foreign and economic affairs.
Although I see the importance in proving why we will never run out of oil, I believe the question that should be asked here is 'Is government a better advocate in the environment than private industry?'
We should note that Pollution is costly, it is not cheap as it pollutes the factories surroundings which is where the laborers live. Would the laborers stay to work in a factory that destroys their lifestyle? Of course not. A good employer would find ways to improve the lifestyle of his workers.

We can see more of this argument by reading on sweat shops and why the only problem with them is there are not enough. If we are to say that sweat shops are slave shops, we are discussing two different types of shops. Slave labor is a forced labor, while a sweat shop is the decision of the laborer to work at a given rate albeit its considerably less than that which workers in places such as the states may receive, but it is the best opportunity where they are and therefore they take the position. With more sweatshops, the industries would compete with one another and would pay the more productive workers more or create better working standards in order to give them enough incentive to work for them.

Roberto Ribadeneira: For short intro to why we will never run out of oil, I give you a title of another book called Invisible Heart. Its a fiction story written by an economist. He lectures his students and a female he pursues on economics. The book begins with a pop quiz on when the Earth will run out of oil. This is the link for the first chapter and you'll know when you are at the part when he is talking about the Nut Room:
http://www.invisibleheart.com/Iheart/ISampleC1.html