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Nicholas Stern: Spend billions on green investments now to reverse economic downturn and halt climate change
David Adam, Guardian
Governments across the world must commit to hundreds of billions of pounds in green investments within months in a combined attack on the global economic crisis and global warming, according to leading economists including Nicholas Stern.
The team says some $400bn (£277bn) should be channelled to support low-carbon technologies such as home insulation and renewable energy.
… Lord Stern, the former Treasury economist and now chair of the Grantham Research Institute on Climate Change and the Environment, said: “With billions about to be spent by governments on energy, buildings and transport, it is vital that these public investments do not lock us for many more decades into a costly and unsustainable high-carbon economy.”
(11 February 2009)
Can’t Raise A Keynes Back Up When He’s In Defeat
Albert Bates, Culture Change
We need to reposition the global human prospect to make it more survival-oriented. That will require us to re-strike the carbon balance so that net sequestration is the prime directive for any new enterprise.
… I have been going back and forth about the stimuli being applied to get the global economy, which went off the rails 14 months ago, or perhaps a few decades ago, or even 10,000 years ago, depending how you look at it, back on track. The problem is that I am not even convinced that the track is the best place for it to be.
Still, it may be helpful to break it down a little more and get at some core principles.
… John Maynard Keynes’ big idea was that if no-one has money left to buy anything, and credit is dead, you can “shock” the national corpse back to life by copious government spending. Only after trying everything else did Franklin D. Roosevelt try Keynes’ advice, and then — with the help of the Second World War — manage to put the industrial engine back on the tracks. The George Marshall and Douglas A. MacArthur commands applied the same serum to devastated Europe and Japan, with favorable result.
… However, there is an important change in the game now, and it is one that White House Economy Czar Larry Summers apparently doesn’t get, assuming he has not had a “come to Jesus” moment in the 15 years since he sneered at the “risk of an apocalypse due to global warming.”
… We have not yet owned up to the failure of our unlimited growth economic model to come to grips with the idea of sustainability within a finite planetary ecology. We have spent our billion-year starlight savings account on predator drones and cattle feeding operations while not thinking seriously about ways to live on the daily income that arrives for free. And so we rode our train right off a cliff, still accelerating. We were just following that track.
… A good place to begin would be the U.S.Treasury’s unique management role at GM, Chrysler and Ford. We can transition from cars to mass-transit by building light rail. We can power that mass-transit with next generation renewables engineered in Detroit and elsewhere. We can make organic no-till farming implements and keyline plows. Do you think this is unrealistic, or too late? We are already committed to spending more to bail out the automakers than we spent to put a man on the moon. We had light rail (trolleys and barges pulled by horses) and heavy rail (with engines powered by wood) before kerosene began replacing whale oil in home lighting. This is not rocket science.
One man’s jobs program is another man’s pork barrel, and so there is a huge amount of money about to be thrown down the rat-hole of nuclear energy, “clean” coal, and offshore oil, especially the part under Afghanistan and Iraq. And, there is still a lot of warming in the climate pipeline, no matter what we do now. We could do worse than to sponsor jobs re-greening inland deserts with coastal desalination plants and urban waste-to-biochar, switching to no-till organic farming and reforesting the Mississippi valley.
(10 February 2009)
Asia: The Coming Fury
Walden Bello, Foreign Policy in Focus (FPIF)
As goods pile up in wharves from Bangkok to Shanghai, and workers are laid off in record numbers, people in East Asia are beginning to realize they aren’t only experiencing an economic downturn but living through the end of an era.
For over 40 years now, the cutting edge of the region’s economy has been export-oriented industrialization (EOI).
… U.S.-East Asia economic relations today resemble a chain-gang linking not only China and the United States but a host of other satellite economies. They are all linked to debt-financed middle-class spending in the United States, which has collapsed.
China’s growth in 2008 fell to 9%, from 11% a year earlier. Japan is now in deep recession, its mighty export-oriented consumer goods industries reeling from plummeting sales. South Korea, the hardest hit of Asia’s economies so far, has seen its currency collapse by some 30% relative to the dollar. Southeast Asia’s growth in 2009 will likely be half that of 2008.
The sudden end of the export era is going to have some ugly consequences. In the last three decades, rapid growth reduced the number living below the poverty line in many countries. In practically all countries, however, income and wealth inequality increased. But the expansion of consumer purchasing power took much of the edge off social conflicts. Now, with the era of growth coming to an end, increasing poverty amid great inequalities will be a combustible combination.
(9 February 2009)
Articles have been appearing about the economic declines in Asia, such as this from the BBC: China’s exports see sharp decline .
Newsweek: We are all socialists now
Jon Meacham and Evan Thomas, Newsweek
… Whether we want to admit it or not—and many, especially Congressman Pence and Hannity, do not—the America of 2009 is moving toward a modern European state.
We remain a center-right nation in many ways—particularly culturally, and our instinct, once the crisis passes, will be to try to revert to a more free-market style of capitalism—but it was, again, under a conservative GOP administration that we enacted the largest expansion of the welfare state in 30 years: prescription drugs for the elderly. People on the right and the left want government to invest in alternative energies in order to break our addiction to foreign oil. And it is unlikely that even the reddest of states will decline federal money for infrastructural improvements.
If we fail to acknowledge the reality of the growing role of government in the economy, insisting instead on fighting 21st-century wars with 20th-century terms and tactics, then we are doomed to a fractious and unedifying debate. The sooner we understand where we truly stand, the sooner we can think more clearly about how to use government in today’s world.
… In the short run, since neither consumers nor business is likely to do it, the government will have to stimulate the economy. And in the long run, an aging population and global warming and higher energy costs will demand more government taxing and spending. The catch is that more government intrusion in the economy will almost surely limit growth (as it has in Europe, where a big welfare state has caused chronic high unemployment). Growth has always been America’s birthright and saving grace.
(7 February 2009)
