Wednesday, April 22, 2009

Consumption and Growth; OR Wise and Humble

Consumption isn't what it's cranked up to be.
An excellent article by John Coulter a Beijing-based independent Australian researcher collaborating with Tsinghua University and China Agricultural Unversity.

"If the economy is now a mindset of financial solutions, hope is in vain. The word we should be grasping for is humility.

At the Boao Forum, the President of Mongolia was one speaker who struck on this theme. What conventional economists call consumption and growth needs to be appreciated as wise, economical, and yes, humble."

How true...

"A 1997 article in Nature estimated the value of the annual services of Natural Capital (the services Earth provides free to the Real Economy) is about double the global GDP.

No way can we ever dream of paying back, we are just depleting it. There is no way the air and ocean can purify the CO2 that comes from 18 billion tons of fossil fuel burned just in 2008.

It is like 10 people living and smoking in an elevator for a week. You want to try throughputting all that?"

How sad...

On Sustainable Policy Technique

Have found interesting suggestion for sustainable policy technique at the Union of International Associations (UIA). Their thesis though a little too roughly:
Toward transformational and cyclic policy making responsive to change and flux:
There need to be a somewhat external view to western dialectics (summed up logically by Aristotle: A=A, A'=not-A; and by Hegel: A > -A > A') to the tetra-lemmic Discourse on the All-Embracing Circular Net of Views (mentioned extensively in Brahmajala Sutta and I-Ching, the Book of Change/Season/Year (A, not-A, A and not-A, neither A nor not-A.)
On closer examination, dialectics captured identity in difference in the A and not-A synthesis, but another and broader technique may incorporate that without undue fallacy in the said tetra-lemmic cycle and that could enrich adaptive policy in general.
Interesting thought, certainly and perhaps not just another source of mental burden on decent folks...The point is expounded to direct linkages with sustainable policy techniques, which certainly worth a look.

Friday, April 17, 2009

Crowd-sourcing physical Green Infrastructure pipes

Following on my previous post regarding opportunity savings in scientific research - the high cost of a next best options vs the very low cost of the one adopted - I kept thinking about economic accountability in large environmentally sound infrastructure projects. And it looks like, there is something there for crowd-sourcing.

I found the following article that made me think.

"Economic modeling typically includes only that for which we have evidently paid, with large assumptions concerning opportunity costs; or what we gave up in order to get it. Such an approach is not ideal for capturing actions we wouldn’t pay for...Nor is it suitable for capturing our future ambitions and directions, which are based on
ideals and values rather than our present constrained choices. Unpaid activity and future directions are exogenous to economics, but fundamental to society."
Social Policy Research Centre, discussion paper No. 134. University of New South Wales. 2004

From this excerpt and also from the article it contains, it appears that, at least in this respect, some Chinese science officials may suffer from a very established economic habit: - not accounting for the value of that which is free or low cost even though it is of high value (such as open source or volunteering) compared to that which is foregone to get it. This problem may be at the heart of the problem of founding large infrastructure with much less debt and tax.

Crowd-sourcing environmentally sound infrastructure:

Let's take the example of distributed and more or less crowd-sourced supply:
On the face of it, it is a great idea.

Feedback Electricity: Domestic, and commercial windows and solar cells creating a portion of electricity, and supplying any surplus for money back into the main grid.

Feedback Water: Domestic, and commercial water tanks, condensation cells etc creating the portion of water supply, and supplying any surplus for money back into the main grid.

I am not an economist, so this is just thinking aloud:

Distributed low cost is not accounted for in economic analysis when, what is low cost is being considered of low market value. In other words opportunity costs (or savings) are not considered factors.

What is the problem here logistically? Here I am a bit more knowledgeable.

Water and electricity are part of the flow stream. That stream can be distributed. But there is a much larger cost of supplying the pipeline and the reservoir. To avoid central bank debt or tax hikes --- could that also be crowd sourced?

Crowd-sourcing the Pipeline

How to get those large funds from micro-pools of money that we expect to self-administer and self-organise? Granted, I can only attempt to answer this using very basic arithmetic: division.

If a crowd based shareholding of a pipeline is underwritten by the central bank it will put the government in more debt that will in due course increase taxes; this ultimately coming back to bite taxpayers to fund the servicing and administration of the debt facility extended to the government by the central bank.

The alternative is in crowd-sourcing --- in part by pooling small credit from a small army of the multi-skilled worker recruited for the project. One model is the cellphone based Carbon-Manna model by David Palella. He proposes recruiting a smaller consortium by commercial sponsors in developed countries to kick-start the process and provide the handsets and network.

For a physical pipeline skilled and even multiskilled (clearing, digging, concreting, plumbing, electrical work, ect) workers need to volunteer.

But how could a supplier consortium of a major pipeline actually sponsor multi-skilled volunteer acts without putting those who provide that act an mass in debt just to foot the bill of coordinating the project and organizing the sponsorship?

These are tough questions.

Thursday, April 16, 2009

Sea-faring Micro-bots. Again.

Some time ago I wrote about the possibility of micro-bots playing a big role in drastically mitigating climate change (what we call here "Changing Climate Back".)

Now there is news that Sea-faring bots are not only out there, they may have been overlooked. The context is different, but the message is the same. Check it out:

"Launched at the start of the millennium, ARGO (Array for Real-time Geostrophic Oceanography) is an ongoing and developing program aimed at keeping a regular check on the temperature and salinity of the Seven Seas with satellite-tracked, automated floats.

The robots, which have a lifespan of four years and dive to 2,000 m for 10 days to take crucial measurements, help scientists to better predict changes or trends in the ocean's climate, explained Xu Jianping, a researcher at the second institute of oceanography under the State Oceanic Administration and chief scientist for the China ARGO program."

It is important to note that the ARGO program is ubiquitous, transparent, highly popular overseas. YET, in China it may be royally overlooked. Why? Because it is too low cost or even free...

"But while experts in Great Britain, Australia, Japan and the United States have embraced the "revolutionary" research, Xu warned his nation is lagging far behind.

"In most participating countries, scientists from various fields have shown great interest in the ARGO program, with climatologists the most enthusiastic," he explained. "But in China, ARGO is still little known among scientists, except oceanographers.

"Everyone has access to the same data. Even a high school student who wants to be an oceanographer or climatologist can access it on his desktop. He or she could also catch up with the international research and climate change studies using the ARGO data. It would be a great pity if China's scientists miss such a good opportunity."

He said researchers in China were failing to exploit the valuable data from more than 3,000 floats across the globe not because of a "lack of interest", but because of restrictions over project funding or background expertise.

The country's climatologists had got too used to expensive information access systems and had no idea the ARGO research could be obtained for free, he said. "Few have shown an interest in the data because they are not used to things being free of charge"."

This is an interesting question. Big funding need usually signifies the value of the research. And, between the lines it says, that research institutions are not interested in saving government money if they can spend it.

In fact, the situation may uncover some important problems:

1. HOW TO VALUE THE SOCIAL CAPITAL? This would be the benefit to societies wealth and welfare - present and future - of a program or research, if the costs of carrying it out can be kept very low. The market value would seem to dictate a fractionally low amount, clearly not the real value of such a research.

2. HOW TO FUND SUCH A LOW COST PROJECT? It would still require a multitude of highly priced brains and people-years.

3. HOW TO PASS ON THE BENEFITS? Regardless how we may calculate it, and what is the exact amount, there are clear and massive cost savings to made here. A research team may only be incentives to go low cost in a market value environment IF THEY GET BONUSES IN LINE WITH THE MASSIVE SAVINGS they make. But some of the monetary savings may also need to be passed on to Society,--- perhaps in a form of less related taxes.

So here is a thought: If big research is funded by taxpayers' money, wouldn't it make sense to pass on the savings back to the taxpayer at the end of the financial year when big savings WERE made that did not deter from value adding, but added even bigger value to society? ...Perhaps splitting the benefits as a percentage bonus to researchers and tax cut to the tax payer...

Question is: savings compared to what?

If each year, a certain percentage of the GDP - but not below a certain absolute minimum amount - would be designated to research, and scientists would propose cheaper ways of carrying it out while adding MORE value to society, this could work quite nicely.

Each project could have a long 3-year account and a short half-year account. Savings would be calculated every six month, and realized savings passed on IMMEDIATELY to tax payer and scientists, who could then use it to pay it as bonus or re-invest for more future social capital savings.

You may say this is a little presumptuous when financial years are whole length periods and calculating mid-way makes little sense. However, I suggest that with the climate change crisis unfolding and requiring more emergency response type techniques, such an accounting will be a matter of when not if.