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Environment

Leave it to the old sage, Jeremy Grantham, to provide some interesting insights.  A few brief excerpts from GMO’s latest quarterly letter – available here.

 

“The main potential reward, especially in an economy that is having the slowest recovery ever recorded, is in job creation. Job creation turns out to be an incredibly complicated economic issue, depending on the unique circumstances of each project and how it interacts with competing projects. If there were armies of unemployed welders and other construction workers sitting around, one could easily imagine that almost every job needed would draw from the unemployment pool and would be true job creation. But what if there were intense competition for every welder, every oil worker, and most heavy construction workers? Then we would not be in the job creation business but in the job competition business, deciding which potential employer will bid up wages and which will go without workers. A recent Bloomberg article opened with the question, “How high is the demand for welders to work in the shale boom on the U.S. Gulf Coast?” It then answered, “So high that you can take every citizen in the region of Lake Charles between the ages of 5 and 85 and teach them all how to weld and you’re not going to have enough welders,” citing a source from Huntsman Corp. “So high that San Jacinto College in Pasadena, Texas, offers a four-hour welding class in the middle of the night” because the equipment is finally available then.”

***

“Considering the above, it is clear that the XL Pipeline will not “create” jobs. Every one of its potential workers, almost all of whom already travel widely for jobs, could get a job several times over if given an hour on the telephone. What is happening here is an allocation of limited manpower resources: will we use them to extend chemical plants to capitalize on the incredible U.S. advantage in cheap natural gas; will we extend our fracking of U.S. sweet crude; or will we transport Canadian diluted bitumen, the most dangerous and toxic of all fuels, in order to increase the price for a handful of Canadian Tar Sand producers who currently suffer from constrained delivery capabilities and hence lower local prices? Even ignoring the severe environmental risks, it should be an easy decision on economic grounds alone.”

 

Emphasis mine. 

This video is somewhat disturbing but that’s the point.

The cynic in me thinks that watching animals processed on an old-time traditional farm isn’t necessarily the most comforting thing to watch either – at least in that case you know where your food is coming from, how the animal is raised, and if it is treated humanely.  It makes me think that I should think more about where my food is coming from and how it is treated – after all you quite literally are what you eat.

This video does drive home industrialized society’s insatiable thirst for resources – in this case chicken, milk, and pork – and how easy it is for us to consume more than our fair (or even healthy) share.

If you find this interesting you should check out Food Inc. and In Defense of Food.

It’s been a while since I posted about one of my all time favorite people in this world, Jeremy Grantham.  There are two interesting articles from a sit down chat Leo Hickman had with Grantham. The topic was the environment, and Grantham’s efforts to help save it.  The first article is a summary version from The Guardian.  The second article is the full length interview from Business Insider.

As usual you’ll find my favorite excerpts below.  I especially like his balanced view that oil and gas aren’t entirely bad.  It’s a nuanced opinion but he has a point – for now they’re a necessary evil; try taking them away tomorrow and see what happens.

Part I: Jeremy Grantham, environmental philanthropist: ‘We’re trying to buy time for the world to wake up’ (The Guardian)

Part II: GRANTHAM: Capitalism Is Great, But It Assigns No Value To Your Grandchildren (Business Insider)

Excerpts from Part I:

Many deep-greens – who claim the root cause for our environmental woes is the slavish quest for economic growth – will recoil at the thought of a hard-boiled capitalist such as Grantham underpinning so much of the environmental movement. He is unconcerned. “Capitalism does millions of things better than the alternatives. It balances supply and demand in an elegant way that central planning has never come close to. However, it is totally ill-equipped to deal with a small handful of issues. Unfortunately, they are the issues that are absolutely central to our long-term wellbeing and even survival.”

More awkwardly, he insists his substantial investments in oil and gas don’t contradict his green views. “We need oil. If we took oil away tomorrow, civilisation ends. We can burn all the cheap, high-quality oil and gas, but if we mean to burn all the coal and any appreciable percentage of the tar sands, or even third-derivative, energy-intensive oil and gas, with ‘fracking’ for shale gas on the boundary, then we’re cooked, we’re done for.”

***

But “China is my secret weapon,” he says enthusiastically. His eyes widen with excitement, and he talks quicker and quicker. “The Chinese cavalry riding to the rescue. I have very high hopes for China because they have embedded high scientific capabilities in their leadership class. They know this is serious. And they are acting much faster now than we are. They have it within their capabilities to come back in 30 years with the guarantee of complete energy independence – all alternative and sustainable for ever. They have an embarrassment of capital. We have an embarrassment of debt. So they can set a stunning pace, which they are doing. And they could crank it up. To hell with their five-year plans, they should move up to 25-year plans. They would have such low-cost energy at the end of it they’d be the terror of the capitalist system. Low energy and low labour, that’s the ball game.”

But he argues that there is no reason why the west can’t compete. “Anyone who says government can’t do this, or can’t do that, I say a pox on you; have a look at the Manhattan Project. They did remarkable things. They stuck the brightest minds out in the desert. They were herding cats with great egos, but it worked. If we did that on alternative energy, we’d be home free.”

Excerpts from Part II:

[Continuing his point on where capitalism fails us…]

Unfortunately, today, they are the issues that are absolutely central to our long-term wellbeing and even survival. It doesn’t think long-term very well because of high discount rate structure.

If you’re a typical corporation anything lying out 30 years literally doesn’t matter. Or, as I like to say: QED, your grandchildren have no value. And they usually act as if that was true, even though I’m sure they are actually very kind to their grandchildren.

***

It has been remarked before that modern economics is belief in a perpetual motion machine. Capital and labour, but no mention of energy. Without energy the whole thing grinds to a halt and the whole theory is demonstrated to be totally false. I’m late in the game at recognising this.

One of my new heroes is an economist called Kenneth Boulding who, at 22, got a paper into Keynes‘s journal. At the age of about 50 he realised that economics was not taking its job seriously, that it was not interested in utility, in real serious improvement in the world, but that it was increasingly interested in new, elegant mathematical theories designed to get career advancement, over usefulness.

He said the only people who believe you can have compound growth in a finite world are either mad men or economists. He also said: “Mathematics has brought rigor to economics. Unfortunately, it also brought mortis.”

 

A very sobering infographic carrying a lot of information.  Can you imagine if you had to carry all the water you used?  Also, the cost of providing global access to safe water is only $30 billion?

I know, that is a large huge number but when you put it in the context of the things our government wastes money on, it could easily fit in.  When you consider the Iraq war cost us between $3.2-$4 trillion it really puts this number in perspective – we could have provided safe drinking water to everyone on earth 106 times over for that cost – or completed the project one time for what about one month in Iraq cost us.  Now that would win some hearts and minds.  I digress.

SO – if you’re fortunate enough to be Water Rich try to take shorter showers, fix your leaky faucets, and don’t over-water your lawn.  The more you save, the cheaper your beer will be.

Infographic Water Rich Vs PoorSource: Seametrics

Found via Coolinfographics

 

Anyone who follows this blog knows I’m a HUGE fan of Jeremy Grantham.  He is an incredibly smart man and has the added benefit of being English, so even if you find the substance of his discussions to be boring you can at least enjoy his accent.  You should read his quarterly letters over at GMO.com, I’d put them right up there with Buffett’s Berkshire letters.

Anyone who supports the Keystone Pipeline needs to watch this.

http://www.charlierose.com/view/content/12812

This video does not required much commentary.  Plastic is a wonderful material but it shouldn’t be ending up anywhere but the recycling facility.  Our oceans are full of it.  I believe it was Paul Hawken in The Ecology of Commerce who questioned why we use a packaging material that takes 300 years to decompose for a product that sits on the shelf for 3 weeks and is consumed in 3 days?  The answer is because its cheap – but is it really?  When you factor in the costs that are currently “externalized” (e.g. polluting our oceans) it doesn’t seem so cheap.

More details of the film here: http://www.midwayfilm.com/about.html

I think I’m going to go with the scientists on this one.  Sorry American Petroleum Institute and National Cattlemen’s Beef Association.

For a more serious take on the matter check out Jeremy Grantham’s quarterly letter from 2010 (link) – skip to the section “Everything You Need to Know About Global Warming In 5 Minutes” (p.7 of the PDF).

These Groups Say The Danger Of Manmade Global Warming Is A . . .
FACT FRAUD
U.S. Agency for International Development
United States Department of Agriculture
National Oceanic & Atmospheric Administration
National Institute of Standards and Technology
United States Department of Defense
United States Department of Energy
National Institutes of Health
United States Department of State
United States Department of Transportation
U.S. Geological Survey
U.S. Environmental Protection Agency
University Corporation for Atmospheric Research
National Center for Atmospheric Research
National Aeronautics & Space Administration
National Science Foundation
Smithsonian Institution
International Arctic Science Committee
Arctic Council
African Academy of Sciences
Australian Academy of Sciences
Royal Flemish Academy of Belgium for Sciences and the Arts
Academia Brasileira de Ciéncias
Cameroon Academy of Sciences
Royal Society of Canada
Caribbean Academy of Sciences
Chinese Academy of Sciences
Académie des Sciences, France
Ghana Academy of Arts and Sciences
Deutsche Akademie der Naturforscher Leopoldina of Germany
Indonesian Academy of Sciences
Royal Irish Academy
Accademia nazionale delle scienze of Italy
Indian National Science Academy
Science Council of Japan
Kenya National Academy of Sciences
Madagascar’s National Academy of Arts, Letters and Sciences
Academy of Sciences Malaysia
Academia Mexicana de Ciencias
Nigerian Academy of Sciences
Royal Society of New Zealand
Polish Academy of Sciences
Russian Academy of Sciences
l’Académie des Sciences et Techniques du Sénégal
Academy of Science of South Africa
Sudan Academy of Sciences
Royal Swedish Academy of Sciences
Tanzania Academy of Sciences
Turkish Academy of Sciences
Uganda National Academy of Sciences
The Royal Society of the United Kingdom
National Academy of Sciences, United States
Zambia Academy of Sciences
Zimbabwe Academy of Science
American Academy of Pediatrics
American Association for the Advancement of Science
American Association of Wildlife Veterinarians
American Astronomical Society
American Chemical Society
American College of Preventive Medicine
American Geophysical Union
American Institute of Physics
American Medical Association
American Meteorological Society
American Physical Society
American Public Health Association
American Quaternary Association
American Institute of Biological Sciences
American Society of Agronomy
American Society for Microbiology
American Society of Plant Biologists
American Statistical Association
Association of Ecosystem Research Centers
Botanical Society of America
Crop Science Society of America
Ecological Society of America
Federation of American Scientists
Geological Society of America
National Association of Geoscience Teachers
Natural Science Collections Alliance
Organization of Biological Field Stations
Society of American Foresters
Society for Industrial and Applied Mathematics
Society of Systematic Biologists
Soil Science Society of America
Australian Coral Reef Society
Australian Medical Association
Australian Meteorological and Oceanographic Society
Engineers Australia
Federation of Australian Scientific and Technological Societies
Geological Society of Australia
British Antarctic Survey
Institute of Biology, UK
Royal Meteorological Society, UK
Canadian Foundation for Climate and Atmospheric Sciences
Canadian Meteorological and Oceanographic Society
European Federation of Geologists
European Geosciences Union
European Physical Society
European Science Foundation
International Association for Great Lakes Research
International Union for Quaternary Research
International Union of Geodesy and Geophysics
Intergovernmental Panel on Climate Change
World Federation of Public Health Associations
World Health Organization
World Meteorological Organization
American Petroleum Institute
US Chamber of Commerce
National Association of Manufacturers
Competitive Enterprise Institute
Industrial Minerals Association
National Cattlemen’s Beef Association
Great Northern Project Development
Rosebud Mining
Massey Energy
Alpha Natural Resources
Southeastern Legal Foundation
Georgia Agribusiness Council
Georgia Motor Trucking Association
Corn Refiners Association
National Association of Home Builders
National Oilseed Processors Association
National Petrochemical and Refiners Association
Western States Petroleum Association
“FACT” organizations from Is There a Scientific Consensus on Global Warming?, SkepticalScience.com.
“FRAUD” organizations are petitioners v. U.S. Environmental Protection Agency, Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act.

Source: Think Progress