One Dozen Governments Will Fall

Last night I went to the following event (video here):

On Thursday, April 24, the Museum of American Finance (did you know there was one?) will host a panel discussion entitled "Finance, Energy & the Environment: Changing Markets & Opportunities to explore the sources of power that will be keeping the lights on and filling investors' pockets in the next five years."

Speakers included:
Pete Cartwright, CEO of Advanced Power Projects, Inc.
Daniel Abbasi, Director at Mission-Point Capital Partners,
Michael Molnar, Vice President at Goldman, Sachs & Co. responsible for the
Alternative Energy and Coal sectors in the Energy & Materials Equity Business
Unit, and Carl Pope, executive director of the Sierra Club.

I sit through a lot of these discussions and always find them surreal because of the wild contrast between recognizing the gravity of the planetary threat of climate change, and business-as-usual discussions about First Solar's IPO and whether people will accept higher utility rates. Are we saving our skins here, or are we just rosining our bows and shining up our fiddles?

Also clear was that solutions are abundant, even if the will to implement them isn't immediately in evidence. Countless energy alternatives were mentioned, including carbon sequestration, new co-generation and combined-cycle power plants (wind +gas, solar+coal), pricing efficiency, nuclear. Also discussed were the intricacies of a potential carbon market in the US. There was a lot of healthy disagreement between the enviro guy and the three investor guys that didn't always line up in a predictable way.

There's such a frustrating gap between what's available and possible and what we are actually acting on. In presidential politics and in the media coverage of same, the panelists pointed out, global warming is way down the list.

And the cost of acting is far less than the cost of inaction, even in strict money terms.
Abbasio mentioned the famous Stern report that concluded that the real cost of addressing emissions amounted to 1% of GDP, while the real cost of NOT addressing emissions and allowing global warming to proceed ranges from 5 to 20% of GDP over the next few decades. This is the cost in the existing market, without any fancy pricing of externalities like clean air or drinkable water or health care.

Pope spoke movingly of the Sierra Club's transition from a conservation-focused group to a more activist one, working not only "to stop bad things" but "to make good things happen faster." (Apparently a price on carbon is one of those good things). He also made a prediction that made me sit up. He said between now and November when the next president is elected,

"One dozen governments around the world will fall because of the food crisis, including some that are very important to American security."

Yikes.

Don't know where he got it from, but you heard it here first.

Comments

[felixrandom]

like the sci fi writer said, no government is more than three meals from a revolution. including ours............

[SamanthaJ]

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[mamacat]

In reference to a food crisis, it seems that all of our efforts to develop alternative energy sources, to increase food production, to desalinate water, and to improve health care, will be absolutely and completely futile unless the human population of the world is stabilised, and very, very soon. We are adding another billion consumers to the earth about every ten years, and that is clearly unsustainable.

No amount of good deeds and good intentions will prevent an ecological disaster unless we find a way to prevent ourselves from turning this planet into an overflowing petri dish. We like to criticise China these days, but is there any other nation on the face of the planet that has taken such effective measures to halt its population explosion? Also, while they are the world's worst polluter, their alternative energy industry is growing faster than the one in the U.S.. So, they are aware of their problems, and they are actually working on them. Meanwhile, the population of India has been forecast to exceed China's in less than two generations.

[dchavern]

Your last couple of sentences don't make any sense. The current food crises is not caused by global warming. It is primarily of function of increased demand -- notably via the increasing wealth of large developing countries and their corresponding increasing appetite for all kinds of food. A funny thing happened on the way to helping poor countries develop: it turns out that when they finally do create some wealth that they also want to consume a lot more.

A dozen governments might fall because of food riots, but not because we haven't cut back on carbon emissions.

By the way, all of the talk about solar and wind as a significant answer to carbon emissions is ridiculous. Our best chance is to move quickly into nuclear (including breeder reactors).

[Squalish]

I'm sure that the difference between China eating 3B servings of rice a day and 3.5B servings of rice and 100M servings of meat a day tilted some scales, but that was by no means the only reason we're in this situation.

On energy -

Nuclear, solar, and wind have improved dramatically over the last decade or two. The economies of scale in the wind industry, the rise of CIGS thin-film solar cells, and the ever-improving pace of nuclear have brought all three down to the same ballpark of prices as hydrocarbon power. None of them are yet obvious, no-brainer solutions for increasing capacity over existing plants, however. We're not going to shutter plants burning expensive natural gas yet because they're STILL cheap/profitable enough to run that it's possible to recoup the investment in the equipment. What's lacking in this country is the political will to say "Yeah, we're going to tax carbon" or "Gas taxes are actually going to have to pay for the roads from now on" or "We need to build electric mass transit," or "Strip-mining moratorium". What's lacking in many of the governments that may fall tends to be the money to build any of this, at all.

Every year the entire commodity market doubles in price, we lose a little hope of building alternatives, and we're a little more reliant on the sunk costs of the present hydrocarbon infrastructure.

[Squalish]

While he didn't directly state that global warming was the cause of the food shortages, I'd like to point something out.

The food shortages are intricately intertwined with the energy and water shortages.

Mining our groundwater is becoming more and more expensive & energy intensive - and many countries that are drying up aren't able to start. Transporting crops halfway around the world is becoming more expensive. Fertilizing and farming our crops is becoming more expensive. Running third-world diesel-powered electric grids is becoming more and more expensive. The money is not only being sucked out of middle-class America, it's being sucked out of the third-world just as fast - with much more devastating results in nations that were already so poor as to be on the edge of famine. Nations which have recently urbanized a large portion of their population, and rely on food and fuel imports to survive.

If we had cheap energy, we would have cheap desalination. If we had cheap desalination, Australia (which formed a large chunk of the relatively small worldwide trade in grains) wouldn't have had to dramatically cut its exports after a years-long draught. If we had cheap energy, we wouldn't have to resort to ethanol, pulling large amounts of formerly subsidized export corn & wheat off of the market and raising prices. If we had cheap energy, oilpalm and sugar cane wouldn't be the world's biggest growth crops, pulling potential agricultural resources off the market..

[WASanford]

You are wrong if you think there is no connection between petroleum and food. When you go to the supermarket and buy apricots out of season, where do you think they came from? They were probably grown in South America or Africa. I can just imagine the natives picking fruit to send to us while their own children"s stomachs are distended with malnutrition and starvation. That business plan is totally based on injustice, both social and economical and it is reliant on the use of petroleum. It too contributes to global warming.

As to the other, I"m constantly reminded of a commercial I saw where one of a group of hikes was sinking in quicksand. The "leader?" discussed the merits possible rescues while his group listened earnestly and their companion continued to sink. One of them finally realized that the talk was going nowhere and threw a rope to the guy in the quicksand.

No one"s going to throw us a rope, so we need to do this ourselves.
Step one; begin sipping on gasoline rather than guzzling it, buy a smaller car for your commute or move closer to where you work. Walk or use public transportation when you can. A new bicycle might be nice.
Step two; eagerly embrace new technologies that promise to reduce carbon emissions.
Step three; Begin a firestorm demanding that our representatives stop talking and begin doing something effective to prevent global climate change.

[mamacat]

The idea that the cost of inaction is far higher than the cost of action is in many instances painfully, obviously, true.

Government can work to make vehicles' exhausts cleaner now, or we can pay the consequences later.

Congress authorised billions of dollars to repair the levees prior to Katrina, but Bush refused to spend the money. To do so was against his neo-conservative philosophy of spending money to help people. The cost post Katrina to repair things is more than an order of magnitude higher than the cost of repair before Katrina, and that says nothing about the human cost.

We can give billions in subsidies to oil companies, or we can use that money to replace the need for oil. Under the Republican government, the decision was made, in 2002, to give money to the Oil companies, because the Republicans had the power to do so. Recently, the Republicans were successful in blocking a Democratic effort to take away the give-aways to big oil, and to use that money to replace the need for oil. Their actions have actually been worse than doing nothing.

The Republicans have told us that we are using our troops and treasure in Iraq in order to prevent something worse from happening in the future. The idea that something bad is happening because of what they are doing is above their heads.

[sheila]

With respect, I hardly heard that here first. ALL this information has been out there for years but people are too lazy to find it. The media is complicit with their "soundbyte" style (if it's "solar" it must be good! couldn't be farther from the truth), and there is more to environmentalism than global warming. These guys want to DIRECTLY KILL OF HUNDREDS OF THOUSANDS OF ACRES OF OUR WILDERNESS to pursue their profit margins and pretend to be green!

and here's one thing you certainly DIDN'T hear - that rooftop solar and small wind are the only clean, sustainable energy sources which do not permanently kill of our nation's wilderness. Because then we would all have partial energy independence and the Emperor of so-called "Renewable Power" and his lackeys at Sierra Club and NRDC (not to mention his Corporate Cronies) would be seen as the rapacious ripoff with no clothes that it is.

These guys are greenwasher sellouts, every one. If Carl Pope wanted something "good to happen," he would not cheerlead the externalization of the costs of utility-scale solar and wind (total ecosystem death way bigger than coal, nuclear or natural gas) while harping on carbon taxes. He would get out there and DEMAND that every structure in this nation have an affordable and/or profitable point of use electrical generation system. Why isn't he doing that?

[WorkingClass]

The thing to remember about food riots is the rioters are hungry. Hunger makes people angry. The rioters are angry, desperate and feel they have nothing to lose. We are destroying everything we can get our hands on. We will stop when you give us food. Food riots can cause serious trouble for the ruling class. Its cheaper to get up off the money it would take to feed people.

[politicky]

"that concluded that the real cost of addressing emissions amounted to 1% of GDP, while the real cost of NOT addressing emissions and allowing global warming to proceed ranges from 5 to 20% of GDP over the next few decades."

Hot dayum, I knew there was a reason I flunked out of business school.

I hated being surrounded by idiots.

[Semaj51]

Just love those "throw arounds". Just think of a problem and toss in a number which you think 'may' be right.

Like the old saying, "Don't need no facts....."

[FullChat]

Ethanol has been horribly handled. The Brazilians use sugar cane (12 times better?) to make it. In the US, the subsidies paid to sugar companies make the US price of sugar twice what it is in the international market - and unprofitable to make ethanol. And we tax imported ethanol at 53 cents a gallon.

[January]

She clearly states where the facts and figures she uses come from--even hyperlinks it in case you are among the many who cannot be bothered to read significant information when it originally appears.

One of our greatest human strengths is denial; it is also one of our greatest weaknesses. Denial is central to the common pattern in addictions. Consuming can become an addiction. However, I intend to remain addicted to breathing, food, sex etc. as long as I can, so long as it does not become rotten or unhealthy.

I expect to see posts of denial continue to build up here. Thanks for the Pope's statement. I had missed it.

[kevinabt]

It turns out that the cost of doing 'something' is very often much higher than the cost of not doing something. As has been shown by the government imposed biofuel effort. It should have been obvious that burning our food supplies would lead to food shortages and very high food prices (even a small decrease in supply quickly leads to a bidding war to see who goes hungry). The poor countries and those who speak on their behalf were begging and pleading that the US not burn the food they normally export to poor hungry nations several years ago, if I remember correctly.

Also, a 5-20% decrease in national GDP due to changing weather patterns? Only a 1% cost to take action? Throwing around figures that you have no way of substanciating hurts your credibility. Predicting weather patterns weeks into the future, let alone years into the future, is not possible. Estimating the possible economic effect of those changes is even less possible. Oh, and global temperatures are down over the last 10 years.

[not one of the sheep]

Damn your common sense (LOL). And damn the sun for those solar flares.

[Novista]

Sometimes the cost of acting in a "we must do something" way has unintended consequences.

Biofuel -- corn-for-ethanol in particular was a hugely bad idea. Aside from food riots in 33 countries, corn-ethanol is a net-loss product. Add in the government subsidies to some farmers to grow more corn, and other farmers to NOT grow rice, you're throwing good money after bad.

[WorkingClass]

The government should be providing tax incentives, low interest loans, and price supports for grain and soy producers. No acreage that is suitable for food crops should be used for fuel. The United States could produce a lot more food than it does. The world needs food and we need *real* exports. At the same time the government should provide money to the states to provide micro loans for citizens who want to start truck farms or feed some chickens or plant an orchard or a vinyard. This would give us a good start toward solving our own food problem.