Wednesday, December 30, 2015

The Transition to a Sustainable Economy by 2030

Entry for blog contest asking for ideas about how government and businesses can cooperate to build sustainable economy by 2030:

Government and business have a common interest in keeping the planet from overheating. How can they combine to foster this mutual concern?

Governments can even the playing field. In many countries there are tax benefits and subsidies for energy production. More than 40 countries currently subsidize fossil-fuel production or consumption to the tune of half a trillion US dollars. Governments in the Middle East subsidize 75 percent of the costs of fossil fuels. In the USA, oil drillers receive close to US$5 billion in tax subsidies while the solar energy sector gets US$2 billion. We need a global commitment to reduce all energy subsidies. Subsidies undermine the operation of free, efficient markets and send the wrong message to business.  Unleash market forces on a level playing field of unsubsidized energy costs. Cut subsidies for all energy industries but tax CO2 emissions to motivate business. Imagine a gradual reduction of subsidies and a steadily ratcheting pollution tax that allows business a chance to adapt. Maintaining steady fiscal pressure will result in the private sector finding ways to reduce their carbon footprint and so reduce global warming.

We need to cover the social costs of CO2, the main gas responsible for climate change. Estimates of the total social cost vary, but one commonly used figure is US$60 per metric ton of CO2. We could impose a tax, with annual increases up to US$120 by 2030 that is paid into a Global Carbon Fund (GCF). At the outset, we make each nation’s government responsible for collecting this tax. Different governments may use different methods of assessment and this variety will allow us to test different forms of tax implementation and collection. By 2030 we will be in a better position to decide what works best.

Governments are good at collecting money, much less successful in allocating funds efficiently. The GCF could then be used as an interest-free bank available to the private sector. Business can apply to the GCF, in cooperation with local impacted communities, for innovative programs of adaption and mitigation. Again, by 2030 we will have better ideas of what works and what does not, what is efficient and fair and what is a waste of money. 

The allocation of funds can be decided in a series of five year tranches to allow the benchmarking of successful loans in the short-term before a major reassessment in 2030. A formula could be devised to lighten the load of countries that have a limited CO2 footprint but have very high adaption and mitigation costs. The predicament of low-lying Pacific islands comes to mind: they have tiny carbon footprints, but face huge challenges of sea-level rise.

Businesses require long-term stability in order to make equally long-term investments and to undertake ambitious changes in their trajectory. When governments provide a stable and clearly understandable global set of incentives, they harness the enormous power of the private sector to reduce global warming. A commitment by each country’s government to abolish energy subsidies, to tax carbon in order to fund the GCF will give business around the world a stable and transparent environment in which to make long-term plans and play a vital part in moving towards a low-carbon economy.

With a steadily increasing carbon tax, the private sector will look for ways to reduce their carbon footprint while the GCF will provide them with fiscal incentives to work on climate change adaption and mitigation.

Pumping oil in Los Angeles (Photo ©John Rennie Short)

Wind turbines in Baltic Sea (Photo ©John Rennie Short)

Sunday, December 27, 2015

World Travels 5: Cape Town, South Africa

The city sits at the southern tip of the continent. It is bathed in a salty clear air.  From the base of Table Mountain, the city spreads out along the coasts. There is a rich variety of residential areas from the upmarket suburbs along the coast to the townships on the edge of the city.

Looking up at Table Mountain from affluent suburbs

Expensive real estate beside the coast

Cape Town from the top of Table Mountain: Robben Island is in the distance.

Bo-Kaap, formerly know as Malay Quarter was a township for Muslims, originally from Indonesia. Close to the city center,  it is now undergoing gentrification

Monday, December 21, 2015

Travels 4: Mauritius

Mauritius is a former British colony off the coast of South Africa. It was the home of the dodo bird, now extinct, and the setting for imperial rivalries between Britain and France. Hundreds of thousands of laborers were imported from India to work on the sugar plantation. Sugar still plays an important role but since independence, in 1968, the economy has broadened to include manufacturing, financial services and high-end tourism.  

High end tourism is now a vital  part of the national economy

Small scale agriculture is still important

(All Photos ©John Rennie Short)

Friday, December 18, 2015

Travels 3: Dubai

Dubai is in a race against time. The oil reserves are running out, and running out fast. The oil will be gone, most likely, by 2035. And so the emirate is trying to position itself for a post-oil economy by transforming the city into a global transport hub, financial center, property market investment opportunity and tourist destination. That is the economic rationale behind the frantic building boom. But the buildings do not simply house tenants, they are designed to make a statement about the city's emerging position as a global player. Hence the big name architects and the signature buildings; they are the projections of global aspirations, exercises in place promotion and the embodiment of city marketing.

Burj Khalifa: one of the tallest buildings in the world

Burj Al Arab: luxury hotel and iconic symbol

High rise buildings at Dubai Creek

Laborers from South Asia build these structures

(All photos ©John Rennie Short)

Monday, December 14, 2015

World travels 2: Hawaii to Bali

Flew from Hawaii to Fiji, then to Sydney and onto Bali.

Sugar plantations are still an important part of Fiji's economy

Sydney with entrance to harbor in distance

Portrait of Jack Mundey, one of my heroes that I have written about, in The Rocks area of Sydney

Flying over Australia: Uluru

Balinese dancer

Hindu temple in Bali

Sunday, December 13, 2015

World Travels: 1 DC to Hawaii

Just returned from almost three months of sabbatical travel. Went round the world twice- the first time east to west; then west to east. So first order of business is to show some photos of travel. Will punctuate this updating travel blog with more up to date events.
Traveling through Phoenix

Flying into Kona
Solidified lava flows