Will China lead the world into a new “ecological civilization”, while America falls behind into the remnants of the old carbon age? Hidden by mainstream media, major changes are developing on the global stage. Our guest Laurence Brahm gives us a tour. Meanwhile,
business as usual is setting us up for the awful shocks of climate disruption. Our second guest Gernot Wagner says our economies are heading into a series of hits, something he calls “climate shock”.
In fact, scientific studies say there is at least a ten percent chance we won’t survive at all. We are gambling with an ecosphere, our descendants and a geological age. Let’s hope the ecological civilization comes in time, and let’s pay attention to those who try to lead us there.
I’m Alex Smith, and this is Radio Ecoshock.
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LAURENCE BRAHM – THE OTHER SIDE OF THE WORLD
A successful international trade lawyer helping multinational companies enter China, quits to find himself and the mythical Shangri-La. That journey becomes a book. Along the way our guest finds a passion for restoring ancient buildings of Asia. He founded an influential organization called “The Himalayan Consensus” – which was influential among other things in helping the new secular Constitution of Nepal.
These are among the many sides to Laurence Brahm. He’s been listed as a senior advisor to China’s Ministry of Environmental Protection. I checked. It’s true. When I talked with Laurence in the Spring of 2015 about his new book “Fusion Economics” he said China
would come out with a bold new vision to move away from carbon-powered civilization, perhaps surpassing the United States. That plan has been released.
We talk about the developing bi-polar world of international finance and what that could mean for all of us. We look at real roads to climate sanity, and Laurence’s appointment as Foreign Policy Advisor to Jill Stein‘s 2016 Presidential campaign for the American Green Party.
Laurence is a mix of visions to survive amid realism. He says for example that scientists tell him this civilization has only a fifty-fifty change of making it to the year 2100. As a realist, he see the need for governments and private business to cooperate on plans to decarbonize.
REPLACING WALL STREET AND THE DOLLAR
I won’t go into great detail here about the newly emerging block of China, India and Russia. Following the Asian crash in the late 1990’s, and again after the Lehman collapse of 2008, major countries outside America trust Wall Street and the old Bretton Woods banking system less and less. Developing countries in South America and Africa also see that the International Monetary Fund (IMF) and the World Bank do not really operate in their best interests.
In the last few years we’ve seen the new Asian Infrastructure Investment Bank, the “New Silk Road” initiative and the South-South Cooperative Fund emerge. As a former trade and business lawyer, Laurence is in a perfect position to explain what is going on – the news that never makes it into major American media. We also note the contentious Trans-Pacific Partnership does not include China, and is likely an effort to isolate China.
As I wrote in my blog on Laurence last spring:
“Laurence has his own You tube channel. He talks about “compassionate capital” and “conscientious consumption”. Brahm recommends we set up our own alternative financial systems (like local currencies, or bitcoin).
On BBC in December, Brahm said 80% of the wealth of America comes from betting on stocks, currencies and other financial games, and not from producing goods and services. That is not sustainable.“
CHINA MOVING ON CLIMATE CHANGE
Brahm says that one issue that can unite the world is climate change. It’s a global problem demanding global solutions. While America has been investing its technical skills into games and social media companies that can be flogged by Wall Street, China is pouring investment into green energy. Most of the world’s solar panels, for example, are now made in China.
That is also part of a major new policy announcement made last April (2015). China is planning to decarbonize rapidly, to build an “ecological civilization”. In a centrally planned economy, this is no idle chatter, Brahm tells us. There are a whole range of interlocking finance mechanism, regulations and smart planning aiming to take China away from its current 70% dependence on coal, and into a low carbon, highly energy efficient future.
Laurence explains the five major pillars behind this new policy – with lessons that other countries could learn.
Unfortunately, from my perspective, China will partly do this with a gigantic expansion of nuclear power, with dozens of reactors already under construction. They paused after the triple melt-downs at Fukushima, but decided to go ahead, thinking they can avoid the mistakes made in Japan and other parts of the world.
When it comes to alternative energy and “smart cities” China has found a more willing investment and research partner in European nations. He gives the example of tiny Finland, which has created buildings that create energy instead of requiring energy. But Finland needs China’s big market to make this worthwhile.
THE AMERICAN GREENS
As for the American Greens, Brahm thinks there needs to be a hydrid approach using the free enterprise model, but guided and inspired by a greener government. The Greens are not “anti-capitalist”. Brahm points out it is not “unpatriotic” to recognize the United States has serious problems. End the flag waving, and let’s get busy solving them, for a better country.
I also found this English language interview on Chinese TV (September 23, 2015) very helpful to understand the macro picture.
GERNOT WAGNER: CLIMATE SHOCK
Are you ready for “Climate Shock“?
Your home probably won’t burn down. So why bother buying fire insurance? Because it might. That’s part of a powerful new argument for climate action, coming not from scientists, but from economists.
Gernot Wagner is lead senior economist at the Environmental Defense Fund. He advocates for market-based solutions for environmental problems. Teamed up with Martin Weitzman, a Harvard Professor of Economics, Garnot Wagner joins us to talk about their new book “Climate Shock: The Economic Consequences of a Hotter Planet“.
Most projections you read about in the media, and many scientific papers, are based on “the most likely” outcome. But like any Bell curve, there is a lower and upper end to risk. In the case of climate change, that upper end is really called “a fat tail” because there is at least a ten percent chance, Gernot tells us, that this civilization may not survive to the year 2100 at all.
Read more about “fat tail risk” and the climate here.
The two authors published an article about this in the April 15, 2015 edition of “Foreign Affairs”.
A ten percent chance (of oblivion) may sound comforting, but if you had a gun with ten chambers, and put a bullet in
one of them, would you be prepared to play “Russian roulette” with the whole future of our civilization, and possibly the ecosphere that supports us as a species? Why would we gamble everything? To keep the casino economy “growing” while we wipe out other species and places?
Looking at risk, for example, official estimates for the amount of warming we will see this century go from a couple of degrees all the way beyond 6 degrees C, or 11 degrees Fahrenheit! And that is based on what we think we know. But what if there are huge possible tipping points that we don’t know? For example, nobody expected the massive melting of Arctic Sea Ice in the first decade of this century. What else is out there?
In the economy, these are known as “Black Swan” events. By the way, the author of a book with that title, Nassim Nicholas Taleb has endorsed this book. I’ve been waiting for this kind of book for a few years now. It’s so obvious that climate change is going to hit the economy hard. Wagner gives us a hard-headed look at what could happen to “business-as-usual”.
He says: “What we don’t know may well dwarf what we know. What we know is bad, what we don’t know is potentially much, much worse.”
Gernot tell us every ton of CO2 emitted into atmosphere costs us about $40 in damages now. That’s the damages we know about. Since there are about half a trillion dollars in global subsidies to fossil fuels annually, that means instead of charging per ton, our societies pay about $15 per ton of CO to not pay for damages. We get paid to pollute.
“The less we know, the more risk there is, and so the more we ought to be doing about the problem in the first place.”
IS INDIVIDUAL ACTION POINTLESS?
Then there’s the simple problem of the near-pointlessness of individual action. I may cut my carbon emissions and it makes no difference if the world keeps on polluting. So why bother? The authors talk about this, including voting and recycling, in their Salon article, March 29, 2015.
They discuss two theories of individual action: “Economists are instinctively more comfortable with this crowding-out bias view of the world than the one supporting the self-perception theory, a.k.a. the Copenhagen Theory of Change. “
Some people who consider themselves green blow up all their small action, like cloth bags and a more efficient car – by flying.
Their first advice: scream!
“So: Scream, protest, debate, negotiate, cajole, tweet, use all the means at your disposal to call for the scale of policy change needed to match the magnitude of the climate challenge. To use the economists’ logic of comparative advantage, do what you do best: Teachers, teach; students, study; community leaders, lead. Meanwhile, avoid crowding-out bias at every step and make sure to keep the next step in mind: the Copenhagen Theory of Change in action.“
Second: learn to cope with climate change.
And we should do that as a society. One example is not paying people to rebuild on flood-prone lands, especially near the coast.
Step 3: Profit
They talk about investing in the 700 ppm fund, and the 350 ppm fund. They write:
“Stranded assets dominate the picture. Bill McKibben popularized the concept in Rolling Stone. The Capital Institute did the math for him: Just to stabilize atmospheric carbon dioxide concentrations at 450 ppm, about $20 trillion dollars’ worth of carbon still underground will likely have to remain there or be pumped out only while pumping the resulting carbon dioxide back in, devaluing fossil fuel companies in the process.
In this world, your $1 billion may be best served betting against coal, oil, and gas. They are bound to perform worse than the broader market. Wind, solar, and all sorts of low carbon technologies win. Carbon air capture technologies may be another big winner, assuming that the carbon dioxide price we all pay will be appropriately large. Once again, timing is everything. In order to make a buck, it will be key to get in at just the right time.“
Gernot also has solutions in the book. These involve a price on carbon to start with, but many other economic levers that could actually take us on a path to start removing carbon dioxide from the atmosphere, rather than adding to that burden and that warming.
Personally, I doubt humans will act until irreversible climate change has already taken hold. Some say we are already there. Gernot Wagner knows this situation, but still struggles to warn the business community, and all of us, about the relationship between massive changes to the ecosphere, and our assumptions about the economy.
Find out more at climateshock.org, and get links to You tube videos with Gernot. For example, here is an excellent full-length presentation by Wagner. “Climate Shock : Seeking Insurance Against a Warming Planet.” 1 hour 3 minutes. March 18, 2015, presented by the World Affairs Council of Northern California, hosted by Maureen Blanc.
Or try this Gernot Wagner “Authors on Google” interview.
PERMACULTURE COMING – THE CIVILIZATION BUILT TO LAST
I think we’ve covered the 50 shades of doom pretty well lately on Radio Ecoshock. Next week we’ll start a short series for change, looking for solutions. I’ve got the best from the recent Permaculture Convergence in the UK in September, plus custom interviews of major players by Albert Bates. Stay tuned for those who are planting the future.
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