Bill McKibben Interview of 350.org

I heard a great interview with Bill McKibbon of 350.org at Speaking of Faith. Here is the link.

http://speakingoffaith.publicradio.org/programs/2009/moral-math/

He has some interesting points about the cost of climate change to the world economy.

America is falling behind in the Green Revolution

Just like the automobile industry, the US is falling behind Asia in the area of green technology. Japan is about 10 years ahead of the US in solar technology. That country offers residential solar technology on a large scale. China has been putting in tons of money in development of wind technology.

According to a report from the Breakthrough Institute and the Information Technology and Innovation Foundation, as reported in the Financial Times, the US attracted about $56 billion in private capital for renewable energy technology between 2000 and 2008. China ended this same period with $41 billion in private capital invested. However, the report states that over the next 5 years, Japan, China and South Korea would between them invest a total of $509 billion in clean technology. In contrast, the US will invest about $172 billion over that same period.

This report states further that China is poised to repeat the same success in green technology that South Korea and Japan had established in electronics and automobiles. It looks like these "Green Tigers" will be the leaders in the gren technology industry with the US trying to play catch up once again. This will be a missed opportunity for the US the shift its economy from an unbalanced service oriented economy back to a balanced service and manufacturing economy. This economic transformation will benefit the US both in economic growth and security.

Unfortunately, we may be too late. China is already the leader in exporting solar power components and has one of the biggest wind turbine manufacturing industries. This year China will export the first wind turbine destined for use in a US wind farm valued at $1.5 billion. With a 10% unemployment rate, this is unacceptable that we would not be providing these wind turbines by our own companies to US wind farms.

According to the report, the US relies on foreign-owned companies to manufacture most wind turbines and produces less than 10% of the world's solar cells. In addition, we have already fell behind the other foreign automobile companies in hybrid and electric car technology.

The US needs to take the lead in this. There should be no debate on this by Congress because it benefits all Americans: conservatives, liberals, independents, farmers, city dwellers, the wealthy and the poor. Let's get to work become the leader in the Eco-economy.

News from Copenhagen December 9th

Well, it looks like that China and the US cannot play nice in the global sandbox. China yesterday pushed back the climate change obligations onto the developed countries stating that the developed countries should be responsible for reducing carbon emissions, not the developing countries.

The US has returned responded by stating that it is China, whose Co2 emissions will increase dramatically in the upcoming years, that needs to seriously commit to such C02 reductions.

The fact is the both US and China have to step up to the plate. One country, the US, is currently the largest emitter and the other country, China, will be the largest emitter. Until these two countries commit to take serious action to reduce their emissions, the rest of the world will not take action. We are in an international relations suspended state in a rapidly changing environment. It is time for these two "babies" to grow up, get out of the sandbox and start acting like adults and not like children.

Speaking of children, a US Republican "delegation" is showing up to Denmark to protest any real commitment by the President to a global pact to reduce Co2 emissions. They claim that any such action will have a negative impact on US jobs. The added that the President should not make the same mistake that Al Gore did in Kyoto by committing to something he cannot deliver. And we thought health care reform was tough. Wait until the White House pushes for a climate change bill. That will make the health care reform protests look like a tea party in comparison to the battles that will occur on the Senate and House floor and the various Jerry Springer like town hall meetings throughout the country.

So here is a word of advice to polar bears and nations at sea level, seek hire ground.

This Month's Number: 57%

57%

The Pew Research Center for the People & the Press did a recent polling of 1500 adults regarding the issue of whether global warming is caused by man made activities. The result is that only 57% of those polled believe that there is strong scientific evidence that that the Earth is warming due to man's actions. This dropped considerably from 77% in 2006 and 71% in 2008.

What is happening here? There are more sceptics out there that are getting public exposure to "challenge" the scientific evidence. Because of the 24/7 news cycle and the variety of different methods to express your opinion via the Internet and other forms of electronic communication, there is a larger audience that is being exposed to this counter position.

In addition, although this happened after the polling, more than 3000 emails and documents from the University of East Anglia's Climate Research Unit (CRU) were released to the public after their servers were hacked. According to news reports, there is evidence in these documents and e-mails that certain scientists were working together to exclude or "massage" certain data in order to unequivocally reach the conclusion that man is causing global warning. Also, it has been reported that there were efforts to exclude scientists who were critics of this position.

Unfortunately, this new news might push that 57% down to a level where the majority believes that man is not causing global warming. More importantly, the scientific community is now facing an issue of credibility. They already had a hard time convincing people beforehand. Now, they are facing a more sceptic public with a lack of credibility. Good luck. I am going to start working on that Ark.

Buffett Betting on Coal?

Most of us would agree that Warren Buffett's stature as an investor reaches level of Godlike stature in which many people call him the Oracle of Omaha. His company, Berkshire Hathaway Inc (BRKa.N) (BRKb.N), is paying $26 billion to buy out railroad Burlington Northern Santa Fe (BNI.N), the company's biggest ever investment. Burlington Northern Santa Fe is a leading transporter of coal. According to MarketWatch, this company's coal shipments accounted for roughly 25 percent of the firm's total revenue in Q3 2009. In fact, Burlington Northern had shipped 297 million tons of coal last year, which amounts to roughly 10% of the energy supply used to meet country's electrical needs. Its coal shipments are down 6% this year, however, which many believe is due to recession.

It seems odd that Berkshire and Buffett would invest this amount of money in a company that relies on a good portion of its revenue from shipping coal when there is a pending carbon emissions bill in Congress and a push to replace coal with other alternative clean energy solutions, such as solar and wind. Perhaps Buffett believes that coal will still be a significant part of the country's future energy policy or that the pending bill in Congress will not have as great of an impact in reducing coal usage. In addition, investing in a railroad is not a bad investment considering that trains use a significantly less amount of fuel than other forms of transportation.



In fact, Buffet is quoted as saying the following:
BNSF last year ... moved a ton of goods 470 miles on one gallon of diesel. It releases far fewer pollutants into the atmosphere. It saves enormously on energy consumption and ... it diminishes highway congestion. Rails last year moved 40 percent, more than 40 percent, over the country. They moved more than all those trucks, just the four big railroads. It's a very effective way of moving goods. I basically believe this country will prosper and you'll have more people moving more goods 10 and 20 and 30 years from now, and the rails should benefit.

It should be noted that Berkshire has invested in the energy company, MidAmerican Energy, which has received approval in Iowa to build wind farms with a total 1,001 megawatts of generating capacity. Like any shrewd investor, you need to hedge your bets. I am leaning toward Congress and public pressure to pass a carbon emissions bill that will restrict coal usage; however, betting against Buffett is never a good strategy even if you will be betting against the future survival of the planet.

The Changing of the Leaves and the Landscape of the Rocky Mountains

I have come across news reports on NPR and in the Wall Street Journal about the decrease in Aspen trees in Colorado. So far, over 500,000 acres of Aspens have died off in Colorado. In fact, this decrease in the Aspen tree population is also occurring in Nevada, New Mexico, Arizona, Utah, Wyoming and parts of Canada. There is a variety of opinions on the cause, which range from the severe drought in the West to run of the mill pest and fungus and wild life. There is also the rise in the pesky pine beetle, which is wiping out the evergreen trees. In fact, it is expected that Colorado will lose virtually every mature lodge pool pine, a total of five million acres.

This will result not only a huge environmental impact in this area but a huge economic impact. Millions of people travel to states like Colorado during the fall to see the turning of the leaves of the Aspen trees. If these trees die off, so ends this picturesque spectacle along with the tourist dollars. Tourism is down this year already; however, part of it is due to the recession. Add in the disappearance of fall's main attraction, the small towns scattered throughout this part of the country may feel more of this recession pain.

Foresters and scientists are working on solving this mystery; however, unfortunately, there may not be any clear cut answer. We may be seeing the last of the Aspen and change in the Western landscape forever.

It really is windy

The American wind belt run from Texas up to the Dakotas. Last year, America has overtook Germany to become the world's largest wind power generator. Wind energy accounts for 42% of the new energy generating capacity in the US. Unfortunately, like many industries in the US, the growth of the wind generating industry has slowed down a bit from 2008 where it had grown by 50% compared to this year's growth of 20%.

What happened is that creating wind energy requires a lot of upfront capital. The credit crunch and economic down turn has shrunk the availability for this capital. In addition, the wind industry is having problems getting various local, states and federal authorities to set up power lines to transmit this wind energy. In fact, the biggest wind energy promoter, T. Boone Pickens, just called off plans to build the world's largest wind farm because he could not get the transmissions lines.

However, it is not all negative. Government stimulus and funding is helping to support the growth in this industry. In addition, legislation that would require energy company's to obtain a certain percentage of its power from alternative sources, such as wind, will help states commit to build these transmissions lines. There is great growth opportunity considering that 2% of US electricity is generated by wind and there is a lot of untapped resources out there to harness this energy. Keep any eye out on the weather report for more windy days, which could be a good thing for your utility bill.

Could London Go Dark?

I remember watching documentaries about London in WWII when it suffered countless bombing attacks from the Germans. One of the UK's defense measures against these attacks was to turnoff all of the lights to limit the visual targets for the German bombers. Unfortunately, England may be seeing some form of a blackout again. At least it is not due to the threat of some country's aerial attack.

Britain is running short of power. It is facing the shut down of many power stations over the next decade and its energy supply from its own internal resources is becoming tight. The government estimates that 750GW in generating capacity will be gone by 2015. Ironically, the economic recession has perhaps pushed this out a little further because the demand for energy has dropped; however, it is hoped and believed that this economic down turn will end shortly.

Britain's energy grids have already shown some strain when it was hit by a harsh winter in 2005-06. It has faced blackouts recently due to two power stations failing at the same time. The problem is that Britain is facing aging power stations and a shortage of alternative resources and new power stations. In addition, the building of new "cleaner" power stations, such as nuclear, would take years to get one up and running and other alternative resources, such as solar. On top of that Britain has committed to lower its carbon emissions by 34% lower than its levels in 1990 by 2020 and 80% by 2050. As a result, it cannot turn to a reliable and abundant energy source, such as coal, because it is the largest fossil fuel emitter. The government is looking at expanding its alternative energy resources such as wind power. In fact, the UK is looking at getting 33GW of energy from its offshore wind program. This is an incredible leap considering now they only get 0.6GW. In addition, they would need to build 5000 turbine over the next 11 years to meet this goal. Another source could be gas; however, the supply from the North Sea is shrinking. This means that the Brits will need to rely on foreign sources such as Russia and the Middle East. This dependency could jeopardize the UK's security.

In the future, we may see many countries facing a similar energy crisis as they are limited on the type of energy resource they can use due to their commitments to meet certain carbon emissions reduction goals. This is a tough trade off; however, it seems like trade off that must been done in order to reduced global warming.

It is all about relationships

There were not many countries that liked George W. Bush. India, however, was one of them. One reason they favored Bush was because he did not pressure them to abide to any carbon emission restrictions. That was easy for Bush to do considering that he did not enforce any restrictions on his on country. At least he was not a hypocrite here.

Anyway, when U.S. Secretary of State, Hilary Clinton, raised the subject about India abiding to some carbon emission cap to India's minister of environment and forests, Jairam Ramesh, his response was not what she and many environmentalists hoped. He stated, "There is simply no case for the pressure that we — who have among the lowest emissions per capita — face to actually reduce emissions."

He stated further to her, "And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours."

The U.S. in its recent carbon reduction bill passed in the House has some form of tariff to be assessed against goods of countries that do not abide by certain carbon cap requirements.

The problem is that we have spent the last eight years ignoring this issue and now we are taking internal action, but also pressing other countries. Unfortunately, the President cannot always brush off past sins of the prior President by stating that what his country did in the past was not his fault. India looks at America as one country, regardless of who is running it. The actions of one President tend to carryover into to other President. The only thing America can do in regard to pressing developing countries to seek ways to reduce carbon emissions is to demonstrate to the rest of its world its serious commitment to this matter by drastically reducing its own carbon emissions. Some argue that the current bill passed in the House is not enought. In addition, the US needs to share technology with these countries in assisting them to reduce these emissions, which may be more controversial because of intellectual property issues.

This will not by the first or the last time that America will here the above statements from the developing countries. This is going to take awhile. Unfortunately, some believe we do not have enough time to wait patiently for the developing countries to turn around.

Why isn't the Green going into Green?

$39 billion of February's $787 billion stimulus bill was set aside for the Department of Treasury for purpose of creating sustainable green jobs for this new green economy. With the unemployment rate at 9.7%, including it being double digits in some states, many are wondering whether or not this money was allocated correctly. Secretary of Energy, Steven Chu, stated recently in Iowa that he will soon initiate $16 million in spending for green fuels and energy efficiency. Up to June 19th, however, only $5.8 billion of that $39 billion of "green" dollars has been allocated. So what's holding everything up? You would think that the government being the true American spender would be out there spending money like one of the wives from the reality TV Show, the Wive of Orange County.

According to the Economist magazine, before this new sea change in energy initatives, the priority of the Department of Energy, which includes a large portion of its people and money, had been dedicated to handling America's nuclear-weapon stop pile. In addition, the Department has never seen this amount of money in its budget. It takes a up to three months for the Department to approve its current loan program applications for funding various projects. Unfortunately, even though it has increased its staff, the Department of Energy is seeking volunteer experts to assist them in reviewing applications and doing due diligence on the parties requesting such funding.

In the end, it might be a good thing that the government is being forced to take a little more time to spend this money. Who wants to have the government purchasing 100,000 solar flashlights valued at $1000 each.

What do fireflies have to do with the economy?

I love the summer time. Especially, I love fireflies. They are nature’s little fireworks. When it starts to get dark, you see these little flashes of light dispersed throughout the night air. It brings out the child in all of us. My children love collecting these insects, studying them and then releasing them. Ironically, this spectacle of lights signifies more adult like activity then child’s play. The fireflies have a mission. These lights are the equivalent to a man at the bar sending a drink over to a female to get her attention. And like any male in this natural bar scene, they are competing with hundreds of other males trying to do the same thing. The night sky is not some natural landscape. It is an insect singles scene.

Unfortunately, the attendance of nature’s singles night is dwindling. There has been a considerable drop in the firefly population. It is not due to the firefly population finding marital bliss and coming off the singles market. There are variety of reasons cited, such as pesticides, light pollution and change in the weather patterns. No one is truly certain for this decrease and scientist continue to study the causes. In fact, you can go to the following website to read more about it and assist in the research: https://www.mos.org/fireflywatch/.

So what does this have to do with the economy? Most likely, you did not realize there is this firefly population decrease and you only would have become aware of the problem when there were no more fireflies. This is similar to the economic crisis.

Many of us did not realize that we were in a recession until a year after it officially began. More importantly, almost all of us did not realize the problems we were creating with sub prime loans, credit default swaps, and collateralized mortgage obligations until the crisis hit last year. The problem existed before that; however, everyone ignored it.

They say history never repeats itself; however, that is not true for human behavior. As my wife reminds me, I need to pay better attention. Perhaps, we all need to be more aware of our surroundings. Go out and enjoy the natural beauty of the summer. Watch that natural firework show. Maybe if we pay a little more attention to our surroundings, we can prevent the next crisis from happening as opposed to dealing with it when it happens.

The Godfather

One of my favorite movies of all time is the Godfather. There are multiple scenes I love in that movie; however, one scene that stands out is at the wedding of Don Corleone's daughter. Don Corleone is in his office and people are visiting him asking for a favor. As he grants a favor, he reminds that person that someday he will return the favor to him.

I am afraid America is the person approaching the Godfather and the Godfather is China. Over a $2 trillion of US government bonds have been purchased by Chinese government. The money provided by China is allowing us to float our current deficit. Without that country's assistance, the majority of the free spending the US government is doing would not be possible.

Unfortunately, this relationship may be fine for now; however, this may be different in the future. We may not have the leverage that we had in the past when dealing with China. This shift in the balance of power may impact our ability to influence China in the many areas, including fighting global warming.

It is projected that China and India will pass the US in the leaders in carbon emissions. Both countries have robust economies, which require a lot of energy to fuel their expansion. The cheapest form of energy to maintain this pace of growth is coal. Coal emits the largest of amount of CO2 emissions. According to the New York Times, China currently uses more coal than the US, Europe and Japan combined. In many cases, China is using new energy efficient technology in burning its coal; however, coal is still a dirty energy that emits a large amount of CO2.

So when the US approaches China this December in Copenhagen or in the future and asks China to reduce its Co2 emissions, China will remind the US on how much it benefited from using these large Co2 emitters to expand its economy and now China has the right to do the same. What leverage do we really have if China is providing a debt service to our economy. Not much. That is why we need to reduce our debt with China or any other nation because we will have no leverage for forcing these developing countries to forgo immediate growth to reduce the level of CO2 emissions. If we still have more than $2 trillion of US bonds owed by China, that will be a short conversation. In the end, we might have a better chance in asking Don Corleone to give up the mob business and retire to Sicily than we will have with China forgoing its growing use of coal.

That's alot of money we can save

Here are some interesting statistics from the Union of Concerned Scientists.

If Congress passed legislation consistent with the Union of Concerned Scientists recommendations, we can save the following amount of money:

$900- The net amount of money the average US household would save in 2030 on their energy bills.

$255 billion- The amount of money business and consumers could save in 2030 on electricity, natural gas, home heating oil, and transportation costs.

$1.7 trillion- The net amount of money the US would save from 2010 to 2030.

Go to www.ucsusa.org for more information.

Clearly, taking such action to achieve these cost savings will have an initial impact on our own budgets and livelihoods. As a result, because of the current recession, this is not the best time to ask Americans to support such legislation. However, like many other difficult issues, we cannot continue to hold off taking action until some indefinite period of time in the future. In the end, that future may never arrive.

If we are reevaluating the health care system and the financial markets during this economic crisis, why not reevaluate how we impact our environment. One could argue that without a sustainable environment, there would be not health care system or financial markets. Also, many of us have spent extra money initially to receive significant savings in the future. Therefore, this is concept of spending now to receive future savings is not a novel approach. Previous generations have made sacrifices for the future generations. It is our time to do the same. Winston Churchill once said, "Americans will always do the right thing, after they have exhausted all the alternatives." Let's prove Winston Churchill wrong by taking action now.

ECO INDICATOR

There are a variety of economic indicators out there that people are using to help them determine when the global economy will crawl out the recession crater. One indicator I would look at is the Baltic Dry Index. This index provides an assessment of the price of moving major raw materials by sea. It takes into account 26 shipping routes that are measured on a time charter and voyage basis and the index covers certain dry bulk carriers carrying a range of commodities including coal, iron ore and grain. Every working day, the Baltic surveys the brokers around the globe and inquires about the cost to book various cargoes of raw materials on various routes.

This is an important economic indicator because the dry bulk consists of raw materials that are used in production of intermediate and finished goods, i.e. concrete, steel and food. It is a very good indicator to determine future economic growth and production. As you see this index increase, it could be a foreshadowing that the economy is starting to turn around. For example. in May 20, 2008, the index was 11,793 points, which was its record high level since its introduction. By the end December 5, 2008, the index dropped by 94% to 663 points. So keep an eye on this indicator rising.

Ironically, this increase in the index could also be an indicator of an increase in carbon dioxide emission levels. An increase in the index means more ships transporting goods, which release Co2 particles into the atmosphere, to factories to build products, which will require more electricity. This electricity in many places is fueled by coal, which releases an extensive amount Co2. In fact, burning coal is the largest contributor of Co2 emissions. Therefore, an economic down turn may not be good for our pocketbook, but it is good for the environment.

Risk Management

In the financial world, risk management is a major component that a financial institution uses in determining how it operates its business. Unfortunately, the recent financial meltdown has demonstrated that there were major failures in firms correctly determining and mitigating risk. The link below is to a video that provides an excellent risk analysis on whether we should take action or not to fight global warming, aka global climate destabilization. There is a debate on whether we should fight global warming with carbon caps, carbon taxes and other emission restrictions because such government intervention will slow down our economic growth. Alternatively, if we do nothing and those cataclysmic events forecasted by leading scientists do occur, we will have bigger problems than a stagnant economy. We will have:

1) Economic losses that could equate up to 20% of the world GDP;

2) mass migration of people;

3) destruction of thousands of species;

4) flooding of major cities such as New York, Hong Kong, Shanghai and Tokyo;

5) destabilization of governments;

6) increased conflict of countries fighting over water rights and other resources;

7) mass starvation;

8) droughts; and

9) the end of humanity.

Perhaps, not all of these events will occur; however, if at least a quarter of them occur, I would say that I would be willing to accept a slow down in econonic growth over the end of the world as we know it.

By acting now, we will be able to mitigate the above events and hopefully prevent them from occuring at all. In addition, such action will be an investment for a better future for our children and generations to follow. Of course, this will require us to change our habits. Consider it similar to any other bad habits that we have to change to avoid a negative result, such as eating fried food or smoking. Of course, there is a level of adjustment and some growing pains; however, in the end we do it because we know it is good for us and, ultimately, it becomes second nature. Like eating heathier and quiting smoking, we need to break those bad habits to have a future. This will be a painful process for all of us on an economic and personal level; however, we are resourceful people. We have survived two world wars, a depression, epidemics and reality TV shows. We will survive here too. Alternatively, if we do not do anything, we will not survive. Of course, I may be completely wrong here; however the empirical data and the first hand evidence that I see on a daily basis tells me otherwise. In the end, not acting an hoping that I am wrong here is not a risk I am willing to take.

You decide. To help you in your decision making, watch the video and then make your own table with two columns. On one column make a list of the events that would occur if we would take action to fight global climate destabilization and in the other column put down the worse case scenario of events that would occur if we did not act. Then you decide which side you want to be on. Here is the link to the video.

http://www.youtube.com/watch?v=mF_anaVcCXg

Hey Kids! Get off my lawn!

Everyone during there childhood had the neighbor who despised kids treading on his perfectly manicured lawn. We would dare each other to run on the lawn to see if we would get caught. The last two years I have slowly transitioned off of the steroid induced lawn to a more organically fed lawn. What I have realized in this process is that the neighbor's perfectly manicured lawn that has that perfect shade of green throughout the entire summer is a lawn that I would tell my children to stay off. Not because the person will run out and yell at my kids tarnishing the family name. It is because that lawn has a variety of lawn chemicals that could harm my children's health. Of the 30 commonly used pesticides on lawns, 19 are linked with cancer and carcinogenicity, 13 are linked with birth defects, 21 with reproductive effects, 26 with liver and kidney damage, 15 with neurotoxicity, and 11 with disruption of endocrine (hormonal) system. See http://www.beyondpesticides.org/lawn/factsheets/30health.pdf. The concern is that these chemicals that we treat our lawns can seep into the groundwater and contaminate our streams and rivers. And in many instances, it is popping up in our drinking water. This does not mean that our population is going to be wiped off the planet by lawn fertilizer; however, it is changing the environment we live in by polluting our streams and rivers, which in turn is impacting the wild life of these waterways. Therefore, we should all stop and think when we pick up that bag of fertilizer in an effort to obtain the perfect lawn and consider whether our pursuit of the our own suburban oasis is destroying the real oasis, Earth.

Who will stop the rain?

I am looking to purchase a rain barrel. Fortunately, I do not live in Colorado. Colorado's water laws require that precipitation from the sky fall to the ground, run off and into the river of the watershed. Therefore, an individual can not purchase a rain barrel to capture such rain fall without breaking the law. Technically, an individual can go to jail for the collection of rain water. Of course, there are not many police officers patroling suburban neighbors arresting weekend gardeners or busting up garden clubs for capturing rain water to water their vegetable gardens and landscape. Nevertheless, it is a criminal offense where you could end up in jail with other nefarious characters because you violated a law that dates back to the 1800s. Colorado has an appropriation method with respect to water collection where there is a seniority system based on first come first serve claims staked as far back as the 1850s. Under its water law, every drop of water falling from the sky must divided amongst those that have such "water rights" claims. This includes Nestle, Exxon Mobil and many farmers throughout the area. There is a debate in Colorado on whether this law needs to be changed to allow its residents to collect rain water for its own personal use. There is growing pressure on both sides because of the ever growing drought occurring in Colorado. In fact, many parts of the western US have been in a drought for almost a decade.

As our climates changes, there is going to be a clash between (i) those individuals that do things on there own, such as capturing rain water in a barrel, to improve their personal environment and to save some money and what the private and public sector needs, which is to make money. In general, we need to put everything on the table and reevaluate it. A law that established rights 150 years ago might not make sense in the 21st century. I am not saying that we should rescind this law outright. We have seen where that draconion philosophy has led us when we removed Glass Steagal Act in where the financial and banking industry became less regulated. In the end, when we look on how to save this planet and maintain a certain quality of life, we need to fully reevaluate what laws make sense and what works in the 21st century. For now, I can say that I am glad that I live in Pennsylvania. I just hope I get a lot of rain this spring.

Mea Culpa

I do not want to be a hypocrite. I am going to confess to you my non-environmental actions that I have done. Therefore, you can judge me completely when you review my postings on this blog:

1. I do purchase Starbucks coffee on a regular basis;
2. I use disposable diapers for my son;
3. I drive to work and do not take public transportation;
4. I have a plasma TV that uses up a lot of electricity;
5. I have used regular toxic cleaners to clean my house;
6. I have gotten in my car to drive to the store, which is down the road, as opposed to walking to it;
7. I had used non-environmental friendly weedkiller and fertilizer on my lawn;
8. I do not always buy produce locally, especially during the winter, because I live in Northeastern part of the US;
9. I have taken long showers;
10. Many times I have used paper towels to dry my hands instead of a hand towel; and
11. I have stood by for a very long time without taking any action to fight climate change.

Forgive me. I hope the following actions are the right steps toward green salvation:

1. I have started to use non-toxic organic cleaners to clean my house;
2. I recycle everything I can, which my township recycles not only paper, aluminum, and glass ,but also plastics #1 to #7;
3. I have a compost bin where I dump my kitchen scraps and I fertilize my lawn with organic fertilizer and mostly organic weedkiller;
4. I joined the farm to city program where I buy local produce even in the winter;
5. I have reduced consuming meat and have at least one vegetarian meal a week;
6. I have become more aware of the packaging of the products I buy;
7. I bring my own bag when shopping and when I do not have a bag, I try not to use one of the store's plastic bags to carry my purchases;
8. I try to walk more to the shops and try to purchase locally;
9. I replaced all light fixtures with compact fluorescent light bulbs and I unplug my plasma TV every night to drive a stake through those energy vampires; and
10. At least once a month, I write a letter to the editors of my local papers voicing my concerns about global warming and the need to pass legislation to stop it.

I know this is not enough, but at least it is a start. I will continue to modify my ways to be less of a hypocrite and more of an environmentalist. Also, I will continue to work on that caffeine addiction.

Is it really time to consume again?

Most of us will see an increase in our pay check by about $65 per month because of the recent stimulus package that was passed in Congress. What are we suppose to do with that money? Buy stuff. Get the American economy rolling again. In fact, 2/3 of the economy is driving by the consumer. We were told to consume after 9/11 and we kept the economy afloat during six of the last eight years because of consumer spending. That has left many with a huge amount of debt and a bunch of stuff that fills our closets, garages and storage facilities. Yet, again we are asked to jump start the economy by going out to the malls to buy more stuff. Something seems wrong here. Before you dust off your credit card and replace your computer with a new Mac, I recommend that you watch the "Story of Stuff" at http://www.storyofstuff.com/. This will enlighten you about how our consumer mentality is causing havoc to the world. We are on this vicious cycle of buying things and then throwing them away six months later to buy more things. This creates more land fills and uses of more of the planet's resources. In fact, I live in a state that is the largest importer of trash in all of the United States. I really enjoy that smell when I get those western winds coming across the state. It is projected that by 2050 we will run out of room in our current land fills to dump our trash in the US. We will need to export this trash, which is already happening now. We send a lot of our trash to China.

Ironically, this global recession has benefited the environment because we are consuming less, which equates to less trash and a reduction of the use of resources. This is the reason gasoline prices have dropped. We are producing less because there is a drop in demand by the consumer. In fact, it costs, $0.00, excluding fuel and handling, if you want to ship a container of goods from southern China to Europe. In the summer 0f 2007, it would cost you $1,400. According to the Economist magazine, 1/2 of China's 9,000 or so toy exporters have gone bust, shipments of Taiwan's notebook computers have decreased by 1/3 in the month of January and the number of cars assembled in America is 60% below January 2008 number. Now, part of the solution to get us out of this recession is to by more stuff. Do we really need it?

A book called Your Money or Your Life talks about how to get control of your finances. It focuses on energy levels (happiness and work). It has a graph that charts a person's level of happiness vs his or her level of income. In the graph, it logically shows that as we make more money, we become happier; however, it plateaus at a certain level and begins to drop. The result is after the apex of this happiness curve, your level of happiness decreases as you make more money. You are spending more money to live a certain life style, which requires more time to work and less time for enjoyment. The book focuses on people simplifying their lives to achieve happiness, which includes consuming less.

The point is that if we consume less rather than more, our lives will be better. We will not need as much money to meet our basic needs. This will require us to work less and give us flexibility in choosing what we really want to do in life. We can spend more time with family and friends. More importantly, it will help our environment. If we do not consume as much, we do not use as many resources and we have less garbage to put into our landfills. This is good for all of us.

We need to reevaluate our economy and our own finances. I am not asking us to become communists here. I am for capitalism. I work in the financial industry, which is the championing of capitalism. Nevertheless, now is the time to put everything on the table and determine if this model of consumerism makes sense for each of us individual and the environment we live in. Is it really sustainable? There is a breaking point where our resources will not be able to sustain our level on consumption. I would rather address the issue now before we reach that point. If we do it now, we have some time and flexibility to put in place an effective solution rather than some type of ad hoc solution like we are doing now with this global crisis.

WHAT'S A NUMBER?

Having career batting average of .310 may get you into the Baseball Hall of Fame. $10,633,206,380,182.84 was our national debt on January 27, 2009. A cholesterol level less than 200 is ideal to decrease your risk of heart disease. 380 parts per million (ppm) is the current level of carbon dioxide in our atmosphere. Unfortunately, an ideal level is 350 ppm or less. If this level remains the same or increases, we will be unable to stop or reverse global warming. At 450 ppm, we will have catastrophic changes in our climate. Fortunately, like high cholesterol, if you catch it early enough, you can prevent the condition from worsening and you may be able to reverse it. Hopefully, we can catch it early enough by reducing this number below 350 ppm. We can start at home by recycling, driving less and buying locally and, in Washington, by demanding Congress to pass a comprehensive bill to stop global warming. Alternatively, we can do nothing because it is just a number. What is the worse that can happen? 1.877 billion children who live on this planet would rather not find out.

Tough Love: Hard Decisions Need to be made Now!

I continue to hear how eerily similar our financial crisis is to Japan's in the 1990s. Unlike Japan, we want to avoid ten years of stagnant growth that followed. The way to avoid repeating the same missteps of the Japanese government is to invoke tough love on the banks. We have to let banks go under that are not financially able to operate without government subsidies. Everyone argues that this will put us into a deeper recession. Unfortunately, if we do not do this, we may be facing 10 years of slow growth with a huge bill to payoff in the future. Some times we have to make hard decisions that will cause short term pain. We have developed as a nation a mind set of delaying negative outcomes; however, this behavior only postpones and sometimes worsens the inevitable negative result.

This same mind set has been applied to fighting global warming. We continue to: (i) ignore the science; (ii) make arguments that if we take certain action now, it will negatively impact our economic growth; or (iii) search for that magic bullet that will solve all of our environmental woes without changing our life style, which seems similar to someone who is trying to diet by taking a weight loss drug while continuing to eat the same amount of food that made him or her overweight in the first place. We are unwilling to limit our voracious appetite to consume and reevaluate our lifestyle. Unfortunately, like the future of our economy, we are creating a future with significant negative destructive consequences. Continuing this course will result in reduction of the global GDP by 5% to 20% in the future. More importantly, this will impact how we live in the future with less land and more chaotic weather.

Similar to the banks, we need have some tough love here on our consumer habits and our lifestyles. We need to make some tough decisions that might impact our daily lives, such as driving less, consuming products that are in season, and reducing what we purchase. One could argue that we will negatively impact our current economic growth if we do all of this; however, if we do not do it, we will negatively impact our economic growth in the future more significantly. In the end, by invoking this tough love and changing our habits, this will benefit us and the economy in the future. As a parent, I do not like using tough love; however, in the end, sometimes that is what is needed to ensure my kids grow healthy and lead a balanced life. The President of the United States, as a parent, should invoke this tough love of this nation to make certain we and the environment have a healthy and balanced future.

How much can we really borrow?

I was listening to a podcast on NPR's Planet Money. They were discussing the debt to GDP ratio. Currently, the US is at 41%; however, after this additional round of government capital infusion into the economy, this ratio could shoot up to 90%. That is within the debt stratosphere of countries like Greece and Italy. There are a lot of things about Greece and Italy that I wish America would incorporate; however, having the same debt ratio is not one of them.

What does this mean to the US? It will become more costly for us to borrow from countries and other investors. It is true that we had higher levels in the past. In fact, after the World War II, the US was at a debt to GDP ratio between 120% and 140%; however, most of the borrowed money came from within the US, not outside. The concern is that the more we borrow, the more we are dependent on other countries and foreign investors loaning us the money. For America's economy and general security, this is not be a good situation.

During the same day I heard this podcast, I attended a Green Jobs Forum. My Congressman was talking about all of this investment in the green economy. He stated that the money for this investment would come from foreign investors because everyone wants to invest in the US government because it is the safest place for investment. This might change as we continue to spend and borrow, which will push the country's debt closure to 100% of its GDP. As result, we will become a more risky investment and, therefore, we will have to make government securities more attractive for investment by offering a higher rate of return, which will cost America more money to borrow money. This is similar to a bank charging a higher interest rate to a person that has a lot of debt. The US government will have to make tough choices on where to spend this borrowed money as this spigot of cash slows down to a drip and its "water" bill increases. In addition, the US government will need to reevaluate if it should be so dependent of foreign investors.

Unfortunately, as the US government becomes more fiscally prudent and more conscious of who is investing in this country, the victim here may be the investment in green technology because it would not be viewed as an immediate need for the country. This would be a mistake. We cannot lose our focus on the future rate of return for investing in green technology now. The key is that we need to be smart about our investment and spending in this area. Investing in green technology will not only benefit are economic future but also the future of our environment. Unlike my current investments, that would be a very good rate of return.

It's Fundraising Time with NPR

It seems that every three months our favorite NPR program is interrupted by a fundraiser. This also happens on another non-profit music station in my area. Like many of you, I get frustrated and bored in hearing over and over again about how valuable the station is to our lives and what would we do without it. In response, I change to another station until the program resumes. I am a member of one of the stations; therefore, I do not feel guilty about not donating at the moment when I hear that NPR mantra, "A World Without NPR." However, this fundraising season made me think about how we raise money and determine what "cause" is important to us. I also wonder if the financial sector should start their own fundraisers. For example, one of the wall street firms could ask for more money to support the bonus packages of its executive team. For only $2,000 a day, you get an mug with the firm's logo along with a tea-shirts that states, "My government donated $100 million and all I got was this lousy t-shirt!"

In all seriousness, there are good causes out there to donate your money and there are excellent charities to commit your time. In addition, it provides an invaluable feeling that you are helping out people who can't help themselves. This is the reason why I dedicate my spare time to protecting the environment. It is not as much time I would like to donate and perhaps it has no impact; however, it gives me hope that my small effort has a positive impact. Maybe my efforts and message gets to someone who can make a significant difference to the rest of the world, such as my congress person or the president of the United States or a business leader of a multinational corporation. This may be wishful thinking, but it does motivate me to keep on pushing the issue.

It is a shame that I can't have a fund raiser for Earth. I know, many environmental organizations have fundraisers. But, I am talking about a fundraise only for Mother Earth and not for the organization itself. The message, "what would your life be without Earth," would have more of an impact than the message,"what would your life be without NPR." For just $1 a day, you get to live on this planet and enjoy all of its wonders, including free air to breath. What a bargain! Now that is something for which I would donate my money and I would not turn the radio dial to another station.

A Different Type of “Meltdown “

There has been a lot of commentary and analysis on how we could have avoided this “global financial meltdown”. Unfortunately, there is another global meltdown occurring, which has been ignored and will make this economic crisis seem like a minor inconvenience in comparison. The Intergovernmental Panel on Climate Change predicts damages caused by climate change could cost developed countries up to 2% of its GDP. The United Kingdom’s Treasury Department in its 2006 report on the economic impact on climate change concluded that if we do nothing, the overall risk and cost will be equivalent of the world losing between 5% and 20% of its GDP. Therefore, the new Congress needs to pass within the first 100 days a bill that aggressively fights global warming and it needs to include in any economic stimulus bill funding for the development and growth of alternative energy and the upgrade and expansion of public transportation. Unlike the “global financial meltdown”, once the polar caps are melted, there is no way of restoring them. That would be a meltdown from which we could never recover.

Introduction

Today is my first entry. This blog is designed to address two important issues facing this country and the world, the environment and the economy. One appears to be an immediate crisis and the other is assumed to be a crisis in the distant future. Unfortunately, both are a crisis which require equal attention. There needs to be a balance between our economy and the environment. Without the environment, we cannot have an economy. In contrast, with or without an economy, there will be an environment. I can only hope that our leaders get this message.