Andrew Simms's Blog, page 10

July 3, 2013

We keep moaning about population, but ignore consumption habits

Sharing planet Earth's finite resources in a better way is a more practical way of managing the needs of a rising population

At any public meeting on the environment over the past decade , there's one question that almost always came up. It is a variation of 'Why will no one talk about population?' As a result, population is discussed endlessly while people grumble that no one ever talks about it.

The same oddly circular conversation happened in the Observer Review section in an article relating to the new book, 10 Billion, by Stephen Emmott, head of Microsoft's Research Lab. Five full pages of extract and interview warned, 'we're ignoring … the biggest crisis in human history.'

Yet it's hard to ignore, in the circumstances.

We have World Population Day, the UN Population Awards, numerous organisations dedicated specifically to the issue, and just two weeks ago the UN published its latest, and widely reported, update on global population figures.

Government policies around the world on population are untiringly controversial and debated, from countries in Europe (like Germany) worried about declining populations, to those in Asia (like China) worried about the opposite.

Emmott, of course, does not appear to be anti-people, just concerned about the impact we're having on the planet, with climate change being key. He covers what is now very familiar ground describing human pressure on resources, talks generally about the need to reduce consumption, identifies rising population more specifically within poorer countries and suggests that we could be facing a world of 28 billion people by the end of the century (a dangerously loose and wildly unlikely figure to use for someone with a scientific reputation).

It's welcome to have such a senior, corporate figure concerned about the prospects for life on earth. The tone and alarmism echo Paul Ehrlich's 1968 classic, The Population Bomb.

You might expect from someone associated with a dominant, hard-nosed global corporation like Microsoft, a hard-nosed strategy and business plan to sort the problem out. But, having lamented 'the debate we urgently need,' on 'how billions more want to live, behave and consume,' it was frustratingly difficult across five pages to find a single, specific, constructive proposal about what we might do differently.

New energy from 'artificial photosynthesis', which Emmott mentions as one possible solution, might have novelty appeal but, you suspect, might be some way off from solving immediate problems. It was disappointing too because less novel but far more proven approaches are common knowledge. We've known for decades that universal primary education for women and good health services will do more to relieve the pressure for large families than any fiddling in the 'magic bullet' food lab.

Three years ago the science writer Fred Pearce, a knowledgeable and long-term observer of climate change and other natural resource issues, published a book called Peoplequake.

Although expecting population to grow (and level off later in the century), Pearce came to quite opposite conclusions. Future historians, he wrote, would look back on this period in history as marked by a, "dramatic decline in fertility and the transformation of the role of women in society." In recent years, writes Pearce, fertility rates have generally fallen off a cliff.

If there is an explosive problem, he wrote, it is to do with consumption, and it is a problem for a wealthy minority of humankind. The poorest three billion people on earth, short of half the world population accounted for about 7% of carbon emissions, while conversely, the richest 7% of people accounted for about half of all emissions.

More recently still the economist Danny Dorling wrote Population 10 Billion, accepting head-on that rising number. But Dorling too, like Pearce, is more sanguine. And, like many before, he makes the point that with better, much more equal distribution of resources, managing the needs of a rising population is far from impossible. 'There is more than enough to go round,' he writes.

The last point is no throw-away line. Current, extreme global inequality makes eradicating poverty impossible within planetary boundaries (and therefore impossible per se). That is because relying on trickle down, within a growth model already transgressing those boundaries, and in circumstances of great inequality creates the paradox of the already rich and over-consuming having to consume ever more for ever fewer benefits to reach the bottom of the income pile. This might be tastelessly political for some, but sharing better the resources we have to enable a rising number to thrive on a finite planet is also just plain maths, physics, biology and chemistry. An asymmetric consumption explosion remains our great problem.

Last week, President Obama waded into the climate debate saying, "We don't have time for a meeting of the Flat Earth Society ... I am here to say we need to act." A few years ago speaking in Cairo he said, 'Given our interdependence, any world order that elevates one nation or group of people over another will inevitably fail.' Apply that principle to the economy everywhere and we could solve several problems at once.

Onehundredmonths.org

Climate changePopulationSustainable developmentAndrew Simms
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Published on July 03, 2013 04:40

June 28, 2013

So shale gas could meet demand for 40 years. What then? | Andrew Simms

Britain's new gas capacity is much hyped, but the fracking path will most likely lead to the lights going out regardless

For a moment, let's take the shale gas evangelists at their word. Britain has stumbled on a pile of carbon cash in its cellar, the energy equivalent of finding a stack of ugly but valuable china in the attic. With North Sea oil and gas in decline and global markets volatile and pricey, suddenly there seems a sure way to deliver the government's promise of building 40 new gas power stations. By odd coincidence, newly estimated gas resources in the Bowland shale could meet our demand for gas for 40 years.

Wonderful for some, but then what? Fast forward to July 2053 and where will we be? We will have a household and national energy infrastructure hopelessly dependent on an exhausted fuel source, and a climate pushed past the point of no return, warming catastrophically due to the burning of fossil fuels. The government's own committee on climate change has pointed out that this would likely put the UK the wrong side of legally binding commitments to reduce emissions.

Communities that took the £100,000 bribe to accept a gas-fracking well and the parsimonious 1% of revenue will end up feeling like every other community around the world touched by the resource curse: wondering what happened to them. They will be left with the environmental legacy of extraction, locked in to ever costlier fossil fuels, precious little in pocket and with children growing up in a world marked by climatic upheaval.

Worse still, if we believe the Ofgem warning about an energy supply crunch due in 18 months, none of this much-hyped new gas capacity will be ready in time to help regardless.

And there are many other reasons for caution. Policymakers have been hypnotised by the impact on gas prices of shale developments in the US, but this stands to be a misleading and short-lived result of an immature market. There, a gas dash has flooded the market with new supply, pushing prices down. But unlike conventional gas, shale gas fields decline more rapidly, and there's evidence that in the US companies have concentrated on "sweet spots", whereas the broader fields used to justify upbeat estimates are much less productive.

When this was realised, one of the largest American fields, the Marcellus shale in the eastern US, saw an 80% downward revision of its undiscovered, technically recoverable reserves. Similar bad news comes from other hyped new sources such as those in Poland. Industry analysts Bernstein Research concluded that "data from Poland's shale gas wells validate our concerns about European shale gas: poor flow rates in over-pressured, hard-to-develop shales".

If climate change and the economic vulnerability of fossil fuel dependence are insufficient reasons to think twice about deepening our fossil fuel addiction, perhaps we should also remember that, wherever the oil industry treads, conflict and corruption tend to follow. From the Middle East to Africa a story of red blood, black carbon and cold money repeats itself.

But it doesn't stop there. Louisiana, dubbed America's "petro-state", hasn't escaped the resource curse of oil and gas. The Washington Post pointed out not long ago that, instead of prosperity, the industry had brought "dependency, corruption and an indifference to environmental damage". And, far from improving the lives of its people, that state has some of the worst health and social indicators, such as violent crime, in the country. For all the counties sitting on top of shale beds, this may be further cause to pause before taking the shale pound.

The alternative for Britain has been clear, yet ignored, since the need to stimulate the economy after the financial crash of 2007-2008. It involves: large-scale investment in a green new deal; a carbon army of green-collar workers to make the nation's draft buildings energy efficient; the building and maintenance of an efficient, more decentralised and renewably powered energy system; the remaking of our transport system – and more.

Obvious efficiency measures such as overnight electric light curfews in city office blocks might help, sending an important signal, and the government could impose a demand reduction obligation on the utilities too. This is not the embarrassing failure of the current small insulation programme dubbed a green deal, but a bold plan for necessary and rapid transition to a modern, more secure and convivial economy. It stands a far better chance of keeping the lights on too.

Shale gas and frackingEnergyFossil fuelsGasAndrew Simms
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Published on June 28, 2013 07:24

May 30, 2013

Why did the 400ppm carbon milestone cause barely a ripple? | Andrew Simms

Newspapers, for whom marking round numbers is the easiest excuse to report an issue, were mostly disinterested

We are pattern-forming creatures which may explain the round number theory of history. That is our habit of seeking order and meaning in easy round numbers where there may be none. Whole nations grind to a halt to celebrate a royal anniversary arbitrarily divisible by the number 10 or five. Conversely, at the turn of the first Christian millennium an apocalypse was expected to mark the neatly rounded year 1000AD.

When it failed to materialise, doom-laden millenarians claimed that they weren't wrong, but had failed to allow for the lifetime of Christ. The end was due in 1000AD plus 33 years. We don't learn. Remember the febrile anticipation approaching 2000AD? In spite of the fact that in other calendars it was a much less attractively round number – the Buddhist year 2544, and the Hebrew calendar's year 5760-5761.

Irrationally we give space to big round numbers, inject them with meaning and use them to reflect or trigger alarm. It was odd, then, that when a round number came along, symbolic of a genuine threat to stable civilisation, one that was worthy of reflection if not a little alarm, it caused barely a ripple. Newspapers especially, for whom marking round numbers is the easiest excuse to report an issue and fill pages, mostly yawned with disinterest.

On the 10 May readings taken at the Mauna Loa Observatory in Hawaii were made public. They showed that the concentration of carbon dioxide in the atmosphere had passed 400 parts per million (ppm). A twitter feed, @Keeling_curve, from the Scripps Institution of Oceanography at UC San Diego had been daily counting-up to this point.

To put the number into perspective, remember the words of James Hansen from 2008: "If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted … CO2 will need to be reduced … to at most 350ppm."

No centenary or diamond jubilee then, just a clear round number on a path leading away from the climate which was the nursery to civilisation to a future, if unchanged, of certain greater chaos and upheaval.

What priority did Britain's national newspapers give this the following day, how did they rank it alongside other important events? The front pages, an obvious test, made interesting reading.

The Mirror, with glorious abandon, ran with an offer for a free trip into space, and something about the long-running Savile scandal. The Sun, more earthbound, led with a free trip to Legoland and something about retiring football manager Alex Ferguson. The Express had something about pensions and the Daily Mail warned about "deadly drugs for sale on Amazon". The Times ran with something about the Metropolitan police, and the Telegraph with a story about a No 10 adviser. The Financial Times stayed in its comfort zone with another tale of corrupt banking. Even the Guardian, which did cover the story inside its paper and online, gave front page priority to a report on how horsemeat was still galloping out of control through our food chain. Only the humble Independent splashed the story on its front page.

Such lassitude concerning events that determine our chances of collective, convivial survival, may explain why the British establishment in the form of the House of Commons Transport Committee saw nothing wrong in picking the same day to call for the expansion of aviation – the transport mode most targeted to wreck the climate.

This lack of consensus on media and political priorities contrasts with the scientific consensus, with various studies of peer-reviewed literature demonstrating vanishingly little disagreement over the reality and critical importance of addressing human-driven global warming.

Scientists at the University of California, Berkeley recently co-ordinated a "consensus statement", signed by over 500 scientists from around the world, that concluded our current economic path is rapidly taking us to a tipping point, and that the result will be substantial degradation of human quality of life.

Beyond that consensus, out of sight is out of mind. But we could tackle that with one simple innovation. The press and broadcast media daily report a handful of dull statistics. We're told about exchange rates and the performance of stock markets in a way that reinforces a prejudice that such things are what truly matter. Why not meet the real world half way, and add a daily notification of the rising CO2 level to every daily paper and major news broadcast? It won't cost extra, will be harder to ignore and the price of doing so will be very high indeed.

www.onehundredmonths.org

Carbon emissionsClimate changeNewspapersNewspapers & magazinesAndrew Simms
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Published on May 30, 2013 07:37

May 1, 2013

Endless growth will not deliver a healthy economy | Andrew Simms

The UK must seize this opportunity to create an economy that can flourish without addiction to relentless expansion

To judge the health of the economy by whether growth rises or falls by a fraction of 1% is like measuring the height of the tide to see whether the ocean is thriving, or sick and polluted. Regardless, in the eyes of commentators, a mere 0.3% increase in growth granted a reprieve from the harshest judgment on the economic strategy of the chancellor, George Osborne, and by extension the whole austerity programme of the coalition.

It's ironic that lust for unsustainable growth of returns in the financial sector destroyed conditions for significant wider growth in the economy. Now all mainstream politicians yearn for nothing more than its return.

What passes for meaningful public debate about economics today concerns almost entirely who has the most convincing plan to restore growth. Who, in other words, can exert the strongest lunar pull to deliver a high tide, in the unscientific hope that this will be the same thing as ensuring a healthy, thriving ocean.

In this view, it doesn't matter if it means ripping up checks and balances in the planning system, or the inefficient extraction, burning and deeper dependence on fossil fuels. It's all about the rising tide. If you could seed the oceans with something toxic that would somehow aid the gravitational pull of the moon, in the current climate that too probably would be justified as a price worth paying.

The International Monetary Fund (IMF) makes economic predictions that are routinely wrong. Nevertheless their pronouncements are reported with general credulity and governments hang on their words, fearing criticism and boasting about praise. Most recently the IMF estimated that the global economy will grow by a modest, but steady 3.3%.

Not great, but not awful, the world nodded and attention moved on. But wait, at that rate the economy will double in scale in around 20 years. To support the economy's current scale already requires the accumulation of ecological debts – using at least 50% more resources and producing more waste than ecosystems can restore and safely absorb.

But, comes the standard response, technology will fix it, the service economy will replace the material economy, we'll get richer, richer societies produce less pollution, don't they? (They don't).

In Duncan Clarke's new book, The Burning Question, he marvels at how globally, with minimal variation and in spite of immense technological and cultural change, carbon emissions have risen tenaciously on average at around 2% per year since the 1850s. The marvel is that we might expect anything else with an economic model addicted to growth and powered by fossil fuels. Any local gains in efficiency get lost at the aggregate level, drowned out by rising consumption.

On a recent Radio 4 programme about the economy hosted by Stephanie Flanders, callers to the programme asked both: why did we need growth anyway, and was it compatible with a world of finite resources. The questions themselves seemed not to compute with the expert panel, so far did they lie beyond the boundaries of acceptable, polite consensus. Here is an inability to see and comprehend a fundamental problem, at both the media and expert level, that matches and surpasses the collective blindness to financial excess and the shadow banking system that prefigured the crash of 2008.

Another report in April, by the LSE and thinktank Carbon Tracker, reminded us that to preserve a climate fit for civilisation we need to leave the great majority of fossil fuels in the ground. Even one of the oil company Shell's own advisers admits there are just two practical climate strategies: leave the carbon in the ground, or use it and put it back there – while admitting that the latter won't work, leaving really just one strategy.

The government has a huge opportunity with the new consensus on the importance of infrastructure spending. The UK could lead the world by installing at speed the infrastructure for an economy of better, not more, one that can flourish without being addicted to relentless economic expansion. Engineering endless growth, on the other hand, will be like cheering a tide that never stops rising – initially impressive before reality sets in.

One hundred months

Green economyEconomic growth (GDP)Economic policyEconomicsAndrew Simms
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Published on May 01, 2013 04:46

April 25, 2013

'The private sector is superior'. Time to move on from this old dogma | Andrew Simms and Stephen Reid

From healthcare costs to train company subsidies, the evidence for the notion that efficiency requires private ownership is thin

Towards the end of 2012 a telling interview with the head of the London Olympics, Lord Coe, was published in a national newspaper. "I actually don't believe in big government," said Coe "and half the time I'm never quite sure I believe in government, generally." Dumbfounded, the interviewer Decca Aitkenhead responded: "But without government we wouldn't have had the Olympics." Coe conceded, "No, that is true. That is true."

The myth of private sector superiority says that the private sector is efficient and dynamic, the public sector wasteful and slow; that the more we can get the private sector to run things the better. That the head of a massive public enterprise like the Olympics can so blithely discount what underpins it demonstrates its reach. In fact, while billboard adverts said we had commercial sponsors to thank for every minute of pulsating Olympic action, as little as 6% of costs were met from sponsorship.

The myth is effectively government policy. In 2010 David Cameron spelled out his priorities for government which were to use, "all available policy levers," to make it easier for the private sector to "create a new economic dynamism". The following year Cameron announced that he was "taking on the enemies of enterprise", which included the "bureaucrats in government departments" and the "town hall officials". The chancellor, George Osborne, claimed it wasn't just that the one sphere was generally better than the other. He argued that the public sector was "crowding out" the private sector and needed cutting back.

But, what of the evidence of private sector efficiency? Public subsidy to Britain's railways rose dramatically following privatisation. Famously, the failure of Metronet Rail's contract to work on the infrastructure of London Underground was estimated to have cost the public purse more than £400m. Meanwhile, it was recently revealed that the single remaining state-run mainline rail service requires less public subsidy than any of the 15 privately run rail franchises in Britain.

Healthcare is typically much more expensive in countries with heavily privatised systems. As the figure below demonstrates, in 2008, the United States, with predominantly private healthcare, spent around $7,000 per person on health. The NHS spent around half that sum per person, yet, judging by outcomes such as life expectancy at birth, the NHS did just as well.

Some of the UK's largest private care home providers effectively bankrupted themselves and had to be saved by public intervention. Similarly, the banking system – which underpins our economy, and whose demands for financial returns determine the broader shape and nature of the economy – is only standing today due to monumental public backing after near complete failure of its investment model. Private finance is much more expensive than direct public investment: the cost of capital under the heavily used private finance initiative was estimated by the Financial Times in 2011 to have added £20bn to the taxpayers' bill (paywalled link).

Of course, the choice a society has to meet its needs is not between just the state or private sector. The "core economy" describes work done in homes, neighbourhoods and communities that goes unpaid, but upon which wellbeing, resilience and conviviality of society largely depends. Costed at even a basic rate, the value of that work would vastly outstrip spending on formal care. Voluntary, mutual, cooperative and social enterprise models all represent important alternatives to either traditional private sector or state provided goods and services. Although more recently lip service has been paid to the idea that the provision of services should be opened up to these kinds of providers, in reality it is the large private suppliers – the likes of Serco, Atos and Capita – who are set to replace direct provision by the state.

Private sector dynamism versus public sector inefficiency has been the dominant political narrative of the last few decades. It has supplied the excuse for repeated, one-directional upheaval in many of the services that we rely on, and which are essential to our quality of life. At best, evidence of private sector superiority is missing. At worst, such lazy assumptions can cost lives as well as money. The public sphere in its broadest sense can be more efficient, more effective and better for human dignity. That is not to argue against innovation. On the contrary, innovation is desperately needed to reintroduce the human element to how things are run.

• This mythbuster is part of a series co-ordinated by the New Economics Foundation and the Tax Justice Network. You can read the full length piece here

EconomicsPrivate finance initiativePublic services policyAndrew SimmsStephen Reid
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Published on April 25, 2013 03:22

April 17, 2013

The decline of the Tesco empire | Andrew Simms

After the failure of its US arm, the chain's business model suddenly looks fundamentally flawed

'I'd rather not talk about it," said Tesco's chief executive Philip Clarke, when asked to explain the company's failure in the US on the radio today. Clarke was obviously feeling the £1.2bn pain of quitting the store's once bold venture that grew to 199 American outlets.

Yet if he doesn't want to talk about the difficult issues facing Britain's biggest retailer he may end up in a vow of monkish silence, because they are backing up. Look at a map with countries coloured where Tesco is present. Its spread is reminiscent of the British empire. Covering Ireland in the west and reaching out to China in the east, the store's expansion has for a long time looked unstoppable. But now the empire is troubled. Having already withdrawn from Japan and shifted to a more cautious gear in China, admitting defeat over North America is reminiscent of another empire – Rome. Once it had passed its peak it suddenly looked vulnerable.

Tesco's big overseas push came in part in response to the saturation of the British market. Already twice the size of its nearest rival and taking £1 in every £3 spent on groceries, there were only so many more stores the country could take. Although Tesco had a bank of land that meant it could have doubled its floor space, much of this was strategic, to frustrate the chances of its competitors. So not too much can be attached to its decision to sell off more than 100 sites.

More significant is the growing sense of a once bulletproof self-confidence wavering, both in its own business decisions and its reading of the consumer. During the horsemeat scandal it passed the buck down its supply chain, with a "plausible deniability" excuse. It was disingenuous given Tesco's pride in its exacting management of suppliers: the relentless cost-cutting of suppliers was always going to lead to corner cutting. It then sought to change the story with those clever, but frankly odd,, half-poetic public apologies. Tesco's 51% fall in pre-tax profits can't be unrelated. A recent decision to allow poultry providing the supermarket with eggs to be fed with GM grain was also a wrong move, seen as making it harder for shoppers to exercise choice in a way that feels uncomfortable.

The real danger for Tesco is that once you're seen to have lost your touch, everything you do gets interpreted differently. In the past, reaction to the store was often that you might not like them (industry polling revealed customers found Tesco one of the most miserable supermarkets to shop in), but that they were good at what they did. When that lustre goes, however, we're just left with a large, unpleasant shop.

No doubt, given its sheer size, incumbency and the unchanging weakness of regulators, Tesco will be able to occupy any emerging retail formats and fashions. But if there is a sense that they've lost a deeper plot, this may be just decoration on a longer slide. In turn, that shifts the balance of power in the numerous, continuing local battles against the big stores.

While Tesco provides a sort of constrained convenience, in reality it has a business model that leaves us all poorer and the economy less resilient, by sucking spending and social contact out of communities, by hollowing out supply chains and leaving clone towns and ghost towns in their wake.

There may be a deeper reaction still that increasingly works against them. We have entered a period of great economic questioning. Yet supermarkets offer a distorted map of a flat, unchanging world without seasons or reasons to question how we do business, where an already over-consuming population is encouraged to purchase ever more, in such a way that we end up wasting one third of the precious food we buy.

Pictures of smiling people and happily grazing animals on packaging bear as much relation to reality as did the joyous workers and natural abundance in Stalin-era paintings of Soviet realism. It's a world of consumption largely detached from consequences, and the processes of production that fill the regimented aisles. That also maybe something that Philip Clarke would rather not talk about, but I think a lot of other people are ready to.

TescoSupermarketsRetail industryAndrew Simms
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Published on April 17, 2013 11:42

April 2, 2013

UK rewards polluters and locks up people who want to save the planet

The climate campaigners should be given a medal for their outstanding bravery and public service, not prison sentences

What if, instead of giving Marie Curie and Alexander Fleming Nobel prizes for their life-saving work on radiation and penicillin, they'd been thrown in jail? Or, instead of being awarded the Grand Croix of the Légion d'honneur for his work on the germ theory of disease, Louis Pasteur was imprisoned like Napoleon on Elba?

It would be perverse to return the favour of great, public works by depriving people of their freedom. Yet that is just what we're doing in Britain right now. The contributions of the people above were remarkable, but how much greater is the challenge of preserving a readily habitable climate, and how thankful should we be to those prepared to throw their life's energy and creativity at the task?

The answer according to the British establishment currently is not at all. Their response is the kind of gratitude a Caesar might hand-out to an innocent messenger on receiving unwelcome news. He throws them first into court, and then possibly into prison. In early March many celebrated when the state-backed French energy company EDF dropped a £5m civil lawsuit against climate campaigns who occupied one of the company's gas-fired power stations for several days in 2012.

The case was seen as an attempt to intimidate and therefore frighten-off other campaigners, and the victory therefore an important signal. Less noticed, however, was that many of the campaigners still face criminal charges in relation to the occupation. Faced by a magistrates court, with no jury to appeal to on the wider issues, several pled guilty to charges of aggravated trespass. Due for sentencing on 6 June, they could be the first people in the UK sent to prison for acting to prevent global warming.

As part of the No Dash for Gas campaign, their argument for taking action is quite simple. EDF and several other big energy companies, actively supported by the chancellor, George Osborne, are set to lock the UK for decades into a new generation of 40 gas powered energy stations. They point out that even according to the government's official advisers, the committee on climate change, this would be technically illegal, preventing the country from meeting its legally binding greenhouse gas reduction targets.

The reality proves murkier than a polluted puddle in a tar sands field. Since leaving BP, former CEO John Browne became managing director of the private equity firm Riverstone Holdings LLC, which is itself part-owner of Cuadrilla Resources Ltd.

The latter is part of the push for a big expansion of shale gas development in the UK. After already handing out tax breaks in 2012, in his March 2013 budget (pdf) Osborne announced 'a package of support for the UK shale gas industry,' including hints that the compliance of affected local communities would be encouraged with some form of remuneration.

Both job creation and energy security were used by the Treasury to argue their case. Yet a study by Cambridge Econometrics comparing dependence on gas to large scale investment in offshore wind, found that looking forward to 2025, taking the wind option would create 100,000 more jobs and bring broader economic benefits, not to mention being more climate friendly.

In terms of energy security, the signs across Europe and even to some extent in the US, are that backing gas now, rather than a range of renewables will be a strategic folly, a bit like investing in a nationwide network of fire signal-beacons at the dawn of telegraphy. Even in the US gas is being over-hyped, and in Europe especially so.

In economics, as in life, getting the right outcome is often a matter of having the right incentives. Here they seem a little awry, or as an economist might say, perverse. A group of people attempting at great personal cost to promote a rational, life-preserving, economy-enhancing, job-creating energy policy end up facing prison and having their own life and employment chances severely curtailed.

Whereas a carbon intensive energy sector which, to their own huge profit, are set to lock the UK into a costly, polluting and ultimately doomed technology, get the nation's economic policy written to advance their cause. For John Browne, a cheerleader for the sector, he needn't worry about jail, his reward for helping put the UK and planet in peril was to be sent somewhere else entirely, to the House of Lords.

But it won't be long, I believe, before society sees that instead of being weighed down with a criminal record, the climate campaigners should be given a medal for their outstanding bravery and public service.

Onehundredmonths.org

Renewable energyEnergyEDF EnergyClimate changePollutionShale gas and frackingFossil fuelsGasAndrew Simms
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Published on April 02, 2013 22:00

UK rewards polluters and locks up people who want to save the planet

The climate campaigners should be given a medal for their outstanding bravery and public service, not prison sentences

What if, instead of giving Marie Curie and Alexander Fleming Nobel prizes for their life-saving work on radiation and penicillin, they'd been thrown in jail? Or, instead of being awarded the Grand Croix of the Légion d'honneur for his work on the germ theory of disease, Louis Pasteur was imprisoned like Napoleon on Elba?

It would be perverse to return the favour of great, public works by depriving people of their freedom. Yet that is just what we're doing in Britain right now. The contributions of the people above were remarkable, but how much greater is the challenge of preserving a readily habitable climate, and how thankful should we be to those prepared to throw their life's energy and creativity at the task?

The answer according to the British establishment currently is not at all. Their response is the kind of gratitude a Caesar might hand-out to an innocent messenger on receiving unwelcome news. He throws them first into court, and then possibly into prison. In early March many celebrated when the state-backed French energy company EDF dropped a £5m civil lawsuit against climate campaigns who occupied one of the company's gas-fired power stations for several days in 2012.

The case was seen as an attempt to intimidate and therefore frighten-off other campaigners, and the victory therefore an important signal. Less noticed, however, was that many of the campaigners still face criminal charges in relation to the occupation. Faced by a magistrates court, with no jury to appeal to on the wider issues, several pled guilty to charges of aggravated trespass. Due for sentencing on 6 June, they could be the first people in the UK sent to prison for acting to prevent global warming.

As part of the No Dash for Gas campaign, their argument for taking action is quite simple. EDF and several other big energy companies, actively supported by the chancellor, George Osborne, are set to lock the UK for decades into a new generation of 40 gas powered energy stations. They point out that even according to the government's official advisers, the committee on climate change, this would be technically illegal, preventing the country from meeting its legally binding greenhouse gas reduction targets.

The reality proves murkier than a polluted puddle in a tar sands field. Since leaving BP, former CEO John Browne became managing director of the private equity firm Riverstone Holdings LLC, which is itself part-owner of Cuadrilla Resources Ltd.

The latter is part of the push for a big expansion of shale gas development in the UK. After already handing out tax breaks in 2012, in his March 2013 budget (pdf) Osborne announced 'a package of support for the UK shale gas industry,' including hints that the compliance of affected local communities would be encouraged with some form of remuneration.

Both job creation and energy security were used by the Treasury to argue their case. Yet a study by Cambridge Econometrics comparing dependence on gas to large scale investment in offshore wind, found that looking forward to 2025, taking the wind option would create 100,000 more jobs and bring broader economic benefits, not to mention being more climate friendly.

In terms of energy security, the signs across Europe and even to some extent in the US, are that backing gas now, rather than a range of renewables will be a strategic folly, a bit like investing in a nationwide network of fire signal-beacons at the dawn of telegraphy. Even in the US gas is being over-hyped, and in Europe especially so.

In economics, as in life, getting the right outcome is often a matter of having the right incentives. Here they seem a little awry, or as an economist might say, perverse. A group of people attempting at great personal cost to promote a rational, life-preserving, economy-enhancing, job-creating energy policy end up facing prison and having their own life and employment chances severely curtailed.

Whereas a carbon intensive energy sector which, to their own huge profit, are set to lock the UK into a costly, polluting and ultimately doomed technology, get the nation's economic policy written to advance their cause. For John Browne, a cheerleader for the sector, he needn't worry about jail, his reward for helping put the UK and planet in peril was to be sent somewhere else entirely, to the House of Lords.

But it won't be long, I believe, before society sees that instead of being weighed down with a criminal record, the climate campaigners should be given a medal for their outstanding bravery and public service.

Onehundredmonths.org

Renewable energyEnergyEDF EnergyClimate changePollutionShale gas and frackingFossil fuelsGasAndrew Simms
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Published on April 02, 2013 22:00

March 14, 2013

Is a Tesco Giraffe still a Giraffe? When nice little companies get bought up | Andrew Simms

As feelbad companies take over smaller feelgood ones, consumers are finding it harder to express preferences

Tesco's purchase of the family-friendly restaurant chain Giraffe is the latest in a long line of big corporations with problematic reputations buying out smaller firms held in good regard by the public. And in Tesco's case, it follows the launch of the "artisan" coffee chain Harris + Hoole, which is up to 49% owned by the supermarket chain.

Both fit neatly with the supermarket's need to reposition itself in the public imagination. But the intention to introduce Giraffe outlets at some of its huge, impersonal Tesco Extra stores may appear odd to parents more used to visiting Giraffe restaurants on London's South Bank cultural centre, or in winding lanes of Brighton. It could be a very hopeful, or slightly desperate, attempt to humanise and rescue an otherwise depressing supermarket experience, increasingly challenged by online shopping. The purchase puts Giraffe into a special league of smaller feelgood companies taken over by larger feelbad ones.

Gordon Roddick, co-founder of the Body Shop, freely admits that with hindsight he should never have sold the business to global cosmetics giant L'Oréal, which was for years embroiled in controversy over animal testing. He considers it one of the great mistakes of his otherwise impressive career. "We made the very bad mistake of becoming a public company," he said. "It is the antithesis of becoming a human company." He wasn't alone. One by one, successful ethical brands have been subsumed into bigger firms for whom maximising financial returns, a legal obligation of the their shareholder model, means the single bottom line comes first.

Drink an Innocent smoothie now, and – once the increased stake is approved by competition authorities – about 90% of what you pour down your throat will be sold to you by Coke. Likewise, the formerly outspoken, counter-cultural treat of Ben & Jerry's ice cream notoriously fell into the hands of a company once synonymous with colonial trade, the Anglo-Dutch multinational Unilever. Fast food burger chain McDonald's flirted with the upstart, fresh sandwich company Pret a Manger, but sold its stake to a private equity firm. The organic food company Seeds of Change was bought by the confectionary giant Mars. It started out as an actual seed company, but in 2010 Mars closed its seed research centre.

Whatever you think of the science of carbon offsetting (many, myself included, find it dubious, or even counterproductive) Climate Care was a small, well-meaning business set up to channel finance from offsets to a range of green energy schemes. It got bought by investment bank JP Morgan and carbon absolutions were offered as an incentive on the purchase of petrol hungry luxury Land Rovers. The management then thought better of it, and bought themselves out from the bank to go private again.

Wholesome makers of "natural" beauty products such as lip balm from beeswax, Burt's Bees, was bought by a multibillion-dollar American food and chemical company called Clorox, best known for making bleach. While that other staple of eco-stores, toothpaste maker Tom's of Maine was swallowed up by Colgate-Palmolive. Green & Black's, pioneer of organic, fairly traded chocolate, has done the rounds, first being bought by maker of mass confectionery and sugary drinks Cadbury Schweppes, before that was taken over by American junk-food giant Kraft.

Rarely are the new lines of ownership obvious to the consumer, leaving most of us assuming we are supporting one, broadly progressive business model, when in fact we're ultimately supporting global corporations that dance to the tune of big finance, in turn driving inequality and underpinning the economy of the 1%. Where large companies see "progressive" brands as premium products, it is in their interest to keep prices high, leaving more ethical goods in a higher-price ghetto.

It matters, too, because it makes it harder for you and I genuinely to express our preferences, not just for a different product, but different models of ownership that have more than growth and profit maximisation written into their corporate DNA. Scale matters. Economies where power and market share are so concentrated become less resilient, convivial, responsive and open, and probably less innovative and interesting too. It raises what economists call "barriers to entry" to the market for others. Tougher competition rules and dynamic regulators should keep markets properly open.

More than ever today, diverse business models are needed to rebuild a better economy. As Gordon Roddick commented on the history of big corporations: "'It confirms my belief that closing down the Harvard Business School would be doing a service to mankind."

Retail industryEthical businessTescoAndrew Simms
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Published on March 14, 2013 06:00

March 1, 2013

Apocalypse? No. But unless we change tack, the planet is running out of time | Andrew Simms

How we can face the challenge of saving the environment without slipping into denial, despair or cynical profiteering?

After millennia of falsely predicting the apocalypse, humanity has become understandably flippant. There were so many threatened catastrophes in 2012, from rolling earthquakes to interstellar collisions and a misunderstanding of the Mayan calendar that the quips began to flow. "People are making apocalypse jokes like there's no tomorrow,' was a favourite.

But just because we've been wrong so many times before, does that mean we're safe forever? Or have we been lulled into a false sense of security, and do the timeframes involved disguise the scale of the risks posed to conditions for human civilisations?

Look back far enough and you'll see that very bad things do happen. The world has experienced five mass extinction events during which over 95% of marine species and 80% of four legged creatures died out.

The climate warmed during the gloriously named Paleocene–Eocene Thermal Maximum (PETM), driving one of Earth's more recent extinction events 55m years ago. Now we are living through a man-made mass extinction event.

The PETM was bad, but NASA climate scientist James Hansen notes that with global warming today, climate zones are moving about 10 times faster than they did during the PETM extinction. It's an indicator of the force and speed of the unintended consequences of our economic activity, and something which makes it impossible for many species to adapt. And left unaddressed that could be the case for humanity too.

Homo Sapiens may feel smugly secure in our abilities, but its worth remembering we've only been around for a humble 300,000 years or so. The dinosaurs lasted for about 165m years, and we seem to be trying hard not to outlive them.

Vast subsidies pour into the fossil fuel industries, and in the UK new tax breaks have encouraged investment at a 30-year high into North Sea oil and gas exploration and production.

That is in spite of the best science available suggesting that we can only afford to burn around a quarter or a fifth of proven reserves if we are to avoid potentially runaway global warming. And, instead of climate campaigners being applauded for their actions, they are being hounded with £5 million law suits.

My new book, Cancel the Apocalypse, is about how we can face this challenge positively, without slipping into denial, despair or cynical profiteering.

With the right approaches we can all benefit from re-engineering our financial, food, transport and energy systems. We can re-imagine the shape of our high streets and the pattern of our working weeks to improve the quality of our lives and lessen our burden on the biosphere. But this can only happen if we let go of the tenacious economic dogma that has taken root in recent decades. Perversely, as evidence mounts of its failure to spread the benefits of enterprise, its lack of respect for its natural resource base, or even its ability to succeed on its own terms, the old ideas are clung to more tightly. Political familiarity misinterpreted as security.

Work harder and longer we're told, bow to the judgement of the markets, pretend that life-supporting ecosystems are a luxury whose protection and enhancement we cannot afford to prioritise.

In the grip of this epic perversity, perhaps the most exhilarating realisation is that countless other successful ways of organising our affairs already exist. The book is an exploration of these, that looks at the lessons of history, both positive and negative, for how to survive and thrive in times of adversity. It also scours the modern world highlighting working examples that refute the argument that the best we can hope for is to crudely stick the broken model of debt-fuelled, environmentally destructive and socially divisive overconsumption back together.

At the time of the second world war, economist JM Keynes came up with a plan for how to finance the war effort. It aimed to raise savings for the war effort and minimise costs for those least able to bear it. But even with the spectre of Nazism looming, his medicine was thought too strong. Opinion was not ready. Keynes lamented: "My discomfort comes from the fact, now made obvious, that the general public are not in favour of any plan."

The Economist newspaper, however, congratulated him for, if nothing else, revealing among the so-called "leaders of opinion," the state of their ignorance on the central economic problem of the war. This book is my take on where and how to begin to tackle current systemic environmental, economic and social challenges. It's the start of a plan. If having this conversation it only reveals the state of ignorance among our leaders, that will be a start.

I'd love to see other books that honestly and explicitly address how we make a global economic transition at scale, and within the timeframe that change is needed. Such plans have to be calibrated so that we can all live well within the tolerance levels of the biosphere.

It would be wrong to say that those who support the status quo have failed to notice there is a problem. They just react to it differently.

In 2011, The Wall Street Journal published a Guide to Investing in the Apocalypse. Listing a range of potential economic and environmental disasters it quite seriously observed that their occurrence, "will touch off panic and, in some cases, hysteria. As a result, these events will also contain the seeds of profit for investors who stay calm."

Of course, the alternative is that we could try to stop them. As the great cultural critic Raymond Williams once said, 'To be truly radical is to make hope possible rather than despair convincing.'

Climate changeEconomic policyUS economic growth and recessionEconomic growth (GDP)Andrew Simms
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Published on March 01, 2013 05:46

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