Natural Gas vs. Renewables

The Economist Debates: Natural Gas or Renewables?

Anyone interested to know about the future of energy and climate change mitigation must follow the elements of this debate hosted by The Economist. Likewise, the fight to eliminate poverty hinges on the energy security of every nation, more specifically the resultant impact of energy prices on third-world countries.

The big question that everyone wants answered: What comes after oil? There is immense pressure on giant economies from China, who invested a massive US$51.1bn in renewables last year, to pick up pace on their own investments and R&D. The possibility of implementing a global carbon tax, as well as the general urgency for positive climate change, has pushed governments and energy corporations to diversify their energy sources.

The debate however, is flawed. There is no argument that renewables surely produce less carbon emissions than natural gas, but basic economics of scale will ensure that natural gas will take over as the top energy resource over the next two to three decades. Even with government subsidies and incentives, it would take huge technological breakthrough to overcome the cost-effectiveness of using gas.

Despite being cited countless times as a positive example, China is very much an outlying case for two strong reasons: Firstly, as an ascending world power, China would want to develop energy self-reliance. Given its resources and manpower it has the potential to do so, and once achieved, will allow the superpower to throw its weight around the region. Secondly, by leading in terms of renewable energy infrastructure manufacturing and investment, it provides jobs for its population, pulling millions of Chinese people out of poverty and eventually monopolizing the sector.

For most other countries however, there are insurmountable barriers to direct investment into renewables. Politicians from developing countries have but one goal, and that is to ensure that energy production matches the growth of their economies. When compared to the cost of coal, gas is more competitive than oil and will be a better choice, especially since it fills the nation's coffers and provide bandwidth to provide other basic needs such as education and clean water. In addition, many developed countries such as Singapore have little resources to seriously utilize any form of renewable energy.


Renewables may eventually reach the necessary cost-efficiency to compete at a level with fossil fuels, but as market forces will have it, the day will not come anytime soon. The defense strategy of most countries presently includes a diversification of energy sources, and security requires decoupling from intermittent, unpredictable sources such as wind and sunlight, or niche resources such as biofuels. Besides investing in nuclear plants, hoarding fossil fuels is still the only way to provide such security.


With regards to this particular debate however, both sides will probably pick sure-to-win stances that are not direct opposites, with the defending side insisting on the economies of scale behind gas and the challenger side insisting that renewables produce less carbon emissions than gas. It is in such a flawed debate that should lead one to question the importance of the politico-geographical context and the military defense strategy behind energy diversification.

Climate-Change Litigation and the Forgotten Indigenous People

A flood-affected region is seen in Pakistan. Photo courtesy of AFP.

AFP: Climate change: Dogs of law are off the leash

Richard Ingham of the AFP wrote a headline-grabbing article outlining the growing potential of climate-change litigation, i.e. lawsuits against polluting nations and corporations. In his article, he noted that this is still very much a new legal area, with many gray areas and most significantly, a "causation" problem. Basic questions would include: Who is behind it, and to what extend? What criteria should be included in the creation of a globally-accepted measuring system to calculate and verify damages? How can we take into consideration the fact that often carbon dioxide emissions are results of actions that would be labeled as "necessary evils" for welfare production?

In addition, as exciting a prospect this might be in advancing towards positive climate change (be in through creating awareness or providing compensation), it would be vital to note that law firms are still profit-driven organizations. Many of them are drawn to the potential profits that can be made from the eventual payouts, and in so doing, would be pretty much selective of clients.

Ironically, the ones most in need of legal intervention are also those who can least afford it. Indigenous people, especially those lagging far behind in economic development and suffering from politico-judicial injustice, are often the most desperate for some form of protection from big logging or mining corporations. Many third-world countries like Indonesia, for example, have numerous cases depicting the lack of social justice and democratic decision-making. Indigenous communities once bounded by religious and economic ties to the resources provided by their land are evicted by force without proper compensation.

However, these same third-world politicians and corporate leaders (that many have demonized too quickly) have also listed many benefits to the bigger population and national economy through this very claiming of resources. Jobs can be created, resources can be utilized efficiently, and potential monies can be further invested in noble causes such as education and public works.

What climate-change litigation can truly bring about is the legal appointment of spokesperson(s) for the indigenous people who need a representative voice that understands their situation and who is also familiar with local judicial proceedings. The lawyer must assist in the setting up of an agreement that involves the democratic decision-making of the indigenous community involved, but also ensure that the dilemmas of the politicians and corporate leaders are taken into consideration. A general example will include the recognition of land and resource ownership by the indigenous people, developmental benefits in exchange for resources according to pace of utilization, and rules that ensure that the resources are constantly being zoned off and/or replenished through efforts by the corporations involved.

There is indeed a place for climate-change litigation, but legal firms must not solely focus on the victims created as a result of mankind-related climate disasters but more importantly on the voiceless victims created by actions that further perpetuate the climate problem. However, as long as legal firms are driven by profit alone, climate-change litigation look set to be little more than lengthy debates between influential groups in first-world countries.

Equality, a True Soul Food

The New York Times: Equality, a True Soul Food

The detrimental health effects of inequality on Americans, as noted by Nick Kristof, apply to nearly all urban populations in the world. The American dream as a cultural value has become the mainstream influence underlining all social structures from early education and family norms to corporate ladders and political administrations.

Nick's article has strong traces of Merton's sociological thought and influence. The creation of unlimited aspirations combined with differential access to fulfill them can lead to the establishing of unconventional hierarchies of power and system dropouts who eventually pull out of society totally. However, the majority of people who choose to remain in the system (or in some cases have no choice) manifest social pathologies indicative of stress levels and other psychological trauma.

In the past, most civilizations rest on monarchies and other religion-centric hierarchies, which limits aspirations (as well as imagination). The tenets of capitalism and economic globalization however, have their roots in democracy, meritocracy and equal worth, and these frameworks are now beyond the control of any one human being. Inequality challenges those tenets whilst in the contemporary context of capitalism and economic globalization, and social pathologies appear as reactions, although not necessarily corrective measures.

The toll on health is more than simply the elimination of the "unfit" in a global "strongest will survive" challenge. No human being works alone, and inequality breaks down more than just the human body but the social body as well. Persistent social inequality prevents any remedies except those invoking Old Marxist overtones. However, urban social inequality is much more complex today. No longer is it based simply on quantifiable class factors such as real estate, educational level and meritocracy. Nor can it be simply glossed over with intangible, fluid factors such as social status and prestige.

Pushing down levels of social inequality in urban areas must take be factored at an international level. Governments can only do so much by implementing policies and laws; religious institutes can only provide a limited amount of counseling and spiritual solace; families and communities are limited by the output (and burden) of each member.

The solution to social inequality must start from a conscious choice from those with much to reach out to those with the least in the very surroundings where we live and breathe in. And often, it starts with an understanding among those with much to know that there is already so much that we can give.

Food doesn’t cause crises, governments do

Reuters: Food don't cause crises, governments do

It will be interesting to watch food prices next year. Although fluctuations will still be determined largely by crises such as natural disasters, another potential cause of trouble will most certainly come from speculation fears of major food producers. John Foley is correct to point out that the governments of India, China and the United States will have a major influence.

From a national perspective, most of their market policies have been intuitive and internally interest-driven, although it would be more correct to classify them as "top-down crisis management reactions". Political stability is still the strongest prediction factor as to how strongly implementations are applied and closely adhered to, but it also reveals the direction that governments take when exerting control over food prices.

As a commercialized necessity, governments are least likely to compromise on food prices. After all, their political interests depends very much on voter support, especially in democracies such as the United States and India. Any demonstration of the lack of ability to respond to food crises such as famine can cause parties to lose their popularity (and consequently power). On the other end, incorrect speculations lead to tremendous wastage of both food and energy supplies.

From a global perspective, producers who do not have strong governments and policies in place to manage food price fluctuations are subjected to market demands. The volatility of these markets mean that local small-scale producers who engage in charitable or altruistic efforts are displaced from the market inevitably, and pressures the rest of them to divert whatever profit they have into market expansion through land acquisition and political advantages instead of environmental conscious measures and technology. This only encourages the already terrible political infighting within the political systems of these smaller producers, and may even breed other political groups aimed at grabbing power via unconventional means.

This brings up a very difficult problem to solve. With the current political structures in place, any international organization's attempts to manage food price controls will only be met with resistance and/or noncooperation. Like the present climate change situation, rich countries will also fight hard to have their way, even if it is clear that they will suffer less on all key life indicators. However, it would be ideal to create a measuring tool that primarily analyzes the negative effects to each country in the event of price fluctuations, and that projects a clear picture with recommended measures to take for each governments. Whether or not governments take up the recommendations is a secondary issue, what's more important is that such key statistics should be created, easy to understand, and made accessible for big picture policy making. The presence and emphasis of such information is key to the mentalities of future generations who will eventually take over the reins of their own national economies.

Renewable Energy Must Think Outside the "Sector" Constraint

The convenience store in the center of Kiptusuri acquired a solar lighting system and can now stay open at night. Photo courtesy of The New York Times.

The New York Times: African Huts Far From The Grid Glow With Renewable Power

Increasing demand for home-sized renewable energy infrastructures in cost-inefficient, off-grid areas is offering another challenge to business innovation and social advancement. The market exists and is growing, but how should businesses make full use of this opportunity to penetrate and establish its presence so as to reap early-entry advantages?

Drawing inspiration from Muhammad Yunus and the Grameen Bank's efforts in Bangladesh, a far-sighted enterprise should not be daunted by the energy needs of these areas, but should try to leverage on this gap and allow profit-driven innovations to improve the lives of villagers in these various areas. One conceptual obstacle that has impeded progress in this area is the inability to "think out of the sector".

Theoretical constraints, although useful as a hypothesizing platform, should never restrict the creative element required to innovate. In this particular case, there is immense potential for solar energy companies to start-up food and/or technology businesses that will utilize their panels. Centralization of services such as refrigeration, mobile-charging, and education premises as well as agricultural or mining-related technologies such as grain husking and ore sieving not only creates a stable demand for energy infrastructure but also introduces technological innovation that help villagers reap economies of scale.

Early branding is also very important, and it will not be difficult for energy companies to find willing partners in other industries to invest in small joint ventures like that. The positive effects of branding cannot be measured by accountants, and yet can bring immense value that outweighs the initially small profits of early market penetration.

Energy companies can learn a thing or two from the fast-consumables market: Look beyond supplying direct demand and create or support indirect demand. And why not, when in doing so one provides a service to mankind and move forward a step in eliminating poverty?

Listening to Businesses is the Key to Climate Change

 

Reuters: Climate Talks Might Need a Profit Motive

The UN Climate talks in Cancun has ended, and observers are divided about what to think about the outcomes. It was about time however, that state representatives recognize and acknowledge the role that businesses play in bringing about real, substantial climate changes.

Negotiators understand that the art of "positioning" a proposal is the key to making or breaking a deal. For far too long have climate change advocates and publications been putting big corporations and governments on guilt trips, which have resulted in the construction of defenses and eventually, nonchalance. The UN talks (as well as other major energy and environmental events) should be platforms not simply for political delegates to debate over circumstances beyond their control using general assumptions that wipe out any potential for ground-level changes. It should also cater for exchanges between green technology businesses and coal/oil guzzling industry trend setters, especially for opportunities where the latter can voice their concerns regarding their bottom line. 

Green technology is advancing at breakneck pace today, and climate-positive improvements to instruments and production processes are saturating the markets. What green businesses need to do is to penetrate their clienteles' markets and listen to the conversations within, before re-positioning their proposals. They have to identify key players and trendsetters, and from there cater their products to these clients' specific needs. If it means moving away from the fanatical green movement that has been mowing down other important considerations with their one-track minded zealousness, then such an ideology shift would be no less than a necessity.

This is not to say that all green efforts have to submit to the wimps and fancies of big corporations with no impetus to make changes. That analogy is itself a biased picture painted by environmental extremists. However, like the article has already noted, if private corporations continue to be ostracized from such high-level negotiations, such actions will only create opportunities to demonize them further. And shouldn't their profit objectives be taken more seriously, in light of their (admittedly overestimated) negotiation power over governments in the era of economic globalization?

Jumo: Linking Online Users to Charities

Chris Hughes, founder of Jumo, says he wants his site, to be unveiled Tuesday, to do for charities “what Yelp did for restaurants.” Photo courtesy of the New York Times.

New York Times: A Facebook Founder Begins a Social Network Focused on Charities

Social media is gradually gaining traction with regards to connecting people and charities. Most people with a serious desire to contribute back so society have a personal cause that they would like to know more about, and the Internet is one of the greatest platforms of readily accessible knowledge to make informed decisions. Citizens of developed countries are also more inclined to reach out to organizations with a foreign or even international reach, and media evolution has transformed communications to a two-way interaction channel. This allows donors to contribute not simply capital or funds, but also ideas, knowledge and passion.

Chris Hughes, already internationally renowned as one of the founders of Facebook, is one contemporary media mogul out to imitate the Facebook model to create what I would term another "middleman enterprise". Facebook acts as a platform to link the interests of online users to specific business or service organizations with the potential of catering to their needs. Based on this model, Jumo links the interest of donors online to specific charities that they would like to contribute to. This enterprise has already grabbed the headlines of many traditional publications and social media platforms, and will probably have to cater to the incoming tide of registrations.

However, as Jumo is a non-profit enterprise which survives largely on advertising profits, it is likely that many charities leveraging onto this platform will be inclined to spend money on advertising. Well-known charities with more money will be pressured to create a budget for it, and the bigger the charity, the more spending power it will have to monopolize airtime on the website. If caps are not implemented and the priorities of charity organizations not adhered to, social media platforms can potentially skew donations to one side, and donations become channeled to advertising instead of their target group.