Force Change

Foreign gas subsidies distort market and decrease incentive to conserve

While U.S. politicians have become bogged down in the blame game over whether the Republicans, Democrats, or market speculating boogey men are responsible for our high gas prices, the issue of subsidies by foreign governments is often overlooked in the debate.  Apparently, 96% of the increase in the world’s consumption of oil last year came from countries that have gas subsidies.  The two largest subsidy providers are the governments of China and Indonesia ($40 billion and $20 billion this year, respectively). 

The effect of these subsidies is the exact opposite of what has been occurring in the United States.  Here, the rapid increase in gasoline prices have spurred on a massive shift in how people think about their cars and the environment.  In countries where the governments subsidize gas, much of this effect has been prevented.  It is Economics 101 that an increase in price should result in a decrease in demand.  Governments that subsidize gas distort this corrective force. 

Of course, the oil market is far from free and open, being dominated by a handful of massive multinational corporations and the openly monopolistic OPEC.  Nonetheless, this type of governmental action is apparently having a very real effect on personal behavior throughout the developing world by insulating them from a disincentive to consume. 

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Posted in Energy, General, Governmental Behavior, Greenhouse Gas Emissions, Transportation | No Comments »

Shift in domestic oil policy must be accompanied by global agreement

One issue that we have not looked at with respect to Al Gore and T. Boone Pickens’ recent proposals to decrease our consumption of oil, is the unintended effect that these plans might have on oil use in developing countries like China and India.  Our concern is that if the United States is successful in dramatically reducing our consumption of oil, the resulting decrease in demand and price on the global market could allow developing nations to continue, or even increase, their own reliance on oil. 

While it may not sound fair, if the rest of the developing world follows the irresponsible path that America and other developed countries took, there will be dire climate consequences.  Therefore, we should not only be concerned with decreasing our own consumption of oil, but we should be aware of the effects of any potential easing of global demand and price on oil consumption in these countries.

While we must shift off of fossil fuels domestically, we should also attempt to involve the rest of the world in the process.  Hopefully the next president will be able to undue the ill will created by our rejection of the Kyoto Treaty, and will be able to begin the process of creating some sort of global agreement on steps necessary to shift the entire planet away from the burning of fossil fuels.  Otherwise, we may win the battle but lose the war. 

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Posted in Energy, General, Greenhouse Gas Emissions, Human Health, Politics, Science and Innovation | No Comments »

China seeks green technology from Japan

Chinese President Hu Jintao, while visiting Japan today, expressed his hopes that Japan would share environmental technology with China, as it attempts to deal with the side-effects of its rapid growth.  Apparently, while anti-green leaders in America  assert that environmentally oriented policies will do too much damage to our economy, countries like Japan, are using green tech to not only improve international relations with its neighbors, but could see a profitable export industry develop, as well.

Proponents of comprehensive environmental policy reform in America have long argued that a shift towards a green economy will not “wreck” us, as warned by President Bush, but instead will provide economic growth and trade opportunities into the future.  In fact, the policies of our current “pro-economy” leaders, like Bush, have led to the current situation where solar power development is shifting to Europe, where it has found a friendlier policy in place.  Fortunately, it is still early in this global shift, and therefore imperative that the next U.S. president help to formulate and implement a policy that will nourish green industry, rather than sending it abroad.

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IMF study says global economy can grow while curbing emissions.

The International Monetary Fund released a study [subscription required] examining the effects of drastic greenhouse gas reductions on the global economy. The study looked forward to the year 2040 and worked from the assumption that greenhouse gas emissions would need to be cut to levels 60% of that released in 2002.

The study concluded that while the global economy, in that time period, should more than double in size, the burden of reducing greenhouse gasses through, carbon taxes or cap-and-trade systems, would cause the global economy to be only 2.6% smaller than it would otherwise. Therefore, according to the study, drastic cuts in greenhouse gas emissions will still permit dramatic increases in the size of the global economy.

Naturally, the study noted that all countries in the world must abide by these cuts, in order to make them effective. As we all know, if China and India grow without concern for their own emissions, any reductions made elsewhere in the world would be more than canceled out. Hopefully this study will not only help convince developing countries that it is possible to have substantial economic growth while significantly reducing emissions, but it may also convince American leaders resistant to emission curbs that this is possible.

Posted in General, Governmental Regulations, Greenhouse Gas Emissions, Industrial Development, Science and Innovation | No Comments »

China to maintain “one child” policy for at least another decade.

We recently noted that should China’s rapid development proceed without serious consideration of its environmental impacts, the resulting environmental damage could be catastrophic. However, as we also noted, China does appear to be paying more attention to this issue lately.

One of China’s most controversial developmental regulations has been its “one child” policy. Recently there has been speculation that the government might be ready to lift that rule. However, news reports this week indicate that the Chinese government has decided to maintain its current policy for at least another decade.

It is hard to say that this is a good thing, since it is a very controversial policy and there are many obvious ethical issues surrounding it. Nonetheless, as we’ve stated, one of the major keys to the health of the planet going forward, is going to be the decisions that China makes vis-à-vis development and the environment.

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Chinese government creates environmental “super ministry.”

The Chinese government recently reorganized its bureaucratic structure by creating five “super ministries,” one of which is dedicated specifically to the environment. This news is being interpreted as a sign of greater commitment by the communist party towards the environment. Prior to this reorganization, the government’s environmental policy did not have full ministry status, and therefore often didn’t have the clout necessary to effect change throughout the country.

Of course, China’s commitment to green development is integral to the health of the planet. As that country develops, it is clear that should they take the same path as already developed nations, the planet would suffer immensely. For example, America has approximately 300 million citizens versus China’s 1.3 billion. Yet it was only recently that the United States was passed by China in overall greenhouse gas emissions. Given that China has four times the population and relatively recently began industrial development, it is imperative that China implements pro-environmental policies. Hopefully they will learn from the other industrialized nations many mistakes. Maybe their governmental reorganization is a recognition of this fact?

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Posted in General, Governmental Regulations, Industrial Development | 1 Comment »