BP says 4900 nuclear stations
Guardian Unlimited Business Business latest Winds of climate change are about to make their impact felt in many a boardroom
The expertise of John Browne, the chief executive of BP, is interesting here, though. Browne says that building enough capacity to deliver seven gigawatts of energy could put a ceiling on emissions at around 500 ppm. That doesn't sound much, but one gigawatt is the equivalent of 700 nuclear power stations. That's a heck of a lot of nukes, and by the time we've built them rising sea levels may mean they're a few feet under water. At the very best, it will mean that the lights stay on in the UK as darkness descends in the rest of the world.
Top science adviser sounds death knell for theory that insists growth is good Larry Elliott, economics editorMonday February 6, 2006The Guardian
The old economics is dead. Its death knell was sounded last week, not by a practitioner of the dismal science but by Tony Blair's chief scientific adviser. Sir David King said concentrations of greenhouse gases were already at a level where the warning signs were flashing red: a comment that starkly illustrates the impending clash between economic orthodoxy and environmental sustainability.
Economics is a discipline in which the factors of production - capital and labour - are supposed to be harnessed to maximise production at the cheapest price. By this yardstick, an economy is doing twice as well if it is growing at 4% rather than 2% and disastrously badly if consumers are not in the shops from dawn till dusk. Globalisation is seen as the ultimate form of a market economy, according to the prevailing model, because a more efficient use of the factors of production leads to lower prices and therefore permits higher levels of consumption. In a globalised world, you're only as good as your last GDP number.
But think about it for a minute. Concerns are frequently being raised about the fact that many developed countries are about to see - or are already seeing - a decline in their populations. This will have an impact on their trend rate of growth, which is a function of population and productivity. Stories about falling population are always couched in terms of demographic time bombs, suggesting that they are clearly a bad thing. But fewer people in Germany, Italy or Japan will mean more space, less pressure on resources and a more pleasant life.
Take another example. Globalisation has meant clothes in the UK are cheap. The inflation figures show that women's outerwear is less expensive now than it was in the late 1980s. And we're not talking about the inflation-adjusted price either; the average sterling price of a skirt or a dress is lower than it was two decades ago.
There's no longer the need to wear a top several times to get your money's worth: they can be worn once and tossed in the bin. Likewise, stores now sell jeans at below £5 a pair and market them to manual workers on the basis that if they get them filthy in the course of a week they can simply throw them away and buy anew. According to the present model of economics, this is progress, just as it is to be welcomed that flights as low as £2.50 mean stag and hen weekends in Tallinn or Prague.
But are these developments really positive? Orthodox economics says they are, because they raise the real incomes of consumers. But, according to Sir David's analysis, they are potentially very bad indeed. Currently, greenhouse gas concentrations in the atmosphere are around 380 parts per million, compared with around 220 ppm during the last ice age. Climatologists estimate that 400ppm - of thereabouts - is the tipping point and if we push concentrations much above that the process of climate change could become irreversible.
Seduced
Sir David says climate change is a threat to our civilisation, and he's right about that. There is no cast-iron guarantee that societies - no matter how smart or technologically advanced - persist. Think of the Romans in the last days before the collapse of the empire ushered in the Dark Ages. But Sir David thinks it is unrealistic to limit concentrations to the levels that scientists say would be safe. He thinks about 550 ppm is the limit and, sadly, given the current configuration of politics - domestically and globally - he is probably right about that too.
One problem is that as individuals we lack the incentives to do the sensible thing. If you are seduced by the idea of a cut-price flight, you get 100% of the benefit but only assume a tiny fraction of the cost to the environment. Another problem is that we lack the institutional framework for coping with climate change; instead, we have national governments fearful of doing anything that would damage international competitiveness. A more damaging mindset you could not hope to find, since it sends out the clear message that action on the environment comes a long way second to policies that foster growth.
The attempt in Britain to have our cake and eat it will mean - almost inevitably - that the government goes ahead with its plan to build more nuclear power stations. The expertise of John Browne, the chief executive of BP, is interesting here, though. Browne says that building enough capacity to deliver seven gigawatts of energy could put a ceiling on emissions at around 500 ppm. That doesn't sound much, but one gigawatt is the equivalent of 700 nuclear power stations. That's a heck of a lot of nukes, and by the time we've built them rising sea levels may mean they're a few feet under water. At the very best, it will mean that the lights stay on in the UK as darkness descends in the rest of the world.
Nor will the technical solution to climate change be feasible unless governments use their power to change behaviour. That means tougher building regulations, emission controls that force car manufacturers to get serious about vehicles that don't run on petrol, a range of new economic indicators that look beyond traditional methods of assessing growth, subsidies for environmental industries. The argument that business would not be able to cope with curbs on greenhouse gases is a fallacy; the longevity of capitalism is due almost entirely to its ability to adapt to any regime. What business lacks now is a clear steer; it has the expertise.
Peet Osta, the author of The Winds of Change: Climate, Weather and the Destruction of Civilisations, puts it this way: "Once government at all levels commits to purchasing clean technologies, making efficiency improvements, and using alternative energy where possible, this massive spending would provide economies of scale that would help speed the commercialisation of new technologies as well as prepare society for the shift away from fossil fuels. Such proposals have been on the table since the early 1960s. By not taking action on greenhouse emissions, we are betting our wellbeing that climate change poses little threat. If we are wrong, we will meet our fate."
Unleashing
Governments are almost certainly wrong to believe that action on climate change means economic stagnation. On the contrary, it would probably lead to an unleashing of a new clean industrial revolution based on green technology. They are also wrong to believe that the Kyoto process - rather than a new, comprehensive global solution - is the way to cut carbon emissions in any meaningful way.
If the initiative does not come from governments, it may eventually come from business itself. In particular, the insurance industry sees itself facing ruin if climate change leads to more hurricanes on the scale of Katrina. The executives of companies in the US have what is known as directors' -and officers' - insurance, which indemnifies them against lawsuits arising from their companies' actions. But they are going to be very wary indeed about writing insurance for companies that are at risk from lawsuits arising from climate change.
Exxon Mobil looks vulnerable in this respect. It accounts for around 1% of carbon emissions globally but has lobbied long and hard against efforts to combat greenhouse gas emissions. Christopher Walker, head of the greenhouse gas risk solutions unit at Swiss Re, says his company may be forced to approach Exxon Mobil and say: "Since you don't think climate change is a problem, and you're betting your stockholders' assets on that, we're sure you won't mind if we exclude climate-related lawsuits from your D&O insurance." That sort of talk, you can be sure, tends to concentrate minds in the boardroom.
Mamma may not know best
The myth of Italian men being mamma's boys is not such a myth after all, it appears. Where five out of every 10 men in Britain aged between 18 and 30 live with their parents, in Italy eight out of 10 men in the 18-30 group are expected home for a bowl of pasta every night.
It has been assumed that Italian parents are simply being altruistic: they allow their offspring to stay at home because they are unemployed or moving from one lowly paid, insecure job to another.
Research published by the Centre for Economic Performance at the London School of Economics suggests an alternative explanation; the Italians love having their children around them so much that they are prepared to bribe them to stay at home.
The study showed that an increase of 10% in the parents' income resulted in a 10% increase in the proportion of children living at home: the authors of the study, Marco Manacorda at Queen Mary College and Enrico Moretti at the University of California, Berkeley, say Italians give money to their children in the hope that they will stick around. Many do, but it is the cohabitation - paradoxically - that leads to higher youth unemployment because the children have less incentive to make their own way in the labour market.
The expertise of John Browne, the chief executive of BP, is interesting here, though. Browne says that building enough capacity to deliver seven gigawatts of energy could put a ceiling on emissions at around 500 ppm. That doesn't sound much, but one gigawatt is the equivalent of 700 nuclear power stations. That's a heck of a lot of nukes, and by the time we've built them rising sea levels may mean they're a few feet under water. At the very best, it will mean that the lights stay on in the UK as darkness descends in the rest of the world.
Top science adviser sounds death knell for theory that insists growth is good Larry Elliott, economics editorMonday February 6, 2006The Guardian
The old economics is dead. Its death knell was sounded last week, not by a practitioner of the dismal science but by Tony Blair's chief scientific adviser. Sir David King said concentrations of greenhouse gases were already at a level where the warning signs were flashing red: a comment that starkly illustrates the impending clash between economic orthodoxy and environmental sustainability.
Economics is a discipline in which the factors of production - capital and labour - are supposed to be harnessed to maximise production at the cheapest price. By this yardstick, an economy is doing twice as well if it is growing at 4% rather than 2% and disastrously badly if consumers are not in the shops from dawn till dusk. Globalisation is seen as the ultimate form of a market economy, according to the prevailing model, because a more efficient use of the factors of production leads to lower prices and therefore permits higher levels of consumption. In a globalised world, you're only as good as your last GDP number.
But think about it for a minute. Concerns are frequently being raised about the fact that many developed countries are about to see - or are already seeing - a decline in their populations. This will have an impact on their trend rate of growth, which is a function of population and productivity. Stories about falling population are always couched in terms of demographic time bombs, suggesting that they are clearly a bad thing. But fewer people in Germany, Italy or Japan will mean more space, less pressure on resources and a more pleasant life.
Take another example. Globalisation has meant clothes in the UK are cheap. The inflation figures show that women's outerwear is less expensive now than it was in the late 1980s. And we're not talking about the inflation-adjusted price either; the average sterling price of a skirt or a dress is lower than it was two decades ago.
There's no longer the need to wear a top several times to get your money's worth: they can be worn once and tossed in the bin. Likewise, stores now sell jeans at below £5 a pair and market them to manual workers on the basis that if they get them filthy in the course of a week they can simply throw them away and buy anew. According to the present model of economics, this is progress, just as it is to be welcomed that flights as low as £2.50 mean stag and hen weekends in Tallinn or Prague.
But are these developments really positive? Orthodox economics says they are, because they raise the real incomes of consumers. But, according to Sir David's analysis, they are potentially very bad indeed. Currently, greenhouse gas concentrations in the atmosphere are around 380 parts per million, compared with around 220 ppm during the last ice age. Climatologists estimate that 400ppm - of thereabouts - is the tipping point and if we push concentrations much above that the process of climate change could become irreversible.
Seduced
Sir David says climate change is a threat to our civilisation, and he's right about that. There is no cast-iron guarantee that societies - no matter how smart or technologically advanced - persist. Think of the Romans in the last days before the collapse of the empire ushered in the Dark Ages. But Sir David thinks it is unrealistic to limit concentrations to the levels that scientists say would be safe. He thinks about 550 ppm is the limit and, sadly, given the current configuration of politics - domestically and globally - he is probably right about that too.
One problem is that as individuals we lack the incentives to do the sensible thing. If you are seduced by the idea of a cut-price flight, you get 100% of the benefit but only assume a tiny fraction of the cost to the environment. Another problem is that we lack the institutional framework for coping with climate change; instead, we have national governments fearful of doing anything that would damage international competitiveness. A more damaging mindset you could not hope to find, since it sends out the clear message that action on the environment comes a long way second to policies that foster growth.
The attempt in Britain to have our cake and eat it will mean - almost inevitably - that the government goes ahead with its plan to build more nuclear power stations. The expertise of John Browne, the chief executive of BP, is interesting here, though. Browne says that building enough capacity to deliver seven gigawatts of energy could put a ceiling on emissions at around 500 ppm. That doesn't sound much, but one gigawatt is the equivalent of 700 nuclear power stations. That's a heck of a lot of nukes, and by the time we've built them rising sea levels may mean they're a few feet under water. At the very best, it will mean that the lights stay on in the UK as darkness descends in the rest of the world.
Nor will the technical solution to climate change be feasible unless governments use their power to change behaviour. That means tougher building regulations, emission controls that force car manufacturers to get serious about vehicles that don't run on petrol, a range of new economic indicators that look beyond traditional methods of assessing growth, subsidies for environmental industries. The argument that business would not be able to cope with curbs on greenhouse gases is a fallacy; the longevity of capitalism is due almost entirely to its ability to adapt to any regime. What business lacks now is a clear steer; it has the expertise.
Peet Osta, the author of The Winds of Change: Climate, Weather and the Destruction of Civilisations, puts it this way: "Once government at all levels commits to purchasing clean technologies, making efficiency improvements, and using alternative energy where possible, this massive spending would provide economies of scale that would help speed the commercialisation of new technologies as well as prepare society for the shift away from fossil fuels. Such proposals have been on the table since the early 1960s. By not taking action on greenhouse emissions, we are betting our wellbeing that climate change poses little threat. If we are wrong, we will meet our fate."
Unleashing
Governments are almost certainly wrong to believe that action on climate change means economic stagnation. On the contrary, it would probably lead to an unleashing of a new clean industrial revolution based on green technology. They are also wrong to believe that the Kyoto process - rather than a new, comprehensive global solution - is the way to cut carbon emissions in any meaningful way.
If the initiative does not come from governments, it may eventually come from business itself. In particular, the insurance industry sees itself facing ruin if climate change leads to more hurricanes on the scale of Katrina. The executives of companies in the US have what is known as directors' -and officers' - insurance, which indemnifies them against lawsuits arising from their companies' actions. But they are going to be very wary indeed about writing insurance for companies that are at risk from lawsuits arising from climate change.
Exxon Mobil looks vulnerable in this respect. It accounts for around 1% of carbon emissions globally but has lobbied long and hard against efforts to combat greenhouse gas emissions. Christopher Walker, head of the greenhouse gas risk solutions unit at Swiss Re, says his company may be forced to approach Exxon Mobil and say: "Since you don't think climate change is a problem, and you're betting your stockholders' assets on that, we're sure you won't mind if we exclude climate-related lawsuits from your D&O insurance." That sort of talk, you can be sure, tends to concentrate minds in the boardroom.
Mamma may not know best
The myth of Italian men being mamma's boys is not such a myth after all, it appears. Where five out of every 10 men in Britain aged between 18 and 30 live with their parents, in Italy eight out of 10 men in the 18-30 group are expected home for a bowl of pasta every night.
It has been assumed that Italian parents are simply being altruistic: they allow their offspring to stay at home because they are unemployed or moving from one lowly paid, insecure job to another.
Research published by the Centre for Economic Performance at the London School of Economics suggests an alternative explanation; the Italians love having their children around them so much that they are prepared to bribe them to stay at home.
The study showed that an increase of 10% in the parents' income resulted in a 10% increase in the proportion of children living at home: the authors of the study, Marco Manacorda at Queen Mary College and Enrico Moretti at the University of California, Berkeley, say Italians give money to their children in the hope that they will stick around. Many do, but it is the cohabitation - paradoxically - that leads to higher youth unemployment because the children have less incentive to make their own way in the labour market.
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