Friday, January 8, 2010

The Copenhagen Copout.

All the world's leaders showed up in Copenhagen, agreed on all the problems, disagreed on all the solutions, and left. Let's forget for the moment the complete unnecessity of these summits where nothing gets done, and let's forgive for the moment the stupendously bad example of polluting the earth for summits like this, when all communications and negotiations could have been held via satellite and even allowed for an innovative interactive round the clock worldwide television debate that could have brought the peoples of the world together in an epochal electronic gathering. It could have been amazing. Sponsors would have flocked to be part of this mega television event, and money made from the program could have been earmarked for a symbollic investment in carbon footprint reduction.

Copenhagen, instead, turned out to be a bureaucratic bungle, a diplomatic dilemma, and a circus of clowns who got nothing done. In fact, there was a spectacular amount of nothing that came out of it. It was aptly called COP, and sure enough, everyone copped out. None of the issues were new, none of the arguments came as a surprise, and none of the failures were so difficult to foresee. The intent was to take a chance on this summit, and we can appreciate that, but for the
leaders of all the countries to have to put on such a poor show when the fiasco was completely avoidable puts us in a bigger quandary - "Can the decisions on climate change wait for the world to come to agreement?".

While we ponder upon the solutions to the gravest problems to our existence and survival as a race, and allow for Mother Nature to play her own hand in many ways, we really should take an amused look at the clearest specifics.

The USA is the world's biggest polluter. People in the USA have finally taken to driving smaller cars, but more driven by high fuel prices than any real concern for global warming. It also helped that their economy was on the squeeze. However, the biggest pollution they cause is from electricity generation and that hasn't changed dramatically, althought there is plenty of incentive now under Obama, to change their ways. God bless their optimism, and trust them for being enterprising. Obama is headed in the right direction when he says that the next big economic boom could come out of building environmentally important industries while coming out of dependence on oil. Great! But they're not going nuclear anytime soon, and the country is so big in every perspective that when you consider 4% of the world's population hogging 25% of the world's energy, any change the USA makes will be significant but slow. Let's wish them well, but
not expect too much to happen very soon.

The next biggest polluter is China. China is power hungry at the moment, and who can blame a giant who has just woken up. The problem with China, however, is that its pollution is on an increase! All its new power plants are coal fired thermal power generation units, and they are all massive. Could they have opted for nuclear power? Sure, but they didn't. China needs power today, and it is not likely to hamper the speed of its progress for any environmental goodwill.
China has never been too bothered about brownie points. So, they cannot be stopped.

Now, in terms of solutions, there is no way we can allow the rainforests of Brazil to vanish. It is the biggest heat sink in the world, and we are pretty much doomed without that. A lot of poor
Brazilians are dependent on these forests and they are depleting rather fast. Vanishing, really. So, just as unimaginatively as this COP summit was held, President Obama has suggested the band aid to solve this problem - Let's pay the poorest people money so they don't cut their forests. In other words, if your forest gives you two cents for cutting a tree, we will give you three for not cutting it. Okay, great!

For some reason, this sounds too good to be true, and sure enough it is. Obama is unwittingly shining a bright light on his ignorance of the other factors. Whenever money changes hands, some work has to get done. It is one of the most basic tenets of economies. Getting paid to NOT
do something is not going to be sustainable. If a farmer gets money for NOT farming, he will stop producing whatever he produces. An entire economic subculture that is currently dependent on wood, gum, rubber and a myriad other products coming out of these rainforests
cannot be stopped because America and China would like to piss away their carbon into the leaves of Brazil. Imagine what a black market in carbon credits this will open up under the auspices of controlled laziness!

This isn't that far away from our own reality, right here in Tamilnadu, in the wake of Chief Minister Karunanidhi's Re.1/kg rice scheme. Nobody asked for this rice, and nobody wanted it. Now, what is happening is that an entire black market has opened up for this rice, which is bought, polished and sold at higher prices by the people who are eligible for it. Now that they are finding a way to make money without doing much, our agricultural lands have no labourers. We have a new culture of laziness that has brought decay to our well established system of working for money.

We are seeing a whole generation of poor people suddenly incentivized to be lazy, to seek easy money working for minimum wages doing light physical work like digging for local road projects for a few hours and getting paid a lot more than agricultural wages paid them for generations. The big difference is that agriculture sustained them for generations, while a whole generation with no skills that is coming out of myopic government programs won't be able to sustain
anything but the vote banks. Farmers in Tamilnadu have to depend on migrant labour from Bihar to rescue their crops, and with agriculture becoming less and less worth it, why do we wonder why grain prices are going through the roof? Yet another bubble waiting to burst.

Artificial injections of money to change cultures, lifestyles, and mindsets have never worked. It isn't that hard to see poor Brazilians losing all their forest dependent skills, becoming lazy and
unproductive, taking to illicit trades to boost their incomes, and frittering their lives away. There is simply no cause for optimism when an entire populace is given incentive to be lazy. No subculture of laziness has ever gone unpunished. We are about to witness chaos in Brazil unfold over the next decade, if this monkey of a scheme finds its way out of the cage.

Let's see if we can actually fix the problem with this logic. How about giving Australia its twelve billion dollars a year instead of having to export its coal to China? That would put the world out of its misery from China's coal burning power plants, the Australians would be happy to get money for not mining, and China would... wait a minute! That's not going to work too well for the Chinese! They would go to war to get their coal, and since they hold the world's greatest reserves of the US dollar, nobody wants to piss them off just yet.

So, if every country in the world could get endless amounts of money for NOT exploiting something they have, we would put an end to global warming, but we would also put an end to all commerce as we know it. In any case, what is the world going to buy if nothing gets made
anywhere? The money we pay for people to laze around will eventually become meaningless, since there won't be anything to buy with it! Every currency being printed is roughly equivalent to the GDP of the country or region, but this is where the US dollar has been playing the monkey. It isn't based on the USA's GDP! It isn't based on its gold reserves either! It is based on this grand assumption that a great deal of the world's very important resource reserves are pegged
to the US dollar and that the world will continue to grow infinitely in abundant hunger for the same currency in order to buy from the same resource reserves of - mostly oil! It is also based on the assumption that the USA will be around as the world's most robust economy for a very long time.

Question the stupidity of these assumptions, promoted by and subscribed by people that graduated from the best business schools in the world, and question the connection between California real estate loan defaulters and people losing jobs in Chennai, and what we can do
to really save the world, and all economists will tell you in many complicated ways what we already know - we don't know what the heck to do! But it's all clearly suddenly less important than global warming? Why? Because the game is up and a great deal of the US dollar's strength is going to depend heavily on new technologies coming out of the USA! That's why!

A country like Canada, on the other hand, actually benefits from global warming. With a one degree C rise in average temperatures, it stands to get a substantially higher portion of its land more agriculturally productive, a fair amount of it to come under new agriculture, and what better way for Canada than to hold a bigger stake in the USA's food consumption while the USA edges towards becoming a bigger desert? A country with a 30 million population feeding a giant in the neighbourhood with a 300 million population that eats too much. Brilliant economic sense. They have enough land mass to not worry about a few islands of theirs vanishing either. So we will never hear anything about global warming coming out of Canada, anytime soon.

It's still about timing, and while the rest of the world sweats for survival, for no fault other than teaming up with speculative American financial shenanigans dressed as geniuses, many countries will still look with bated breath at economic recovery of that same country! Quite simply because it isn't easy to build another 330 million behemoth that can provide so much - yo guessed it, consumption. The bad news is, when the USA's current band aid of building infrastructure to spur local economic growth runs out, it will wonder how to refinance its $2trillion debt.

The rest of the world, including China, will not want to buy any more into the USA's debt trap, since it hasn't repaid anything substantial debt for a long, long time. It is no longer a manufacturing powerhouse and while still the innovation leader, it cannot expect to make a booming global business out of technologies that can take people to Mars, for instance, just yet. There won't be so much betting on the next real estate bubble either. Automatically, interest rates will rise and Americans will be choking on their wake up calls. The US Dollar is going to decline and one can expect that countries like India, that have substantial US Dollar reserves will
diversify, further accelerating the panic.

A country like Australia that is building its economic reserves on the export of billions of dollars worth of coal to power China's powerplants, will hope that nothing comes in the way of their growth. With the drop of the US Dollar in value, all of a sudden, Australia might have to quickly rethink the currency they want to have. It won't take long for a few OPEC countries to peg their oil reserves to the Euro, since the Euro is at the very least backed by gold. The US Dollar is not backed by anything that has everlasting value.

In the middle of this mess, small countries are likely to be submerged by rising waters and their refugee populations will rush to the nearest safe havens. By virtue of its distance from many vulnerable islands, the USA is not in the greatest danger of receiving many of these environmental refugees, but by moral responsibility, it should pay for causing so much damage over the years. The other side of the argument is that the USA spurred economic growth around the world for so long, so where is the gratitude?

Money may not be a solution to many problems we face today. It is important to realize the big mistake the USA for example, commits often, in thinking the world would be a "better place" if the rest of the world lived and thought like it! What could be further from the truth? It is this perception that has led the USA to "throw money" at every problem, and hope that a solution will magically arrive. It is one of the reasons the War On Terror isn't going anywhere.

A lot of solutions will come from investing human capital, in actions that show our will to be involved, our readiness to give ourselves to the need at hand. We may continue to get hit by Katrinas and Ailas and earthquakes and fires, but now we're faced with the spectre of entire countries being submerged, gone forever! We can't really throw money to aliens to give us the technology to clean up our planet. We can, however, get out of our myopic, hoarding oriented mindsets and examine the virtues of an unspeculative present, our immediate availability to tell the truth, and our collective intent to take sincere action.

Put simply, it is time to stop thinking about PROFIT at any cost. It isn't about philanthropy either, but it is about working without expecting a proportionate reward. All for one, and one for all. Resources must be set aside from wherever possible, in whichever form possible, to reverse global warming. The results and findings of all scientific studies can and will actually deliver a phenomenal amount of business opportunity. If there is one thing we can learn from history, it is that our greatest progress and prosperity came from periods when we were industrious. It is simply time to go to work again, not try to buy laziness.

The doors are opening for a more holistic understanding of the earth as OUR planet, and doesn't matter what we do or don't, we're in this together. It might be the time to give the spiritually evolved voices of united humanity a bigger stage, for the political expertise exercises haven't got us very far as a race. We're running out of some resources, but that doesn't mean we need to run out of ideas as well. After all, we didn't come out of the stone age because we ran
out of stones. We survived without the wheel, and we did quite okay even before we found oil. We must believe the best of us lies ahead, because we have no choice! We better come up with our best performance yet, this time just to survive! We simply cannot waste time looking back. We don't have any examples from our past that can save us now! We need to figure out in the present how to have some kind of a future. What fun!

Yes, it is a fact that livestock farming has a greater environmental negative impact than all the cars, planes, and ships put together. Anybody turning vegetarian because of this? Did anybody in Copenhagen even talk about this? We still haven't learned how to make it our business to think beyond business, have we?

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