from Herman Daly
Causation is both bottom-up and top-down: material cause from the bottom, and final cause from the top, as Aristotle might say. Economics, or as I prefer, “political economy,” is in between, and serves to balance desirability (the lure of right purpose) with possibility (the constraints of finitude). We need an economics fit for purpose in a finite and entropic world.
As a way to envision such an inclusive economics, consider the “ends-means pyramid” shown below.
from Herman Daly
As production (real GDP) grows, its marginal utility declines, because we satisfy our most important needs first. Likewise, the marginal disutilitiy inflicted by growth increases, because as the economy expands into the ecosphere we sacrifice our least important ecological services first (to the extent we know them). These rising costs and declining benefits of growth at the margin are depicted in the diagram below.
From the diagram we can distinguish three concepts of limits to growth. Read more…
from Dean Baker
In the wake of the Russian takeover of Crimea, there havebeen a number of calls for weaning Europe from dependence on Russian natural gas. Some have suggested that Europe would abandon environmental restrictions on drilling for oil and gas to increase domestic production. To help, the U.S. would continue to massively increase production of oil and gas as well as its capacity to liquefy natural gas and transport it to Europe.
The weaners seem to have the impression that this is yet another case in which the United States has to come to the rescue of those weak Europeans. After all, while we were drilling everywhere, the Europeans were fiddling around with wind and solar energy, all the while making themselves vulnerable to Russian President Vladimir Putin’s machinations.
Reality-based fans of arithmetic see matters differently. The reality is that Europe, especially Germany, has done a huge amount over the last two decades to reduce its consumption of fossil fuels, including natural gas, from Russia. The reduction in fossil fuel use swamps the impact of the drill-everywhere strategy in the United States.
If Europe had not been aggressively pushing to reduce its energy use, there is no way that gas from Russia could be replaced by domestically fracked gas or imports from elsewhere. In addition, Europe’s efforts to reduce fuel consumption have the advantage of slowing global warming.
from Mark Weisbrot
The U.S. economy is still weak, with 7 percent unemployment, many millions more underemployed and less people employed in November than there were six years ago. At the same time – and not unrelated – we are still devolving along a path toward increasingly ugly inequality, with 95 percent of the income gains since the Great Recession going to the top 1 percent of the income distribution.
Meanwhile, the crisis of global climate change is moving toward more irreversible catastrophic damage each year that the United States, which is responsible for more of the cumulative carbon emissions than any other country, procrastinates in making the necessary changes to reduce fossil fuel consumption.
There are feasible policy changes that can address all of these problems – and we don’t have to sacrifice employment or a more just and decent society in order to make progress on climate change. Here are five of them: Read more…
from David Rosnick
I am greatly pleased to see such interest in CEPR’s recent report on work hours and climate change. All evidence points to the idea that gradually reducing annual labor hours per worker will reduce the amount of climate change with which the world will have to cope. But this does not mean that ordinary workers will have to make a sacrifice. Rather, this is about how workers may choose to enjoy the fruits of increased productivity—if only they are given the chance to share fully in economic progress.
Throughout the 1950s, workers in the United States enjoyed fewer hours of labor than almost every country in Western Europe. On average, an employed American worked 1,909 hours in 1950. Only Sweden—at 1,871 hours—worked less. By contrast, Greeks averaged 2,712 hours that year; the Irish put in 2,753.
Today, workers in Greece are second only to Poland for the longest working hours in all Europe and labored 330 hours longer in 2012 than their American counterparts. However, productivities of these countries have climbed dramatically since 1950 as hours have fallen. In each hour of work in 2012, each American produced 3.2 times as much as in 1950. This allowed workers to build 2.9 times as much in each year— and do so in 200 fewer hours than in 1950. In this way, American workers labored a bit less and still prospered materially.
These same Americans might have enjoyed a little more time off and still produced far more than did workers in 1950. Over those same 62 years, the average French work-year fell by 684 hours and still workers produce 4.7 times as much in a year. Read more…
from Dean Baker
Imagine Japan attacked at Pearl Harbor in December of 1941 and our political leaders responded by debating the best way to deal with the deficits projected for 1960. This is pretty much the way that Washington works these days.
The political leadership, including the Washington press corps and punditry, were already intently ignoring the economic downturn that is wreaking havoc on the lives of tens of millions of people across the country. Now, in the wake of the destruction from Hurricane Sandy, they will intensify their efforts to ignore global warming. After all, they want the country to focus on the debt, an issue that no one other than the elites view as a problem. Read more…
from Dean Baker
Millions of people across the East Coast are sweltering in near-record temperatures. In the Washington area, tens of thousands are dealing with the heat without air conditioning or power due to a storm the prior weekend. The remarkable part of this story is that almost no one is talking about global warming.
Of course no specific weather event can be directly tied to global warming, just as any individual person’s heart attack cannot be directly attributed to the fact that they don’t exercise and are 50 pounds overweight. In both cases it is a question of probabilities. And the fact that greenhouse gas emissions are raising the planet’s temperature substantially increases the probability that we will get long stretches of extraordinary heat like the one that hit the Midwest and Northeast over the last 10 days.
In short, this is what global warming looks like, or least what it looks like in the United States. If there were an environmental movement in the United States, they would be screaming at the top of their lungs about the harm to life and property from this heat wave and power outage.
These costs are likely to be considerable. Hundreds of thousands of people had to discard food in their refrigerators and freezers as a result of the power outages. Many gathered their family together and went to stay with friends or spend time in a hotel. There were likely hundreds of thousands of days of lost work. Read more…
from Ali Kadri
Between 1980 and 2010 the share of the rural to total population in the Arab world dropped significantly from about 60 percent to around 40 percent. In absolute terms, an estimated seventy million people left the countryside to urban centres at home. This conservative estimate is nearly equivalent to the total number of rural-urban migrants since the beginning of the twentieth century until 1980. While this exodus was occurring, the regional rate of unemployment was rising and the share of labour in the form of wages fell to around a quarter of national income. By 2007, the Arab League declared that more than half the Arab population was living at less than the two-dollar per day benchmark. Basic food production was decreasing and food imports were rising in this high per capita food dependent and scarcest-water area globally. Around half the population in the Arab world was spending more than half of its income on purchasing food. When speculation reached the commodity market and basic food prices rose, scuffles before bakeries in Egypt resulted in several fatalities. The agricultural sector was shrinking relative to the economy. The productive economy, in turn, was de-industrialising and retreating relative to oil and geopolitical rents. The deconstruction sustained by the agricultural sector, in particular, led to massive dislocation throughout the neoliberal age.
The explanation of this phenomenon afforded by the class of neoclassical economy models known as dual-economy models are unfitting tools for understanding why and how this process could undergo unchecked for three decades. Read more…
from Mark Weisbrot
Environmentalists seem to realize that they have some stake in a fight such as the Ecuador-Chevron lawsuit. In that case, which Chevron has recently moved to an international arbitration panel in an attempt to avoid a multi-billion penalty handed down by Ecuadorian courts, it is about whether a multinational oil corporation will have to pay damages for pollution, for which it is responsible. Most environmentalists figure that would be a good thing.
But what about fights between multinational oil giants and the governments of oil-producing states, over control of resources? Do people who care about the environment and climate change have a stake in these battles? It appears that they do, but most have not yet noticed it. Read more…
from Peter Earl
In some of the first posts on this blog I reported on how Australia’s Commonwealth Scientific Research Organization (CSIRO) was attempting to censor and ban from publication Clive Spash’s peer-reviewed paper ‘The Brave New World of Carbon Trading”. Though Spash eventually resigned from CSIRO and the paper was published in New Political Economy in 2010 (vol. 15, no. 2), CSIRO’s attitude towards dissenting views has recently become even clearer and more disturbing.
CSIRO, a government funded public research agency that employs about 6,500 people, was required to answer a series of questions Read more…
from Ali Kadri
Call for papers
The collapse of Lehman Brothers on 16 September 2008 has opened a new stage of economic history, ushering in the world’s worst recession since WWII. The trajectory of global capitalism has been diverse but, after three years of deep crisis, protracted economic problems persist and are even intensifying, notwithstanding accelerated growth in a number of large developing countries. Read more…
from Edward Fullbrook
There is a letter of mine in the current issue of the London Review of Books. It is as follows.
Old Blue Banger
In 1963 I backpacked through Southern Sudan. So, naturally, reading Jonathan Littell’s ‘A Journey in South Sudan’, I tried to make connections between there then and there now (LRB, 30 June). I wasn’t very successful. Place and tribe names remain the same, but today’s referents seem to belong to a different anthropological period from the ones I knew. Littell writes: Read more…
from Edward Fullbrook
If you have time, I recommend reading “The three crises: oil prices, climate change and international debt” on feasta.org. But here are four graphs regarding oil and natural gas from the article that illustrate some of the difficulties that we face. Read more…
This alarming graph comes from a report titled: Read more…
Global average annunal crude oil production 2001 – 2010 Read more…
from Edward Fullbrook
Climate scientists are divided over whether “the tipping point”, the point at which positive feedbacks make climate change accelerate and irreversible, thereby endangering the survival of the human species, has been reached. But the pessimists do not claim to know for sure and so agree that humankind should act to diminish the possibility of civilization’s point of no return ever being passed. True, some elements of the general public do not regard the possibility of future generations beyond the next one or two as a matter of much importance. But people idealistically inclined do. Read more…
Debate: Should GNP growth no longer be a goal in advanced economies?
from Kevin P. Gallagher
To kick off 2011, the Obama administration has had the audacity to file suit at the World Trade Organisation (WTO) against China’s policies to build green technologies.
This action is deeply flawed. The US should not try to beat China down, but should pursue its own green jobs policy and reform the WTO, so the rules allow countries to combat climate change. Read more…
from Frank Ackerman and Kevin P. Gallagher
The failure of US climate legislation, following last year’s disappointing negotiations at Copenhagen, casts a pall over the round of climate talks in Cancún this week. And the global recession and budget-cutting crisis makes this seem like the worst time for new climate initiatives. Unfortunately, we don’t have the luxury of delaying action: the laws of physics don’t need 60 votes in the US Senate to continue making the world’s climate less and less liveable.
There are two battles over climate change. Read more…