Democratizing energy policy

earth-day

I should have posted this yesterday to mark Earth Day, but since we should be thinking about these issues every day – not just on an arbitrary Friday in April – here is a short video made by a German group, PowerShift, which offers a quick overview of some issues related to energy policy. The video focuses on the use of biomass (like trees) from developing countries to produce energy in the West, using the example of a German company which purchases rubber trees from a Liberia-based company, Buchanan Renewables (which is actually a cool company, worth checking out their work), to use in a power plant in Berlin which uses gas and biomass. The idea they present is that instead of perpetuating a cycle whereby rich countries use up resources of poorer countries to support their unbridled energy consumption, we should turn to smaller-scale, decentralized models of energy production.

Video is in German, with English subtitles (click “CC” at the bottom right of the screen to enable them)

I am not an expert in energy policy by any means – but I instinctively agree with the notion that we need to rethink our models of energy production. We are hooked on oil, gas and coal, and have developed unsustainable energy consumption practices. I fully support the efforts of those who are committed to thinking about new and innovative means to produce energy.

As individuals, I believe we have a responsibility to curb our own energy consumption as much as we can – it’s not so hard to turn off power bars connected to the wall, drive a little bit less, buy at least some of your food from local sources. Every bit makes a difference. Furthermore, we can also support the efforts of companies like the one presented in the video. Even simply talking about these alternatives, raising awareness among friends and family that a different way is possible, can go a long way toward shifting paradigms.

Wonk love

A woman in Nigeria's Otu-Jeremi village carries tapioca on a palm tray as a large gas flare burns nearby. Photograph by Akitunde Akinleye/National Geographic

‘Tis that time of the year again: long weekends and celebrations of national holidays, fireworks and hot-dogs. As I suspect many of you will be traveling this weekend (and throughout the summer), I thought I’d recommend one of my all time favorite podcasts: the Center for Global Development’s Global Prosperity Wonkcast. Usually hosted by Lawrence MacDonald, the podcasts usually last about 20 minutes and feature Center for Global Development (CGD) fellows, as well as other prominent guests. The themes discussed are always salient and topical, and the expertise is spot-on.

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Last week, the Wonkcast had an excellent episode on the Gulf of Mexico gusher and Africa’s oil boom (mostly about the latter topic, really), with Todd Moss and Vijaya Ramachandran. The New York Times reports that “as many as 546 million gallons of oil spilled into the Niger Delta over the last five decades, or nearly 11 million gallons a year.” Unlike the outrage sparked by the Deepwater Horizon catastrophy, the response to the relentless flow of oil into the Niger delta has generated little action. There are different factors affecting the situation: criminal activity by rebel groups, which illegally tap pipelines and fail to cap them, is one major issue. But one point which the experts in the Wonkcast insist on is the responsibility of corporations.

Nigeria has a weak regulatory environment, and many of the companies drilling for oil do so out of sight – literally. With offshore platforms left unmonitored by the government or other independent bodies, the safety and security precautions taken by companies are determined internally. This leads to several issues related to poor maintenance of facilities (corroding and unsecured pipelines), environmentally destructive practices (gas flares, which are the result of burning off natural gas recovered during the extraction of crude oil), and a general lack of accountability and responsibility for the social and environmental impact of natural resource extraction activities.

The Nigerian authorities – both federal and local – and natural resource companies share the responsibility for what is occurring in the Niger Delta. If they are not directly responsible, they are at the very least guilty of omission. Todd Moss speaks of the need to drastically improve the regulatory framework that governs natural resource extraction in Nigeria. I would add that companies also need to adopt much stricter standards, and embrace good corporate citizenship. As we are seeing with BP in the Gulf of Mexico, the practice of putting profits and the bottom line ahead of any other concerns has to change.

Efforts to promote the value of corporate social responsibility have been gaining in importance in recent years. The notion of “triple bottom line” (people/planet/profits), for instance, is becoming the dominant approach to full cost accounting, which takes into account the full economic, social and environmental cost of operating a business. The Dow Jones Sustainability Index “comprises the leading companies in terms of sustainability around the world. It captures the top 10% based on long-term economic, environmental and social criteria out of the biggest 2500 companies worldwide.” The Extractive Industries Transparency Initiative, as well at the Global Reporting Initiative, are other examples of new accountability systems that are changing the way in which companies report on their activities. What ties all these initiatives together is the move towards taking into account all of the dimensions – economic, social, environmental – which a business necessarily impacts.

Another initiative, this time led by executives in the natural resource sector, is the International Council on Mining and Metals (ICMM). The ICMM’s mission is to help its member companies make their social and environmental commitments in line with sustainable practices, and to increase the overall sustainability of their operations. Having worked with the ICMM in the past, I can attest to the quality of the organization’s work. As far as I know, there is no similar initiative for the oil and gas industry.

Because of the nature of the natural resource extraction business,  negative externalities caused by these activities are often not on people’s radars. It took a massive disaster in the Gulf of Mexico for the general public in the United States to question the practice of deep-water, offshore drilling. In our day to day lives, we are not exposed to the environmental and social consequences of natural resource extraction – out of sight, out of mind.

For the estimated 30 million people living in the Niger Delta, however, the effects of poorly regulated oil extraction have very tangible consequences: destroyed ecosystems, depletion of fish stocks and wildlife (impacting the livelihoods of local fishermen and farmers), hampered agricultural production, pollution (leading to many health issues), insecurity (due to the presence of armed criminal groups), etc. Amnesty International released a comprehensive report last year, where these issues are explored in depth.

One of the solutions discussed by Todd Moss to decrease poverty in the Niger Delta is the institution of direct cash transfers to the local population. Under this scheme, the Nigerian government would redistribute 10% of its annual dividends directly to individuals in the region. By by-passing state coffers, and thus the possibility of funds being misappropriate or mismanaged, direct cash transfers are seen as a way to beat the “oil curse”, which has plagued natural resource rich countries with poor governance. This method of redistributing revenue is being used in Alaska since 1982, and Moss has been advocating for this approach to be adopted by West African nations such as Ghana and Nigeria.

In the podcast, Moss notes that this direct cash transfer proposal is creating strange bedfellows: on the one hand, progressive liberals believe that this allows citizens to have a stake in the wealth of their country, and, on the other hand, libertarians love the idea of cutting out the government middle man. Moss points out that the dividends paid to citizens should still be taxed by the government, in an effort to keep accountability loops. Nevertheless, I wonder about the indirect effects of such a system.

For example, under this system, the incentives for government accountability in terms of natural resource wealth management are reduced. In other developing nations, the approach has been to strengthen both the regulatory framework and redistribution channels, and to build the capacity of government agencies to manage natural resource wealth. While direct cash transfers may be a good short term solution, in the long term, it does not help resolve the overarching challenge of poor governance.

In my mind, building the institutional capacity of resource-rich countries is the most critical element of turning the “resource curse” into a blessing. Chile and Peru are examples of countries that, not very long ago, were struggling with poverty. Both of these nations have instituted reforms and focused on attracting and managing foreign investors and natural resource companies. The government of Peru has a complex taxation and redistribution system in place, which seeks to ensure that the wealth generated by mining is shared based on principles of equality.

A study by the Fraser Institute supports this view (emphasis mine):

“The authors of the report, after considering new and existing data, come to the conclusion that whether a country benefits from natural resources depends largely on the integrity of its institutions and economic freedom — government bureaucracy, legal structure, property rights, monetary policies and international trade. Simply put, the higher the level of economic freedom a country enjoys, the greater the benefit from resources.”

For Nigeria, direct cash transfers can probably help alleviate poverty to some degree. Nevertheless, I don’t think the egregious violations of human rights, the environmental destruction and insecurity will subside unless: 1. the government of Nigeria improves governance and regulation, and 2. natural resource companies self-impose stricter standards for safety, security and work much harder on mitigating the negative social and environmental impact of their activities.

These aren’t short term projects, but they should accompany any initiative that seeks to diminish the negative impact of natural resource extraction in the region.

Eco-photo opps

A couple of eco-stunts by policy makers ahead of the Copenhagen Summit:

In the Maldives, President Nasheed held what was arguably the most high profile cabinet meeting the atoll has ever known. (Video here)

President Nasheed, emerging from a 30 min meeting under 20 ft of water. (AFP)
President Nasheed, emerging from a 30 min meeting under 20 ft of water. (AFP)

CBC reports that “They sat at a table anchored to the sand on the floor of the Indian Ocean and signed a document calling on all countries to reduce their carbon dioxide emissions.”

Under the sea (AP)
Under the sea (AP)

In Europe, members of the European Green Party commissioned an ice sculpture for the European parliament plenary meeting in Strasbourg. The statue, which began to melt instantly, was meant to bring (media) attention to the threats created by climate change:

Sculptor Christian Claudel in front of the EU Parliament in Stasbourg
Sculptor Christian Claudel in front of the EU Parliament in Strasbourg

Are these types of actions, performed by politicians and legislators, more effective at influencing the policy making process than non-profits, international organizations and scientists?

Blog Action Day 09: Climate Change: Paradise Lost

Boy am I late in the game here…It’s not even *really* October 15th anymore, but hey. In any case, I’m really happy to contribute to Blog Action Day 09 (BAD09). If you haven’t heard of it, BAD09 is a great, simple initiative from our friends over at change.org. Basically, it’s “an annual event that unites the world’s bloggers in posting about the same issue on the same day. Our aim is to raise awareness and trigger a global discussion.” BAD organizers emphasize that the first and last purpose of BAD is to create a discussion – clearly, a blog post (or 10,000) can’t be the tipping point on an issue like climate change, which is not only broad and complex, but also divisive and polarizing. It’s an honor to be a part of it, and I hope that this post will, at the very least, be thought provoking.

Few places in the world inspire awe like the beautiful atolls of the Indian and Pacific Ocean. Their startling blue waters and white sandy beaches have inspired artists and attracted tourists since modern transportation has made these little pieces of paradise accessible. However, climate change has made these typically low-lying, coral protected islands atolls — such as the Marshall Islands, Tuvalu or the Maldives — particularly vulnerable. Rising sea levels, storm surges and the increased acidification of ocean waters, which contributes to the loss of coral reefs, are already threatening the livelihoods of these islands’ inhabitants. According to the Intergovernemental Panel on Climate Change (IPCC):

  • Sea-level rise is expected to exacerbate inundation, storm surge, erosion and other coastal hazards, thus threatening vital infrastructure, settlements and facilities that support the livelihood of island communities
  • There is strong evidence that under most climate change scenarios, water resources in small islands are likely to be seriously compromised.

Studies from the University of Copenhagen (here and here) argue that island cultures have developed and refined coping mechanisms to handle variations in climate and habitat: storm surges, erosion and shifting sea levels are fundamental features of island life, and cultures have adapted to these realities. However, the current challenges posed by climate change patterns are so stark, that traditional coping strategies will likely not suffice:

Polynesian cultures on small islands in the Pacific have a long tradition for adapting to climate change and variability, as well as to changes in other factors, in order to maintain their culture and way of life. Current and future climate change constitutes, however, a qualitatively and quantitatively different set of challenges.

While there is still some degree of uncertainty as to exactly what the impact of current climate patterns will be on island atolls, there is a broad consensus that (i) these effects are caused by increased CO2 in the atmosphere, a lot of it attributable to human activity and, (ii) that there is a strong chance that these islands will become unsuitable for people to live on. In fact, it is the very existence of island atolls that is at stake.

(Watch: Impact of Climate Change in the Pacific from Oxfam Australia on Vimeo.)

To draw attention to the threat faced by low-lying islands, the Maldives government will be holding an underwater cabinet meeting on October 17:

The president of the Maldives is desperate for the world to know how seriously his government takes the threat of climate change and rising sea levels to the survival of his country. He wants his ministers to know as well.

To this end, Mohamed Nasheed has organised an underwater cabinet meeting and told all his ministers to get in training for the sub-aqua session. Six metres beneath the surface, the ministers will ratify a treaty calling on other countries to cut greenhouse emissions.

pg-24-maldives-afp-_248191s
AFP/Getty

The Maldives, like other island atolls, may very well become uninhabitable by the end of the century. This raises a number of critical questions regarding the legal obligation of states to provide a territory to live on for its citizens. If entire island nations disappear, what then happens to its people, its culture? The Maldives government has been wrestling with this question, and is establising a sovereign wealth fund with revenues generated from tourism for the purchase of territory. President Nasheed said

Sri Lanka and India were targets because they had similar cultures, cuisines and climates. Australia was also being considered because of the amount of unoccupied land available.”We do not want to leave the Maldives, but we also do not want to be climate refugees living in tents for decades.”

The Maldives highest point is 2.4 meters above sea level.
The Maldives highest point is 2.4 meters above sea level.

In the Pacific, the Carteret Islands have become the poster child for the issue of climate related migration flows. The Carteret Islanders, a matrilineal community living on an island chain 50 miles off the coast of Papua New Guinea, have become the world’s first “climate refugees”. The government of Papua New Guinea has begun the evacuation, scheduled until 2020, of some 3,000 islanders.

While predictions vary as to the precise number of people around the world who will be forcibly displaced by climate related events, a commonly accepted figure is that an estimated 200-250 million people will have to migrate by 2050 as a result of climate change. According to Oxfam, 75 million of these people are living in poor islands and low-lying areas of the Pacific. And, as the evacuation of the Carteret Islands is a clear demonstration of, there is an urgent need to create legal safeguards for “climate refugees”.

The UNHCR estimates that there are 42 million displaced people in the world, 25 million of which are receiving assistance or protection from the agency. Internally Displaced Persons (IDPs), which constitute a majority of the displaced (26 of 42 million) do not, in fact, fall under the mandate of the UNHCR de facto – the agency regroups certain IDPs, stateless persons and other special cases that do not fall under its strict, narrow mandate under the umbrella of “persons of concern.”

Migration and asylum-seeking due to climate change will likely be on the increase in the coming years, however, the UNHCR (or any other international organization, for that matter) does not have a mandate to protect or assist “climate refugees”. Legal and funding constraints mean that dealing with “climate refugees” will most likely not be a core UNHCR task.  Not only that, but there is currently a dearth of legislation (both international and national) that would guarantee the rights of people displaced by climate change. Rajesh Chhabara, writing for Climate Change Corp, explains:

Sources at UNHCR, who want to remain anonymous, add that UNHCR is not equipped or designed to handle hundreds of millions of refugees from climate change. It already finds its resources stressed in handling the 14.3 million political refugees in the world.

Clarifying UNHCR’s position, Yoichiro Tsuchida, UNHCR Senior Advisor on Climate Change, explains that the case for environment refugees is too complicated and disparate to fit within the current refugee framework. Justifying international migration due to natural disasters is difficult, as is the task of attributing environmental phenomena directly to climate change. “While environmental factors can contribute to prompting cross-border movements, they are not grounds, in and of themselves, for the grant of refugee status under international refugee law,” she says.

Tsuchida claims that “the broader international human rights regime” should serve as the basis for guiding the responsibility of states towards people who are in need of international protection but who do not qualify for refugee status.

Elements of a response are being developed – Australia and New Zealand, whose small neighbors are sinking, are beginning to shape policy responses. New Zealand, for example, has a Pacific Access Category for migrants hailing from Pacific islands, a fast track, simplified immigration option. The Australian Labour Party published a policy paper in 2006, “Our Drowning Neighbours“, which outlines steps for Australia to take to assist Pacific islands. The paper includes recommendations regarding what sort of assistance Australia should provide Pacific islands to mitigate the effects of climate change, as well as its responsibility as a leading voice for the advocacy of strong action internationally and locally to address climate change.

However, while these initiatives are necessary, they only begin to scratch the surface of the problem. Some experts suggest that policy makers need to construe the inevitable migration flows resulting from climate change as an opportunity rather than a burden. Indeed, while displaced people and migrants already suffer disproportionately from discrimination and difficulties in integration, it is critical for policy makers and governments to prepare us for increased and more complex migration flows. A paper prepared for the Expert Group Meeting on Population Dynamics and Climate Change in June 2009 argues:

There is growing evidence suggesting that mobility, in conjunction with income diversification, is an important strategy to reduce vulnerability to environmental and non-environmental risks – including economic shocks and social marginalisation. In many cases, mobility not only increases resilience but also enables individuals and households to accumulate assets. As such, it will probably play an increasingly crucial role in adaptation to climate change. Policies that support and accommodate mobility and migration are important for both adaptation and the achievement of broader development goals.

In addition to questions related to the development of an appropriate framework for managing migration due to climate change, the consequences of the impending disaster facing islanders is well summarized by Tarita Holm, an analyst with the Palauan Ministry of Resources and Development. Of the displacement and relocation of islanders, she says: “It is about much more than just finding food and shelter,” said  “It is about your identity.”

Addressing climate change is more than just figuring out how and when a carbon tax is appropriate, or whether coal is clean or not. It will force us to grapple with very difficult and fundamental questions about the preservation of culture and civilizations.

Better or Worse

Via @willtownes, this interesting graphic (click for enlarged view)

Well, yes, sure there are signs of improvement globally: reduction in child mortality, improvements in water and sanitation, etc. But I’m not sure that the good balances the bad here. While I find their graph for conflicts a little simplistic (define “conflict” please?), the not-so-great record on the environment, displacement and conflict is pretty worrying. What’s the point of decreasing child mortality if we’re headed in a potentially catastrophic direction with these other  issues?

Climate change, environmental destruction, conflict, displacement – trends that affect us globally and will most definitely have consequences on people in the developing and the developed world. Child survival, maternal mortality, and hunger won’t matter if we don’t have a planet to live on.

[ end of your apocalyptic interlude ]

Paradigm shift, maybe

In spite of what David Rothkopf has to say on the subject, I am really hopeful that the crisis that has been shaking the world economy since last fall will not have been in vain. Given all that has happened, and the intense amount of media scrutiny and public debate on the outcomes of the “Crash of 2008” (however you want to call it – does it even have a proper capitalized name yet?), you would think that this would have created some space for a healthy discussion regarding the future of our civilization… We live in a world of gross overconsumption, excess and waste. While I’ll be the first to admit that I’m firmly part of this system, I see the need to adopt a system that doesn’t promise to drive us straight into the wall as an urgent one (Lula said it best.)

Yesterday, I came across a TED talk by Ray Anderson, the CEO of a carpet company. Now you might think – as I did – that hearing Mr. Anderson’s take on the “business logic of sustainability” would probably not be the most enlightening and thought provoking experience (again: carpet company.) Well, that is a misguided impression, dear reader, and I invite you to check out his 15 min talk in the video below. Personally, I’m a huge fan of the Environmental Impact Equation (min 4:40), and particularly of his re-writing of it (min 11:18). 
Obviously, developing a “new civilization” is no easy feat, and you can’t draw a fancy road map for completing this task. Nonetheless, the notion that Anderson introduces in his speech, that we must decrease the importance of “Affluence”, and increase the importance of “Happiness” in our calculation of the impact of production really appeals to me (watch the video, really). Sure, it’s a pipe dream – and for working with (and not for) the private sector on a daily basis, I know that the notion of the triple bottom line is far from being a central tenet of modern business.
However, stories like these instill a little bit of hope:


The video [The Story of Stuff] is a cheerful but brutal assessment of how much Americans waste, and it has its detractors. But it has been embraced by teachers eager to supplement textbooks that lag behind scientific findings on climate change and pollution. And many children who watch it take it to heart: riding in the car one day with his parents in Tacoma, Wash., Rafael de la Torre Batker, 9, was worried about whether it would be bad for the planet if he got a new set of Legos.

Of course, no one wants their kids (or other people’s kids, even worse) becoming staunch and unwavering advocates of the environment at home – I can already picture children across America going through their mothers’ cosmetics and hiding/throwing away (I mean, recycle) all of the products that don’t meet their high standards. Regardless – and seriously – I do believe that tackling the question of how to adapt our modes of production/consumption to current realities (more people, more pollution, less resources) will require some efforts on the educational front. Leaders of tomorrow (it’s apparently too late for today’s leaders) will need to view the world through the filter of sustainability – and that can only happen if we educate and shape our young generation to respond appropriately to the challenges of their time. 

The Story of Stuff is an amazing video, which I highly recommend you watch – similarly to the Anderson TED talk, it shows how modern means of production are outdated. I’m not surprised that it’s being used in classrooms across the US to teach students about the environment and climate change. Living in Vancouver, I sometimes feel like I live “in the future”: few people still use plastic water bottles, taxis are almost all hybrid, buses are electric, electricity comes mostly from hydropower… etc… There are so many signs that we are turning a corner in terms of how we approach consumption/waste – but not nearly enough, in my view. And I suppose it will take time. And that, to a large extent, it’s the millions of small, everyday paradigm shifts that really make a difference (recall Rafael de la Torre Batker who was worried about the effect of a new set of Legos on the planet). 

The Economist published a story about money growing on trees. Wait. What? 


When forests vanish, people suffer. That is why many believe that there is an urgent need to bring forests onto the global financial balance sheet. Last year Pavan Sukhdev, an economist at Deutsche Bank, reported that the world was losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. If money could be made by selling these ecosystem services, then the financial equation for forests would change.

So a London-based firm, Canopy Capital, is taking up the challenge with Iwokrama International Center (Iwokrama is 370,000 hectare forest in Guyana). They are creating an entirely new class of asset management, by analyzing all of the “services” the forest offers and putting a price tag on it: carbon sequetration, soil regulation, oxygen production… Possibilities are endless, seemingly. I think the conclusion of The Economist piece captures it: “For a few bright sparks out there, financial innovation and engineering combined with science will let them generate wealth in a whole new way.”

Brilliant! I’m already imagining the answers we’ll hear when we ask a child, ten years from now, what he or she wants to be when they grow up: “I want to be a financial scientist!”