Ruminations

'The greatest market failure the world has ever seen'

Sir Nicholas Stern
Image source: Wikipedia

Could this be the start of something? This is a hard-nosed economist talking the language of people in business and government, and saying things like climate change will impact on economic growth (... crikey! There I was thinking it meant we all got better sun tans ...) and that climate change represents 'the greatest market failure the world has ever seen'. This is seriously heavy stuff from a dark suit, and maybe (just maybe) it will make people sit up and think ... maybe not the Bush administration, but the rest of the world at least.

Click here to watch Stern’s speech (16m:54s) from BBC. (You will need RealPlayer on your machine to do this). His presentation slide are available here.

The era of consequences

I finally got to see this movie here in Singapore yesterday. Not surprisingly, it was in a half empty small theatre, the punters here preferring the likes of Matt Damon and Leonardo DiCaprio over Al Gore. Much of the material I knew about already and so I was prepared for the bad news. One thing that stuck in my mind is a quote Gore uses from Churchill. The latter used it in a different context, of course, but it is highly applicable to the current crisis we face. The debate over climate change is over. No independent, right-minded scientist will argue to the contrary. Now the issue is political and how to overcome the power of vested interests. As Churchill said: "The era of procrastination, of half-measures, of soothing, and baffling expedience of delays is coming to a close. In its place, we are coming to a period of consequences".

Whacky water world

Image source: www.theepoch.times.com

I read somewhere recently, that early Taoist philosophers spoke of the virtues of humankind living in harmony with nature. Unfortunately, this philosophy does not seem to have much appeal for Chinese government officials whose penchant for whacky engineering projects continues to amaze.

The Economist this week runs a story, A modest proposal, on increasingly acute water shortages in northern China, and how it has even been suggested that water be diverted hundreds of kilometres from Tibet at a cost of tens of billions of dollars. This has been pooh-poohed by the Chinese water minister, who is more comfortable with the two less ambitious [sic] projects currently in progress to divert water from the Yangzi River. In characteristic style, The Economist prescribes market solutions. If only it were that simple. More realistic pricing will obviously help, but demand management (when it is largely inelastic demand) will always be a challenge politically. The Chinese might start by dropping their 'Disneyworld'-type mega-projects to focus on smaller scale supply side measures that improve efficiency of water supplies (e.g. water conservation, sewage treatment). This approach, aside from being more in keeping with the ancient Taoist philosophy, has the added advantage of being ecologically sustainable, reducing the likelihood of more problems down the track.

The Haze

The view from my home office window is not gentle on the eye at the best of times. I am a regular witness to ExxonMobil's direct contribution to global warming through its oil refinery at Jurong. Today, however, the view is much worse thanks to what Singaporeans commonly refer to as 'The Haze'. Sadly, it is becoming a regular phenomenon because the Indonesian government does nothing to prevent land-clearing by burning. According to the Singapore Straits Times today, the Pollutants Standards Index (PSI) hit a high of 130 at 10am this morning which is considered 'unhealthy'. Meanwhile, Greenpeace activists have staged a demonstration [RealPlayer required] outside the Indonesian foresty ministry in Jakarta, filling the building with smoke to make a point.