On access to electricity and higher education in SA

A beautiful graph from GapMinder showing the relationship between access to electricity and higher education for South African municipalities.

A few observations:

- Access to electricity increases markedly over this time period

- The percentage of with higher education increases up to 2000, and started decreasing since then, but with some notable exceptions

- The curve is pulled back towards the left-hand corner as time progresses; improved access to electricity without corresponding gains in higher education.

- A notable rebound effect from 2001 onwards - access to electricity still improved in most cases, but percentage of population with higher education starts to fall behind

This signals pressure on higher education, especially from 2001 onwards, that is not directly related to the lack of access to electricity. This failure is not uniform throughout the country though.

Increasing income, increasing waste

The generation of waste does not (yet) seem to follow the richer is greener, or Environmental Kuznets Curve theory. Even in the relatively rich EU25, rising incomes still mean rising amounts of municipal waste in landfills, but there is some good news, according to a new paper "Municipal Waste Kuznets Curves: Evidence of Socio-Economic Drivers and Policy Effectiveness from the EU": "elasticity to income drivers appears lower than in the past".

The full abstract:

Abstract Waste generation and waste disposal are becoming increasingly prominent in the environmental arena, from a policy perspective and in the context of delinking analysis. In general, waste generation is still increasing proportionally with income, and economic and environmental costs associated to landfilling are also increasing. This paper provides a comprehensive analysis of waste generation, incineration and landfill dynamics based on panel data for the EU₂₅, to assess the effects of different drivers (economic, structural, policy) and the eventual differences between Western and Eastern EU countries. We show that for waste generation there is still no Waste Kuznets Curve (WKC) trend, although elasticity to income drivers appears lower than in the past. Landfill and other policy effects do not seem to provide backward incentives for waste prevention, and in terms of landfill and incineration, as expected, they are respectively decreasing and increasing, with policy acting as a strong driver. Eastern countries appear to be performing generally quite well, thus benefiting from EU membership and related policies in terms of environmental performance. We can conclude that although absolute delinking is far from being achieved for waste generation, there are some first positive signs of an increasing relative delinking for waste generation and robust landfill diversion, and varying evidence of a significant role of the EU waste policies implemented in the late 1990s and early 2000s. Our evidence suggests that if while landfill diversion is currently associated to a delinking partly explained by EU policies, waste prevention must be the next objective of waste regulation efforts.

Online Materialism

The somewhat bizarre phenomenon that people spent real money on virtual goods is attracting attention. It may not be that bizarre after all..

People buy virtual goods for the same reasons as they buy material goods. In online spaces, virtual goods can function as markers of status, elements of identity and means towards ends in the same way as material consumer goods do in similarly contrived physical spaces, says Lehdonvirta, the author of a new Phd on the topic.

The good news?

From a macroeconomic perspective, it does not matter what consumers buy, as long as they keep on spending. Virtual consumption might offer an ecological way out of this consumer society's dilemma, says Lehdonvirta.

Increased consumption and less ecological impact? Enough to get me interested and to add the thesis on my pile of reading.

Read a summary on the website of the Helsinki University of Technology which also contains links to the full thesis.

H/T: World Future Society

A day of number crunching on hunger in SADC

The Southern African Development Community suffers from a food crises. The impact is certainly not uniform. On a country level both impact and direction of change is very different. Here are some facts:

- Hunger is a problem on an enormous scale: 95 million people or almost half the SADC population are undernourished. That is twice the number of people living in South Africa.

- Hunger tends to be more acute in certain regions. Almost half of undernourished people in SADC are in the Democratic Republic of Congo alone. Almost 84% of undernourished people in SADC are found in only five countries: DRC, Tanzania, Mozambique, Angola and Madagascar, 15% are in Zambia, Zimbabwe and Malawi and 1.5% in the rest of SADC.

- In absolute terms hunger is increasing, but the rate at which this increase is happening is slowing down. For the whole of SADC the rate of growth in undernourished people slowed down from 46% between the time periods 1990-1992 and 1995-97 (roughly 9% pa), to 10% between the time periods 2000-02 to 2004-6 (roughly 2.5% pa).

- There are mixed successes across the region in responding to the problem. Countries with large undernourished populations are either making good progress (Angola, Mozambique, Zimbabwe) or are making very poor or poor progress (DRC, Tanzania, Madagascar, Zambia).

- Early prognosis?: In the cases of countries with large undernourished populations, the scale of the problem is such that a normal business as usual approach will not eradicate hunger in the forseeable future.

For more read the latest FAO/WFP report on food insecurity in the world.

Comeback of the Commons

The 2009 Nobel Prize in economics went to Elinor Ostrom & Oliver Williamson. They pointed out that internal social control mechanisms regulate the use of the commons and that one does not have to resort to private property rights.

Here the award announcement:

“Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctions are the responsibility of the state and should be conducted by public employees.”

H/T: NY Times

Hunger in sub-Saharan Africa

The 2009 Global Hunger Index reveals the disturbing reality that hunger is on the rise again in the region. Although GHI declined overall in sub Saharan Africa, nearly all the countries in which the GHI rose since 1990 are in the region. Both in the DRC and in Burundi the GHI has reached alarmingly high levels.

The report states as reasons for this growing food insecurity: government ineffectiveness, conflict, political instability and high rates of HIV and AIDS, noting that the financial crises adds to the vulnerability of the hungry. The report further argues that reducing gender inequality is an important part of the solution to global hunger.

Rising prices and... rising demand!?

Again...

Will electricity demand keep on increasing while prices are rising? (A few days ago I posted on a study done by the University of Pretoria showing a substantial reduction in electricity demanded when prices double)

Eskom seems to think that they can have both raising prices and raising demand as evident from their Proposed Revenue Application. Quoted from the document (p 30, for simplicity I am only showing the low sales scenario here):

The sales forecast for the next 10 years has some downside risk (i.e., lower sales) based on the

depth and length of the economic slowdown especially for the first 2 years.

Low

(GWh) % Growth

2010/11 220,260 1.0%

2011/12 224,737 2.0%

2012/13 232,388 3.4%

2013/14 239,536 3.1%

2014/15 248,621 3.8%

2015/16 258,921 4.1%

2016/17 265,399 2.5%

2017/18 271,946 2.5%

2018/19 279,163 2.7%

2019/20 286,388 2.6%

Economic theory says that as electricity prices rise the quantity of electricity demanded will fall, holding other factors constant. The percentage change in quantity demanded in relation to the the percentage change in price is called the price elasticity of demand.

Electricity demand traditionally was relatively inelastic to price which basically means that the rate at which demand slowed down was much less then the rate at what prices increased. There are many different price elasticities for different regions and sectors, but it seems that most tend to converge around a range of -0.2 to -0.7. That means that a 1% increase in price would lead to between 0.2 to 0.7% reduction in demand. There are also signs, at least in the US economy, that price elasticity of electricity is increasing.

This raises questions on the assumptions used in the utility's modelling as well as more serious implications of this modelling and the practical need to entrench market power from the utility's perspective. Will customers be freely allowed to respond to raising electricity prices even if it reduces the demand and thus the sales of the utility? Looking at Eskom's modelling assumptions I am not convinced.

(But then, we need to be sure that all substitutes for Eskom electricity are factored in (what substitutes?), and that the powering forces of raising incomes in South Africa will dwarf the increases in price (really?)).

See, I am still not convinced.

Quote of the day

“I am done with great things and big plans, great institutions, and big success. I am for those tiny, invisible, loving forces that work from individual to individual, creeping through the crannies of the world like so many rootlets, or like the capillary oozing of water, which given time will rend the hardest monuments of pride.”

William James, American philosopher

H/T: Business Day

Types of growth and poverty reduction

Only economic growth in certain sectors reduced poverty (at least in China):

"The Pattern of Growth and Poverty Reduction in China"

World Bank Policy Research Working Paper No. 5069

JOSE G. MONTALVO, Universitat Pompeu Fabra
Email: jose.garcia-montalvo@upf.edu
MARTIN RAVALLION, World Bank - Development Research Group (DECRG)
Email: mravallion@worldbank.org

China has seen a huge reduction in the incidence of extreme poverty since the economic reforms that started in the late 1970s. Yet, the growth process has been highly uneven across sectors and regions. The paper tests whether the pattern of China´s growth mattered to poverty reduction using a new provincial panel data set constructed for this purpose. The econometric tests support the view that the primary sector (mainly agriculture) has been the main driving force in poverty reduction over the period since 1980. It was the sectoral unevenness in the growth process, rather than its geographic unevenness, that handicapped poverty reduction. Yes, China has had great success in reducing poverty through economic growth, but this happened despite the unevenness in its sectoral pattern of growth. The idea of a trade-off between these sectors in terms of overall progress against poverty in China turns out to be a moot point, given how little evidence there is of any poverty impact of non-primary sector growth, controlling for primary-sector growth. While the non-primary sectors were key drivers of aggregate growth, it was the primary sector that did the heavy lifting against poverty.

Will rising electricity prices reduce demand?

Analyse both price and quantity effects! Therefore it is quite a relief to see a new research paper attempting to quantify the effects of rising electricity prices on demand.

In the new paper " Aggregate electricity demand in South Africa: Conditional forecasts to 2030", Roula Inglesi at the University of Pretoria argues that electricity demand will drop substantially due to the price policies agreed – until now – by Eskom and the National Energy Regulator South Africa.

This is the full abstract of the paper:

In 2008, South Africa experienced a severe electricity crisis. Domestic and industrial electricity users had to suffer from black outs all over the country. It is argued that partially the reason was the lack of research on energy, locally. However, Eskom argues that the lack of capacity can only be solved by building new power plants.The objective of this study is to specify the variables that explain the electricity demand in South Africa and to forecast electricity demand by creating a model using the Engle–Granger methodology for co-integration and Error Correction models. By producing reliable results, this study will make a significant contribution that will improve the status quo of energy research in South Africa.

The findings indicate that there is a long run relationship between electricity consumption and price as well as economic growth/income. The last few years in South Africa, price elasticity was rarely taken into account because of the low and decreasing prices in the past. The short-run dynamics of the system are affected by population growth, too. After the energy crisis, Eskom, the national electricity supplier, is in search for substantial funding in order to build new power plants that will help with the envisaged lack of capacity that the company experienced. By using two scenarios for the future of growth, this study shows that the electricity demand will drop substantially due to the price policies agreed – until now – by Eskom and the National Energy Regulator South Africa (NERSA) that will affect the demand for some years.

In a summarised discussion in the monthly AfriNem Newsletter the following telling graph on projected electricity demand (assuming a doubling of the price of electricity from 2008-2011) is presented:

Even at relatively high economic growth rates of 4% and 6%, electricity demand is expected to fall around a massive 27% (when 2007 and 2030 values are compared). Good news is that this is expected to reduce CO2 emissions with 24Mt, but at a cost to several economic sectors such as utilities, construction and mining.

If you are relying on income from electricity sales and have not yet taken into account some basic economics yet: take note. There may be less funds than expected.

(partial) Development Indicators

The South African government has released a third edition of the Development Indicators publication. The report does not contain a specific section on the trends in natural and environmental capital, but a few indicators did make it into the report:

- 470 000 'environmental' jobs were created in the expanded public works programme, compared to 980 000 in infrastructure and 200 000 in the social and economic spheres.

- membership of voluntary environmental organisations declined steeply from 7.9% of citizens in 1995 to 3.9% in 2006.

- International tourist arrivals increased sharply from 6.4m in 2002 to 9.6m in 2008.

- Greenhouse gas emissions per GDP is declining from 450MtCO2 eq in 1990 to 400MtCO2eq in 2007.

- Greenhouse gas emissions per capita is increasing from 9.87 tCO2eq per person in 1990 to 10.29 in 2007.

From an earlier blogpost:

The mainstream economic growth model assumes that natural capital and the environment is in abundant supply, or that a combination of technological developments and the price mechanism will take care of natural resource and environmental shocks on the economy. These are very strong assumptions to make and one that needs to evaluated in much more detail in the further discussion of these recommendations.

Clearly the dominant thinking in economic development is still that natural resources are in abundant supply and scarcity (in quality and/or quantity) will have no discernible feedback effects that may threaten the country's development path.

Flowers...

The Western Cape's flowers is always a stunning display. This year is no exception. See these beautiful galleries of Wild Coast flowers.

Flowers are not the only attraction. Time to join the steady flow of tourists up there...

So long!

Water Shedding?

It was argued in an earlier post that natural resource constraints, which are generally ignored by macroeconomic planners advising South Africa's government, could have a detrimental impact on South Africa's development path. A new paper by South African economists James Blignaut and Jan van Heerden on water limits to economic development takes a stab in this direction. They do point out that increasing the price of water may help avert such a crises, but remain sceptical on the implementation of such measures:

Is Water Shedding Next?

James Blignaut and Jan van Heerden

July 22, 2009

Abstract

South Africa is in the grip of an electricity crisis marked by a euphemism known as ìload

sheddingî. The demand for electricity has grown to the point that the supply reserve margin is

often under threat, necessitating the electricity supplier to cut supply to some areas for various

periods of time, or to shed load. This is a condition previously unknown to South Africa since

the country has enjoyed electricity security from the mid-1950s. Are we, however, heading in

the same direction when considering water? Is water shedding inevitable?

We ask these questions since South Africa is a country classified has having chronic water

shortages, a condition exacerbated by climate change and the rapidly increasing demand for

water. Can we avert a water shedding crisis by being proactive? In this paper we address

this issue by applying a Computable General Equilibrium (CGE) model using an integrated

database comprising South Africaís Social Accounting Matrix (SAM) and sectoral water use

balances. We refer to AsgiSA, the governmentsíAccelerated and Shared Growth Initiative in

South Africa, and conclude that continuing business as usual will indeed lead to a situation

where water shedding will be inevitable.

Unlike electricity, however, water security is much more serious from livelihood, health and

socio-economic development perspectives since there are no substitutes for it, although its influ-

ence is not directly and immediately visible. This delayed effect can create a degree of comfort

and ill-founded complacency leading to non-action, whereas there is an urgent need for proactive measures.

See here for more on water pricing is an important policy instrument to manage water scarcity and risks.

Trade and Development Report on Africa and Environment

The UN Trade and Development Report 2009 was released. A few snippets highlights the worsening state of Africa and possible growth and development opportunities in addressing environmental concerns:

On Africa:

Falling GDP...

In Africa output growth is expected to slow down sharply in 2009, particularly in sub-Saharan Africa, where per capita GDP will actually fall.

Increasing food insecurity...

In 2009, food emergencies persist in 31 countries, and it is estimated that between 109 million and 126 million people, most of them in sub-Saharan Africa and South Asia, may have fallen below the poverty line since 2006 due to higher food prices

On the natural environment:

Climate change and development...

Increased efforts aimed at climate change mitigation can be combined with forward-looking development strategies and rapid growth in developing countries.

Market for ’environmental goods’...

At present, the global market for what is sometimes called “environmental goods” is clearly dominated by developed countries, but several developing economies already account for an increasing share of this market. For some countries, climate change mitigation offers new possibilities to exploit natural comparative advantages, particularly in the production of low-carbon energy, which so far have been of minor economic importance; for others it may offer opportunities to build new dynamic comparative advantages.

A proactive industrial policy with a special focus on using existing comparative advantages and creating new ones in the production of environmental goods is of particular relevance in the context of forward-looking development strategies, because the policy space for support measures in this area is less narrowly circumscribed by multilateral agreements than in other areas.

Adaptation!?

Adapting to the impacts of climate change needs much more attention, especially for a developing continent such as Africa, an idea that was supported in earlier posts on this blog (See: In Africa climate change = adaptation, Africa and Adaptation, Let's not forget adaptation)

This time another article From Project Syndicate:

COPENHAGEN – Striking the right balance between preventing global warming and adapting to its effects is one of the most important – and most vexing – policy questions of our age. It is also often ignored.

According to the conventional wisdom of many environmental campaigners, we should first do everything we can to mitigate global warming, and only then focus on adaptation strategies. This seems wrong – even immoral – if we could do more for people and the planet through adaptation.

Read here for full article.

Read here for the background economic analysis supporting the article.

Fragile Growth

Every now and then we post something on the topic of African growth. This time starting with a a new study published in the Journal of African Economies.

How Fragile Is Africa's Recent Growth?

Jorge Saba Arbache^* and John Page¹

Office of the Chief Economist, Africa Region, The World Bank, The Brookings Institution, Washington, D.C. 20433, USA

^* Corresponding author: Jorge Saba Arbache. E-mail: jarbache@worldbank.org.

Has Africa finally reached the path to sustained growth? We find that much of the improvement in economic performance in Africa after 1995 is attributable to a substantial reduction in the frequency and severity of growth declines in all economies and an increase in growth accelerations in mineral-rich economies. We find, however, that growth accelerations have not been generally accompanied by improvements in variables often correlated withlong run growth, such as investment. We also fail to find evidence that substantial policy and governance improvements were associated with the post-1995 accelerations. We conclude that Africa's growth recovery remains fragile.

In an earlier post it was argued that sub-Saharan growth is largely achieved by a depletion of capital. It does not seem that the badly needed investments to maintain or expand the regions' productive base is realising. It was also pointed out earlier that economic growth does not lead to meaningful gains in social development.

The conclusion becomes stronger that the gains of growth in sub-Saharan Africa is dissipating. One of the reasons could be the high volatility of growth in Africa.

The obvious response is to question growth in itself, but to lift millions of people out of poverty growth is needed. Not less growth, but more (inclusive, transparent and environmentally friendly) growth is what Africa needs.

Low income countries benefit from open access

From Online Access to Research in the Environment (OARE) website:

Online Access to Research in the Environment

Online Access to Research in the Environment (OARE), an international public-private consortium coordinated by the United Nations Environment Programme (UNEP), Yale University, and leading science and technology publishers, enables developing countries to gain access to one of the world's largest collections of environmental science research.

Over 2,990 peer reviewed titles (as of 4/2009) owned and published by over 340 prestigious publishing houses and scholarly societies are now available in more than 100 low income countries. Research is provided in a wide range of disciplines, including Biology; Biotechnology, Genetics & Genetically Modified Species; Botany & Plant Biodiversity; Climatology, Climate Change & Meteorology; Ecology & Wildlife Conservation; Energy Conservation & Renewable Energy; Environmental Chemistry; Environmental & Natural Resource Economics; Environmental Engineering; Environmental Law, Policy & Planning; Fish & Fisheries; Forests & Forestry; Geography, Population Studies & Migration; Geology & Earth Sciences; Natural Environmental Disasters; Oceanography & Marine Biology; Pollution & Environmental Toxicology; Satellite & Remote Sensing Technologies; Soil Sciences and Desertification; Waste Management; Water, Hydrology & Wetlands; and Zoology & Animal Biodiversity.

Investing in Fynbos

Link to the presentation delivered at Fynbos Forum (see earlier post for abstract), exploring the tension between high economic value and low real world investments in fynbos ecosystems.

See here for a beautiful gallery on fynbos.

Image: Courtesy of Wim Gelderblom

Biodiversity: From hotspots to human needs

Protecting ecosystem services and biodiversity in the world's watersheds

Authors: Luck, Gary W.¹; Chan, Kai M.A.²; Fay, John P.³

Source: Conservation Letters, Volume 2, Number 4, August 2009 , pp. 179-188(10)

Publisher: Blackwell Publishing

Abstract:

Despite unprecedented worldwide biodiversity loss, conservation is not at the forefront of national or international development programs. The concept of ecosystem services was intended to help conservationists demonstrate the benefits of ecosystems for human well-being, but services are not yet seen to truly address human need with current approaches focusing mostly on financial gain. To promote development strategies that integrate conservation and service protection, we developed the first prioritization scheme for protecting ecosystem services in the world's watersheds and compared our results with global conservation schemes. We found that by explicitly incorporating human need into prioritization strategies, service-protection priorities were squarely focused on the world's poorest, most densely populated regions. We identified watersheds in Southeast Asia and East Africa as the most crucial priorities for service protection and biodiversity conservation, including Irrawaddy—recently devastated by cyclone Nargis. Emphasizing human need is a substantial improvement over dollar-based, ecosystem-service valuations that undervalue the requirements of the world's poor, and our approach offers great hope for reconciling conservation and human development goals.

Keywords: Biodiversity; carbon storage; conservation investment; conservation policy; ecosystem services; flood mitigation; human well-being; water provision;watershed

Document Type: Research article

DOI: 10.1111/j.1755-263X.2009.00064.x

Affiliations: 1: Institute for Land, Water and Society, Charles Sturt University, Albury, NSW 2640, Australia 2: Institute for Resources, Environment and Sustainability, University of British Columbia, Vancouver, British Columbia, Canada 3: Geospatial Analysis Program, Nicholas School of the Environment and Earth Sciences, Duke University, Durham, NC 27708-9328, USA

A laudable effort!

Several research questions remain, for instance: is investment in biodiversity (and resulting ecosystems goods and services) an effective developmental strategy when compared to alternatives? Who pays for these investments? Will the benefits of investing in ecosystems in fact reach the poor? By which mechanisms?

Overlaying the supply of ecosystem goods and services to the demand from a human needs perspective is a vital first step. Placing this in context of alternative developmental programmes is next. Institutions that realise those remaining real values in a sustainable way are key to implementation.

Saving Energy

From my Inbox:

As discussed, the National Energy Efficiency Campaign’s microsite, www.savingenergy.co.za, has been live for three months now. It isn’t an SA green blog but rather an online portal that links up all of the information that already exists on the internet about saving energy in South Africa.

Quick facts:

· South Africa holds the number 11 spot on the top 20 greenhouse gas emitters list, contributing 1.8% of global emissions and is responsible for 42% of Africa's emissions

· The load shedding that took place in 2008 cost the South African economy somewhere in the region of R50-billion

· The SA government introduced the National Energy Efficiency Campaign to increase awareness about the need to save energy

· The SA community has a growing interest in doing their part to save energy

· In three months, nearly 350 people have signed on online pledge to save energy

Background:

In March 2009 the National Energy Efficiency Campaign launched a microsite www.savingenergy.co.za to provide South Africa with a wealth of information that aims to educate South Africa about the energy crisis and provide useful tips to improve energy consumption from the home to the office.

Over the past three months the site has attracted many visitors from across the country (and a few from beyond our borders) with nearly 350 people declaring that they will do their part to save energy by signing the pledge at http://www.savingenergy.co.za/pledge/index.php.

How it can work for you:

The microsite aims to include a comprehensive listing of energy-relevant websites at http://www.savingenergy.co.za/explore/index.php. If you would like us to add your website to our listing, you can send us a short blurb and we will be happy to list you.

The site also has an abundance of information that is available for you to use such as facts and figures, an energy addiction quiz, and downloadable audits for home and business all can be found at http://www.savingenergy.co.za/recovery/index.php

We are also early awaiting the launch of the saveit game that will be available on the site within the next few weeks. The game aims to help kids aged 10-14 to learn about saving energy in a fun way. Watch this space for the launch.

Finally (and most importantly) we would like to invite you to take the Energy Savers Pledge. We are trying to grow a list of people who will publicly commit themselves to conquering their “energy addictions”. We hope that you will join this list.

The Future is Africa?

Send to me by a friend, spotted en route to Lusaka air port:

Afro-optimism at its illustrated best? (I tried wikipedia - they do not even have a page on Afro-optimism...)

Biodiversity, landscapes and tourism

New research shows that biodiversity and landscapes are important for tourism - at least in Ireland:

Assessing the Impact of Biodiversity on Tourism Flows: A Model for Tourist Behaviour and its Policy Implications

This analysis provides an example of how biodiversity can be measured by means of different indicators, and how the latter can be used to assess the influence of the biodiversity profile of a region on the tourism flows towards it. Previous studies have considered environmental amenities as one of the determinants of tourism destination choice. The central hypothesis of this paper is that the destination’s biodiversity profile can be considered as a key component of environmental amenities. The main objective of this study is to propose a different perspective on this topic, considering the role of biodiversity on tourists’ choice of destination and duration of stay. Domestic Irish tourist flows have been chosen as a case study. The first step of the analysis required the construction of biodiversity indicators suitable for developing a biodiversity profile of each Irish county. Subsequently, a model was developed so as to explain the total number of nights spent in any location as a function of a set of explanatory variables including information about the socio-demographic characteristics of respondents, biodiversity and the landscape profile of the county of destination and features of the trip. Results show that most of the biodiversity and landscape indicators included in the analysis turn out to be statistically significant in determining tourists’ choices regarding the duration of their trip. As a result, policies pursuing biodiversity conservation appear to have a positive impact on the revenue of regional tourism.

Luxury Shame

There is a new emerging term: Luxury Shame

Interesting research to back it up:

"Luxury Shame: An Emerging Norm"

RYAN VINELLI, Yeshiva University - Benjamin N. Cardozo School of Law
Email: vinelli@yu.edu

The luxury goods market, once only accessible by the ultra-wealthy, has been transformed in the past few decades to be a world within the reach of middle class consumers. However in the wake of the growing international financial crisis, governments, societies, and individuals have been forced to make substantial changes. As such, consumers have begun shunning outward displays of wealth. Heavily branded, self-promoting luxury products are being forced to reinvent themselves due in part to the deep pains of the financial crisis, especially hitting the lucrative middle-class market. This phenomenon has manifested in a trend, dubbed "Luxury Shame." By using psychoanalytic theory, this paper seeks to examine the development of societal prohibition in the form of luxury shame and the internalization of this prohibition in individuals as guilt and shame.

One caveat: It does not only affect the middle-class, but also the very rich.

H/T: CSN Abstracts

Priorities for Environmental Expenditure

The South African government has released the Medium Term Strategic Framework

a framework to guide government's programme in the electoral period 2009-2014. This is what the report has to say on the environment:

 

The main objective of government is to encourage sustainable resource management and use by focusing on various interventions including the diversification of the energy mix in pursuance of renewable energy alternatives and promotion of energy efficiency; adopting waste reduction practices by encouraging the re-use of waste outputs as productive inputs; enforcing zero tolerance approach to illegal and unsustainable exploitation of resources; improving air and atmospheric quality for health and well being of citizens; supporting local and sustainable food production; sustainable water use and preserving quality of drinking water and enhancing biodiversity and the preservation of natural habitats.

The focus is on energy efficiency and renewables, waste, exploitation of natural resources, air quality and health, water use and quality, biodiversity and natural habitats. No specifics, such as targets, timeframes and allocations are mentioned. The report does include a list of programmes, but do not appear conclusive:

Establishing a National framework response on climate change mitigation and adaptation whilst maintaining our reputation as a global player

A common system for environmental impact management across government in developing the Environmental Impact Management Strategy that will ensure improved efficiency and effectiveness

Implementing the Water for Growth and Development strategy: strengthening institutional capacity for water management so that water scarcity is not exacerbated by ineffectual management, and finding the right mix of mechanisms to effect change in behaviour including regulatory, self-regulatory, market-based instruments and awareness and education. Projects such as the Mokolo River Augumentation Project and the Lower Sunday’s river aimed at improving water availability and irrigation especially for poor farmers and providing Previously Disadvantaged Users access to user rights will continue

Finalise a policy process on market-based instruments such as taxes, charges and incentives that can be used to promote environmental protection and biodiversity conservation

Implementation of the National Framework for Sustainable Development to ensure that the country follows a sustainable development trajectory for now and into the future

Promote innovation and diversification towards alternative production of resources

To pursue and explore further the concept of Green Jobs including scaling up labour intensive natural resources management practices that contribute to decent work and livelihood opportunities. In particular projects and industries are being pursued in the fields of marine aquaculture development, wildlife management, waste services and ecosystems rehabilitation programmes

Efforts to meet the energy efficiency target of 12% by 2015 and renewable energy target of 10 0 GWh by 2013, will be enhanced by creating an enabling environment for renewable energy, through for example implementing the renewable energy feed-in tariff and building the local renewable energy manufacturing capacity

Effectively managing and allocating the radio frequency spectrum, which is a finite and scarce national resource, prioritising the allocation of the spectrum for developmental purposes.

Growth and greenhouse gases: no decoupling (yet?)

Almost a year and a half ago this is what we quoted from an article posted on Project Syndicate (see earlier post on decoupling):

"...the solution to the challenge of global climate change is as plain as day. The only chance of improvement is to decouple economic growth from energy consumption and emissions. This must happen in the emerging countries, and even more urgently in the old industrial economies."

The "only chance of improvement" does not show convincing signs of ...eh... improvement yet. New research shows that 1% growth in the economy corresponds to 0.8% growth in greenhouse gas emissions. Very few countries diverge too much from this norm. 

Link to full paper

H/T: Scitizen.

Soybean oil

Just after coffee on a slow Monday morning. 

From a new paper "The Life-cycle Carbon Footprint of Biofuels": 

Our results indicate that soybean biodiesel production, despite its high savings from a pure engineering perspective, dramatically increases greenhouse gas emissions compared to conventional diesel when factoring in emissions from land use change across a broad range of assumptions.

Carbon emissions: what is a fair share?

The debate on who should take responsibility for climate change is heating up.  Industrialised nations want developing countries to accept reduction targets as well.  This brings renewed interest in the question how to compare emissions across nations.  The World Resources Institute for example proposed differentiated per capita greenhouse gas emissions targets to counter the obvious inequitable outcomes of absolute emission targets.  Moving beyond this proposal is another option published in PNAS to link responsibility of climate change to individuals instead of nations.  This means that all of the world's high emitters are treated the same regardless where they live. 

This is good news for Africa, which as a result of a large number of carbon poor people, can emit more, and thus, have some space to grow. High carbon intensity and inequality in countries like South Africa is not good news for rich people who will have to accept deeper then average cuts under such a framework.

Education in systems thinking

Systems thinking is not something I associate with following a standard education. In fact, it is something that bring memories of a long and painful process of unlearning...

Now, look at this:

6th grade overarching question: What is the architecture of a dynamic system?

7th grade overarching question: What are the big systems that order our world?

8th Grade overarching question: How do we contribute to and transform dynamic systems?

This is from an on-line curriculum Quest to Learn from the Institute of Play.

Fascinating.

H/T: Plektrix.

ERE conference papers on the web

The presentations from the ERE conference held in Cape Town 20-21 May have been uploaded on SANBI's website.  

Investing in ecosystems

Economists have long assisted with valuing the world's natural assets and ecosystems. To create functional markets to exchange this value is the next step. I agreed to talk on this in the local context of the fynbos biome....

“After all those cosy years of working together,  show me the money”: 

From economic valuation to real-world investment in the fynbos biome

Key words: economic valuation, ecosystems, fynbos, decision making, institutional processes and arrangements

The last decade has seen several studies demonstrating the economic value of ecosystems and the fynbos biome is no exception.  Despite notable criticism on some of these studies, on average they have succeeded in raising the awareness on the value of well-functioning ecosystems.  In some instances this has led to conservation and restoration success on the ground, but what is needed is an institutional system that will translate abstract economic values into real financial investments in ecosystems. With continued increased pressure on the world’s biodiversity on the one hand and shifting agendas towards climate change and a rather reductionist and in practice partial ecosystems goods and services (EGS) analysis on the other, economists and ecologists need to build on their successes and find new meaning in their work on total systems value, as opposed to a focus on total economic value (TEV) or an EGS analysis only.  Economists and ecologists would also do well by soliciting the services of those who can assist in the development of new institutional processes and arrangements that can capture the real financial benefits of well-functioning ecosystems beyond the usual short-term and consumptive benefits.  Based on a analysis of current bottlenecks to realise real-world investments in specifically fynbos ecosystems, an action-orientated agenda focussed on performing economic valuation studies to better serve the needs of decision makers, an increased understanding of and leverage of total systems value, and a renewed focus on the institutional process and arrangements to capture fynbos ecosystem values, is proposed.  

Another view on green jobs

With the emergence of a Global Green New Deal, the question whether government investments and stimulus packages in greenery will pay off is very prominent (see also earlier post on a damning report by the Institute of Energy Research in the US on green jobs for example). 

A study by the Pew Centre emphasised that jobs in the clean energy economy were growing faster then overall jobs, as  reported in an article on SocialFunds.Com:

Despite a lack of sustained government support between 1998 and 2007, the number of jobs in the emerging clean energy economy grew nearly two and a half times faster than the overall job market during that time. According to a report by the Pew Center on the States, jobs in the clean energy economy grew at a rate of 9.1% during that time, compared to a rate of 3.7% in traditional jobs.

and, what is more intriguing is that 

...job growth in the clean energy economy occurred without significant government engagement. However, recent developments such as funds for clean energy provided by the American Recovery and Reinvestment Act of 2009 (ARRA) show promise for rapid growth in the field. The stimulus bill provides $85 billion in spending for energy and transportation, and includes $21 billion in tax incentives for renewable energy, as well as more than $30 billion for spending on a variety of clean energy programs. 

The net costs of these jobs over time remains an important question (see also here for an experience with renewable energy in Spain).

Electricity generation and scale

Yesterday we pointed out that South Africa's share of electricity generation when compared to China has declined rapidly. Today a graph telling something about scale; for the years 2002-2007 China's growth in electricity generation was more then the total amount of electricity generated in South Africa. The scale at which electricity is generated in China dwarfs the relative minor contributions from smaller developing nations such as South Africa.

South Africa's declining share of electricity generation and responsibility for climate change

Based on numbers produced in the recently released BP Statistical Review of World Energy 2009 we did an analysis on South Africa's relative share of electricity generation. South Africa generates around 1.3-1.4% of the world's electricity and this number has been relatively stable from 1990 up to 2008. However, when expressed as a percentage of electricity generated in the BRIC countries and in China a different picture emerges.  In 1990 South Africa produced almost 27% of the amount of electricity that China generated, but this has declined rapidly to only 8% in 2008. In comparison to the BRIC countries this declining share is less dramatic, from 7.5% in 1990 to 4.8% in 2008.

Although not a direct proxy for greenhouse gas emissions over time, these numbers provide some important insights in South Africa's relative responsibility to mitigate against the emissions of greenhouse gases when compared to other developing countries.

Training Manual: Economic Instruments for Environmental and Natural Resource Management

From the UNEP’s Division of Environmental Policy Implementation (DEPI) and the Economics and Trade Branch (ETB) of the Division of Technology, Industry and Economics (DTIE) - a jam-packed training manual on the use of economic instruments for environmental and natural resource management.

The Training Manual builds on a report on ‘The Use of Economic Instruments in Environmental Policy: Opportunities and Challenges’ published by UNEP in 2004 and on a range of standard literature on environmental economics. The 2004 report was prepared under the auspices of the UNEP Working Group on Economic Instruments consisting of twenty-five developed and developing country experts from research institutions, relevant international and non-governmental organization and governments.