Coal prices are expected to double this year (see article in Forbes)
Expect much more new coal mine development applications.
Wednesday, February 13, 2008
Does poverty kill?
People die earlier the poorer they are (at least in part). This is the finding from a new NBER paper Aging and Death under a Dollar a Day, as reported on by VoxEUon panel data from Vietnam and Indonesia.
From VoxEU:
...the largest difference in mortality rates across incomes is consistently found in cohorts of old people. For example, in 1992-93, an Indonesian or Vietnamese aged 50 year-old or more faced a 15% probability of dying within 5 years if he lived in an extremely poor rural household compared to just a 3% to 5% chance if he lived in a rural household with a daily per capita expenditure of $6 to $10.
The causal relationships are more complex to understand: Does ill health reduce people’s ability to work and thus lower incomes, or is it low incomes that lead to ill health and early death?
The NBER paper further concludes:
The direction of causality is unclear: the poor may be poor because they are sick (and thus more likely to die), or they could die because they are poor.
Whatever the case, there is no joy in being stuck in the bottom billion.
In Africa alone that means 41% of the population living on less then $1 per day.
From VoxEU:
...the largest difference in mortality rates across incomes is consistently found in cohorts of old people. For example, in 1992-93, an Indonesian or Vietnamese aged 50 year-old or more faced a 15% probability of dying within 5 years if he lived in an extremely poor rural household compared to just a 3% to 5% chance if he lived in a rural household with a daily per capita expenditure of $6 to $10.
The causal relationships are more complex to understand: Does ill health reduce people’s ability to work and thus lower incomes, or is it low incomes that lead to ill health and early death?
The NBER paper further concludes:
The direction of causality is unclear: the poor may be poor because they are sick (and thus more likely to die), or they could die because they are poor.
Whatever the case, there is no joy in being stuck in the bottom billion.
In Africa alone that means 41% of the population living on less then $1 per day.
Tuesday, February 12, 2008
Rigidity and flexibility in times of crises
What are the best preconditions for a development trajectory that lasts? Most of us would agree that it should at least be a stable system, without inherent risks of breaking down in the face of internal and external shocks. The trick is to convey this into a workable policy. Should the system be more rigid or more flexible? Where is the balance?
Development is a complex and dynamic process. Complex in the sense that there are many interrelationships between different actors operating at different levels. Complexity must never be interpreted as a licence for indecision and lack of leadership. Often our first reaction to unintended consequences, a lack of understanding complex systems, or in times of crises is to regulate with a heavy hand relying on a linear interpretation of the policy making process (and here). Centralise decisions (see earlier post), design new and more rules on the tax system, on how and when to invest, on how to avoid future financial meltdown, on constraining development, and to increase exploitation of ecosystems to name a few. Coupled with a strong belief that policy actions will turn the system towards equilibrium this is more then often confused with strong action and leadership.
The fact is that this approach may worsen the situation, and provide a whole set of new complexities that in turn may trigger a collapse. Increased rigidity may breed instability, the very opposite of what was intended. (For a discussion on the dangers of instability from rigidity in international financial markets see this piece 'Instability from Rigidity' in Project Syndicate).
In a complex and dynamic systems (not all systems are complex and dynamic!) sustainable development trajectories need to be supported by flexible policies, strategies and operational procedures. In such an approach novelty, surprise and crises can be easily adapted to without too much disruptions and with an eye on possible emerging new opportunities.
(All of this will not hold if the world is becoming more certain and simple to understand, less connected, more computable and predictable, less globalised and with only isolated social and natural systems feedbacks...)
In a complex world, stable systems are far closer to resilient then to rigid systems. This means a lot for development policy; at least to provide the means for people to adapt to an ever changing world, and better even, to instill possibilities of learning in times of adjustment.
In a nutshell? Embrace change. Learn to adapt to it. Grow smarter and smarter while doing it.
Development is a complex and dynamic process. Complex in the sense that there are many interrelationships between different actors operating at different levels. Complexity must never be interpreted as a licence for indecision and lack of leadership. Often our first reaction to unintended consequences, a lack of understanding complex systems, or in times of crises is to regulate with a heavy hand relying on a linear interpretation of the policy making process (and here). Centralise decisions (see earlier post), design new and more rules on the tax system, on how and when to invest, on how to avoid future financial meltdown, on constraining development, and to increase exploitation of ecosystems to name a few. Coupled with a strong belief that policy actions will turn the system towards equilibrium this is more then often confused with strong action and leadership.
The fact is that this approach may worsen the situation, and provide a whole set of new complexities that in turn may trigger a collapse. Increased rigidity may breed instability, the very opposite of what was intended. (For a discussion on the dangers of instability from rigidity in international financial markets see this piece 'Instability from Rigidity' in Project Syndicate).
In a complex and dynamic systems (not all systems are complex and dynamic!) sustainable development trajectories need to be supported by flexible policies, strategies and operational procedures. In such an approach novelty, surprise and crises can be easily adapted to without too much disruptions and with an eye on possible emerging new opportunities.
(All of this will not hold if the world is becoming more certain and simple to understand, less connected, more computable and predictable, less globalised and with only isolated social and natural systems feedbacks...)
In a complex world, stable systems are far closer to resilient then to rigid systems. This means a lot for development policy; at least to provide the means for people to adapt to an ever changing world, and better even, to instill possibilities of learning in times of adjustment.
In a nutshell? Embrace change. Learn to adapt to it. Grow smarter and smarter while doing it.
Development is a hard slog
The Economist reports on the relationship between technological leapfrogging in developing countries and sustained development. The case is argued that basic infrastructure and the development of human capital cannot be ignored,and in fact, is a prerequisite for a larger scale
diffusion of technology in these societies. Mobile phones are the exception.
A few quotes from these articles:
Building a fibre-optic backbone or putting plasma screens into schools may be much more glamorous than building electrical grids, sewerage systems, water pipelines, roads, railways and schools. It would be great if you could always jump straight to the high-tech solution, as you can with mobile phones. But with technology, as with education, health care and economic development, such short-cuts are rare. Most of the time, to go high-tech, you need to have gone medium-tech first.
Broadly, two sets of obstacles stand in the way of technological progress in emerging economies. The first is their technological inheritance. Most advances are based on the labours of previous generations: you need electricity to run computers and reliable communications for modern health care, for instance. So countries that failed to adopt old technologies are at a disadvantage when it comes to new ones. Mobile phones, which require no wires, are a prominent exception... The other set of problems has to do with the intangible things that affect a country's capacity to absorb technology: education; R&D; financial systems; the quality of government. In general, developing countries' educational levels have soared in the past decade or so. Middle-income countries have achieved universal primary-school enrolment and poor countries have increased the number of children completing primary school dramatically. Even so, illiteracy still bedevils some middle-income countries and many poor ones.
Development is a hard slog.
diffusion of technology in these societies. Mobile phones are the exception.
A few quotes from these articles:
Building a fibre-optic backbone or putting plasma screens into schools may be much more glamorous than building electrical grids, sewerage systems, water pipelines, roads, railways and schools. It would be great if you could always jump straight to the high-tech solution, as you can with mobile phones. But with technology, as with education, health care and economic development, such short-cuts are rare. Most of the time, to go high-tech, you need to have gone medium-tech first.
Broadly, two sets of obstacles stand in the way of technological progress in emerging economies. The first is their technological inheritance. Most advances are based on the labours of previous generations: you need electricity to run computers and reliable communications for modern health care, for instance. So countries that failed to adopt old technologies are at a disadvantage when it comes to new ones. Mobile phones, which require no wires, are a prominent exception... The other set of problems has to do with the intangible things that affect a country's capacity to absorb technology: education; R&D; financial systems; the quality of government. In general, developing countries' educational levels have soared in the past decade or so. Middle-income countries have achieved universal primary-school enrolment and poor countries have increased the number of children completing primary school dramatically. Even so, illiteracy still bedevils some middle-income countries and many poor ones.
Development is a hard slog.
Nine climate change tipping points
Most cats have nine lives so the saying goes. It is somewat ironic that sientists have come up with no less then nine serious tipping points, each one of them serious events that may trigger larger scale collapse.
Here are the earth's 'nine deaths' according to an article on climate change tipping points in The Independent:
* Arctic sea ice: some scientists believe that the tipping point for the total loss of summer sea ice is imminent.
* Greenland ice sheet: total melting could take 300 years or more but the tipping point that could see irreversible change might occur within 50 years.
* West Antarctic ice sheet: scientists believe it could unexpectedly collapse if it slips into the sea at its warming edges.
* Gulf Stream: few scientists believe it could be switched off completely this century but its collapse is a possibility.
* El Niño: the southern Pacific current may be affected by warmer seas, resulting in far-reaching climate change.
* Indian monsoon: relies on temperature difference between land and sea, which could be tipped off-balance by pollutants that cause localised cooling.
* West African monsoon: in the past it has changed, causing the greening of the Sahara, but in the future it could cause droughts.
* Amazon rainforest: a warmer world and further deforestation may cause a collapse of the rain supporting this ecosystem.
* Boreal forests: cold-adapted trees of Siberia and Canada are dying as temperatures rise.
Knee-jerk reactions to such natural shocks will only aggrevate the situation. How to make decisions under such complex uncertainties is an area that warrants far more attention.
Here are the earth's 'nine deaths' according to an article on climate change tipping points in The Independent:
* Arctic sea ice: some scientists believe that the tipping point for the total loss of summer sea ice is imminent.
* Greenland ice sheet: total melting could take 300 years or more but the tipping point that could see irreversible change might occur within 50 years.
* West Antarctic ice sheet: scientists believe it could unexpectedly collapse if it slips into the sea at its warming edges.
* Gulf Stream: few scientists believe it could be switched off completely this century but its collapse is a possibility.
* El Niño: the southern Pacific current may be affected by warmer seas, resulting in far-reaching climate change.
* Indian monsoon: relies on temperature difference between land and sea, which could be tipped off-balance by pollutants that cause localised cooling.
* West African monsoon: in the past it has changed, causing the greening of the Sahara, but in the future it could cause droughts.
* Amazon rainforest: a warmer world and further deforestation may cause a collapse of the rain supporting this ecosystem.
* Boreal forests: cold-adapted trees of Siberia and Canada are dying as temperatures rise.
Knee-jerk reactions to such natural shocks will only aggrevate the situation. How to make decisions under such complex uncertainties is an area that warrants far more attention.
Friday, February 8, 2008
Kenya: The real causes are poverty and inequality
Most coverage on Kenya blames tribalism for the recent violence, but there is something far more fundamental that explains why anger is spilling into the streets: pervasive poverty and extreme high inequality. IrinNews reports.
Wednesday, February 6, 2008
Is South Africa running out of resources?
Today the WWF warned of resource shortages in South Africa. See article in Mail & Guardian Online.
South African natural resources (e.g. water, energy, ecosystems, fisheries) are indeed under a lot of pressure. The reasons are legio: ineffective institutions, incorrect price signals leading to misallocation and waste of resources, lack of data and information to inform planning, lack of environmental eduction etc. etc.
Here is a 4 point suggestion what to do to to circumvent resource shortages:
1. Value the contribution of natural resources and the environment to the economy and society. Natural resources are not for free and should not only be charged at a level that recovers capital, operational and maintenance costs. Statistics SA started compiling natural resource accounts, this excercise need to be broadened to all of our important natural resources and repeated at least on a biannual basis.
2. Institution building - creation of markets that provide correct price signals on scarce natural resources. Prices on water, energy and ecosystems should start reflecting its scarcity value. This creates the means for a gradual transition to a less resource intensive society.
3. Structural reform - moving beyond "getting the prices right". Behavioural changes are needed especially in the face of looming resource limits. One example is the growing risks of a very energy and carbon-intensive economy.
4. Monitor and evaluate (M&E) impact of policy instruments. The world is complex, and interventions may create all sorts of unintended consequences. Adaptive management, or being on your toes, requires well constructed M&E feedback.
(Source: Sustainable Options)
South African natural resources (e.g. water, energy, ecosystems, fisheries) are indeed under a lot of pressure. The reasons are legio: ineffective institutions, incorrect price signals leading to misallocation and waste of resources, lack of data and information to inform planning, lack of environmental eduction etc. etc.
Here is a 4 point suggestion what to do to to circumvent resource shortages:
1. Value the contribution of natural resources and the environment to the economy and society. Natural resources are not for free and should not only be charged at a level that recovers capital, operational and maintenance costs. Statistics SA started compiling natural resource accounts, this excercise need to be broadened to all of our important natural resources and repeated at least on a biannual basis.
2. Institution building - creation of markets that provide correct price signals on scarce natural resources. Prices on water, energy and ecosystems should start reflecting its scarcity value. This creates the means for a gradual transition to a less resource intensive society.
3. Structural reform - moving beyond "getting the prices right". Behavioural changes are needed especially in the face of looming resource limits. One example is the growing risks of a very energy and carbon-intensive economy.
4. Monitor and evaluate (M&E) impact of policy instruments. The world is complex, and interventions may create all sorts of unintended consequences. Adaptive management, or being on your toes, requires well constructed M&E feedback.
(Source: Sustainable Options)
An African love affair
Africans love soccer.
Africans love cell phones.
These two love's have found each other. Bizcommunity reports
It is February after all.
Africans love cell phones.
These two love's have found each other. Bizcommunity reports
It is February after all.
Pre-school nutrition and adult wellbeing
From SciDev:
"Many developing country and middle-income country governments face significant trade-offs in how they allocate their budget to various types of investments. Governments which have a strong interest in improving welfare, reducing poverty and increasing economic growth, should increase the investments they make in pre-school nutrition"
See full article in The Lancet.
"Many developing country and middle-income country governments face significant trade-offs in how they allocate their budget to various types of investments. Governments which have a strong interest in improving welfare, reducing poverty and increasing economic growth, should increase the investments they make in pre-school nutrition"
See full article in The Lancet.
Nature: the youngsters will blow it! Really?
From EcoEgg and The Guardian:
Video games compete with outdoor activity. This is expected to lead to less interest in nature and more difficulty in raising public awareness for conservation.
Video games compete with outdoor activity. This is expected to lead to less interest in nature and more difficulty in raising public awareness for conservation.
I have a few questions. Yes we hike less, camp less and fish less. Maybe, we spend less time in the outdoors (will have to verify this for Africa though). That this will translate into apathy is a bit too much:
- Will people only value things that they can physically experience? What about the idea of existence value?
- What about the trend towards higher environmental awareness?
- What about the power of connectivity? Social networking? The contagious effect of a message such as 'cool to be green'?
Non consumptive values such as recreation does not tell the whole picture. We experience negative ecological feedback with larger consequences and on increasing scales then a few decades ago. It is likely that the incentive to conserve will not come from our physical interaction with nature only (sure it helps, and it does help for a lot of other things as well, and I will bring my kids to such places), but from a far more pressing necessity.
Tuesday, February 5, 2008
Facts on R&D
Africa spends $5 billion (expressed in PPP$) on R&D, but that is only 0.6% of the $814 billion R&D expenditures worldwide, according to a new study on R&D indicators released by the US National Science Foundation.
R&D share of GDP for South Africa is 0.87% or gross expenditure on R&D (GERD) of R12 billion (2004 data). According to the HSRC the share has risen to 0.92% or a GERD of R14.1 billion in 2005/6. For full results of 2005/6 survey click here.
This compares to 4.71% for Israel (excl. defense R&D), 2.25% for all OECD countries, 1.78% for The Netherlands, 1.34% for China and 0.39% for Romania.
According to the Department of Science and Technology (DST):
To be truly innovative and be able to compete in the knowledge economy, Africa needs accelerating investment in intangibles such as R&D. It will help to translate existing surveys on R&D into a measurement tool, such as R&D satellite accounts, to support the management of this process.
R&D share of GDP for South Africa is 0.87% or gross expenditure on R&D (GERD) of R12 billion (2004 data). According to the HSRC the share has risen to 0.92% or a GERD of R14.1 billion in 2005/6. For full results of 2005/6 survey click here.
This compares to 4.71% for Israel (excl. defense R&D), 2.25% for all OECD countries, 1.78% for The Netherlands, 1.34% for China and 0.39% for Romania.
According to the Department of Science and Technology (DST):
- South Africa has set a goal of achieving R&D expenditure equivalent to 1% of GDP by the year 2008.
- Most South African R&D is performed in the major research field of engineering sciences (comprising 23.9% of total R&D), followed by the natural sciences (20.8%) and the medical and health sciences (14.8%).
- The business sector is the major performer and financier of R&D in the country and performs 58% of all R&D undertaken, while financing 45% of total R&D. The higher education sector undertakes 21.1% of national R&D while government (including the science councils) performs 20.9% of the total but finances 32.1% of R&D. About 15% of South Africa’s R&D is financed from abroad.
To be truly innovative and be able to compete in the knowledge economy, Africa needs accelerating investment in intangibles such as R&D. It will help to translate existing surveys on R&D into a measurement tool, such as R&D satellite accounts, to support the management of this process.
Monday, February 4, 2008
Prices up, use of plastic bags down?
In Ireland - the use of plastic bags decrease a whopping 94% for a plastic bag tax of 33c. New York Times,2 Feb 2008
In Ireland - the use of plastic bags decrease a whopping 95% for a plastic bag tax of 15c. BBC News, 20 August 2002.
How are we doing in South Africa? It seems that we are not that lucky.
A 2007 paper "The Economics of Plastic Bag legislation in South Africa" by Reviva Hasson, Anthony Leiman and Martine Visser argues the folowing:
The results suggest that plastic bag demand is relatively price inelastic and imply that instruments utilising price alone, would have limited efficacy. However, the combination of standards and pricing successfully curbed plastic bag use in the short run. Further analysis suggests that the effectiveness of the legislation may be declining over time.
In plain language: when prices increased, first we did not want them, then we started to get used to it and just paid for them, now we cannot be without them again. The net effect is that state receives a steady flow of income.
Wat happened in Ireland that did not happen here? Social pressure. You do not dare be seen with one of those filthy plastic bags.
I guess South Africans just do not care. The more bags, the more succesfull the shopping.
In Ireland - the use of plastic bags decrease a whopping 95% for a plastic bag tax of 15c. BBC News, 20 August 2002.
How are we doing in South Africa? It seems that we are not that lucky.
A 2007 paper "The Economics of Plastic Bag legislation in South Africa" by Reviva Hasson, Anthony Leiman and Martine Visser argues the folowing:
The results suggest that plastic bag demand is relatively price inelastic and imply that instruments utilising price alone, would have limited efficacy. However, the combination of standards and pricing successfully curbed plastic bag use in the short run. Further analysis suggests that the effectiveness of the legislation may be declining over time.
In plain language: when prices increased, first we did not want them, then we started to get used to it and just paid for them, now we cannot be without them again. The net effect is that state receives a steady flow of income.
Wat happened in Ireland that did not happen here? Social pressure. You do not dare be seen with one of those filthy plastic bags.
I guess South Africans just do not care. The more bags, the more succesfull the shopping.
GDP growth makes Africa look green
No this is not a post on the virtues of a steady state economy. It is also not a post on the green quality of Africa's growth path (will save that for another day).
This is a map on average GDP growth from 1990-2003. The mapmakers ironically chose greener colours for higher growth (couldn't figure out whether South East Asia was dark green or black). Africa has quite a lot of it.
Figures are up to 2003 so the recent commodity-based growth surge is not fully included yet.
Notes:
Average annual percentage growth rate of GDP at market prices based on constant local currency. Dollar figures for GDP are converted from domestic currencies using 1995 official exchange rates. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
Per capita gross domestic product (GDP) average annual growth, 1990–2003. Average annual percentage growth rate of GDP per capita at market prices based on constant local currency. Dollar figures for GDP are converted from domestic currencies using 1995 official exchange rates. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
This is a map on average GDP growth from 1990-2003. The mapmakers ironically chose greener colours for higher growth (couldn't figure out whether South East Asia was dark green or black). Africa has quite a lot of it.
Figures are up to 2003 so the recent commodity-based growth surge is not fully included yet.
Notes:
Average annual percentage growth rate of GDP at market prices based on constant local currency. Dollar figures for GDP are converted from domestic currencies using 1995 official exchange rates. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
Per capita gross domestic product (GDP) average annual growth, 1990–2003. Average annual percentage growth rate of GDP per capita at market prices based on constant local currency. Dollar figures for GDP are converted from domestic currencies using 1995 official exchange rates. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
Source: World Bank
Cartographer/designer/author (Philippe Rekacewicz, Emmanuelle Bournay, UNEP/GRID-Arendal)
Biogas well underway
South Africa's national biogas programme is well underway.
Biogas is a product of the anaerobic digestion or fermentation of biodegradable materials such as manure or sewage, municipal waste, and energy crops. (from Wikipedia)
Engineering News reports that in the first phase of the programme 20 000 households will benefit from the scheme. According to the article a potential of 310 000 households have the technical ability to participate in a rural biogas programme.
Biogas is used worldwide as a solution to biodegradable waste and the provision of sustainable energy. For example, the Biogas Support Program in Nepal has installed over 100,000 biogas plants in rural areas. Vietnam’s Biogas Programme for Animal Husbandry Sector has led to the installation of over 20,000 plants throughout that country. According to the Institute of Science in Society, up to the end of 2005, China had 17 million digesters with annual production of 6.5 billion m3 biogas, mostly in rural areas, with 50 million people enjoying the benefits of biogas technology.
Click here for more information on Integrated Biogas Solutions.
Biogas is a product of the anaerobic digestion or fermentation of biodegradable materials such as manure or sewage, municipal waste, and energy crops. (from Wikipedia)
Engineering News reports that in the first phase of the programme 20 000 households will benefit from the scheme. According to the article a potential of 310 000 households have the technical ability to participate in a rural biogas programme.
Biogas is used worldwide as a solution to biodegradable waste and the provision of sustainable energy. For example, the Biogas Support Program in Nepal has installed over 100,000 biogas plants in rural areas. Vietnam’s Biogas Programme for Animal Husbandry Sector has led to the installation of over 20,000 plants throughout that country. According to the Institute of Science in Society, up to the end of 2005, China had 17 million digesters with annual production of 6.5 billion m3 biogas, mostly in rural areas, with 50 million people enjoying the benefits of biogas technology.
Click here for more information on Integrated Biogas Solutions.
Saturday, February 2, 2008
Who reads this blog?
Saturday afternoon, siesta time in Cape Town.
It is 32 degrees C outside.
Fiddling a bit with the world behind the blogosphere.
This is the result.
From statcounter.com some great statistics on who reads this blog.
594 page loads, 346 unique visitors.
38% are South Africans (long last! almost thought Eskom and Telkom succeeded killing all energy in this country)
15% come from the US (must be a plus that I do not have a poll on Obama and Clinton on the blog)
8% from The Netherlands (university and social networks that last?)
8% from the UK (did not know my brother was that keen on my work)
7% from France (must have been that trip to Paris last week)
3% from Mauritius (thanks guys, I have not even posted one word about Mauritius yet)
Kenya and Uganda? 0.5% after all that stuff on food miles and Kenyan strawberries and the whole Ushahidi campaign..
Rest of Africa? zero.
Remember,this is a blog on Africa's development challenge...
Cold beer sound good, thanks. Have a great weekend.
It is 32 degrees C outside.
Fiddling a bit with the world behind the blogosphere.
This is the result.
From statcounter.com some great statistics on who reads this blog.
594 page loads, 346 unique visitors.
38% are South Africans (long last! almost thought Eskom and Telkom succeeded killing all energy in this country)
15% come from the US (must be a plus that I do not have a poll on Obama and Clinton on the blog)
8% from The Netherlands (university and social networks that last?)
8% from the UK (did not know my brother was that keen on my work)
7% from France (must have been that trip to Paris last week)
3% from Mauritius (thanks guys, I have not even posted one word about Mauritius yet)
Kenya and Uganda? 0.5% after all that stuff on food miles and Kenyan strawberries and the whole Ushahidi campaign..
Rest of Africa? zero.
Remember,this is a blog on Africa's development challenge...
Cold beer sound good, thanks. Have a great weekend.
Thumbs up for land reform, but not the Zimbabwean way
A very recent paper published in the Journal of African Economies from Margaret Chitiga and Ramos Mabuga argues that well-planned land reform can play an important role in the reduction of poverty and inequality.
Friday, February 1, 2008
The uneven distribution of ecological damages
Science News Online reported on a study that measures the distribution of ecological damage around the world. The main outcomes are contained in this figure:
GIANT STEPS. Color-coded footprints indicate the dollar cost, in trillions, of environmental damage inflicted by high-, middle-, and low-income groups of nations on each of the other two groups. E. Roell, from Srinivasan graphic
The study does set the stage though and a surprising result is the high amount of impact by low income countries on middle-income countries.
See Proceedings of National Academy of Sciences of the USA (PNAS) for the full studyThe electricity crises and short-circuiting city power reticulation
In times of crises the urge to centralise power and to be opportunistic in settling old scores is always present. South Africa's electricity crises is no exceptance. The CEO's of the National Energy Regulator of SA (Nersa), Smunda Mokoena and the CEO of the Electricity Distribution Industry Holdings, Phindile Nzimande, are calling for municipalities to be stripped of their (constitutional) powers to reticulate electricity to their customers.
According to Business Day, both argue that infrastructure at local level is in a state of collapse and that municipalities were such inefficient distributors of electricity that they were harmful to the economy. For full article see Business Day.
Such a move, apart from being unconstitutional and somewhat utopian, will have severe impacts on South African cities coping with years of backlog of local infrastructure. According to a draft (as yet unreleased) paper by the Sustainability Institute on natural resource-based services in the City of Cape Town (see earlier blogpost for background), the reason for this infrastructure backlog stems from the challenge to expand services into poorer areas, while maintaining standards throughout the City. Electricity and water services traditionally cross-subsidised this roll-out, at expense of infrastructure maintenance. Thisis unsustainable and it is realised that alternative ways of financing such expansion should be sought.
Here a few extracts from the paper:
Despite the many political changeovers in Cape Town’s municipal government since 1994, a constant theme of successive administrations has been the need to address the service backlogs in the poorer areas of the city. This has had major implications for capital and operating expenditures in the energy, waste, water and sanitation (EWWS) sectors which together account for the bulk of expenditure by the CCT.
The core challenge that has faced officials since 1994 has been to find fiscally viable ways to expand the EWWS services into poorer areas while maintaining and operating the EWWS services for the city as a whole.
To complement the progressive aims of rates and tariff policies, the general approach to services from the mid-1990s onwards was that the levels and standards applied in the former white areas must be applied to all areas. This had major implications for capital budgets, reinforced by increasingly large inter-governmental transfers. However, it is one thing to extend infrastructure using capital budgets and transfers, it is a completely different matter to make sure that operating budgets are expanded accordingly in order to maintain and repair these infrastructures into the future, and provision is made in capital budgets for refurbishment and upgrade.
From 2005 onwards, municipal engineers and the consulting industry were issuing strong warnings that cross-subsidisation coupled to funding of service expansion to achieve uniform levels and standards of service were undermining the operating budgets. By 2006, major infrastructure projects had to be postponed and serious disruptions due to under-maintained infrastructures began to emerge. In 2007 the municipality declared restrictions on new developments in numerous suburbs due to overloading of existing bulk infrastructure, in particular sanitation. These, coupled to rising levels of bad debt, reinforced calls to move towards a sectoral cost recovery model. By the start of 2007, there was a general consensus that the rollout of basic services to meet the needs of the poor could no longer be at the expense of essential maintenance and refurbishment of existing city-wide infrastructures.
According to Business Day, both argue that infrastructure at local level is in a state of collapse and that municipalities were such inefficient distributors of electricity that they were harmful to the economy. For full article see Business Day.
Such a move, apart from being unconstitutional and somewhat utopian, will have severe impacts on South African cities coping with years of backlog of local infrastructure. According to a draft (as yet unreleased) paper by the Sustainability Institute on natural resource-based services in the City of Cape Town (see earlier blogpost for background), the reason for this infrastructure backlog stems from the challenge to expand services into poorer areas, while maintaining standards throughout the City. Electricity and water services traditionally cross-subsidised this roll-out, at expense of infrastructure maintenance. Thisis unsustainable and it is realised that alternative ways of financing such expansion should be sought.
Here a few extracts from the paper:
Despite the many political changeovers in Cape Town’s municipal government since 1994, a constant theme of successive administrations has been the need to address the service backlogs in the poorer areas of the city. This has had major implications for capital and operating expenditures in the energy, waste, water and sanitation (EWWS) sectors which together account for the bulk of expenditure by the CCT.
The core challenge that has faced officials since 1994 has been to find fiscally viable ways to expand the EWWS services into poorer areas while maintaining and operating the EWWS services for the city as a whole.
To complement the progressive aims of rates and tariff policies, the general approach to services from the mid-1990s onwards was that the levels and standards applied in the former white areas must be applied to all areas. This had major implications for capital budgets, reinforced by increasingly large inter-governmental transfers. However, it is one thing to extend infrastructure using capital budgets and transfers, it is a completely different matter to make sure that operating budgets are expanded accordingly in order to maintain and repair these infrastructures into the future, and provision is made in capital budgets for refurbishment and upgrade.
From 2005 onwards, municipal engineers and the consulting industry were issuing strong warnings that cross-subsidisation coupled to funding of service expansion to achieve uniform levels and standards of service were undermining the operating budgets. By 2006, major infrastructure projects had to be postponed and serious disruptions due to under-maintained infrastructures began to emerge. In 2007 the municipality declared restrictions on new developments in numerous suburbs due to overloading of existing bulk infrastructure, in particular sanitation. These, coupled to rising levels of bad debt, reinforced calls to move towards a sectoral cost recovery model. By the start of 2007, there was a general consensus that the rollout of basic services to meet the needs of the poor could no longer be at the expense of essential maintenance and refurbishment of existing city-wide infrastructures.
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