C. H. Tung, the first Chinese-appointed chief executive of Hong Kong after the handover in 1997, offered me a three-sentence summary the other day of China’s modern economic history: “China was asleep during the Industrial Revolution. She was just waking during the Information Technology Revolution. She intends to participate fully in the Green Revolution.”
I’ll say. Being in China right now I am more convinced than ever that when historians look back at the end of the first decade of the 21st century, they will say that the most important thing to happen was not the Great Recession, but China’s Green Leap Forward. The Beijing leadership clearly understands that the E.T. — Energy Technology — revolution is both a necessity and an opportunity, and they do not intend to miss it.
We, by contrast, intend to fix Afghanistan. Have a nice day.
O.K., that was a cheap shot. But here’s one that isn’t: Andy Grove, co-founder of Intel, liked to say that companies come to “strategic inflection points,” where the fundamentals of a business change and they either make the hard decision to invest in a down cycle and take a more promising trajectory or do nothing and wither. The same is true for countries.
The U.S. is at just such a strategic inflection point. We are either going to put in place a price on carbon and the right regulatory incentives to ensure that America is China’s main competitor/partner in the E.T. revolution, or we are going to gradually cede this industry to Beijing and the good jobs and energy security that would go with it.
Is President Obama going to finish health care and then put aside the pending energy legislation — and carbon pricing — that Congress has already passed in order to get through the midterms without Republicans screaming “new taxes?” Or is he going to seize this moment before the midterms — possibly his last window to put together a majority in the Senate, including some Republicans, for a price on carbon — and put in place a real U.S. engine for clean energy innovation and energy security?
I’ve been stunned to learn about the sheer volume of wind, solar, mass transit, nuclear and more efficient coal-burning projects that have sprouted in China in just the last year.
Here’s e-mail from Bill Gross, who runs eSolar, a promising California solar-thermal start-up: On Saturday, in Beijing, said Gross, he announced “the biggest solar-thermal deal ever. It’s a 2 gigawatt, $5 billion deal to build plants in China using our California-based technology. China is being even more aggressive than the U.S. We applied for a [U.S. Department of Energy] loan for a 92 megawatt project in New Mexico, and in less time than it took them to do stage 1 of the application review, China signs, approves, and is ready to begin construction this year on a 20 times bigger project!”
Yes, climate change is a concern for Beijing, but more immediately China’s leaders know that their country is in the midst of the biggest migration of people from the countryside to urban centers in the history of mankind. This is creating a surge in energy demand, which China is determined to meet with cleaner, homegrown sources so that its future economy will be less vulnerable to supply shocks and so it doesn’t pollute itself to death.
In the last year alone, so many new solar panel makers emerged in China that the price of solar power has fallen from roughly 59 cents a kilowatt hour to 16 cents, according to The Times’s bureau chief here, Keith Bradsher. Meanwhile, China last week tested the fastest bullet train in the world — 217 miles per hour — from Wuhan to Guangzhou. As Bradsher noted, China “has nearly finished the construction of a high-speed rail route from Beijing to Shanghai at a cost of $23.5 billion. Trains will cover the 700-mile route in just five hours, compared with 12 hours today. By comparison, Amtrak trains require at least 18 hours to travel a similar distance from New York to Chicago.”
China is also engaged in the world’s most rapid expansion of nuclear power. It is expected to build some 50 new nuclear reactors by 2020; the rest of the world combined might build 15.
“By the end of this decade, China will be dominating global production of the whole range of power equipment,” said Andrew Brandler, the C.E.O. of the CLP Group, Hong Kong’s largest power utility.
In the process, China is going to make clean power technologies cheaper for itself and everyone else. But even Chinese experts will tell you that it will all happen faster and more effectively if China and America work together — with the U.S. specializing in energy research and innovation, at which China is still weak, as well as in venture investing and servicing of new clean technologies, and with China specializing in mass production.
This is a strategic inflection point. It is clear that if we, America, care about our energy security, economic strength and environmental quality we need to put in place a long-term carbon price that stimulates and rewards clean power innovation. We can’t afford to be asleep with an invigorated China wide awake.
http://www.nytimes.com/2010/01/10/opinion/10friedman.html
Showing posts with label green tech. Show all posts
Showing posts with label green tech. Show all posts
11 January 2010
5 July 2009
Crisis a manifestation of deeper bigger problems
I think the denialists, paid optimists and pollyanas are dim, Andrew Agrees...
Today, after decades of easy growth feeding off widespread, indiscriminate destruction of the global environment, rapid depletion of basic resources starting with oil but extending to water resources, fish stocks, forests, arable soils and even iron ore, and the stacking up of probably open-ended climate change for perhaps centuries ahead, De-growth is the new No Alternative. In other words the current Black Swan big surprise for growth fanatics is simply an outrider for other, more exotic and terrifying animals that despite the current and biggest ever Mass Extinction will fly, swim, leap, hop or slither towards us.
This outlook is almost completely discounted, denied or ignored for rather evident reasons, for example the fond hope that somehow the global economy lurches back into growth, maybe with a large dose of inflation, but lurches back all the same. However this pious hope changes nothing in the real world. We are increasingly able to forecast the almost inevitable, unavoidable sequels of so many splendidly ignored crises starting to coalesce and congeal. They generate huge and unfortunately very logical, increasingle easy-to-identify tipping points for the world economy, human societies around the globe, and geopolitical stability. Rather soon and rather predictably we can find ourselves not in the "real Black Swan" context that Durden talks about, but something much worse than worriers about Wall Street liquidy like to bleat about. The endgame recession which can logically come will of course be called hard to predict and "a surprise", like its 2008-2009 outlyer and forerunner. We could say: like getting a headache from continuous headbanging, round the clock, but announcing this result as a “surprise” !
We may find that we didn’t need cleantech after all, because global economic gave such a good impression of being a dead cat that organic catfood and alternate energy catwarmers for cold nights in parts of the world unaffected by global warming were found to be unnecessary. This however will be at most a two- or three-year illusion, before real world resource and environment limits quite quickly restore the need to invest in, and spend on sustainable alternatives. What the world's deciders decide at the Copenhagen summit will be interesting, if only to see what extent they accept that an era of no-growth must also be one in which long-term sustainable alternatives are heavily funded, where necessary by international agreement and treaty.
When we turn to current attempts at generating conventional economic recovery, ie. growth, this by definition is conventional. As such, it can only depend on fossil energies, high throughput of mineral resources, depletion of bioresource stocks, increased soil erosion, intense water needs, loss of agricultural land to urban expansion and road construction, pollution of waterbodies by pesticides, and so on. The net result is already peeping out in the data used by "green shoot" enthusiasts, that is a fast bottoming out in the fall of world demand and consumption rates for energy, mineral resources, transport, food, cement, water and so on. In truly mechanistic fashion, this underlays or rationalizes the 'exuberant recovery' of tradable asset prices we noted above.
Because 'ecological' is the new trendy word, we can take an ecological outlook and use ecological analysis to the above paradigm. One key concept we can utilize is teleology which may perhaps be an evolutionary trait, but in any case describes the goal-seeking and goal-setting characteristic of large, even continental size ecosystems. Both conventional economic growth, and present format sustainable economic growth, have no teleological capability. They set non-goals, or pernicious and unattainable goals. Even worse, if the goal of conventional economic recovery, through conventional economic growth was achieved, its sustainability would be a few months - not a few years. This is the dramatic extent of what we can call "shrunk horizons". This is the real, real world outlook at this time, with multiple, quite easy-to-predict impacts in the trading circus – quite a large number of light years away from what Durden and Roubini take as their kickoff points.
http://www.financialsense.com/editorials/mckillop/2009/0701.html
Today, after decades of easy growth feeding off widespread, indiscriminate destruction of the global environment, rapid depletion of basic resources starting with oil but extending to water resources, fish stocks, forests, arable soils and even iron ore, and the stacking up of probably open-ended climate change for perhaps centuries ahead, De-growth is the new No Alternative. In other words the current Black Swan big surprise for growth fanatics is simply an outrider for other, more exotic and terrifying animals that despite the current and biggest ever Mass Extinction will fly, swim, leap, hop or slither towards us.
This outlook is almost completely discounted, denied or ignored for rather evident reasons, for example the fond hope that somehow the global economy lurches back into growth, maybe with a large dose of inflation, but lurches back all the same. However this pious hope changes nothing in the real world. We are increasingly able to forecast the almost inevitable, unavoidable sequels of so many splendidly ignored crises starting to coalesce and congeal. They generate huge and unfortunately very logical, increasingle easy-to-identify tipping points for the world economy, human societies around the globe, and geopolitical stability. Rather soon and rather predictably we can find ourselves not in the "real Black Swan" context that Durden talks about, but something much worse than worriers about Wall Street liquidy like to bleat about. The endgame recession which can logically come will of course be called hard to predict and "a surprise", like its 2008-2009 outlyer and forerunner. We could say: like getting a headache from continuous headbanging, round the clock, but announcing this result as a “surprise” !
We may find that we didn’t need cleantech after all, because global economic gave such a good impression of being a dead cat that organic catfood and alternate energy catwarmers for cold nights in parts of the world unaffected by global warming were found to be unnecessary. This however will be at most a two- or three-year illusion, before real world resource and environment limits quite quickly restore the need to invest in, and spend on sustainable alternatives. What the world's deciders decide at the Copenhagen summit will be interesting, if only to see what extent they accept that an era of no-growth must also be one in which long-term sustainable alternatives are heavily funded, where necessary by international agreement and treaty.
When we turn to current attempts at generating conventional economic recovery, ie. growth, this by definition is conventional. As such, it can only depend on fossil energies, high throughput of mineral resources, depletion of bioresource stocks, increased soil erosion, intense water needs, loss of agricultural land to urban expansion and road construction, pollution of waterbodies by pesticides, and so on. The net result is already peeping out in the data used by "green shoot" enthusiasts, that is a fast bottoming out in the fall of world demand and consumption rates for energy, mineral resources, transport, food, cement, water and so on. In truly mechanistic fashion, this underlays or rationalizes the 'exuberant recovery' of tradable asset prices we noted above.
Because 'ecological' is the new trendy word, we can take an ecological outlook and use ecological analysis to the above paradigm. One key concept we can utilize is teleology which may perhaps be an evolutionary trait, but in any case describes the goal-seeking and goal-setting characteristic of large, even continental size ecosystems. Both conventional economic growth, and present format sustainable economic growth, have no teleological capability. They set non-goals, or pernicious and unattainable goals. Even worse, if the goal of conventional economic recovery, through conventional economic growth was achieved, its sustainability would be a few months - not a few years. This is the dramatic extent of what we can call "shrunk horizons". This is the real, real world outlook at this time, with multiple, quite easy-to-predict impacts in the trading circus – quite a large number of light years away from what Durden and Roubini take as their kickoff points.
http://www.financialsense.com/editorials/mckillop/2009/0701.html
19 May 2009
Australia to build world's largest solar energy plant: Kevin Rudd
this is good breaking news for australia, solar thermal, esp. with steam storage, is a built once then its an almost free output situation.
SYDNEY (Reuters) - Australia plans to build the world's largest solar power station with an output of 1000 megawatts in a A$1.4 billion (US$1.05 billion) investment, Prime Minister Kevin Rudd said on Sunday.
The plant would have three times the generating capacity of the current biggest solar-powered electricity plant, which is in California, Rudd said during a tour of a power station.
Tender details will be announced later in the year, and successful bidders will be named in the first half of 2010. Rudd said the project was aimed at exploiting the country's ample sunshine, which he called "Australia's biggest natural resource."
It was also aimed at helping the country become a leader in renewable, clean energy, he said.
"The government plans to invest with industry in the biggest solar generation plant in the world, three times the size of the world's current biggest, which is in California," Rudd said.
"Why are we doing this? We are doing it in order to support a clean energy future for Australia, we're doing it to boost economic activity now and we're doing it also to provide jobs and much needed opportunities for business as well."
The project should eventually lead to a network of solar-powered stations across the country, Rudd said, with locations chosen to fit in with the existing electricity grid and ensure good access to sunshine.
"We don't want to be clean energy followers worldwide, we want to be clean energy leaders worldwide." Rudd said.
The A$1.4 billion dedicated to this project was part of a wider A$4.65 clean energy initiative by the government, he said.
Rudd also said Australia would become a full member of the International Renewable Energy Agency, which will have its first global meeting in June.
(Editing by David Fox)
SYDNEY (Reuters) - Australia plans to build the world's largest solar power station with an output of 1000 megawatts in a A$1.4 billion (US$1.05 billion) investment, Prime Minister Kevin Rudd said on Sunday.
The plant would have three times the generating capacity of the current biggest solar-powered electricity plant, which is in California, Rudd said during a tour of a power station.
Tender details will be announced later in the year, and successful bidders will be named in the first half of 2010. Rudd said the project was aimed at exploiting the country's ample sunshine, which he called "Australia's biggest natural resource."
It was also aimed at helping the country become a leader in renewable, clean energy, he said.
"The government plans to invest with industry in the biggest solar generation plant in the world, three times the size of the world's current biggest, which is in California," Rudd said.
"Why are we doing this? We are doing it in order to support a clean energy future for Australia, we're doing it to boost economic activity now and we're doing it also to provide jobs and much needed opportunities for business as well."
The project should eventually lead to a network of solar-powered stations across the country, Rudd said, with locations chosen to fit in with the existing electricity grid and ensure good access to sunshine.
"We don't want to be clean energy followers worldwide, we want to be clean energy leaders worldwide." Rudd said.
The A$1.4 billion dedicated to this project was part of a wider A$4.65 clean energy initiative by the government, he said.
Rudd also said Australia would become a full member of the International Renewable Energy Agency, which will have its first global meeting in June.
(Editing by David Fox)
23 April 2009
Silver metal; its high tech, solar and medical money ~
Don't wait to buy silver, buy silver and wait...KN
Since 2001, the production and proliferation of solar panels and solar-powered devices has been impressive. The future for solar power looks almost limitless. And why not? Solar power is the cleanest and cheapest form of electrical generation once installed. It’s the greenest of the green. Installation costs, while still formidable, are declining yearly. Silver plays an important role in collecting and concentrating the electrical current from photovoltaic cells. Another form of solar uses silver back mirrors to concentrates the sunlight.
The production and sale of hybrid vehicles has exploded since 2001, with Toyota’s Prius a common sight on the roads. These gas/electrical battery vehicles dramatically extend miles per gallon. When gasoline prices were at their peak, there were waiting lists for these autos. Honda is now introducing an even more affordable version, and many manufacturers will add hybrids or all-electrical vehicles soon. This electrical transmission requires silver to insure performance in batteries, contacts and switches.
China recently embarked on an ambitious long-term plan to become the leader in world production and sales of all-electric vehicles. China has recently emerged as the world’s largest producer and consumer of gas-powered vehicles. But China knows the limitation that gasoline-powered vehicles have in its future. They have decided to leapfrog gas and hybrid production to become the leader in all-electric powered vehicles. There should be no doubt that this requires vast quantities of silver.
When I wrote about superconductivity in 2001, the main promise was for electrical transmission. Some studies have shown that as much as a third of all electricity produced is lost in its transmission over high-powered wires (mostly aluminum). No, I’m not suggesting that silver will replace aluminum in high-powered transmission wires. Due to the cost and weight that’s not feasible. Besides, there’s hardly enough silver available as it is.
However, an announcement just this week, from the new Administration has focused attention on the electrical grid in our country. It is operating on a system that is essentially 100 years old. It is inefficient and loses too much electricity in transmission. As the world’s best conductor of electricity, silver will play an important role in the new technology and devices developed to increase the efficiencies of the grid.
Like China, we will also be producing and using all-electric cars in the near-future. As these vehicles are plugged in to be recharged, tremendous new strains will be placed the electrical grid. Where will the power come from? Only from new power generation and efficiency improvements in current transmission systems. All this requires silver in a wide variety of applications.
There will continue to be dramatic gains in solar power, electric vehicles and electrical transmission. The future will require significant quantities of silver. This will exert a powerful stimulus on silver prices. You should buy silver for its many electrical applications, not the least is the "charge" it can give to your financial well-being.
http://news.silverseek.com/TedButler/1240328208.php
Since 2001, the production and proliferation of solar panels and solar-powered devices has been impressive. The future for solar power looks almost limitless. And why not? Solar power is the cleanest and cheapest form of electrical generation once installed. It’s the greenest of the green. Installation costs, while still formidable, are declining yearly. Silver plays an important role in collecting and concentrating the electrical current from photovoltaic cells. Another form of solar uses silver back mirrors to concentrates the sunlight.
The production and sale of hybrid vehicles has exploded since 2001, with Toyota’s Prius a common sight on the roads. These gas/electrical battery vehicles dramatically extend miles per gallon. When gasoline prices were at their peak, there were waiting lists for these autos. Honda is now introducing an even more affordable version, and many manufacturers will add hybrids or all-electrical vehicles soon. This electrical transmission requires silver to insure performance in batteries, contacts and switches.
China recently embarked on an ambitious long-term plan to become the leader in world production and sales of all-electric vehicles. China has recently emerged as the world’s largest producer and consumer of gas-powered vehicles. But China knows the limitation that gasoline-powered vehicles have in its future. They have decided to leapfrog gas and hybrid production to become the leader in all-electric powered vehicles. There should be no doubt that this requires vast quantities of silver.
When I wrote about superconductivity in 2001, the main promise was for electrical transmission. Some studies have shown that as much as a third of all electricity produced is lost in its transmission over high-powered wires (mostly aluminum). No, I’m not suggesting that silver will replace aluminum in high-powered transmission wires. Due to the cost and weight that’s not feasible. Besides, there’s hardly enough silver available as it is.
However, an announcement just this week, from the new Administration has focused attention on the electrical grid in our country. It is operating on a system that is essentially 100 years old. It is inefficient and loses too much electricity in transmission. As the world’s best conductor of electricity, silver will play an important role in the new technology and devices developed to increase the efficiencies of the grid.
Like China, we will also be producing and using all-electric cars in the near-future. As these vehicles are plugged in to be recharged, tremendous new strains will be placed the electrical grid. Where will the power come from? Only from new power generation and efficiency improvements in current transmission systems. All this requires silver in a wide variety of applications.
There will continue to be dramatic gains in solar power, electric vehicles and electrical transmission. The future will require significant quantities of silver. This will exert a powerful stimulus on silver prices. You should buy silver for its many electrical applications, not the least is the "charge" it can give to your financial well-being.
http://news.silverseek.com/TedButler/1240328208.php
21 April 2009
Spain's Bullet Train changes Nation ~ Fast
CIUDAD REAL, Spain -- To sell his vision of a high-speed train network to the American public, President Barack Obama this week cited Spain, a country most people don't associate with futuristic bullet trains.
Spain's system of 218-mile-an-hour bullet trains, the AVE -- meaning 'bird' in Spanish -- has increased mobility for many residents, though critics say it has come at the expense of less-glamorous forms of transportation.
Yet the country is on track to bypass France and Japan to have the world's biggest network of ultrafast trains by the end of next year, figures from the International Union of Railways and the Spanish government show.
The growth of the Alta Velocidad Española, or AVE, high-speed rail network is having a profound effect on life in Spain. Many Spaniards are fiercely attached to their home regions and studies show they are unusually reluctant to live or even travel elsewhere.
But those centuries-old habits are starting to change as Spain stitches its disparate regions together with a €100 billion ($130 billion) system of bullet trains designed to traverse the countryside at up to 218 miles an hour.
"We Spaniards didn't used to move around much," says José María Menéndez, who heads the civil engineering department at the University of Castilla-La Mancha. "Now I can't make my students sit still for one second. The AVE has radically changed this generation's attitude to travel."
Spain opened its first high-speed line, between Madrid and Seville, in 1992. At the time, the decision to run the line to sleepy Seville, host to the World Expo that year, was deeply controversial. Critics said it would be a costly failure for then-Prime Minister Felipe González, and that he built the line just to take him to Seville, his hometown, on the weekends.
But the AVE-which means "bird" in Spanish- proved to be a popular and political success. Politicians now fight to secure stations in their districts. Political parties compete to offer ever-more ambitious expansion plans. Under the latest blueprint, nine out of ten Spaniards will live within 31 miles of a high speed rail station by 2020.
By last year, the sprawling network of lines that stretches out from the capital, Madrid, reached Málaga in the south, Valladolid to the north and Barcelona in the country's northeast. Now, residents of Barcelona can be in Madrid in just over two-and-a-half hours-a journey that takes around six hours by car.
In the year since the Madrid-Barcelona line opened in February 2008, the AVE, costing passengers roughly the same as what they would pay to fly, has snatched half the route's air-passenger traffic.
"We had expected it to be mostly business travelers on this line," says Julio Hermida, a spokesman for Renfe, the state train operator. "But we're finding it's just as busy on the weekends," as Barcelona residents discover Madrid and vice-versa, despite a long-lived rivalry between the two cities. "To some extent, it's changing the way people think about each other."
Not everyone is pleased. ETA, the militant Basque separatist group, has said it would target anyone involved in the construction of a high-speed train line that will connect the restive northern region with Madrid and France. In December, ETA killed the owner of a company working as a contractor on the project, and in February detonated a bomb at the headquarters of Ferrovial SA, another contractor working on the project.
Other, nonviolent critics say the country's massive investment in high speed rail has come at the expense of other, less-glamorous forms of transportation. Starved of funds, Spain's antiquated freight-train network has fallen into disuse, forcing businesses to move their goods around by road. That means the Spanish economy is unusually sensitive to changes in the price of crude oil.
Critics say the AVE will never stop losing money. Even its backers say high-speed rail can only be economical if the state bears much of the construction costs. But they say the train's benefits-lower greenhouse-gas emissions, less road congestion and, in Spain's case, greater social cohesion and economic mobility-make it an investment worth making.
"The country is becoming far more intertwined," says José María Ureña, a professor of city and regional planning at the University of Castilla-La Mancha. "In a country that tends to separate out somewhat, that can only be a good thing."
The AVE was originally designed to compete with the airplane for commutes between major cities around 300 miles apart. But the biggest, and least expected, effect of the AVE has been on the smaller places in between.
Perhaps the most striking example is Ciudad Real, a scrappy town 120 miles south of Madrid in Castilla-La Mancha which, Mr. Ureña says, "had completely vanished from the map." In medieval times, the town was a key stopover point on the route between the two of most important cities of the time, Córdoba and Toledo. But the railway and the highway south later bypassed the town, and Ciudad Real began to wither.
Now it has an AVE station that puts it just 50 minutes away from Madrid, and Ciudad Real has come alive. The city has attracted a breed of daily commuters that call themselves "Avelinos." The AVE helped attract a host of industries to Ciudad Real, and the train is full in both directions.
Indra, an information technology company, moved a "software factory" to Ciudad Real a decade ago. "Along with the University, the AVE was one of the key reasons we moved here," says Ángel Villodre, the director of the center.
The University of Castilla-La Mancha's campus here has grown sharply in size and importance. "The school is here because of the AVE," says Mr. Menéndez, the department head. "Without it, it would be impossible to attract the high-level staff we need."
Around a third of Mr. Menéndez's students are from a different region of Spain -- almost unheard of in a country where students mostly stay close to home.
Airlines have in the past lobbied hard against high-speed rail projects, seeing them as unfair, government-subsidized competition. Southwest Airlines was credited with helping to kill a project to build a Texan bullet train in the 1990s.
But in Ciudad Real, an international airport has just opened its doors. Its key selling point? The AVE. The private owners of the airport have placed it next to the high speed line, hoping to offer a cheap alternative to Madrid's airports.
"If you can't beat them, join them," shrugs José Lopes, director of airlines development at Aeropuerto Central.
http://online.wsj.com/article/SB124018395386633143.html#
Spain's system of 218-mile-an-hour bullet trains, the AVE -- meaning 'bird' in Spanish -- has increased mobility for many residents, though critics say it has come at the expense of less-glamorous forms of transportation.
Yet the country is on track to bypass France and Japan to have the world's biggest network of ultrafast trains by the end of next year, figures from the International Union of Railways and the Spanish government show.
The growth of the Alta Velocidad Española, or AVE, high-speed rail network is having a profound effect on life in Spain. Many Spaniards are fiercely attached to their home regions and studies show they are unusually reluctant to live or even travel elsewhere.
But those centuries-old habits are starting to change as Spain stitches its disparate regions together with a €100 billion ($130 billion) system of bullet trains designed to traverse the countryside at up to 218 miles an hour.
"We Spaniards didn't used to move around much," says José María Menéndez, who heads the civil engineering department at the University of Castilla-La Mancha. "Now I can't make my students sit still for one second. The AVE has radically changed this generation's attitude to travel."
Spain opened its first high-speed line, between Madrid and Seville, in 1992. At the time, the decision to run the line to sleepy Seville, host to the World Expo that year, was deeply controversial. Critics said it would be a costly failure for then-Prime Minister Felipe González, and that he built the line just to take him to Seville, his hometown, on the weekends.
But the AVE-which means "bird" in Spanish- proved to be a popular and political success. Politicians now fight to secure stations in their districts. Political parties compete to offer ever-more ambitious expansion plans. Under the latest blueprint, nine out of ten Spaniards will live within 31 miles of a high speed rail station by 2020.
By last year, the sprawling network of lines that stretches out from the capital, Madrid, reached Málaga in the south, Valladolid to the north and Barcelona in the country's northeast. Now, residents of Barcelona can be in Madrid in just over two-and-a-half hours-a journey that takes around six hours by car.
In the year since the Madrid-Barcelona line opened in February 2008, the AVE, costing passengers roughly the same as what they would pay to fly, has snatched half the route's air-passenger traffic.
"We had expected it to be mostly business travelers on this line," says Julio Hermida, a spokesman for Renfe, the state train operator. "But we're finding it's just as busy on the weekends," as Barcelona residents discover Madrid and vice-versa, despite a long-lived rivalry between the two cities. "To some extent, it's changing the way people think about each other."
Not everyone is pleased. ETA, the militant Basque separatist group, has said it would target anyone involved in the construction of a high-speed train line that will connect the restive northern region with Madrid and France. In December, ETA killed the owner of a company working as a contractor on the project, and in February detonated a bomb at the headquarters of Ferrovial SA, another contractor working on the project.
Other, nonviolent critics say the country's massive investment in high speed rail has come at the expense of other, less-glamorous forms of transportation. Starved of funds, Spain's antiquated freight-train network has fallen into disuse, forcing businesses to move their goods around by road. That means the Spanish economy is unusually sensitive to changes in the price of crude oil.
Critics say the AVE will never stop losing money. Even its backers say high-speed rail can only be economical if the state bears much of the construction costs. But they say the train's benefits-lower greenhouse-gas emissions, less road congestion and, in Spain's case, greater social cohesion and economic mobility-make it an investment worth making.
"The country is becoming far more intertwined," says José María Ureña, a professor of city and regional planning at the University of Castilla-La Mancha. "In a country that tends to separate out somewhat, that can only be a good thing."
The AVE was originally designed to compete with the airplane for commutes between major cities around 300 miles apart. But the biggest, and least expected, effect of the AVE has been on the smaller places in between.
Perhaps the most striking example is Ciudad Real, a scrappy town 120 miles south of Madrid in Castilla-La Mancha which, Mr. Ureña says, "had completely vanished from the map." In medieval times, the town was a key stopover point on the route between the two of most important cities of the time, Córdoba and Toledo. But the railway and the highway south later bypassed the town, and Ciudad Real began to wither.
Now it has an AVE station that puts it just 50 minutes away from Madrid, and Ciudad Real has come alive. The city has attracted a breed of daily commuters that call themselves "Avelinos." The AVE helped attract a host of industries to Ciudad Real, and the train is full in both directions.
Indra, an information technology company, moved a "software factory" to Ciudad Real a decade ago. "Along with the University, the AVE was one of the key reasons we moved here," says Ángel Villodre, the director of the center.
The University of Castilla-La Mancha's campus here has grown sharply in size and importance. "The school is here because of the AVE," says Mr. Menéndez, the department head. "Without it, it would be impossible to attract the high-level staff we need."
Around a third of Mr. Menéndez's students are from a different region of Spain -- almost unheard of in a country where students mostly stay close to home.
Airlines have in the past lobbied hard against high-speed rail projects, seeing them as unfair, government-subsidized competition. Southwest Airlines was credited with helping to kill a project to build a Texan bullet train in the 1990s.
But in Ciudad Real, an international airport has just opened its doors. Its key selling point? The AVE. The private owners of the airport have placed it next to the high speed line, hoping to offer a cheap alternative to Madrid's airports.
"If you can't beat them, join them," shrugs José Lopes, director of airlines development at Aeropuerto Central.
http://online.wsj.com/article/SB124018395386633143.html#
19 April 2009
Replacing Wall Street with Green economics
YOUNG: It's Living on Earth, I'm Jeff Young.
CURWOOD: And I'm Steve Curwood.
The recession has meant a lot of things for a lot of people--lost jobs, lost investments, lost houses, lost sleep.
And for author David Korten, our current economic mess may also generate public support for fundamental changes in our economic system. His new book is called, "Agenda for a New Economy: From Phantom Wealth to Real Wealth: Why Wall Street Can't Be Fixed and How to Replace it."
David Korten, what is the difference between what you call real and phantom wealth?
KORTEN: Phantom wealth is basically money that is created out of nothing. And Wall Street has become a master at phantom wealth creation.
CURWOOD: For example?
KORTEN: Well, pumping up financial bubbles. Of course, the whole mortgage debacle was based on the assumption that housing prices would rise forever and, of course, housing prices were rising even though there was no change in the size of the home and its state of repair, its livability, its location or anything else. It was pure inflation. But we treated that as though inflating housing prices was actually creating real wealth.
CURWOOD: And what is real wealth?
KORTEN: Well real wealth is anything of real value or utility. It can be land, labor, education, ideas. And at the most basic level it's healthy children, it's a strong family, it's a healthy natural environment. The most valuable of real wealth is living wealth. But of course that does not come in in any way in the statistics by which we normally evaluate economic performance.
Author David Korten.
CURWOOD: Now in your book you argue that the fundamental flaw of our economic system is the way money in created. What's wrong with the way we create money in your view?
KORTEN: Yes, in our current system the creation of money is controlled by private banks. And it's created when a bank issues a loan. It records the loan as a liability and makes another entry as an asset, which represents the money you need to repay. And with those simple entries, new money is created. Now the catch is that the bank creates only the amount of the principle, but you have to repay the principle plus interest, which means that in the aggregate, if the economy is not growing fast enough to generate enough demand for new loans to create the money to repay the interest, then the whole system goes into default, which is very much what has happened.
CURWOOD: So, wait a second, you're saying that our banking system is essentially a Ponzi scheme.
KORTEN: It is very much a Ponzi scheme. And it's a very sophisticated Ponzi scheme, but it puts the whole society into a condition of dependence and debt slavery such that we all end up working for the banks in the end.
CURWOOD: Now the folks who talk about a free market often cite Adam Smith. In your book, you also turn to Adam Smith. Seems that you and the folks that you don't agree with are citing the same guru.
KORTEN: We are. And it's interesting how, you know, many of our historic thought leaders have been distorted. Now, if one really understands Adam Smith – he was actually praising a market that looks very much like a local farmers market: a place where small producers and consumers come together in the context of a community and community values to exchange goods and services. Now what his writing has been used to justify is the consolidation and monopolization of economic power and, in fact, those who study Adam Smith's work in depth conclude that he actually wrote "Wealth of Nations" as almost a tirade against the concentration and abuse of corporate power with the support of the state.
CURWOOD: How does the climate change crisis play into your thesis here?
KORTEN: What we need to face up to is that as a species we are exceedingly over consuming beyond what the planet can sustain. Now, we're often told that any change in our consumption level will require sacrifice. There are enormous opportunities to at once reduce our consumption and increase our quality of life. But it requires an enormous reallocation of resources from those uses that are harmful, like warfare is an obvious example or the creation of an auto-dependent society, to a focus on meeting real needs and meeting the real needs of all people. Now, this requires almost literally standing our economy on its head to focus on life needs rather than on increasing the financial assets of the already very wealthy.
CURWOOD: Please describe for me, David Korten, the way a healthy economy from your perspective would operate, one that would in fact protect the environment and support our society. In other words, what should we replace Wall Street with?
KORTEN: We need to redesign around a primary value on life, on the health of our children, the health of our families, the health of our communities and the health of our natural environment. But it requires local economic control, it requires local ownership, it requires the broadest possible participation in ownership, and it means managing the economy for the long term, the long-term health of our living systems. Now that means, curiously, that in many ways what we need to move to is a financial system that looks more like the one we had when I was growing up in the post World War II years, when our banking system was what we called a unitary system comprised of individually locally owned banks that existed to be depositories for people's savings and to make loans to the local people to buy their homes and operate their local businesses.
CURWOOD: David Korten is president and founder of the People-Centered Development Forum, and author of "Agenda for a New Economy: From Phantom Wealth to Real Wealth, Why Wall Street Can't Be Fixed and How to Replace It."
http://www.loe.org/shows/segments.htm?programID=09-P13-00016&segmentID=3
CURWOOD: And I'm Steve Curwood.
The recession has meant a lot of things for a lot of people--lost jobs, lost investments, lost houses, lost sleep.
And for author David Korten, our current economic mess may also generate public support for fundamental changes in our economic system. His new book is called, "Agenda for a New Economy: From Phantom Wealth to Real Wealth: Why Wall Street Can't Be Fixed and How to Replace it."
David Korten, what is the difference between what you call real and phantom wealth?
KORTEN: Phantom wealth is basically money that is created out of nothing. And Wall Street has become a master at phantom wealth creation.
CURWOOD: For example?
KORTEN: Well, pumping up financial bubbles. Of course, the whole mortgage debacle was based on the assumption that housing prices would rise forever and, of course, housing prices were rising even though there was no change in the size of the home and its state of repair, its livability, its location or anything else. It was pure inflation. But we treated that as though inflating housing prices was actually creating real wealth.
CURWOOD: And what is real wealth?
KORTEN: Well real wealth is anything of real value or utility. It can be land, labor, education, ideas. And at the most basic level it's healthy children, it's a strong family, it's a healthy natural environment. The most valuable of real wealth is living wealth. But of course that does not come in in any way in the statistics by which we normally evaluate economic performance.
Author David Korten.
CURWOOD: Now in your book you argue that the fundamental flaw of our economic system is the way money in created. What's wrong with the way we create money in your view?
KORTEN: Yes, in our current system the creation of money is controlled by private banks. And it's created when a bank issues a loan. It records the loan as a liability and makes another entry as an asset, which represents the money you need to repay. And with those simple entries, new money is created. Now the catch is that the bank creates only the amount of the principle, but you have to repay the principle plus interest, which means that in the aggregate, if the economy is not growing fast enough to generate enough demand for new loans to create the money to repay the interest, then the whole system goes into default, which is very much what has happened.
CURWOOD: So, wait a second, you're saying that our banking system is essentially a Ponzi scheme.
KORTEN: It is very much a Ponzi scheme. And it's a very sophisticated Ponzi scheme, but it puts the whole society into a condition of dependence and debt slavery such that we all end up working for the banks in the end.
CURWOOD: Now the folks who talk about a free market often cite Adam Smith. In your book, you also turn to Adam Smith. Seems that you and the folks that you don't agree with are citing the same guru.
KORTEN: We are. And it's interesting how, you know, many of our historic thought leaders have been distorted. Now, if one really understands Adam Smith – he was actually praising a market that looks very much like a local farmers market: a place where small producers and consumers come together in the context of a community and community values to exchange goods and services. Now what his writing has been used to justify is the consolidation and monopolization of economic power and, in fact, those who study Adam Smith's work in depth conclude that he actually wrote "Wealth of Nations" as almost a tirade against the concentration and abuse of corporate power with the support of the state.
CURWOOD: How does the climate change crisis play into your thesis here?
KORTEN: What we need to face up to is that as a species we are exceedingly over consuming beyond what the planet can sustain. Now, we're often told that any change in our consumption level will require sacrifice. There are enormous opportunities to at once reduce our consumption and increase our quality of life. But it requires an enormous reallocation of resources from those uses that are harmful, like warfare is an obvious example or the creation of an auto-dependent society, to a focus on meeting real needs and meeting the real needs of all people. Now, this requires almost literally standing our economy on its head to focus on life needs rather than on increasing the financial assets of the already very wealthy.
CURWOOD: Please describe for me, David Korten, the way a healthy economy from your perspective would operate, one that would in fact protect the environment and support our society. In other words, what should we replace Wall Street with?
KORTEN: We need to redesign around a primary value on life, on the health of our children, the health of our families, the health of our communities and the health of our natural environment. But it requires local economic control, it requires local ownership, it requires the broadest possible participation in ownership, and it means managing the economy for the long term, the long-term health of our living systems. Now that means, curiously, that in many ways what we need to move to is a financial system that looks more like the one we had when I was growing up in the post World War II years, when our banking system was what we called a unitary system comprised of individually locally owned banks that existed to be depositories for people's savings and to make loans to the local people to buy their homes and operate their local businesses.
CURWOOD: David Korten is president and founder of the People-Centered Development Forum, and author of "Agenda for a New Economy: From Phantom Wealth to Real Wealth, Why Wall Street Can't Be Fixed and How to Replace It."
http://www.loe.org/shows/segments.htm?programID=09-P13-00016&segmentID=3
27 March 2009
Friedman on Lateline (ABC TV)
LEIGH SALES, PRESENTER: A recent letter writer to the New York Times described America's current economic crisis as President Obama's "Hurricane Katrina moment," meaning the point in the presidency when public sentiment turns.
Several opinion polls in America show Barack Obama's approval rating has slipped by around 20 points since his election, although Gallup still gives him a solid 65 per cent rating.
The President's facing a public that's furious about the erosion of retirement savings.
And cases like AIG, where executives took big bonuses from a taxpayer bailout, which they've now paid back.
Somebody who's been writing in great detail about the American recession and its political implications is Tom Friedman, one of the New York Times' most prominent columnists.
He's also the author of numerous books. His latest is 'Hot, Flat and Crowded'.
He joined me earlier today from Washington.
Mr Friedman, many thanks for being with us.
TOM FRIEDMAN: Wonderful to be with you, Leigh. It's great to be in touch with all my friends in Australia.
LEIGH SALES: In a column this week you wrote that President Obama needs to have an overdue, fire-side chat with the nation. What did you mean by that?
TOM FRIEDMAN: Well, I guess what I meant by that, Leigh, is this: that in a funny way President Obama is both overexposed and underexposed. He's been great about meeting with the press, going on late night TV, really interacting with the public in a lot of different ways than a President has in the past.
But to me, one thing's been missing, and it's been that FDR, Franklin Delano Roosevelt fireside chat where the President simply sits down and explains to people just how much financial trouble we're in, and that all these brush fires out there - who makes how much money et cetera, what bonus - you know, they're all important issues, but ultimately we've got to heel our banking system, Leigh.
The banking system is like your heart. It pumps blood to your industrial muscles and right now we have, in banking terms, congestive heart failure. Our heart is not pumping credit into the system. And without that, you know, the system doesn't work. And I think one thing that has been missing from the beginning, is a sense of, for the average American, how big this problem is, and, you know, the image I've really been using from the beginning of this crisis is that incredible scene in the movie 'Jaws' where Roy Scheider first beholds the great white shark. And after he sees the shark he walks, you know, wide-eyed up to the captain and says, "We're going to need a bigger boat". And we are going to need a bigger boat. And right now, that sense, that this is so big, you know, Leigh, we built up a credit bubble that was THIS big. And you know what that means? The hole we're in is THIS deep. And I think the President still hasn't quite conveyed that to the American people.
LEIGH SALES: Well, your paper, The New York times has created a bit of a buzz during the past week because three very influential columnists - you, Paul Krugman and Frank Rich - each wrote columns critical of President Obama, and The Times also ran a critical editorial. Is Barack Obama beginning to lose some of his political capital, as Mr Krugman argues?
TOM FRIEDMAN: You know, I think it's premature to say that. You know, a lot of this is simply the natural to and fro over what is a really big, complicated issue. And all of us have slightly different takes on it. I think that's really healthy right now. Because, you know what, Leigh, nobody knows for sure. There's nobody standing out there saying, "It's my way or the highway, I know exactly how to get out of this problem."
I mean, you know, we've never faced a problem like this in any our lifetime - anything this big, and not since the Great Depression, and it's a very different world since then. And so I think what you are seeing is the natural to and fro. I think it's really healthy, because the public is trying to sort this out as well.
One of the problems, Leigh, is this: we basically just have three choices. One is to nationalise the sick banks, including some of the biggest brand names in the world. Maybe Citibank, hard to believe, but one is nationalise the big banks.
The second option is to create a bank of Junk, the B of J. Some call it not Fanny May but Crappy May, where this bank of junk would basically buy up all the toxic assets. And the third option is the Geitner plan, that was announced this week, where the Government would basically partner with hedge funds and private equity firms to leverage their assets to have the private market buy up these toxic assets.
Now the reason we actually ended up with option three is not only because the Government didn't want to nationalise the banks, it's but because the Congress, remember, wasn't going to give another dime, basically, for any of this. And so the option of leveraging the private market and the hedge funds was really, you know, came out of the fact that the administration really didn't have the money to do either nationalisation right now or create a bank of junk.
LEIGH SALES: Given the enormous anger we've seen in the US over the AIG bonuses, though, do you think that the American public is in the mood for the third option?
TOM FRIEDMAN: Well, it's a real problem. Honestly, Leigh, we've two choices. You can have revenge or recovery, but you can't have both. It's either revenge or recovery. And one of the points I've making since the very beginning: unfortunately, to get out of a problem this deep, to get out of a problem this deep, we're going to have to reward people who you really wouldn't want to reward. We're going to have to allow people to make money who really don't deserve to make money, but the issue of fairness, unfortunately - unfortunately fairness it isn't on the menu anymore.
There's just systematic risk, or, you know, systematic failure, or systematic survival. And I think we have to come to terms with that. Again, that gets back to my fireside chat. I don't think the President has explained that to the American people, that fairness isn't on the menu anymore. God, I wish it were. But unfortunately what I'm worried about now is the system.
LEIGH SALES: You wrote in a recent column that perhaps this crisis is telling the US that the growth model it's created over the last 50 years is unsustainable, economically and ecologically. And indeed in your new book 'Hot, Flat and Crowded' you write what's needed in the US is a revolution, a green revolution.
What did you mean by that? And is what we're seeing in the US now a precursor to it?
TOM FRIEDMAN: I think it is. I think it's a precursor to what my Australian friend and environmental teacher Paul Gielding calls "the great disruption". And what he means by that, and sort of what I mean by that is I think two things happened in 2008/2009, Leigh. I think both the market and Mother Nature hit a wall. And they both hit a wall. And what they basically - the wall they hit was that we cannot keep raising standards of living for us, for our kids, the way we've been doing for the last 50 years.
What was that system? Well, in short it worked like this: we built an America - more and more stores - to sell more and more stuff, to more and more Americans, which triggered more and more factories in China, powered by more and more coal, that earn more and more dollars, that went to buy more and more T bills, that were recirculated back to America to build more and more stores, to sell more and more stuff.
And that cycle basically had become unsustainable for a number of reasons. One is the incredible imbalance of our consumption and China's savings, that we built all this huge horde of global dollars that basically triggered more and more people inventing more and more crazy ways to get higher yield out of those dollars, and that finally exploded in the mortgage and credit default swaps. that was one problem.
But the other problem is that this system really required living off and stripping off more and more stocks, stocks of natural resources, and not living off more and more renewable flows. And in that sense Mother Nature was telling us what the market was telling us: we can't do this anymore. That if we try to pass on this way of growing standards of living to our children, we're going to blow up.
What was missing in the system? What was missing in the system, Leigh, is that both the market and Mother Nature were not honestly pricing things. The market was not pricing the real risk of some of these derivatives and credit default swaps, and when you don't price the real risks of things, OK, and the real potential cost, then these kinds of explosions happen, because people go to excess. And at the same time we were not allowing Mother Nature to price the real cost of what we were doing climatically. The cost of putting all this CO2 in the atmosphere.
So we had a kind of unreal system. We were living, as a world community, as if there were no laws of gravity, either in the financial markets or in Mother Nature's universe. We could do whatever we want and there would be no cost. And I think what happened in 2008/2009, is that the real cost became so big, and they just smacked us right across the head. And therefore coming out of this, it seems to me we need to find a different way of raising standards of living, but it's got to begin with putting the real cost on things, the real cost of these derivatives, so people won't think they're free and therefore do crazy, reckless things, and the real cost of carbon in the atmosphere, so people don't think polluting the atmosphere is free, and therefore do crazy things.
LEIGH SALES: How did this mentality that you describe come to the fore in the United States? I think in your book you write that a certain connection between hard work, achievement and accountability has been broken?
TOM FRIEDMAN: That's really what I feel. I can only speak for my own country, but we've become a - we became a subprime nation. We became a subprime nation. We thought and we told people and we acted as if you could have the American dream - a house, a yard, a car and a dog and a job - with no money down, and nothing to pay, you know, for two years. That's basically what we did. We told people, "You could have the dream that our parents had," but we could have it with nothing down and nothing to pay. So our parents, Leigh, they were the greatest generation, we we're the greediest generation, and what our kids need to be is the regeneration, where they basically regenerate America, but not on the way we did it, by stripping all the stocks, but rather by creating renewable flows. And I think that's really the challenge.
LEIGH SALES: I'm just wondering how that might change, though. Let me quote from the White House spokesman Ari Fleischer in 2001. He was asked if Americans need to take difficult decisions about their consumption levels to address the nation's energy problems, and his response was, "That's a big 'No.' the President believes it's an American way of life and that it should be the goal of policymakers to protect the American way of life. The American way of life is a blessed one". If that's a prevalent attitude in the US, how difficult is it going to be to take the sort of steps, the hard steps that you advocate?
TOM FRIEDMAN: Well, that quote really stands out as kind of the, you know, absolutely epitome of this view that really got us into this problem, which is that we can do what we want. "We can do whatever the heck we want. It's our world, it's our way of life and everyone else be damned."
I do believe that's starting to change. I can't tell you that it's going to happen overnight. And I tell you it is critical that we have a President who leads this change. You have to remember, Leigh, for eight years we had a President and a Vice President who could not get the words c-c-c-c-c-c-conservation out of their mouth, OK. I mean, as far as Dick Cheney was concerned, conservation was a four-letter word.
So we're going from that to a President, you know, who has made green jobs, green growth and a low carbon economy a real priority. And he's using his bully pulpit of the presidency everyday to make that. My great fear is that he's going to get swallowed by the great white shark of this economic crisis and won't be able to pursue this agenda. But at least we have a President who's talking in a very different way. And that really does matter.
LEIGH SALES: You're famously an advocate for globalisation, and in a recent interview you said that "... the flattening of the world is a metaphor for the rise of middle class citizens from China to India, Brazil to Russia, to Eastern Europe, who are beginning to consume like Americans. That's a blessing in so many ways, it's a blessing for global stability and global growth." But how is it a blessing if other nations start to consume like American, given that the American pattern of consumption has contributed to its recession and the global crisis?
TOM FRIEDMAN: Sure. Well, the point I was making, actually, that's sort of half of my thought. The full thought is that there are too many Americans in the world today. Then I say, of course I'm being facetious, it's a blessing there's so many more people, whether in Australia, in Russia, Brazil, Argentina, China and India, can live in American size house, drive American size cars on American size highways. I want people to enjoy rising standards of living just as my generation did and my country did.
The problem is: unless we the original Americans redefine, and this is the point I make in the book, redefine in more sustainable terms what it means to be an American and lead the world in inventing the clean, green technologies that will allow so many people to live like us. Unless we do that, there are too many Americans in the world, there are carbon copies, and this world - the good Lord did not design this planet for this many Americans, this many people consuming like us. So I believe it's our obligation both to set a different example and to invent the technologies so other people can enjoy this, otherwise, Leigh, we're going to burn up, choke up, heat up, smoke up and eat up this planet with this many Americans so much faster than even Al Gore predicts.
In the book I use a - an image that a British environmentalist came up with. He calls it the Americom, and he says an Americom is any 300 million people living like Americans. So when I was born in 1953 there were two-and-a-half Americoms in the world. There was America, Western Europe and sort of Japan and parts of east Asia, including Australia. Today, Leigh, there are nine Americoms. There's one in America, one in Western Europe, now there's one in Eastern Europe and Russia, one in Japan, East Asia, one in India - giving birth to another - one in China, giving birth to another, and one in Latin America. So just in the last 30 years we've gone from a world of two-and-a-half Americoms, units of 300 million people living like Americans, to a world of nine Americoms. And the energy and natural resource implications of will be staggering unless we, the original Americoms, at least take the lead in redefining what it means to be an Americom.
LEIGH SALES: With all the study that you've done on these issues, with all the people that you meet, with all the governments that you cover - are you an optimist or pessimist about the future?
TOM FRIEDMAN: Well, you know, I tell you, Leigh, I was in Israel. And I always end my talks this way. A couple of years ago when I was having dinner with the editor of the Arutz newspaper, which is Israel's leading newspaper, and they blessedly run my column twice a week in Hebrew. And I said to the editor, "Why do you run my column?" He said, "Well, Tom, you're the only optimist we have left. And I laughed and we were going to sit down at the table and here was an Israeli general who pulled me aside and said, "Tom, I know why you're an optimist." "Why?" He says, "It's because you're short." "Short?"He said, "Yeah, you can only see that part of the glass that's half full."
So, the truth is I am an eternal optimist. I believe in that old adage that pessimists are usually right, optimists are usually wrong, but all the great change in history was done by optimists.
One of the things that really excites me is I travel around my country, right now, to big schools and small schools, big towns and small towns. And I've been doing my book talks and after I do a book signing. I go back to the hotel and you know what I do? I empty my pocket of business cards. Business cards from energy innovators around this country. It's great, rock stars get room keys; I get business cards. But I tell you, they're very exciting because they're from people that come up to me, they say, "I've got a solar project, I've got a wind project, I've got a cellulosic project, I've got a duck, it paddles a wheel, blows up a balloon, issues methane, turns a turbine." I hear the craziest stuff. But it tells me this country is really alive. It is really alive still with innovation and entrepreneurs, and if we can just have a government in Washington that captures and enhances that energy at the speed, scope and scale we need - then I'm an optimist.
LEIGH SALES: Mr Friedman, thanks so much for sharing your thoughts with us, we really do appreciate your time.
TOM FRIEDMAN: My pleasure, thanks for having me.
Video...scroll to the right...
http://www.abc.net.au/lateline/
Earlier audio......
US author and columnist Thomas Freidman has won three Pulitzer prizes, his last book, The World Is Flat, was an international bestseller. In his new book he argues green politics has to be re-branded in the US, so that it is no longer the sole domain of liberals, but is something every red, white, and blue NASCAR Dad and Soccer Mom sees as patriotic and essential.
download
Several opinion polls in America show Barack Obama's approval rating has slipped by around 20 points since his election, although Gallup still gives him a solid 65 per cent rating.
The President's facing a public that's furious about the erosion of retirement savings.
And cases like AIG, where executives took big bonuses from a taxpayer bailout, which they've now paid back.
Somebody who's been writing in great detail about the American recession and its political implications is Tom Friedman, one of the New York Times' most prominent columnists.
He's also the author of numerous books. His latest is 'Hot, Flat and Crowded'.
He joined me earlier today from Washington.
Mr Friedman, many thanks for being with us.
TOM FRIEDMAN: Wonderful to be with you, Leigh. It's great to be in touch with all my friends in Australia.
LEIGH SALES: In a column this week you wrote that President Obama needs to have an overdue, fire-side chat with the nation. What did you mean by that?
TOM FRIEDMAN: Well, I guess what I meant by that, Leigh, is this: that in a funny way President Obama is both overexposed and underexposed. He's been great about meeting with the press, going on late night TV, really interacting with the public in a lot of different ways than a President has in the past.
But to me, one thing's been missing, and it's been that FDR, Franklin Delano Roosevelt fireside chat where the President simply sits down and explains to people just how much financial trouble we're in, and that all these brush fires out there - who makes how much money et cetera, what bonus - you know, they're all important issues, but ultimately we've got to heel our banking system, Leigh.
The banking system is like your heart. It pumps blood to your industrial muscles and right now we have, in banking terms, congestive heart failure. Our heart is not pumping credit into the system. And without that, you know, the system doesn't work. And I think one thing that has been missing from the beginning, is a sense of, for the average American, how big this problem is, and, you know, the image I've really been using from the beginning of this crisis is that incredible scene in the movie 'Jaws' where Roy Scheider first beholds the great white shark. And after he sees the shark he walks, you know, wide-eyed up to the captain and says, "We're going to need a bigger boat". And we are going to need a bigger boat. And right now, that sense, that this is so big, you know, Leigh, we built up a credit bubble that was THIS big. And you know what that means? The hole we're in is THIS deep. And I think the President still hasn't quite conveyed that to the American people.
LEIGH SALES: Well, your paper, The New York times has created a bit of a buzz during the past week because three very influential columnists - you, Paul Krugman and Frank Rich - each wrote columns critical of President Obama, and The Times also ran a critical editorial. Is Barack Obama beginning to lose some of his political capital, as Mr Krugman argues?
TOM FRIEDMAN: You know, I think it's premature to say that. You know, a lot of this is simply the natural to and fro over what is a really big, complicated issue. And all of us have slightly different takes on it. I think that's really healthy right now. Because, you know what, Leigh, nobody knows for sure. There's nobody standing out there saying, "It's my way or the highway, I know exactly how to get out of this problem."
I mean, you know, we've never faced a problem like this in any our lifetime - anything this big, and not since the Great Depression, and it's a very different world since then. And so I think what you are seeing is the natural to and fro. I think it's really healthy, because the public is trying to sort this out as well.
One of the problems, Leigh, is this: we basically just have three choices. One is to nationalise the sick banks, including some of the biggest brand names in the world. Maybe Citibank, hard to believe, but one is nationalise the big banks.
The second option is to create a bank of Junk, the B of J. Some call it not Fanny May but Crappy May, where this bank of junk would basically buy up all the toxic assets. And the third option is the Geitner plan, that was announced this week, where the Government would basically partner with hedge funds and private equity firms to leverage their assets to have the private market buy up these toxic assets.
Now the reason we actually ended up with option three is not only because the Government didn't want to nationalise the banks, it's but because the Congress, remember, wasn't going to give another dime, basically, for any of this. And so the option of leveraging the private market and the hedge funds was really, you know, came out of the fact that the administration really didn't have the money to do either nationalisation right now or create a bank of junk.
LEIGH SALES: Given the enormous anger we've seen in the US over the AIG bonuses, though, do you think that the American public is in the mood for the third option?
TOM FRIEDMAN: Well, it's a real problem. Honestly, Leigh, we've two choices. You can have revenge or recovery, but you can't have both. It's either revenge or recovery. And one of the points I've making since the very beginning: unfortunately, to get out of a problem this deep, to get out of a problem this deep, we're going to have to reward people who you really wouldn't want to reward. We're going to have to allow people to make money who really don't deserve to make money, but the issue of fairness, unfortunately - unfortunately fairness it isn't on the menu anymore.
There's just systematic risk, or, you know, systematic failure, or systematic survival. And I think we have to come to terms with that. Again, that gets back to my fireside chat. I don't think the President has explained that to the American people, that fairness isn't on the menu anymore. God, I wish it were. But unfortunately what I'm worried about now is the system.
LEIGH SALES: You wrote in a recent column that perhaps this crisis is telling the US that the growth model it's created over the last 50 years is unsustainable, economically and ecologically. And indeed in your new book 'Hot, Flat and Crowded' you write what's needed in the US is a revolution, a green revolution.
What did you mean by that? And is what we're seeing in the US now a precursor to it?
TOM FRIEDMAN: I think it is. I think it's a precursor to what my Australian friend and environmental teacher Paul Gielding calls "the great disruption". And what he means by that, and sort of what I mean by that is I think two things happened in 2008/2009, Leigh. I think both the market and Mother Nature hit a wall. And they both hit a wall. And what they basically - the wall they hit was that we cannot keep raising standards of living for us, for our kids, the way we've been doing for the last 50 years.
What was that system? Well, in short it worked like this: we built an America - more and more stores - to sell more and more stuff, to more and more Americans, which triggered more and more factories in China, powered by more and more coal, that earn more and more dollars, that went to buy more and more T bills, that were recirculated back to America to build more and more stores, to sell more and more stuff.
And that cycle basically had become unsustainable for a number of reasons. One is the incredible imbalance of our consumption and China's savings, that we built all this huge horde of global dollars that basically triggered more and more people inventing more and more crazy ways to get higher yield out of those dollars, and that finally exploded in the mortgage and credit default swaps. that was one problem.
But the other problem is that this system really required living off and stripping off more and more stocks, stocks of natural resources, and not living off more and more renewable flows. And in that sense Mother Nature was telling us what the market was telling us: we can't do this anymore. That if we try to pass on this way of growing standards of living to our children, we're going to blow up.
What was missing in the system? What was missing in the system, Leigh, is that both the market and Mother Nature were not honestly pricing things. The market was not pricing the real risk of some of these derivatives and credit default swaps, and when you don't price the real risks of things, OK, and the real potential cost, then these kinds of explosions happen, because people go to excess. And at the same time we were not allowing Mother Nature to price the real cost of what we were doing climatically. The cost of putting all this CO2 in the atmosphere.
So we had a kind of unreal system. We were living, as a world community, as if there were no laws of gravity, either in the financial markets or in Mother Nature's universe. We could do whatever we want and there would be no cost. And I think what happened in 2008/2009, is that the real cost became so big, and they just smacked us right across the head. And therefore coming out of this, it seems to me we need to find a different way of raising standards of living, but it's got to begin with putting the real cost on things, the real cost of these derivatives, so people won't think they're free and therefore do crazy, reckless things, and the real cost of carbon in the atmosphere, so people don't think polluting the atmosphere is free, and therefore do crazy things.
LEIGH SALES: How did this mentality that you describe come to the fore in the United States? I think in your book you write that a certain connection between hard work, achievement and accountability has been broken?
TOM FRIEDMAN: That's really what I feel. I can only speak for my own country, but we've become a - we became a subprime nation. We became a subprime nation. We thought and we told people and we acted as if you could have the American dream - a house, a yard, a car and a dog and a job - with no money down, and nothing to pay, you know, for two years. That's basically what we did. We told people, "You could have the dream that our parents had," but we could have it with nothing down and nothing to pay. So our parents, Leigh, they were the greatest generation, we we're the greediest generation, and what our kids need to be is the regeneration, where they basically regenerate America, but not on the way we did it, by stripping all the stocks, but rather by creating renewable flows. And I think that's really the challenge.
LEIGH SALES: I'm just wondering how that might change, though. Let me quote from the White House spokesman Ari Fleischer in 2001. He was asked if Americans need to take difficult decisions about their consumption levels to address the nation's energy problems, and his response was, "That's a big 'No.' the President believes it's an American way of life and that it should be the goal of policymakers to protect the American way of life. The American way of life is a blessed one". If that's a prevalent attitude in the US, how difficult is it going to be to take the sort of steps, the hard steps that you advocate?
TOM FRIEDMAN: Well, that quote really stands out as kind of the, you know, absolutely epitome of this view that really got us into this problem, which is that we can do what we want. "We can do whatever the heck we want. It's our world, it's our way of life and everyone else be damned."
I do believe that's starting to change. I can't tell you that it's going to happen overnight. And I tell you it is critical that we have a President who leads this change. You have to remember, Leigh, for eight years we had a President and a Vice President who could not get the words c-c-c-c-c-c-conservation out of their mouth, OK. I mean, as far as Dick Cheney was concerned, conservation was a four-letter word.
So we're going from that to a President, you know, who has made green jobs, green growth and a low carbon economy a real priority. And he's using his bully pulpit of the presidency everyday to make that. My great fear is that he's going to get swallowed by the great white shark of this economic crisis and won't be able to pursue this agenda. But at least we have a President who's talking in a very different way. And that really does matter.
LEIGH SALES: You're famously an advocate for globalisation, and in a recent interview you said that "... the flattening of the world is a metaphor for the rise of middle class citizens from China to India, Brazil to Russia, to Eastern Europe, who are beginning to consume like Americans. That's a blessing in so many ways, it's a blessing for global stability and global growth." But how is it a blessing if other nations start to consume like American, given that the American pattern of consumption has contributed to its recession and the global crisis?
TOM FRIEDMAN: Sure. Well, the point I was making, actually, that's sort of half of my thought. The full thought is that there are too many Americans in the world today. Then I say, of course I'm being facetious, it's a blessing there's so many more people, whether in Australia, in Russia, Brazil, Argentina, China and India, can live in American size house, drive American size cars on American size highways. I want people to enjoy rising standards of living just as my generation did and my country did.
The problem is: unless we the original Americans redefine, and this is the point I make in the book, redefine in more sustainable terms what it means to be an American and lead the world in inventing the clean, green technologies that will allow so many people to live like us. Unless we do that, there are too many Americans in the world, there are carbon copies, and this world - the good Lord did not design this planet for this many Americans, this many people consuming like us. So I believe it's our obligation both to set a different example and to invent the technologies so other people can enjoy this, otherwise, Leigh, we're going to burn up, choke up, heat up, smoke up and eat up this planet with this many Americans so much faster than even Al Gore predicts.
In the book I use a - an image that a British environmentalist came up with. He calls it the Americom, and he says an Americom is any 300 million people living like Americans. So when I was born in 1953 there were two-and-a-half Americoms in the world. There was America, Western Europe and sort of Japan and parts of east Asia, including Australia. Today, Leigh, there are nine Americoms. There's one in America, one in Western Europe, now there's one in Eastern Europe and Russia, one in Japan, East Asia, one in India - giving birth to another - one in China, giving birth to another, and one in Latin America. So just in the last 30 years we've gone from a world of two-and-a-half Americoms, units of 300 million people living like Americans, to a world of nine Americoms. And the energy and natural resource implications of will be staggering unless we, the original Americoms, at least take the lead in redefining what it means to be an Americom.
LEIGH SALES: With all the study that you've done on these issues, with all the people that you meet, with all the governments that you cover - are you an optimist or pessimist about the future?
TOM FRIEDMAN: Well, you know, I tell you, Leigh, I was in Israel. And I always end my talks this way. A couple of years ago when I was having dinner with the editor of the Arutz newspaper, which is Israel's leading newspaper, and they blessedly run my column twice a week in Hebrew. And I said to the editor, "Why do you run my column?" He said, "Well, Tom, you're the only optimist we have left. And I laughed and we were going to sit down at the table and here was an Israeli general who pulled me aside and said, "Tom, I know why you're an optimist." "Why?" He says, "It's because you're short." "Short?"He said, "Yeah, you can only see that part of the glass that's half full."
So, the truth is I am an eternal optimist. I believe in that old adage that pessimists are usually right, optimists are usually wrong, but all the great change in history was done by optimists.
One of the things that really excites me is I travel around my country, right now, to big schools and small schools, big towns and small towns. And I've been doing my book talks and after I do a book signing. I go back to the hotel and you know what I do? I empty my pocket of business cards. Business cards from energy innovators around this country. It's great, rock stars get room keys; I get business cards. But I tell you, they're very exciting because they're from people that come up to me, they say, "I've got a solar project, I've got a wind project, I've got a cellulosic project, I've got a duck, it paddles a wheel, blows up a balloon, issues methane, turns a turbine." I hear the craziest stuff. But it tells me this country is really alive. It is really alive still with innovation and entrepreneurs, and if we can just have a government in Washington that captures and enhances that energy at the speed, scope and scale we need - then I'm an optimist.
LEIGH SALES: Mr Friedman, thanks so much for sharing your thoughts with us, we really do appreciate your time.
TOM FRIEDMAN: My pleasure, thanks for having me.
Video...scroll to the right...
http://www.abc.net.au/lateline/
Earlier audio......
US author and columnist Thomas Freidman has won three Pulitzer prizes, his last book, The World Is Flat, was an international bestseller. In his new book he argues green politics has to be re-branded in the US, so that it is no longer the sole domain of liberals, but is something every red, white, and blue NASCAR Dad and Soccer Mom sees as patriotic and essential.
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5 December 2008
Gold and Clean Tech: Two Sides, Same Coin
by John Rubino
Henry Kissinger used to say that the tricky thing about foreign policy is that information and options are inversely related. That is, when you have the widest range of available policy choices you generally have the least information, and vice versa. As information accumulates, options dwindle, until you're left with absolute clarity but only a single viable course of action. That's a pretty apt description of today's global economy. As it has become clear that we're headed into either a deep recession or outright depression, and that the half-measures announced in the past year won't stop the implosion, the list of policy options has collapsed to just one: Flood the system with newly-created currency to bail out pretty much any company or municipality that asks for help.
If history and common sense still apply, this pretty much guarantees a currency crisis brought on by oversupply of increasingly-worthless paper. So buy gold and silver. Simple and straightforward.
But there's another side to this coin: The destination of all this new government spending. For politicians, a world in crisis is a world open to serious renovation, without the usual constraints of deficits and interest rates. So along with the anxiety comes a certain amount of excitement that normal times rarely offer.
Put another way, in crises governments are unusually powerful, so November's election was unusually important. Luckily (for those wondering what happens next) it offered a clear choice between McCain's promise to maintain the military empire, drill for new oil, and build nuclear plants, and Obama's platform of less military and more alternative energy. Obama won big, which means he and his congressional allies will have free reign to induldge their inner FDR.
They'll have some public fights over health care and which Senator's constituents get the biggest bailouts. But one thing they'll all agree on is that the energy infrastructure should be rebuilt along green lines. So expect non-stop rhetoric about "carbon neutrality" and "green jobs." And because the amount of money necessary to offset the deleveraging of the banking system is huge, expect truly massive subsidies, tax breaks, and outright spending for wind farms and solar rooftops and smart grid upgrades--all flowing into what is still a very small base of clean tech companies.
Which makes today a pretty good release date for my new book:
A few excerpts from Chapter 1:
It was nice while it lasted. More than nice. The age of cheap energy, free water, and abundant food was the smoothest stretch of highway that humanity has ever traveled. But now that road has developed some very big potholes.
...The consequences of the past century's mistakes range from inconvenient to disastrous. But focusing solely on the bad news ignores the other side of the coin: Problems create opportunities, and big, complex problems create vast opportunities. Solving any of the looming environmental crises is worth literally trillions of dollars, so extraordinary amounts of capital are flowing into "clean" technologies, with completely predictable results: New energy sources, benign techniques for managing waste streams, even new ways of fishing and farming are being developed that have the potential to put us on a path to sustainable abundance -- or at least to avert disaster. The rise of clean tech is, in other words, an investment theme with long, long legs.
...Add it all up -- a burning, multifaceted need for clean tech, new technologies that really work, and enthusiastic support from every major government -- and you've got the financial world's dream market. According to the National Venture Capital Association, venture capitalists poured $2.6 billion into clean tech in 2007, up about 400 percent from 2005 levels. Silicon Valley legends have shifted seamlessly from info tech to clean tech, with names like Vinod Khosla, Elon Musk, John Doerr, and Paul Allen now cropping up constantly in deal announcements. And companies of all types have discovered that green technologies are both good business and good PR. Google, for example, has promised to pour hundreds of millions of dollars into alternative energy research in an attempt to become a leader in that field, and Wal-Mart is putting solar panels on the roofs of hundreds of supercenters. Meanwhile, virtually every major investment bank and mutual fund is building a presence in clean tech. Goldman Sachs, for instance, has stakes in a wide range of wind and solar power firms and Citigroup recently promised $50 billion for green investments and financings in the coming decade. As an analyst at one of the new green research boutiques told me recently, "Interest is significant to tremendous. Some clients have funds with dedicated investment categories for clean tech and other funds have an interest in high-growth technology, but there isn't a major account that I visit that doesn't understand the political, societal, economic, scientific, and business argument of clean tech. Everyone is aware of it."
... If clean tech is so inevitable, why bother reading another word? Why not just access your brokerage account and move your life savings into a random list of solar, wind, and biofuel stocks? Because, to put it bluntly, hot markets are dangerous markets. When the reasons for investing in a given sector are this compelling, con artists and delusionals come out of the woodwork. In the coming decade, we'll be inundated with breathless accounts of new clean technologies that are sure to save the planet and make early investors rich beyond imagining. And the financial community -- which, in a perfect world, would act as gatekeeper to protect investors from the untried and unwise -- will become the main facilitator of the boom. Venture capitalists will feed these sure-things to investment bankers, who will sell them to stock brokers, who will sell them to us.
Think back to the dot.com era for a sense of green tech's future. During the second half of the 1990s, virtually any company with even the vaguest relationship to e-commerce got venture funding and then was taken public by unscrupulous investment bankers, and then sold to credulous investors seduced by the promise of easy money. As it turned out, the Internet has worked as advertised, changing the worlds of entertainment, shopping, and communication almost beyond recognition. But the vast majority of people who loaded up on late-1990s tech stocks had lost most of their money by the end of 2001. Clean tech differs from the dot.coms in ways that will be explained in later chapters. But human nature is what it is. When something seems to have unlimited potential, it becomes, by definition, hard to measure and therefore hard to value. Tools for distinguishing fantasy from reality are crucial, and that's what this book attempts to provide.
link
Henry Kissinger used to say that the tricky thing about foreign policy is that information and options are inversely related. That is, when you have the widest range of available policy choices you generally have the least information, and vice versa. As information accumulates, options dwindle, until you're left with absolute clarity but only a single viable course of action. That's a pretty apt description of today's global economy. As it has become clear that we're headed into either a deep recession or outright depression, and that the half-measures announced in the past year won't stop the implosion, the list of policy options has collapsed to just one: Flood the system with newly-created currency to bail out pretty much any company or municipality that asks for help.
If history and common sense still apply, this pretty much guarantees a currency crisis brought on by oversupply of increasingly-worthless paper. So buy gold and silver. Simple and straightforward.
But there's another side to this coin: The destination of all this new government spending. For politicians, a world in crisis is a world open to serious renovation, without the usual constraints of deficits and interest rates. So along with the anxiety comes a certain amount of excitement that normal times rarely offer.
Put another way, in crises governments are unusually powerful, so November's election was unusually important. Luckily (for those wondering what happens next) it offered a clear choice between McCain's promise to maintain the military empire, drill for new oil, and build nuclear plants, and Obama's platform of less military and more alternative energy. Obama won big, which means he and his congressional allies will have free reign to induldge their inner FDR.
They'll have some public fights over health care and which Senator's constituents get the biggest bailouts. But one thing they'll all agree on is that the energy infrastructure should be rebuilt along green lines. So expect non-stop rhetoric about "carbon neutrality" and "green jobs." And because the amount of money necessary to offset the deleveraging of the banking system is huge, expect truly massive subsidies, tax breaks, and outright spending for wind farms and solar rooftops and smart grid upgrades--all flowing into what is still a very small base of clean tech companies.
Which makes today a pretty good release date for my new book:
A few excerpts from Chapter 1:
It was nice while it lasted. More than nice. The age of cheap energy, free water, and abundant food was the smoothest stretch of highway that humanity has ever traveled. But now that road has developed some very big potholes.
...The consequences of the past century's mistakes range from inconvenient to disastrous. But focusing solely on the bad news ignores the other side of the coin: Problems create opportunities, and big, complex problems create vast opportunities. Solving any of the looming environmental crises is worth literally trillions of dollars, so extraordinary amounts of capital are flowing into "clean" technologies, with completely predictable results: New energy sources, benign techniques for managing waste streams, even new ways of fishing and farming are being developed that have the potential to put us on a path to sustainable abundance -- or at least to avert disaster. The rise of clean tech is, in other words, an investment theme with long, long legs.
...Add it all up -- a burning, multifaceted need for clean tech, new technologies that really work, and enthusiastic support from every major government -- and you've got the financial world's dream market. According to the National Venture Capital Association, venture capitalists poured $2.6 billion into clean tech in 2007, up about 400 percent from 2005 levels. Silicon Valley legends have shifted seamlessly from info tech to clean tech, with names like Vinod Khosla, Elon Musk, John Doerr, and Paul Allen now cropping up constantly in deal announcements. And companies of all types have discovered that green technologies are both good business and good PR. Google, for example, has promised to pour hundreds of millions of dollars into alternative energy research in an attempt to become a leader in that field, and Wal-Mart is putting solar panels on the roofs of hundreds of supercenters. Meanwhile, virtually every major investment bank and mutual fund is building a presence in clean tech. Goldman Sachs, for instance, has stakes in a wide range of wind and solar power firms and Citigroup recently promised $50 billion for green investments and financings in the coming decade. As an analyst at one of the new green research boutiques told me recently, "Interest is significant to tremendous. Some clients have funds with dedicated investment categories for clean tech and other funds have an interest in high-growth technology, but there isn't a major account that I visit that doesn't understand the political, societal, economic, scientific, and business argument of clean tech. Everyone is aware of it."
... If clean tech is so inevitable, why bother reading another word? Why not just access your brokerage account and move your life savings into a random list of solar, wind, and biofuel stocks? Because, to put it bluntly, hot markets are dangerous markets. When the reasons for investing in a given sector are this compelling, con artists and delusionals come out of the woodwork. In the coming decade, we'll be inundated with breathless accounts of new clean technologies that are sure to save the planet and make early investors rich beyond imagining. And the financial community -- which, in a perfect world, would act as gatekeeper to protect investors from the untried and unwise -- will become the main facilitator of the boom. Venture capitalists will feed these sure-things to investment bankers, who will sell them to stock brokers, who will sell them to us.
Think back to the dot.com era for a sense of green tech's future. During the second half of the 1990s, virtually any company with even the vaguest relationship to e-commerce got venture funding and then was taken public by unscrupulous investment bankers, and then sold to credulous investors seduced by the promise of easy money. As it turned out, the Internet has worked as advertised, changing the worlds of entertainment, shopping, and communication almost beyond recognition. But the vast majority of people who loaded up on late-1990s tech stocks had lost most of their money by the end of 2001. Clean tech differs from the dot.coms in ways that will be explained in later chapters. But human nature is what it is. When something seems to have unlimited potential, it becomes, by definition, hard to measure and therefore hard to value. Tools for distinguishing fantasy from reality are crucial, and that's what this book attempts to provide.
link
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