Carbon offsets and waste, fraud, and corruption

On Maverecon, Willem Buiter writes a sensible post, Carbon Offsets: Open House for Waste, Fraud and Corruption,

Offsets, the creation of credits that can be added to the (national, regional or global) CO2E [carbon dioxide equivalent greenhouse gas emissions] quota under cap and trade schemes, require not only the (difficult) verification of how much CO2E is actually emitted in the real world, but also the impossible verification of how much CO2E would have been emitted in some counterfactual alternative universe. The quantity of offset credits earned by some activity is the net quantity of CO2E that has been saved as a result of this activity.

Just stating it makes one shout out: impossible! Fraud! Bribery! Corruption! Wasteful diversion of resources into pointless attempts at verification! And indeed this is what is happening before our eyes. Enterprises get paid for not cutting down trees and for installing filters and scrubbers they would have installed in any case. The new Verification of the Carbon Counterfactual industry is growing in leaps and bounds. The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless. The offset proposal has birthed a monster.

Who came up with this demented offset concept? It’s an attempt to placate the developing world for not having enough CO2E emitting activities historically to benefit from a significant free initial allocation of credits in proportion to a country’s historical track record of CO2E emissions[...]

- but read the post.

President Sarkozy on competition

France’s new president, Nicolas Sarkozy, recently persuaded his fellow European leaders to drop the principle of “free and undistorted competition” from Article 3 of the old constitutional treaty. He asked, “Competition as an ideology, as a dogma: what has it done for Europe?”

He is right. Apart from making the Europeans prosperous, keeping prices low, businesses honest, encouraging innovation, and sweeping away incompetence, what has competition ever done for Europe?

Environment and economy in China

From Washington Monthly,

Like other cities in China, Beijing has a daily weather report and a daily pollution report. On the increasingly crowded freeways, drivers can see only so far ahead; each car leaves a wake in the smog. The dank air creeps inside buildings, into cars, into hotel rooms, leaving you nowhere to escape the distinct smell and the feeling of a weight always on your chest. The sun looks like a flashlight wrapped in cotton gauze, and the sky remains beige no matter the time of day. Most days, the city has no discernible skyline. Most nights, no moonlight or starlight pierces the darkness.

To understand why Chinese officials are genuinely concerned about the country’s growing environmental problems, you must first remember that they live here.

That is obviously true, and it is one good reason why we can be hopeful about China’s future efforts to curb pollution.

Another article in Business Week, entitled Broken China, is skeptical about the sustainability of the Chinese economic boom.

Huge underground lake found

The BBC reports that a huge underground lake has been found in Sudan’s Darfur region, which scientists believe “could help end the conflict in the arid region”.

Presumably it is non-renewable fossil water, like the Nubian Sandstone Aquifer System.

Why this should help bring about peace, rather that provide another example of the natural resource curse, it not clear.

There is not much water in Dafur. The is no oil in Somalia. If the Chinese state oil company, CNOOC, succeeds in finding oil in Somalia, will that bring about peace in Somalia?

What happens to any system depends not only on the inputs to the system, but also on the state of the system. Just adding an input, be it water or oil, is no guarantee that peace will be the result. The scientists quoted by BBC seem to have an overly simplistic model in mind.

The Cheney Vice Presidency

The Washington Post has a very good series of article on Vice President Cheney.

Here is Part 4 on Environmental Policy,

Dick Cheney steered some of the Bush administration’s most important environmental decisions — easing air pollution controls, opening public parks to snowmobiles and diverting river water from threatened salmon.

Quote of the day

Estonian President Toomas Hendrik Ilves in Der Spiegel on the view of many people in the Baltic countries that the Nazi occupation was not worse than that of the Soviets,

Ilves: If you tell me that the Nazis were worse, then I would say to you that you are comparing the culinary habits of cannibals.

Foreign aid quality

Denmark prides itself on giving a large proportion of its GDP as foreign aid to poor countries. But is there a trade-off between quality and quantity?

Follies rise amid Afghan ruins

By Rachel Morarjee and Stephen Fidler

It was a showcase project to demonstrate the benefits of renewable energy: a fountain and a display of coloured lights at a traffic island in Kabul run from solar panels. The project was small – but significant enough to attract a handful of foreign and local notables to its official opening in December 2005.

All seemed to be well during the opening ceremony. But soon after the dignitaries left, the fountain was switched off, never to work again. In fact, things were not as they seemed: the fountain had been powered not by solar energy but by a diesel generator hidden nearby. The solar panels were never powerful enough to run the fountain, say people associated with the project, and there was no electricity storage to allow the lights to be turned on at night.

The project, managed by the Asian Development Bank and financed ostensibly by Denmark, represents to some a microcosm of the failings of aid to Afghanistan [...]

The article in Financial Times (subscription necessary) goes on to discuss two other project of similar quality.

Biofuel myths

In the International Herald Tribune Eric Holt-Giménez writes that we need a public enquiry into the myths about biofuel:

 

• Biofuels are clean and green.
• Biofuels will not result in deforestation.
• Biofuels will bring rural development.
• Biofuels will not cause hunger.

Will Live Earth save the planet?

Nature magazine writes about the Live Earth concerts, “Concerts aim to save the Earth“.

Comedian Chris Rock says about Live Earth, “I think this will do for global warming what Live 8 did for ending world hunger.”

(Here is a classic Chris Rock video clip)

Strauss-Kahn for the IMF?

French President Nicholas Sarkozy wants Dominique Strauss-Kahn to be the next head of the International Monetary Fund. Since Strauss-Kahn is a prominent member of the opposition Socialist Party and a political rival, why would Sarkozy want advance his career?

First, he wants to promote, and be seen as promoting, French interests.

Second, Sarkozy will be continuing his strategy of reaching across the middle of French politics by appointing people from the left, thus occupying both the right and the center, and leaving little space for the Socialists.

Third, he will be removing a rival from the French political scene.

Fourth, he will weaken the pragmatic social-democratic wing of the Socialist Party, to which Strauss-Kahn belongs, and strengthen the conservative, uninspired and uninspiring wing of the party.

Of course, the idea that the head of the IMF should be a European, and the head of the World Bank should be an American, is totally absurd.

Easterly on the ideology of Development

 William Easterly on The Ideology of Development,

A dark ideological specter is haunting the world. It is almost as deadly as the tired ideologies of the last century — communism, fascism, and socialism — that failed so miserably. It feeds some of the most dangerous trends of our time, including religious fundamentalism. It is the half-century-old ideology of Developmentalism. And it is thriving.[...]

Sachs, Columbia University’s celebrity economist, is one of its main proprietors. He is now recycling his theories of overnight shock therapy, which failed so miserably in Russia, into promises of overnight global poverty reduction. “Africa’s problems,” he has said, “are … solvable with practical and proven technologies.” His own plan features hundreds of expert interventions to solve every last problem of the poor—from green manure, breast-feeding education, and bicycles to solar-energy systems, school uniforms for aids orphans, and windmills. Not to mention such critical interventions as “counseling and information services for men to address their reproductive health needs.” All this will be done, Sachs says, by “a united and effective United Nations country team, which coordinates in one place the work of the U.N. specialized agencies, the IMF, and the World Bank.”[...]

It stresses collective social outcomes that must be remedied by collective, top-down action by the intelligentsia, the revolutionary vanguard, the development expert. As Sachs explains, “I have … gradually come to understand through my scientific research and on the ground advisory work the awesome power in our generation’s hands to end the massive suffering of the extreme poor … although introductory economics textbooks preach individualism and decentralized markets, our safety and prosperity depend at least as much on collective decisions.”[...]

The ideology of Development should be packed up in crates and sent off to the Museum of Dead Ideologies, just down the hall from Communism, Socialism, and Fascism. It’s time to recognize that the attempt to impose a rigid development ideology on the world’s poor has failed miserably. Fortunately, many poor societies are forging their own path toward greater freedom and prosperity anyway. That is how true revolutions happen.

We can no doubt expect a response from Jeffrey Sachs.

 

The UN World Food Program in Somalia

The World Food Program dumps food on the market in Somalia, with predictable results. From The Independent,

“Food aid sent to Somalia to combat one of the world’s largest malnutrition crises has been criticised by Somali elders for causing violence - and for being delivered at the start of the harvest season.

More than 33,500 tonnes of food aid has been delivered to Somalia by the UN’s World Food Programme (WFP) since the start of the year. But in Marere district in the lower Juba valley, farmers and elders said the food distribution had brought chaos and driven down the price of maize by 60 per cent.

“WFP shouldn’t have brought it now,” said Mohammed Abdullahi Gure, chairman of the elders committee in Marere, who said distribution of the food had caused serious security problems.[...]

It is not the first time that Marere’s elders have criticised the WFP. After a chaotic food distribution last year, which also took place during the harvest season, the elders wrote to WFP asking the UN organisation not to deliver food again.[...]

Musa Yusuf Ahmed, 44, was a policeman before the Somali government collapsed in 1991. Now, he tries to make a living from farming, growing maize, beans and watermelons. He normally sells a 50kg bag of maize for 100,000 Somali shillings (about £3.10), but Mr Ahmed said it had dropped to 40,000 (£1.25). “For we farmers it is a big problem,” he said. “The food will benefit the people with no money but it will hurt the farmers.”

Some recipients of the food aid have also claimed that the quality is so bad they have had to feed it to their animals…”

Farm subsidies

This letter made me laugh…

Rt Hon David Miliband MP
Secretary of State,
Department for Environment, Food and Rural Affairs (DEFRA),
Nobel House
17 Smith Square
London SW1P 3JR

16 May 2007

Dear Secretary of State,

My friend, who is in farming at the moment, recently received a cheque for £3,000 from the Rural Payments Agency for not rearing pigs. I would now like to join the “not rearing pigs” business.

In your opinion, what is the best kind of farm not to rear pigs on, and which is the best breed of pigs not to rear? I want to be sure I approach this endeavour in keeping with all government policies, as dictated by the EU under the Common Agricultural Policy.

I would prefer not to rear bacon pigs, but if this is not the type you want not rearing, I will just as gladly not rear porkers. Are there any advantages in not rearing rare breeds such as Saddlebacks or Gloucester Old Spots, or are there too many people already not rearing these?

As I see it, the hardest part of this programme will be keeping an accurate record of how many pigs I haven’t reared. Are there any Government or Local Authority courses on this?

My friend is very satisfied with this business. He has been rearing pigs for forty years or so, and the best he ever made on them was £1,422 in 1968. That is - until this year, when he received a cheque for not rearing any.

If I get £3,000 for not rearing 50 pigs, will I get £6,000 for not rearing 100?

I plan to operate on a small scale at first, holding myself down to about 4,000 pigs not raised, which will mean about £240,000 for the first year. As I become more expert in not rearing pigs, I plan to be more ambitious, perhaps increasing to, say, 40,000 pigs not reared in my second year, for which I should expect about £2.4 million from your department. Incidentally, I wonder if I would be eligible to receive tradable carbon credits for all these pigs not producing harmful and polluting methane gases?

Another point: These pigs that I plan not to rear will not eat 2,000 tonnes of cereals. I understand that you also pay farmers for not growing crops. Will I qualify for payments for not growing cereals to not feed the pigs I don’t rear?

I am also considering the “not milking cows” business, so please send any information you have on that too. Please could you also include the current Defra advice on set aside fields? Can this be done on an e-commerce basis with virtual fields (of which I seem to have several thousand hectares)?

In view of the above you will realise that I will be totally unemployed, and will therefore qualify for unemployment benefits.

I shall of course be voting for your party at the next general election.

Yours faithfully,

Nigel Johnson-Hill

[via Guido Fawkes]

The Myth of Inevitable Progress

A review of Indur M. Goklany’s The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet by James Surowiecki.

The core message of Goklany’s book is that economic growth and technological change are the keys to improving people’s lives. But the success of China and India suggests that no one really knows how to bring these achievements about, which makes Goklany’s wide-eyed optimism about the future seem misplaced.[...]

The fact that every country’s experience is different does not mean that there are not deeper truths to be uncovered by looking at the experience of the world as a whole. But the truths thus far uncovered are relatively few in number and often limited in impact. So, yes, free trade is a good thing, subsidies to agriculture and official corruption are bad things, and so on. And policymakers should be aggressive in implementing those practices and policies that there is a good reason to think will work. But they also need to be cautious about taking theoretical pronouncements for reality, and they should be pragmatists rather than evangelists. After decades of misplaced certainty, it may be time to recognize the limits of our own knowledge — at least if we want the state of the world to continue improving.

Terraforming Terra

What should scare us most, climate change or hubristic schemes to mitigate climate change?

The unintended negative consequences of e.g. biofuel production from food crops are large, and include tortilla riots in Mexico because of rising food prices, destruction of rainforests in Indonesia to make way for palm oil plantations, and a general expansion of land under cultivation.

Here is a harbinger of things to come. A company plans to dump iron particles into the ocean in a 100 by 100 kilometer area near the Galapagos Islands in order to stimulate the growth of plankton.

In this case it is not the action of some mad scientist, it is business. The company is peddling “carbon offsets”.

What will be next? Why not seed the stratosphere with sulphur particles and claim carbon credits for that?

The biofuel fiasco and other well-meaning attempts to improve nature - think of the introduction of rabbits in Australia - should make us vary of climate change interventions.

How should we experiment with our poorly understood, nonlinear planetary systems? Very, very carefully.

Climate change is not as scary as climate change mitigation schemes that are driven by the combination of a powerful rent-seeking lobby, investors’ feeding frenzy, opportunistic politicians, and political correctness. Biofuel from food crops is one such scheme. There will no doubt be other even more ambitious schemes in the future. The danger is that they will do more harm than good, and that they will be almost impossible to stop because of the groups that benefit from them.

Update: BBC: Galapagos experiment sparks alarm.

Let me add that I don’t think that dumping 100 tons of iron filings in a 10,000 square kilometer area in the ocean is a cause for alarm. It is not going to trigger a new ice age, destroy the Galapagos ecosystem, or end intelligent life on Planet Earth. The main effect will be to relieve some rather naive people of some of their cash when they pay for carbon offsets.

Free Review of Environmental Economics and Policy

I have just received the first issue of the new Review of Environmental Economics and Policy in the mail. This issue can also be downloaded free of charge here.

Make Bono History

A fair and balanced view of Paul Hewson (”Bono”) in Spiked,

Bono is a celebrity colonialist. His patronising campaign to single-handedly ‘save Africa’ is actually damaging the continent. It is painting Africa as a pathetic place whose wide-eyed, infantile populations need a loudmouth rock star to fight their corner.

Left Libertarian Reading List

Memo to self: Chris Dillow’s useful left libertarian reading list is here.

Hadza hunters-gatherers under threat

The Washington Post reports on the Hadza hunter-gatherers,

50,000 Years of Resilience May Not Save Tribe

Tanzania Safari Deal Lets Arab Royalty Use Lands

YAEDA VALLEY, Tanzania — One of the last remaining tribes of hunter-gatherers on the planet is on the verge of vanishing into the modern world.

The transition has been long underway, but members of the dwindling Hadzabe tribe, who now number fewer than 1,500, say it is being unduly hastened by a United Arab Emirates royal family, which plans to use the tribal hunting land as a personal safari playground.

The deal between the Tanzanian government and Tanzania UAE Safaris Ltd. leases nearly 2,500 square miles of this sprawling, yellow-green valley near the storied Serengeti Plain to members of the royal family, who chose it after a helicopter tour.

A Tanzanian official said that a nearby hunting area the family shared with relatives had become “too crowded” and that a member of the Abu Dhabi royal family “indicated that it was inconvenient” and requested his own parcel.

The official, Philip Marmo, called the Hadzabe “backwards” and said they would benefit from the school, roads and other projects the UAE company has offered as compensation…

The long-run threat to the Hadza is habitat loss. Tanzania has for many years had one of the fastest growing human populations in the world, and the Hadza have lost land from encroachment by farmers and the destruction of woodlands. Ironically, what caused the destruction of one forest was the demand for charcoal from the neighboring Ngorongoro Conservation Area.

The actions of the Abu Dhabi royal family may or may not threaten the Hadza’s livelihood, but obviously some Hadza believe it does. What the Hadza need are clear and well-defined property rights to their land, including rights to charge tourists and hunters.

Here are a few photos.

“For God’s Sake, Please Stop the Aid!”

A notable interview with Kenyan commentator James Shikwati in Der Spiegel.

Ugandan journalist Andrew Mwenda interviewed in The Times.