Climate Change

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Bank of England and Financial Times schools blogging competition: And the winner is…

Published by Anonymous (not verified) on Mon, 11/05/2020 - 6:00pm in

…India Loader from South Wilts Grammar School, whose post “Loss aversion: the concept every supplier should be utilising to tackle climate change”, is published today on Bank Underground.

We had more than 300 entries from schools all over the UK, focused on the theme of the economy and climate change. The final selection of a winner and a runner up were picked by our expert panel of David Hendry (Professor of Economics at the University of Oxford), Chris Giles (Economics Editor, FT) and Sarah Breeden (Executive Director for UK Deposit Takers Supervision at the BoE). The judges were unanimous in their selection of “Loss aversion: the concept every supplier should be utilising to tackle climate change” as the overall winner. David commented that the post by India “shows knowledge of behavioural economics and how to deduce its implications to explain an otherwise puzzling response.”

We are also publishing the post “Thrive or dive: can our economy weather the climate crisis?” selected as runner-up, written by Marco Minasi-Smith from Fortismere School, London.

A big thank you to all those who took part in this year’s edition.

Belinda Tracey

Managing Editor

Planet of the Humans Puts Sacred Cows Out to Pasture

By Brian Czech

Planet of the Humans is a once-in-a-decade documentary for all concerned with the environment, the economy, and life on Earth. Directed by Jeff Gibbs and produced by Michael Moore, Planet is especially important for advancing the steady state economy. It is reminiscent of Pope Francis’ Laudato si’ in that it makes the case for a steady state economy—resoundingly—while never quite uttering the phrase “steady state economy.”

When viewing a documentary, a political scientist will mind whose ox is being gored. In Planet, entire teams of oxen are gored, including sacred cows. Wind, solar, and biofuels industries are gutted, exposing rotten cores of corporate greed, co-opted NGOs, and an all-too-prevalent intellectual laziness of “green energy” groupies.

Big Environmentalism takes a heavy hit, too. The Nature Conservancy? Gibbs calls it “The Logging Conservancy.” Union of Concerned Scientists? “Union of Concerned Salesmen.” The Sierra Club comes out looking like some environmental Madison Avenue, dazed and confused about what side(s) it’s even on.

Gibbs doesn’t spare environmental heroes, either—not if he catches them with their fingers in the pie or their minds muddled with money. The heaviest hit are Bill McKibben and Al Gore, but Van Jones, Robert F. Kennedy, Jr., and various heads of the Sierra Club are pummeled as well.

Planet isn’t exclusively a downer with regard to leadership, though. In addition to Gibbs himself, Vandana Shiva comes out clean, and a star is probably born in the form of Ozzie Zehner, a visiting scholar at Northwestern University. Zehner’s mastery of the “green energy” terrain, along with a natural ease in front of the camera, should bring him to the forefront of planning and policy for our energy and environmental futures.

Let’s take a closer look at the sacred cows, their fresh wounds, and the lasting lessons from Planet of the Humans.

Green Energy—“It wasn’t what it seemed.”

While Planet is pitched as a Michael Moore production, it’s really the brainchild of director and narrator Jeff Gibbs, a long-time student and activist in environmental affairs. Gibbs has taken a deep dive into the technics, economics, and politics of energy extraction and marketing. As with most environmental activists, he was naturally inclined to support the movement toward renewable energy development. Surprises laid in store, however. As Gibbs put it, “Everywhere I encountered green energy, it wasn’t what it seemed.”

You’ll see exactly what he means as he canvasses the various businesses, industries, and environmental organizations assembled at “green” energy conferences. The mini-interviews he conducts with folks staffing the booths are full of cringe-worthy moments. Many of the sales representatives and industry spokespersons have no clues whatsoever about what their products are made of. Neither they nor the activists get it about energy return on investment or the net environmental effects of “green” energy.

Few of them know, for example, that a single wind tower requires over 60 truckloads of concrete at the base and needs its own acre to operate in. One tower takes hundreds of tons of steel and several tons each of copper, aluminum, and rare earth elements. It takes around $4 million to install one, and the net energy savings of wind projects are very much in doubt. Factoids and lists such as these make little impression on paper; Gibbs’ genius is bringing us to a site of “mountaintop removal for wind.” Pay keen attention to the ratio of environmental destruction to electricity served up, noting that the site you are visiting vicariously will seat only 21 turbines!


Ivanpah Solar Power Facility: ecologically economic? (Gibbs, Jeff, director. Planet of the Humans. YouTube, uploaded by Michael Moore, 21 Apr. 2020, https://www.youtube.com/watch?v=Zk11vI-7czE&feature=youtu.be&t=10)

Folks at the “green” energy conferences might also tell you that solar panels are made of “sand”—easy to come by, cheap as dirt! Yet it’s not the sand of vacant lots or empty backwoods (if you can find any such woods) that goes into solar panels, but rather highly refined quartz, plus the sodium hydroxide and hydrofluoric acid required in manufacturing the panels. And how much space does a solar array require? The Ivanpah Solar Power Facility, which opened in 2014 at a cost of $2 billion, required 3,500 acres and was supposed to power 140,000 homes, but already shows ominous signs of wear and tear.

The dull surprise behind these wind and solar follies is the constant idling (as opposed to shutdown) of fossil-fueled, base-load power plants. The sun goes down predictably, but clouds are less predictable, and winds literally come and go. Not so with the appliances, computers, entertainment paraphernalia, and “green” cars plugged into the grid, much less the pumps, generators, and communications infrastructure at the local and regional utilities and manufacturing plants. So, the grid is kept running, and not by “green” energy. As described by an energy consultant interviewed in Planet, “You’ve got to have a fossil fuel power plant backing it up and idling 100% of the time. Because if you cycle up or cycle down, as the demand on the wind comes through, then you actually generate a bigger carbon footprint than if you just ran it [the fossil-fueled power plant] straight.”

As Zehner put it, we would have been “better off just burning the fossil fuels in the first place, instead of playing pretend.” Taken out of context, such a statement might sound flippant, yet it was more like the bottom line of a thorough analysis of costs and benefits, including, for example, how much fossil fueling is required for the construction, maintenance, and de-commissioning of “green” energy projects.

Now please, don’t even think of accusing me, of all people, of pandering to fossil fuel interests. I wrote, for example, “BP: Beyond Probabilities” and that was ten years ago! Solar and wind projects have clear environmental advantages over coal-fired and nuclear power plants as well as fracking and tar sands mining. The point, though, is that the “green” energy industry is a charade if we think it will solve the sustainability problem without ever addressing the unsustainable demands of the human economy.

The take-downs of wind and solar power are persuasive and resonant, but Gibbs saves his goriest goring for the oxcart of biofuels. For a conservation biologist like me, biofuels have always seemed like a sham, especially as a form of “green” energy. One of my roles while serving at U.S. Fish and Wildlife Service headquarters was “biomass coordinator” for the National Wildlife Refuge System. Frankly it was an unwelcome role, and I can tell you that the only green aspect of biofuels is the color of the leaves headed for the chipper. As Gibbs points out in his plain-spoken but insightful way, “Wood chips, which is just a euphemism for trees, are being exported to Europe from America, British Columbia, Brazil and Indonesia.”


Logs headed to the wood chipper; thence the incinerator for “green” energy. (Gibbs, Jeff, director. Planet of the Humans. YouTube, uploaded by Michael Moore, 21 Apr. 2020, https://www.youtube.com/watch?v=Zk11vI-7czE&feature=youtu.be&t=10)

In the USA, too, entire groves, woodlands, and forests are headed for the incinerator in the “green” attempt to fuel the economy. That’s in addition to all the trash, dead animals, and even shredded tires that somehow qualify as “biofuels.” But the incinerators need any kind of fuel they can get to put a dent in the energy demand that comes with a $20 trillion GDP. Does any of that sound like “sustainable yield?” It’s another reminder that sustainability is first and foremost about size—in particular the size of the economy—and then about technological efficiency.

It’s hard to do justice to the comprehensiveness of the biofuels take-down in Planet. An entire review could be done just on that component, which addresses a plethora of technical, economic, and political nuances. I’ll leave it at this: If you are inclined to support the notion of biofuels as a significant energy source, you really must watch the film.

 

 

Fair to Gore and McKibben?

For steady staters, the world is no oyster. Ask yourself how many prominent figures you’ve heard explicitly advocating the “steady state economy.” Now contrast that with the multitude of figures and followers crowing for economic growth. Steady staters swim straight upstream in the river of political economy, with Big Money rushing relentlessly over us. Therefore, when a prominent figure comes along and signs the CASSE position on economic growth, we’re reluctant to take part in the bashing thereof. Friends are hard enough to find.

Bill McKibben signed the CASSE position in 2009 at the Powershift conference in Washington DC, where he and Gus Speth greeted enthusiastic young students following a session. When McKibben signed the CASSE position, he said, “I love what you guys are doing,” and it was apparent from the pages of Deep Economy (2007) that he’d been aware of CASSE for years. After the Powershift conference, with the signatures of McKibben (and Speth) in hand, the CASSE network was encouraged by the prospect of wider acceptance. Surely McKibben, who ‘loved what we were doing,’ would be a powerful ambassador for the steady state economy. But disappointment followed as news about McKibben never mentioned— because McKibben never seemed to mention—the steady state economy at all!

It’s hard not to notice, then, that numerous clips in Planet suggest McKibben got too far in bed with Big Money. His 350.org movement picked up steam—and for that he deserves credit—but naturally it attracted tempting suitors. McKibben found comfortable rafting in the river of political economy, as powerful corporate and political interests sidled up to him to get their slice of the “green” energy pie. By the time he was involved with the Green Century Fund, he was a de facto collaborator with mining corporations, oil and gas infrastructure companies, McDonalds, ADM, and Coca-Cola, along with a laundry list of banks. Advocating a steady state economy in that crowd would be like pushing for gun control at an NRA convention.

Fortunately, the verdict (for whomever may judge) is far from in on McKibben. People get in over their heads all the time; the best of them get back out and onto the solid ground they came from. Our bets are on McKibben. Going forward, he will have plenty of opportunities to clarify—as he once did by signing the CASSE position—that there is a fundamental conflict between economic growth and environmental protection. He can clarify, in other words, that sustainability is not some newfangled energy technology but rather a steady state economy with stabilized population and per capita consumption.

Al Gore will forever remain a mystery with regard to the net effects of his politics. During my Ph.D. research in the 1990s, and especially with my minor in political science, Gore was one of my biggest heroes. Earth in the Balance (and later An Inconvenient Truth) probably did more to raise awareness of environmental perils than anyone aside from perhaps Rachel Carson. Eventually, however, I caught on to the fact that Gore was also one of the world’s leading proponents of “sustainable growth,” the oxymoronic bane of the steady-state program. Along with Bill and Hillary Clinton, Gore favored the win-win rhetoric that “there is no conflict between growing the economy and protecting the environment.”

The CASSE network, myself included, has tried on many occasions to reach Gore and encourage him to come clean on the fundamental conflict between economic growth and environmental protection. Not that it’s easy to contact vice presidents while you’re swimming for your life in the river of political economy, trying not to drown while Big Foundation Money is funding all the win-win rhetoricians, keeping them more than afloat. But we’ve tried when we could, given the contacts available to us. Our guess is that Gore is quite familiar, by now, with the steady state economy as the sustainable alternative to growth. His intransigence in sticking with the win-win rhetoric tells us plenty.

Orangutan

Orangutan in a clear-cut rainforest. Reality, analogy, and sadness. (Gibbs, Jeff, director. Planet of the Humans. YouTube, uploaded by Michael Moore, 21 Apr. 2020, https://www.youtube.com/watch?v=Zk11vI-7czE&feature=youtu.be&t=10)

In Planet, then, we see the sad demise of a surely well-meaning but ultimately corrupted, win-win politician. The segment on “Blood and Gore” is most telling. Gore teamed up with David Blood (who spent 18 years at Goldman Sachs) to establish Generation Investment Management, known most notoriously for its investment in Brazilian sugar cane, where the industry creates severe pollution problems and pushes indigenous Amazonians straight out of their very cultures. The last scene of Gore, cynically defending the hypocrisy of his financial life, has to be one of the saddest clips in the film, albeit not as sad as the very last scene of the film, with the orangutan down to one last tree in a rainforest devastated for logs and biofuel and to make way for more sugar cane.

Big Environmentalism—Why Keep Our Memberships?

Unlike the big environmental NGOs, Gibbs and his guests “go there” on population and consumption issues. They both plop out of the bag a little over 19 minutes in, when an environmental consultant, skeptical about “green” energy, says, “Not being judgmental and not playing God, but we’ve got to deal with population growth and sustainable resources. We’ve all got to cut back.” From then on, population and consumption become the underlying—and eventually the overarching—themes.

The most prominent coverage of population and consumption appears in the alarming graphical display of these two variables skyrocketing since the industrial revolution. Reflecting on the rapidity and enormity of these trends, Gibbs states, “And that is the most terrifying realization I have ever had.”

We wish only that Gibbs had connected these themes of population and consumption with the single most policy-relevant phrase: GDP. Over the years, this has been one of our top priorities at CASSE; to get well-meaning activists and scholars to move beyond relatively impotent (and frankly obvious) warnings about population and connect it with the metric—GDP—that is central to the policy maker’s mind on Capitol Hill, in the White House, at the Fed and in the World Bank. We can lament population growth until we’re blue in the face, but as long as the fiscal and monetary levers are all set for GDP growth, incentives will be devised, installed, and maintained for population and consumption growth. That’s how public policy works: Incentives are provided to accomplish goals. And the #1 domestic policy goal, perhaps of all time, is GDP growth!

GDP

Gibbs’ population × consumption graph (top). Same graph with CASSE’s GDP Stamp, and with ten times the policy implications (bottom). (Gibbs, Jeff, director. Planet of the Humans. YouTube, uploaded by Michael Moore, 21 Apr. 2020, https://www.youtube.com/watch?v=Zk11vI-7czE&feature=youtu.be&t=10)

Not that Gibbs is oblivious to the connection. Approximately 70 minutes in, while skewering billionaire Michael Bloomberg and his supposedly “Beyond Coal” campaign, Gibbs does hit the nail on the head by recognizing, “the reason we’re not talking about over-population, consumption, and the suicide of economic growth, is that would be bad for business. Especially the cancerous form of capitalism that rules the world, and now hiding under a cover of green.” We only wish he had driven home that singular point about economic growth—coupled with “GDP” as the measure thereof— again and again and again.

Speaking of “bad for business,” now is the time to remind Big Environmentalism of a challenge it has thus far skirted. On September 18, 2018, I challenged the presidents of the Big 10 American environmental organizations—The Nature Conservancy, National Wildlife Federation, Sierra Club and others— to a debate on the topic: Is there a conflict between economic growth and environmental protection? While none of them stepped up to the plate, we have certainly noticed some decline in the win-win rhetoric, at least around the Washington, DC beltway.

On the other hand, some NGO representatives and board members have stubbornly stuck to the destructive nonsense that “there is no conflict between growing the economy and protecting the environment.” And, not a single one of the big NGOs has proactively handled the responsibility of raising awareness of limits to economic growth. Some do at times vaguely reference population, and even more vaguely consumption, yet “economic growth” and “GDP” are treated like elephants in the room. This is simply not good enough for NGOs who collected billions of dollars over the years from millions of members.

So, I have an idea. Let’s drop our memberships in these time-wasting, “green” energy pushing, corporately connected “environmental” NGOs and join, instead, organizations that explicitly raise awareness of limits to growth and call just as explicitly for the steady state economy! Or even “degrowth toward a steady state economy.” As the founder and now executive director of one such organization, I may be biased, but I may be right, too.

But don’t just listen to me. Listen very carefully to Jeff Gibbs and the cast of Planet of the Humans. You’ll be brought to the very doorstep of steady statesmanship!

Brian Czech

Brian Czech is the Executive Director of the Center for the Advancement of the Steady State Economy.

The post <em>Planet of the Humans</em> Puts Sacred Cows Out to Pasture appeared first on Center for the Advancement of the Steady State Economy.


Fresh audio product

Published by Anonymous (not verified) on Fri, 01/05/2020 - 8:55am in

Just added to my radio archive (click on date for link):

April 30, 2020 Lauren Sandler, author of This Is All I Got, on homelessness in NYC • Cathy Cowan Becker, author of this review of the Jeff Gibbs–Michael Moore documentary Planet of the Humans, on why it’s so bad

Book Review: India in a Warming World: Integrating Climate Change and Development edited by Navroz K. Dubash

Published by Anonymous (not verified) on Tue, 28/04/2020 - 2:15am in

In India in a Warming World: Integrating Climate Change and Development, Navroz K. Dubash brings together contributors to reflect on climate change and development debates in India, discussing India’s climate vulnerability, the impact of climate policies on long-term development and India’s global engagement through foreign policy. Readers will close the book appreciating the need for societal cooperation to ensure a harmonious approach to development and environmental conservation that achieves equity among different needs, writes Gayathri D. Naik

India in a Warming World: Integrating Climate Change and Development. Navroz K. Dubash (ed.). Oxford University Press. 2019.

The multifarious impacts of climate change have already hit the globe, with countries like small island states most vulnerable to threats to their existence. Climate change discussions and debates divide countries into ‘developed’ and ‘developing’, but the impacts have not spared any single country yet. Multilateral discussion forums and domestic initiatives have tried to address this global challenge, engaging different stakeholders, but the perspectives and approaches of the Global North and South still vary, stalling holistic solutions. The Paris Agreement of 2015 has been able to bring together almost the entire world with a more bottom-up approach where individual nations enjoy choice over their Nationally Determined Contribution (NDC), tuned to both their development needs and global targets. However, the US decision to withdraw from this global agreement will have severe repercussions for climate change negotiations, adaptations and mitigation plans, considering its emission history as well as its financial contributions to global climate change research.

A developing country such as India is simultaneously the victim of climate change impacts as well as an active contributor to international negotiations since the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992. India in a Warming World: Integrating Climate Change and Development, edited by Navroz K. Dubash, foregrounds climate change and development debates in India through a network of arguments, concerns and the voices of actors from science, development, policy, civil society, law and technology. Comprised of 29 chapters, this edited collection is a follow-up to a previous volume compiled by the editor, Handbook on Climate Change and India, which examined the climate change discussions and scenarios up until 2012.

The development concerns of addressing poverty and ensuring basic services to its citizens, along with its negligible contributions to historic emissions, have hitherto driven India’s engagements in climate negotiations. Dubash chooses a pragmatic approach to address this when he highlights the climate vulnerability of the country, the impact of climate-oriented policies on long-term development strategies and global engagement through foreign policy to stress the need for a more proactive Indian role in these debates. This active engagement is required to consider India a ‘responsible global nation’ that is regarded not only as ‘part of the solution but also seen to be a part of the solution’ among the global community.

Each section of this book provides different perspectives and dimensions of understanding climate change and is very relevant to a first-time reader on the issue. It offers a compendium of topics, beginning with an analysis of the impacts of climate change in India, followed by international debates and negotiations with a focus on the role played by India, politics, policy and ends, with an examination of the interactions between climate and development, thereby taking the reader through different spheres of knowledge on climate change. Dubash’s decision to begin the book with the impacts of climate change eases the complexity of understanding this, and the reader also receives first-hand knowledge from the three chapters in this section regarding the evidence of climate change from daily weather patterns in India.

The contributing authors in this part of the collection examine the science of climate change and its impacts in India and caution on the gravity of these impacts due to population density, rainfall variability and the vulnerability of several sections of the population. Though some extreme weather changes could be attributed to climate change, incorrect attribution through incorrect information could have serious implications on long term-oriented policy strategies to address climate change. This section also provides the reader with the perception of local people on climate change as well as how they experience and negotiate it in their daily lives, which is a novel attempt to move away from top-down discussions on the impacts of climate change and policies.

Policy discussions on climate change at the international level typically involve a Global North-South divide on issues of responsibility, accountability, adaptation and mitigation, which is reflected throughout the section on international debates and negotiations in this volume.  Equity among nations in the attribution of responsibility for historic emissions to developed countries, the right of development for developing countries and the right to sustenance for island nations are among the most debated issues in climate change negotiations. The approach of ‘share the blame and not the responsibility’ would aggravate this global issue, resulting in intergenerational injustice when future generations are exhausted of all natural resources and left with a polluted Earth.

Following the trajectory of the development of international climate change conventions up until the binding commitments under the Paris Agreement of 2015, India’s engagement with international negotiations showcases the change in its approach to being a responsible global power intending to be part of the solution without being part of the problem. Foreign policy dynamics, a detailed roadmap to achieving consensus in Paris and the way forward, along with India’s domestic efforts in its NDC, are discussed in detail by the book’s contributing authors.

The influence of civil society organisations and the business world on policymaking at international and domestic levels are widely known. They have significant influence when it comes to decision-making over climate change too, which is discussed by contributing authors in Part Three of the book on the topic of ‘Politics’. In addition to these debates and discussions, the perspectives of and impacts on labour in the energy sector of India, primarily public and coal-based, is also included along with shifting discourses on climate change in print media.

Part Four of the book contains five chapters on policy, which focus on climate finance, technology transition, national climate policies as well as the adoption and implementation of climate policies at state levels, which are the first points of climate vulnerability. State climate action plans are foregrounded here, which have been typically been kept at the margins while national action plans, policies and attempts have reigned in scholarly discussions. State action plans also matter when each state in the country is unique and experiences its own weather and climate problems.

As in the title of the volume, the interaction of climate and development is the theme of the book’s final section. In my opinion, this is the most dynamic and vibrant part of the book as it leads the reader through the impacts of climate change on significant sectors that influence development, such as energy, water, forests, biodiversity and agriculture. Urban areas, coastal zones and islands are more threatened by weather and climate change due to urban population density, the natural vulnerability of coastal and island areas along with their strategic importance. Climate change vulnerabilities in these areas and sectors could have severe ramifications for food security and the economy and therefore the whole population of India.

Of course, climate change impacts are already obvious. A holistic analysis of climate change, intertwined with science, policy, politics and development, is a valuable contribution to scholarly discussions on climate change, which are often thematic or sector-focused. Dubash has brilliantly integrated these sectors through the collaboration of scholars and experts in this volume. The book proves to be a worthwhile read for readers looking to begin by understanding the science behind climate change, and they will close the book realising the need for cooperation among various sections of society to ensure a harmonious approach to development and environmental conservation in order to achieve equity among different needs and address poverty and development challenges without compromising the rights of nature and future generations.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics.

Image Credit: River Cauvery during summer (Ashwin Kumar CC BY SA 2.0).

 


A Poet a Day: James Balog Reads ‘Ice Diamonds’

Published by Anonymous (not verified) on Sat, 25/04/2020 - 8:08am in

During these trying days of social distancing, self-isolating and quarantines, days rife with fear and anxiety, my colleagues and I thought you might like some company. So each day we will be introducing you to poets we have met over … Continue reading

The post A Poet a Day: James Balog Reads ‘Ice Diamonds’ appeared first on BillMoyers.com.

Remembering Sir John Houghton

Published by Anonymous (not verified) on Sat, 25/04/2020 - 5:21am in

Widely recognized as one of the world's preeminent climatologists, Sir John Houghton was well-known for his theories on the compatibility of science and religious faith. Continue reading

The post Remembering Sir John Houghton appeared first on BillMoyers.com.

Debt, wealth and climate: globally coordinated Climate Authorities for green financing

Published by Anonymous (not verified) on Thu, 23/04/2020 - 11:54pm in

By T.Sabri Öncü & Ahmet Öncü

This article first appeared in the Indian journal, Economic and Political Weekly on 18 April 2020. The authors’ contact details are at he foot of this article.

Abstract

Based on the German Currency Reform of 1948 and the “Modern Debt Jubilee” of Steve Keen, a globally coordinated orderly debt deleveraging mechanism is proposed to address the global debt overhang problem. Since the global debt overhang and lack of sufficient climate finance flows are interconnected, Climate Authorities are added to the mechanism.

Note: We completed this article two months before the Coronavirus Crisis that started in January 2020. Although we present the article as is, the Climate Authority we propose can be expanded to meet the funding needs of fighting the Corona Virus Disease by issuing not only climate bonds but also corona bonds. The Deleveraging and Climate Authorities of this article are no different than any of the special purpose vehicles such as the Primary Market Corporate Credit Facility or the Term Asset-Backed Securities Loan Facility the Fed introduced on 23 March 2020 in its response to the Coronavirus Crisis. [1] Our proposal can be combined with the 30 March 2020 United Nations call for $2.5 trillion Coronavirus Crisis package for developing countries, to provide funding for the debt jubilee of distressed economies. [2]

Introduction

In a recent article (Öncü and Öncü 2019), we proposed a globally coordinated debt deleveraging mechanism with a climate component to address the global debt overhang problem. And a few days after we finished that article, on 14 November 2019, the Institute of International Finance (IIF) issued a warning in its Global Debt Monitor Report that “[h]igh debt burdens could curb efforts to tackle climate risk.” The IIF (2019) wrote:

Global climate finance flows remain far short of what’s needed for an effective transition to a low-carbon economy. Total global issuance of sustainable loans and securities to date amounts to slightly over $1 trillion: for context, the IPCC estimates suggest that an average of $3.5 trillion ($3 trillion) in 2010 U.S. dollars is needed annually to prevent global temperatures from increasing 1.5 (2.0) degrees Celsius by 2050. To achieve this goal, public and private climate finance flows will have to be scaled up rapidly.

 According to the IIF (2019a), global debt reached an all-time peak of about $250.9 trillion in the first half of 2019, and at a total of about $121.4 trillion, the debt of the non-financial private sector comprising households and non-financial firms is its biggest component. However, we should not fall into the fallacy of division. As the United Nations Conference on Trade and Development (UNCTAD) 2019 report documents, while in developed and high-income developing countries, the non-financial private sector is more over-indebted, in middle-income and low-income developing countries, the public sector is more over-indebted (UNCTAD 2019). Therefore, the high debt burdens that could curb efforts to tackle climate risk are neither only private nor only public, but both.

Based on the International Monetary Fund (IMF) Global Debt Database (GDD) comprising debts of the public and private non-financial sectors for an unbalanced panel of 190 countries dating back to 1950, Mbaye et al (2018) find that whenever the non-financial private sector consisting of households and firms is caught in a debt overhang and needs to deleverage, governments come to the rescue through a counter-cyclical rise in government deficit and debt, and that this is not just a crisis story but a more prevalent phenomenon that affects countries at various stages of financial and economic development. Mbaye et al (2018) then conclude that if the non-financial private sector deleveraging concludes with a financial crisis, “this other form of bailout, not the bank rescue packages, should bear most of the blame for the increasing debt levels in advanced economies,” and note that their results suggest that private debt deleveraging happens before one can see it in the non-financial private debt to gross domestic product (GDP) ratio.

Furthermore, the IIF numbers are based mainly on loans and debt securities. The IMF GDD all instruments [3] data available for 45 of the 190 countries imply that these numbers grossly underestimate the actual debt stock of the non-financial private sector. Given that the world GDP was about $85 trillion in 2018, the global non-financial private sector debt to GDP ratio must be way above 150%. At this level of debt overhang, a global non-financial private sector debt deleveraging is inevitable. This means that the public sector debts of the developed and high-income developing countries will also go up. As the ongoing non-financial private sector deleveraging in the developed and high-income developing countries deepens, unless we face what is coming in an orderly fashion, a deep global recession will ensue, further constraining the governments’ ability to spend on climate change-related projects for many years to come, and our hopes to make the necessary investments and innovations to address the now existential climate crisis on time will diminish.

And despite this, although - other than the extreme right-wing and sections of some industries that have vested interests in carbon-based fuels - no one denies the need for tackling climate risk, there is no serious discussion of the need for restructuring these debts among those who acknowledge the risks associated with climate change. They appear unaware of how these unpayable debts and insufficient global climate finance flows are interconnected. For example, although it received an A+ and ranks the first among the climate plans of the United States 2020 presidential candidates according to Greenpeace, the Democratic candidate Bernie Sanders’ Green New Deal Plan mentions the word “debt” only once, and in a totally different context.

A Proposal

Our proposal is a variation on the “Modern Debt Jubilee” of Keen (2017), which is a “helicopter money” proposal in the sense that Keen proposes a direct injection of the state-created money into the personal bank accounts of the residents. The main deviation of Keen’s proposal from other “helicopter money” proposals, such as those of Wolf (2014) and Turner (2016), is that it is a blend of “helicopter money” and debt reduction: make a direct injection of the state-created money to all private bank accounts, but require that its first use is to pay down debt.

Keen’s proposal avoids two problems. The first problem is that debt forgiveness favours debtors over savers, but since everyone gets the same amount of “helicopter money,” there is no discrimination against the savers in his proposed jubilee. The second problem he avoids is that without forcing the debtors to use the “helicopter money” first to pay down debt, the “helicopter money” need not reduce the level of personal debt of the households.

One shortcoming of “helicopter money” proposals, including Keen’s, is that they all focus on the household sector. However, IIF (2019) and UNCTAD (2019) indicate that the current global debt overhang is way beyond a household sector debt overhang. With this in mind we blended Keen’s “Modern Debt Jubilee” with the German Currency Reform (GCR) of 1948, which reduced all debts. Further, since the less affluent keep most of their savings in saving accounts whereas the more affluent in financial and real assets, as is the case in almost every country these days, we left the deposits intact to protect the less affluent, although the GCR of 1948 cancelled 93.5% of the deposits.

The original plan of the Allied powers occupying the western zones of Germany, the United States, the United Kingdom and France, consisted of

(i) conversion of currency and all debts at a ratio of 10 Reichsmarks for one Deutschemark, leaving payments, including wages, rents, taxes, and social insurance benefits, as well as prices other than those of debt securities intact, and

(ii) a fund built with a capital levy for the Lastenausgleich (equalisation of burdens), which would correct part of the inequity between owners of debt, and owners of real assets and shares of corporations.

Had that happened, the balance sheets of all financial institutions would have remained unimpaired, assuming no bad debts. However, the actual GCR deviated from the planned GCR in that it required all financial institutions to remove from their balance sheets any securities of the Reich and cancel all accounts and currency holdings of the Reich, and of a few others, which impaired the balance sheets of nearly all of the financial institutions (Bennet 1950).

The solution the GCR offered was the equalisation claims: “Financial institutions to receive state equalisation claims to restore their solvency and provide a small reserve if either or both were impaired by these measures” (Bennet 1950). The equalisation claims were interest-bearing government bonds of the then non-existing government and had no set amortisation schedules. They were just placeholders on the assets side of the balance sheets to ensure that financial institutions looked solvent. They later became bonds of the Federal Republic of Germany, established on 23 May 1949.

The equalisation claims were used for the second time in 1990, during the German reunification, because unified Germany also faced a severe balance sheet problem in the financial sector, again resulting from unequal conversion of assets and liabilities. The equalisation claims are well-tested, and historians have found no evidence that the equalisation claims imposed any long-term negative repercussions on either the viability of financial markets or economic growth (van Suntum and Ilgmann 2013).

The Lastenausgleich Law was passed after the establishment of the Federal Republic of Germany. Effective from 1 September 1952, it increased the compensation of the savers by an additional 13.5% so that their loss was reduced to 80%. The law also imposed a nominal 50% capital levy on capital gains, but allowed payment in instalments over 30 years, making the levies merely an additional property tax rather than a wealth tax.

Deleveraging, Lastenausgleich and Climate Authorities

We proposed two authorities in each country: a deleveraging authority and a Lastenausgleich authority. We also proposed to establish a multi-currency “Global Climate Fund” under the UN and allowed to maintain deposit accounts at the central banks of all countries. But, if the Green Climate Fund (GCF) already under the United Nations Climate Change (UNFCCC) is any indication, such a fund cannot exist without national authorities representing their governments. There are such authorities in the GCF.

Therefore, there would be three authorities to maintain a deposit account at the Central Bank in each country: A deleveraging authority for leverage reduction, Lastenausgleich authority for capital levies, and a climate authority for financing needs in developing national climate plans. But since debt forgiveness and capital levies for the equalisation of burdens in a single country would lead to a capital flight to tax havens, the efforts of the national authorities must be coordinated globally.

Given their mandates, the GCF under the UNFCCC, the Financial Stability Board (FSB), and the UN Economic and Social Council (ECOSOC) could coordinate the efforts of the national climate authorities, deleveraging authorities, and Lastenausgleich authorities, respectively. Indeed, there already exists a tax committee in the UN ECOSOC, and there have been proposals to turn it into an intergovernmental tax body within the UN ECOSOC. Further, the global coordinator of the national Lastenausgleich authorities should consider the creation of a central database on worldwide ownership of financial assets, that is, a “global financial register,” that Thomas Piketty and Gabriel Zucman have proposed. The Independent Commission for the Reform of Inter­national Corporate Taxation (ICRICT) expanded the idea to a “global asset registry” (ICRICT 2019), and Stiglitz, Tucker, and Zucman (2019) further expanded it to a “global wealth registry.” The more comprehensive is the registry, the better it would be for the equalisation of burdens.

The Lastenausgleich authority would be under the finance ministry, whereas the Deleveraging and Climate Authorities would be non-profit corporations promoted by the government. The government would capitalise the Deleveraging and Climate Authorities by the Treasury issuing zero-coupon perpetual bonds, that is, our proposed equalisation claims. The Deleveraging Authority would then sell its equalisation claims to the Central Bank in exchange for an increased balance in its deposit account at the Central Bank while the Climate Authority would wait until the deleveraging concludes. Further, the Climate Authority would not be allowed to open deposit accounts to its borrowers, to ensure that it would be a pure financial intermediary, not a bank, although it has the privilege of maintaining a deposit account at the central bank.

Deleveraging process

We assume that a globally agreed-upon debt reduction percentage that would bring the global non-financial sector leverage well under 100% is determined, and that all countries agreed to act simultaneously. Under these assumptions, the mechanism is:

(i) the financial institutions comprising the banks and non-banking financial institutions (NBFIs) write down all the loans and debt securities on both sides of their balance sheets by the required percentage,

(ii) the Deleveraging Authority compensates the banks and NBFIs for the loss if any, and

(iii) the Deleveraging Authority pays each qualified resident their allocated amount less the debt relief if any. Since our percentage-based debt reduction proposal is equivalent to the Deleveraging Authority purchasing a portion of each of the loans and debt securities and cancelling the purchased portions, there is no violation of any of the loan and debt security contracts in our proposed mechanism.

Given that almost all corporations in all countries are debtors, there should not be a need to pay any amount to corporations. Further, it is possible for some NBFIs after the above debt reduction that their liabilities go down more than their assets, and they gain. When a gain happens, the institution should owe equalisation liabilities to the Deleveraging Authority of its jurisdiction. Note that equalisation liabilities are not novel either as they were used during the German Reunification of 1990. We propose that the national deleveraging authorities should independently determine the interest rates of the equalisation liabilities based on the prevailing government interest rates in their countries. We should also mention that as all debts mean all debts, public sector debts will also be written down by the same percentage. Hence, our deleveraging mechanism addresses the public sector debt overhang also. One exception is the official debts of the sovereigns that fall out of the scope of our proposed mechanism. Official debts should be handled by other means.

Even if the above deleveraging materialises, it is likely that there will remain some bad debts to be resolved in many countries. If that happens, the Deleveraging Authority could then purchase the bad debts at their book values less the provisions from the impaired financial institutions with the funds in its central bank account to resolve through asset management companies (AMCs) it establishes and, in addition, may invite private AMCs. While personal and small and medium-sized enterprise debts that cannot be paid would be cancelled fully, other debts should be subjected to usual resolution procedures such as the ones detailed in the “Key Attributes of Effective Resolution Regimes for Financial Institutions” document of the FSB (2014).

After the deleveraging

After the deleveraging, the balance of the Deleveraging Authority account at the central bank goes down and the total balance of the bank accounts at the central bank, that is, reserves go up by the total payment the Deleveraging Authority made. Hence, the base money goes up by the total payment of the Deleveraging Authority. Since NBFIs and residents cannot maintain deposit accounts at the central bank by law and, therefore, cannot be paid in reserves, they have to be paid through a bank which creates deposits for the NBFIs and residents against reserves. Hence, the broad money goes up by the amount of the payment to the NBFIs and residents.

One issue is that in many countries, the bank and NBFI balance sheets are multi-currency balance sheets. However, the Deleveraging Authority payments are in domestic currency, which may create currency risk for some banks and NBFIs. Backed by the central banks, the globally coordinated national deleveraging autho­rities should stand ready to intervene to avoid potential crises. Furthermore, capital controls should also be considered to curtail the surge in capital outflows, to reduce illiquidity driven by sell-offs in developing country markets and to arrest declines in currency and asset prices.

The authorities would require their domestic banks and other financial institutions to spend an internationally agreed-upon percentage of their newly found money, if any, after the deleveraging on the interest-bearing, finite-maturity climate bonds the national climate authorities would issue. Since the promoter of the Climate Authority is the government, the climate bonds would have the same credit with the government bonds, and the Central Bank would accept the climate bonds in its open market operations.

Therefore, the Climate Authority bonds backed by the funds in its Central Bank account and the green loans it would make, would be one of the tools to manage the reserves and, although to a lesser extent, the deposits created through the equalisation claims. In addition, the climate bonds could be used for the greening of the financial system through the investment of foreign exchange reserves of the central banks the Bank of International Settlements (BIS) proposed (BIS 2019).

A second tool to manage the reserves and deposits created through the equalisation claims, a form of which Coppola (2019) also proposed, could be that the Central Bank issues its interest-bearing finite-maturity bonds backed by the equalisation claims for sale in the market and also for its open market operations.

A third tool could be the loan-to-deposit ratio restrictions on the banks’ credit extension to manage the liquidity in the economy. The loan-to-deposit ratio restrictions have been employed in many countries and two important examples are China and India, although effective from 1 October 2015, China abandoned the 75% loan-to-deposit ratio requirement on banks—which was enacted into law and put into effect in 1995—on 29 August 2015, to bolster lending as the Chinese economy started to slow down in 2015. [4]

However, the loan-to-deposit ratio requirement, called the statutory liquidity ratio (SLR) requirement, is still in effect in India. The SLR requirement can be met not only by holding reserves but also by holding gold and government-approved securities (see Öncü, 2017 for details). The current SLR requirement in India is 18.5%, and the aggregate loan-to-deposit ratio of the Indian banking system is about 77.5% in November 2019. [5]

Lastly, equipped with a “global wealth registry,” the Lastenausgleich authorities would collect progressive wealth taxes from the owners of real and non-debt financial assets for the equalisation of burdens. While a part of these taxes could be used to retire some of the equalisation claims and the corresponding reserves and deposits created in the deleveraging process, another part could be transferred to the climate authorities, and the rest could be spent in the interests of the society such as on healthcare, elderly care, education, and public transportation, to name a few.

Debt relief, inevitable though it may be, is not enough. All it would do is to give the world a break, after which another speculative debt bubble will form. Under the existential threat of climate change, we must take extraordinary measures to break up this cycle of excessive debt build-up, before it is too late. The Lastenausgleich and Climate Authorities could be among the other measures.

Authors: Ahmet Öncü, aoncu@sabanciuniv.edu Sabancı University, İstanbul, Turkey and T. Sabri Öncü sabri.oncu, @gmail.com İstanbul Kültür University, İstanbul, Turkey

The authors would like to thank Yılmaz Akyüz, Dirk Bezemer, Jayati Ghosh, Michael Hudson, Michael Hughes, Steve Keen and Richard Vague for discussions. Michael Hudson brought the German Currency Reform of 1948 to our attention. Michael Hughes helped us improve our understanding of the German Currency Reform of 1948.

References

Bank of International Settlements. 2019. Green Bonds: the Reserve Management Perspective. Available online at: https://www.bis.org/publ/qtrpdf/r_qt1909f.htm, last accessed on December 18, 2019.

Bennet, J. 1950. The German Currency Reform. The Annals of the American Academy of Political and Social Science, 267, 43–54.

Financial Stability Board. 2014. Key Attributes of Effective Resolution Regimes for Financial Institutions. Available online at: https://www.fsb.org/wp-content/uploads/r_141015.pdf, last accessed on December 18, 2019.

Independent Commission for the Reform of International Corporate Taxation. 2019. A Roadmap for a Global Asset Registry. Available online at: https://www.icrict.com/press-release/2019/3/25/icrictnew-paper-a-roadmap-for-a-global-asset-registry-measuring-and-tackling-inequality-curbing-tax-avoidance-tax-evasion-corruption-and-illicit-financial-flows, last accessed on December 18, 2019.

International Institute of Finance. 2019. Global Debt Monitor, November 2019. Available online on subscription at: https://www.iif.com/Research/Capital-Flows-and-Debt/Global-Debt-Monitor, last accessed on November 29, 2019.

Keen, S.  2017. Can We Avoid Another Financial Crisis? Cambridge and Malden: Polity Press.

Mbaye, S., M. Moreno-Badia and K. Chae. 2018. Bailing Out the People? When Private Debt Becomes Public. IMF Working Paper 18/141.

Öncü, T. S. 2017. Bad Bank Proposal for India: A Partial Jubilee Financed by Zero Coupon Perpetual Bonds, Economic & Political Weekly, 52(10), 12–15.

Öncü, A. and T. S. Öncü. 2019. A New Framework for Global Debt Deleveraging: Globally Coordinated Deleveraging Authorities, available at:  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3492749

Stiglitz, J. E., T. N. Tucker and G. Zucman. 2019. The Starving State: Why Capitalism’s Salvation Depends on Taxation. Available at: https://www.foreignaffairs.com/articles/united-states/2019-12-10/starving-state.

Turner, A. 2016. Between Debt and the Devil: Money, Credit and Fixing Global Finance. Princeton: Princeton University Press.

United Nations Conference on Trade and Development. 2019. Trade and Development Report 2019. Available online at: https://unctad.org/en/PublicationsLibrary/tdr2019_en.pdf, last accessed on December 3, 2019.

van Suntum, I. and C. Ilgmann. 2013. Bad Banks: A Proposal Based on German Financial History. European Journal of Law and Economics 35:367–384

Wolf, M. 2014. The Shifts and Shocks. London: Penguin

Footnotes

[1] https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm

[2] https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2315  

[3] https://www.imf.org/en/Publications/WP/Issues/2018/05/14/Global-Debt-Database-Methodology-and-Sources-45838

[4] https://economictimes.indiatimes.com/news/international/business/china-removes-75-cap-on-loan-to-deposit-ratio/articleshow/48724491.cms?from=mdr

[5] https://www.thehindubusinessline.com/opinion/indian-banking-continues-to-be-metro-centric/article30069880.ece#

 

The Solutions to the Climate Crisis No One is Talking AboutBoth...

Published by Anonymous (not verified) on Thu, 23/04/2020 - 5:43am in

The Solutions to the Climate Crisis No One is Talking About

Both our economy and the environment are in crisis. Wealth is concentrated in the hands of a few while the majority of Americans struggle to get by. The climate crisis is worsening inequality, as those who are most economically vulnerable bear the brunt of flooding, fires, and disruptions of supplies of food, water, and power.

At the same time, environmental degradation and climate change are themselves byproducts of widening inequality. The political power of wealthy fossil fuel corporations has stymied action on climate change for decades. Focused only on maximizing their short-term interests, those corporations are becoming even richer and more powerful — while sidelining workers, limiting green innovation, preventing sustainable development, and blocking direct action on our dire climate crisis.

Make no mistake: the simultaneous crisis of inequality and climate is no fluke. Both are the result of decades of deliberate choices made, and policies enacted, by ultra-wealthy and powerful corporations.

We can address both crises by doing four things:

First, create green jobs. Investing in renewable energy could create millions of family sustaining, union jobs and build the infrastructure we need for marginalized communities to access clean water and air. The transition to a renewable energy-powered economy can add 550,000 jobs each year while saving the US economy $78 billion through 2050. In other words, a Green New Deal could turn the climate crisis into an opportunity - one that both addresses the climate emergency and creates a fairer and more equitable society.

Second, stop dirty energy. A massive investment in renewable energy jobs isn’t enough to combat the climate crisis. If we are going to avoid the worst impacts of climate change, we must tackle the problem at its source: Stop digging up and burning more oil, gas, and coal.

The potential carbon emissions from these fossil fuels in the world’s currently developed fields and mines would take us well beyond the 1.5°C increased warming that Nobel Prize winning global scientists tell us the planet can afford. Given this, it’s absurd to allow fossil fuel corporations to start new dirty energy projects.

Even as fossil fuel companies claim to be pivoting toward clean energy, they are planning to invest trillions of dollars in new oil and gas projects that are inconsistent with global commitments to limit climate change. And over half of the industry’s expansion is projected to happen in the United States. Allowing these projects means locking ourselves into carbon emissions we can’t afford now, let alone in the decades to come.

Even if the U.S. were to transition to 100 percent renewable energy today, continuing to dig fossil fuels out of the ground will lead us further into climate crisis. If the U.S. doesn’t stop now, whatever we extract will simply be exported and burned overseas. We will all be affected, but the poorest and most vulnerable among us will bear the brunt of the devastating impacts of climate change.

Third, kick fossil fuel companies out of our politics. For decades, companies like Exxon, Chevron, Shell, and BP have been polluting our democracy by pouring billions of dollars into our politics and bankrolling elected officials to enact policies that protect their profits. The oil and gas industry spent over $103 million on the 2016 federal elections alone. And that’s just what they were required to report: that number doesn’t include the untold amounts of “dark money” they’ve been using to buy-off politicians and corrupt our democracy. The most conservative estimates still put their spending at 10 times that of environmental groups and the renewable energy industry.

As a result, American taxpayers are shelling out $20 billion a year to bankroll oil and gas projects – a huge transfer of wealth to the top. And that doesn’t even include hundreds of billions of dollars of indirect subsidies that cost every United States citizen roughly $2,000 a year. This has to stop.

And we’ve got to stop giving away public lands for oil and gas drilling. In 2018, under Trump, the Interior Department made $1.1 billion selling public land leases to oil and gas companies, an all-time record – triple the previous 2008 record, totaling more than 1.5 million acres for drilling alone, threatening multiple cultural sites and countless wildlife. As recently as last September, the Trump administration opened 1.56 million acres of Alaska’s Arctic National Wildlife Refuge to oil drilling, threatening Indigenous cultural heritage and hundreds of species that call it home.

That’s not all. The ban on exporting crude oil should be reintroduced and extended to other fossil fuels. The ban, in place for 40 years, was lifted in 2015, just days after the signing of the Paris Climate Agreement. After years of campaigning by oil executives, industry heads, and their army of lobbyists, the fossil fuel industry finally got its way.

We can’t wait for these changes to be introduced in 5 or 10 years time — we need them now.

Fourth, require the fossil fuel companies that have profited from environmental injustice compensate the communities they’ve harmed.

As if buying-off our democracy wasn’t enough, these corporations have also deliberately misled the public for years on the amount of damage their products have been causing. 

For instance, as early as 1977, Exxon’s own scientists were warning managers that fossil fuel use would warm the planet and cause irreparable damage. In the 1980s, Exxon shut down its internal climate research program and shifted to funding a network of advocacy groups, lobbying arms, and think tanks whose sole purpose was to cloud public discourse and block action on the climate crisis. The five largest oil companies now spend about $197 million a year on ad campaigns claiming they care about the climate — all the while massively increasing their spending on oil and gas extraction.

Meanwhile, millions of Americans, especially poor, Black, Brown, and Indigenous communities, already have to fight to drink clean water and breathe clean air as their communities are devastated by climate-fueled hurricanes, floods, and fires. As of 2015, nearly 21 million people relied on community water systems that violated health-based quality standards. 

Going by population, that’s essentially 200 Flint, Michigans, happening all at once. If we continue on our current path, many more communities run the risk of becoming “sacrifice zones,” where citizens are left to survive the toxic aftermath of industrial activity with little, if any, help from the entities responsible for creating it.

Climate denial and rampant pollution are not victimless crimes. Fossil fuel corporations must be held accountable, and be forced to pay for the damage they’ve wrought.

If these solutions sound drastic to you, it’s because they are. They have to be if we have any hope of keeping our planet habitable. The climate crisis is not a far-off apocalyptic nightmare — it is our present day.

Australia’s bushfires wiped out a billion animals, California’s fire season wreaks more havoc every year, and record-setting storms are tearing through our communities like never before. 

Scientists tell us we have 10 years left to dramatically reduce emissions. We have no room for meek half-measures wrapped up inside giant handouts to the fossil fuel industry. 

We deserve a world without fossil fuels. A world in which workers and communities thrive and our shared climate comes before industry profits. Working together, I know we can make it happen. We have no time to waste.

Earth Day at 50

Published by Anonymous (not verified) on Thu, 23/04/2020 - 2:40am in

  “A unique day in American history…a day set aside for a nationwide outpouring of mankind seeking its own survival..a day dedicated to enlisting all the citizens of a bountiful country in a common cause of saving life from the … Continue reading

The post Earth Day at 50 appeared first on BillMoyers.com.

Happiness and the COVID-caused Recession

Published by Anonymous (not verified) on Wed, 22/04/2020 - 12:58am in

By Beth Allgood

Modified from the original published in Our Daily Planet (ourdailyplanet.com) on March 21, 2020.

In 2013, the United Nations designated March 20th as the International Day of Happiness to recognize the importance of happiness and wellbeing in the lives of people around the world. Last year I attended the launch of the annual UN World Happiness Report in New York. This year the UN is closed to the public, and the 2020 Report launch was virtual due to the COVID-19 pandemic.

What a difference a year makes. As we self-isolate and practice social distancing, we begin to ponder the nature of happiness. Can we still be happy in the midst of a pandemic and the resulting recession? Can we—the collective we as a society—look at this as an opportunity to make the necessary changes to support our wellbeing instead of focusing on GDP growth at all costs? Where will the world be by next March 20th? What lies beyond the crossroads we’ve come to?

Family dinner during the COVID recession

As stay-at-home orders are instituted across the country, we have time to consider what really makes us happy. (Image: CC BY 2.0, Credit: Rubbermaid Products)

The 2020 World Happiness Report FAQ indicates that COVID-19 poses great risks to some of the key drivers of wellbeing, especially to health and income. But, it also states, “A high trust society quite naturally looks for and finds co-operative ways to work together to repair the damage and rebuild better lives. This has led sometimes to surprising increases in happiness in the wake of what might otherwise seem to be unmitigated disasters.”

This is a profound finding, and one that can help us understand why some societies are more resilient in the face of disasters than others. The authors go on to say that when communities and institutions work together, their common effort “delivers a heightened sense of belonging, and pride in what they have been able to achieve by way of mitigation. These gains are sometimes great enough to compensate for the material losses. But, where the social fabric is not strong enough to support co-operative action on the required scale, then fear, disappointment and anger add to the happiness costs of a disaster.”

Those of us with the privilege of working from home have a rare chance to slow our lives down at the busiest edges (commuting, for example!) and reflect upon what really makes us happy. Some are conducting virtual meetings with cats and dogs on their laps as a form of stress relief. Others are having lunches or dinners with their family members, some for the first time in a long time. Still others simply get a sense of satisfaction seeing their car sit quietly on a work day, burning no gasoline and emitting no greenhouse gases.

Wildlife

During the COVID-caused recession, the world around us recovers. (Image: CC0, Source)

The social fabric also includes those who are not so fortunate with their working arrangements. Those who must serve the public in person—in hospitals, at the grocers, on the streets, and behind the scenes at municipal utilities—deserve our utmost appreciation and, for the faithful, our heartfelt prayers. The happiness of these essential non-home workers can be served under any circumstances, if we let them know how respected and valued they are by the rest of us.

In survey after survey by the UN, OECD, Gallup, and others, family relationships, friends and community, health and vitality, purpose and meaningful work, spirituality and religion, as well as being around animals and within nature, figure prominently in many respondents’ definition of happiness.

In the very short time that these COVID-19 restrictions have been in place, we have seen and heard some amazing stories of happiness and wellbeing in the face of difficult circumstances. Stories of Italian towns coming together (emotionally) by singing in concert from their balconies; birds filling the blue skies of Wuhan; canal water running clear in Venice; and smog lifting from European cities in lockdown. These examples encourage us with the fact that positive changes do occur—even during a pandemic coupled with a recession!

We are living through something historic: this is the year that Mother Nature or an act of God has forced the world to pause. While we are quarantined, the air is clearing up, deforestation has slowed, and our wildlife is living with a little less fear. For instance, the wildlife trade and consumption bans approved by China are a critical step forward for wildlife welfare and human health. On a broader scale, the “GDP bulldozer” has slowed, giving wildlife a break across the board.

Protection of animals

As we look to the future, we see our wellbeing connected with Earth and animals as well. (Image: CC0, Credit: Tatiana)

Now is the time—indeed a rare opportunity—to look at what truly matters in our lives and for society, and to redesign our public policies to better support wellbeing for all. In my opinion this ought to include species conservation, habitat protection, and pro-climate policies. How happy could we be without all people, animals, and Earth thriving alongside us? None of these policies will succeed if the greater goal is GDP growth.

So, let us do what we can to work toward a vision of the future that is happier for everyone. The COVID-caused recession is helping us realize that such a future does not include the rabid pursuit of GDP growth. What will make us happier in the long run is a deeper connection with people, animals, and the planet.

Next March 20th, let’s really have something to celebrate!

 

 

Beth Allgood is the US Country Director at the International Fund for Animal Welfare.

The post Happiness and the COVID-caused Recession appeared first on Center for the Advancement of the Steady State Economy.


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