developing countries

Friedman embraces “E.T.” as solution to energy problems

by Fran Smith on November 18, 2009

in Energy, Environment, Global Warming

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Thomas L. Friedman’s op-ed in the NYT today could have been written by Paul Krugman.  And that’s not a compliment.

Friedman, like Krugman, waxes hysterical about those who are opposing  the cap-and-trade energy bill – those “deniers.” And, also like Krugman, he sets up those opponents as straw men that he can readily knock down.  In today’s article, Friedman worries about U.S. dependence on foreign oil supplied by  ”petro-dictators” and he fears ever-rising prices for increasingly scarce fossil fuels.

So either the opponents of a serious energy/climate bill with a price on carbon don’t care about our being addicted to oil and dependent on petro-dictators forever or they really believe that we will not be adding 2.5 billion more people who want to live like us, so the price of oil won’t go up very far and, therefore, we shouldn’t raise taxes to stimulate clean, renewable alternatives and energy efficiency.

Friedman’s terror about world population growth, especially growth in developing countries, is Malthusian.  (See Julian Simon on population and natural resources in “The Ultimate Resource II.”) . And Friedman  doesn’t seem to want those people to use energy to improve their standard of living.  Here’s what he says about that dream for a better life:

The world keeps getting flatter – more and more people can now see how we live, aspire to our lifestyle and even take our jobs so they can live how we live. So not only are we adding 2.5 billion people by 2050, but many more will live like “Americans” – with American-size homes, American-size cars, eating American-size Big Macs.

Such horror one can’t imagine for a person living at a subsistence level in India or China.

In his article, Friedman says that “clean energy” is the answer to the world’s energy problems.  He embraces  “E.T.” (no, not that visitor from another planet), but “energy technology”  that is carbon-less and efficient.

And we believe the best way to launch E.T. is to set a fixed, long-term price on carbon – combine it with the Obama team’s impressive stimulus for green-tech – and then let the free market and innovation do the rest.

His solution then is to tax conventional energy and subsidize alternative energy sources. Right.  That’s clearly an innovative solution that nobody has thought of.  And how would this affect the population bomb he fears?  Undoubtedly, raising the price of fossil fuels could indeed have an effect on developing countries’ populations.  While waiting for those alternative energy sources to develop, they’ll  continue to face poverty and resultant devastating diseases.  Not surprisingly, Friedman doesn’t address that problem.

Dambisa Moyo: Zambian Author Takes on Foreign Aid

by Ivan Osorio on February 25, 2009

in Deregulate to Stimulate, Economy, International, Stimulus to Nowhere, Trade

The celebrity parade calling for more foreign aid to poor countries has become so ubiquitous — and accepted — these days that critiques of it are rare. So it’s refreshing to see just such a critique in no less vaunted an outlet than The New York Times Magazine. The magazine’s current issue features an interview with Dambisa Moyo, a native of Zambia and author of the book, Dead Aid: Why Aid Is Not Working and How There is a Better Way for Africa, to be released in the United States on March 17.

You argue in your book that Western aid to Africa has not only perpetuated poverty but also worsened it, and you are perhaps the first African to request in book form that all development aid be halted within five years.
Think about it this way — China has 1.3 billion people, only 300 million of whom live like us, if you will, with Western living standards. There are a billion Chinese who are living in substandard conditions. Do you know anybody who feels sorry for China? Nobody.

Maybe that’s because they have so much money that we here in the U.S. are begging the Chinese for loans.
Forty years ago, China was poorer than many African countries. Yes, they have money today, but where did that money come from? They built that, they worked very hard to create a situation where they are not dependent on aid.

What do you think has held back Africans?
I believe it’s largely aid. You get the corruption — historically, leaders have stolen the money without penalty — and you get the dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its people.

If people want to help out, what do you think they should do with their money if not make donations?
Microfinance. Give people jobs.

Finally, in these times of economic turmoil she’s got great advice not only for developing countries, but for rich ones, too.

For all your belief in the potential of capitalism, the free market is now in free fall and everyone is questioning the supposed wonders of the unregulated market.
I wish we questioned the aid model as much as we are questioning the capitalism model. Sometimes the most generous thing you can do is just say no.

Amen, though I would add that there is a form of aid of sorts that does help those it’s supposed to: remittances, which are private and voluntary, and thus can respond to recipients’ needs better than any bureaucratically administered aid program ever could. Moreover, as the current issue of The Economist notes, they can reach those in most need during lean times, because they “are less dependent on the growth prospects of receiving countries than other kinds of flows, which seek profitable investment opportunities.”

Of course, remittances alone will not help struggling countries rise out of poverty — that is a job for sound economic policies, including secure property rights, flexible markets (including labor markets), and free flow of goods, services, and capital. And again, not just for the developing world. As the American government pretends to “stimulate” the economy with the biggest spending bill in history, Dambisa Moyo’s advice could not be more timely. (Thanks to Margaret Griffis and Jeremy Sapienza for the New York Times Magazine link.)

Gold Is Not the Enemy – Poverty Is

by Silvia Santacruz on December 31, 2008

in Energy, Environment, International

National Geographic magazine has published an article titled The Price of Gold focusing on the high price of gold and the high human costs of gold production. The piece reveals useful data on artisan miners in the world and the health hazards they face daily while mixing mercury to separate rock from gold. Overall, the article leans firmly against India’s growing demand for gold and the metal’s global providers: 75% of the world’s gold comes from large-scale mining companies, and 25% from artisan miners.

The article questions gold exploitation per se, and overlooks that responsible mining companies may be the solution to eliminate poverty and the damage caused by informal miners. But, the piece does recognize that responsible large-scale mining brings prosperity to developing countries.

Baru Hijau was supposed to be a model mine, and Newmont likes to tout its benefits: the $391 million in local royalties and taxes it paid in 2007, the more than 8,000 jobs it has created for Indonesians, the reported $600 million spent to minimize environmental damage. Then there’s the more than $3 million Newmont spend each year on community development. It may be a pittance compared with the company’s annual revenues, but it has provided the five villages closest to the mine with electricity, health clinics, irrigation dams, and agriculture projects.

That single paragraph is a very powerful one, yet it is followed by a negative paragraph that describes the jealously of other communities that do not directly benefit from the project.

But the most important issue in this matter it is not the hunger for gold from India, or the millions in profits mining companies are making, but how a single industry can change the lives of thousands of the poor by providing job opportunities and basic services. Larger modern firms can also put an end to risky informal miners and children miners, who risk their lives everyday. These men, women, girls and boys often subsist on bunches of coca leaves they chew—nothing more. And they sometimes pour local liqueurs called pisco at the mine entrance in tribute to spirits they hope will keep them alive as in La Rinconada, in Perú.

Prediction 2009: No Agreement at Copenhagen

by Iain Murray on December 30, 2008 · 2 comments

in Energy, Environment, Global Warming

The global warming community have suggested for a while now that, given the almost-certain change in US administration policy on global warming (remember John McCain’s position), the conference of the Kyoto Treaty parties in 2009 at Copenhagen would result in a sea change in global action on greenhouse gas emissions. Copenhagen would produce a new treaty, son-of-Kyoto, that would have full US participation, set stringent and enforceable emission limits aimed at getting the world to the sort of emissions levels some scientists demand, and start to involve the developing world in emissions reductions.

This is not going to happen.

For a start, it looks like US policy is going to concentrate on getting a domestic settlement in place before agreeing to any international action other than the traditional “agreeing to agree.” Secondly, with the world in financial chaos, governments are going to look askance at any possibility of deep emissions cuts in the short term because they know how costly that will be (the recent EU agreement – in actuality an agreement for just 4% cuts by 2020 – is a great example). This will make the drastic emissions cuts supposedly necessary in the medium-term well-nigh impossible to achieve. Finally, developing countries have consistently stated that they will not take on any emissions reductions, demanding the developed world move first. Yet even if the developed world reduces its emissions to zero by 2050, the developing world will have to keep its emissions at around today’s levels to meet just a 50% global reduction by 2050. That represents a reduction from expected developing world emissions of 57%. To meet the 80% reduction demanded by most scientists will require a severe reduction in emissions from today’s levels that represent widespread energy poverty.

So despite the optimism, a genuine international agreement looks some way off. Copenhagen will doubtless be sold as a triumph, but in reality the world will be no closer to a genuine, binding international agreement than it was in 2001.