By Julia Conley
Bloomberg's year-end report on the wealth of the world's billionaires shows that the richest 500 people on the planet added $1.8 trillion to their combined wealth in 2020, accumulating a total net worth of $7.6 trillion.
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By Amol Mehra
Set against rising calls for action to combat growing inequality and the climate crisis, the COVID-19 pandemic underscores the importance of the key drivers of industry and economic reform: workers, communities and the environment.
The Built Environment<p>The built environment – the physical places and structures that we inhabit – is a huge potential change agent in this regard. Buildings and construction account for massive amounts of energy usage and about 40% of global CO2 emissions, providing a clear pathway to shift current consumption and production pathways.</p><p>The construction sector accounts for around <a href="https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-Construction-In-Brief.pdf" target="_blank">13% of the world's GDP </a>and<a href="https://iloblog.org/2020/05/11/the-construction-sector-can-help-lead-the-economic-recovery-heres-how/" target="_blank" rel="noopener noreferrer"> for 7.2% of the global workforce</a>. Many of the jobs linked to these sector have a negative history of labour rights, especially with respect to <a href="https://laborrights.org/issues/migrant-labor" target="_blank" rel="noopener noreferrer">migrant laborers</a>. As <a href="https://iloblog.org/2020/05/11/the-construction-sector-can-help-lead-the-economic-recovery-heres-how/" target="_blank" rel="noopener noreferrer">experts have noted</a>, the scale of the industry and its relative impacts on labour markets and the environment make it a prime agent of transformation of the broader global economy.</p><p>By prioritizing approaches that focus on decarbonization and the promotion of labor rights protections, we can create economic opportunities that promote healthy, regenerative structures. Efforts are starting to seed in this regard, with <a href="https://www.vox.com/energy-and-environment/2020/1/15/21058051/climate-change-building-materials-mass-timber-cross-laminated-clt" target="_blank" rel="noopener noreferrer">increased attention</a> being placed to mass timber and other wood products in construction, as well as the use of natural materials in buildings.</p><p>At the same time, leading human rights organizations are looking more closely at promoting <a href="https://www.ihrb.org/focus-areas/built-environment/commentary-linking-climate-human-rights-built-environment-lifecycle" target="_blank" rel="noopener noreferrer">rights-based approaches</a>.</p>
Not all industries are equal. ourworldindata.org
Fashion<p>But this isn't the only sector with transformative power. The fashion sector produces <a href="https://www.weforum.org/agenda/2020/01/fashion-industry-carbon-unsustainable-environment-pollution/" target="_blank">nearly 10% of the world's carbon emissions and is the second largest consumer of the water</a>, all while employing between <a href="https://www.ilo.org/global/industries-and-sectors/textiles-clothing-leather-footwear/lang--ja/index.htm" target="_blank">60 and 70 million</a> workers in garment supply chains.</p><p>While there have been laudable innovations in recent years towards adopting circularity and increasing the use of organic materials, there is still huge potential to promote transformative change in protections for workers.</p><p>Workers in the sector are often left without social protections, exposing them to vulnerability. In recognition of this need, the International Labor Organization, business actors and labor rights leaders have <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---dialogue/documents/statement/wcms_742371.pdf" target="_blank">committed to take</a> action to protect garment workers' income, health and employment, and to work together to establish sustainable systems of social protection for a more just and resilient garment industry.</p><p>This "Call to Action" launched in April 2020 and now needs steady implementation. The effort should seek to cast a wide tent, bringing in other industry players and leveraging development actors as well.</p><p>What's clear from the examples above is that critical, much needed efforts are starting to emerge and that these efforts need to be encouraged and accelerated. As social movements, consumers, investors, regulators and businesses themselves start to realize the value of transforming practices, the momentum will increase for other sectors to follow suit. This domino effect will spur the economic transformation that is so desperately needed to ensure that the environment, and the people who inhabit it, can live in a healthy, just society.</p><p>There can be no doubt: transformation of our economic system is imperative. The moment is now for businesses, and the industries they are part of, to seize it.</p>
Like many other plant-based foods and products, CBD oil is one dietary supplement where "organic" labels are very important to consumers. However, there are little to no regulations within the hemp industry when it comes to deeming a product as organic, which makes it increasingly difficult for shoppers to find the best CBD oil products available on the market.
Charlotte's Web<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDcwMjk3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0MzQ0NjM4N30.SaQ85SK10-MWjN3PwHo2RqpiUBdjhD0IRnHKTqKaU7Q/img.jpg?width=980" id="84700" class="rm-shortcode" data-rm-shortcode-id="a2174067dcc0c4094be25b3472ce08c8" data-rm-shortcode-name="rebelmouse-image" alt="charlottes web cbd oil" data-width="1244" data-height="1244" /><p>Perhaps one of the most well-known brands in the CBD landscape, Charlotte's Web has been growing sustainable hemp plants for several years. The company is currently in the process of achieving official USDA Organic Certification, but it already practices organic and sustainable cultivation techniques to enhance the overall health of the soil and the hemp plants themselves, which creates some of the highest quality CBD extracts. Charlotte's Web offers CBD oils in a range of different concentration options, and some even come in a few flavor options such as chocolate mint, orange blossom, and lemon twist.</p>
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By Ruby Russell
We are used to hearing politicians and policy wonks talk about economic growth, celebrating when it goes up, and selling their pet projects and policies as key to boosting growth.
The problem is, as the economy expands, so does our consumption of resources. Waste, emissions and other pollution go up, too. Which is why many are asking — can we really keep infinitely expanding our economies on a planet of finite resources?
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By Jo Harper
The Democratic Party candidate Joe Biden proposes net-zero CO2 emissions in the United States by 2050. It's an ambitious target, but 30 years is a long time in politics and there is a key tension between the party's moderate nominee with links to corporate funders, such as the asset manager BlackRock, and progressives whose votes he needs to win. This is nowhere better seen perhaps than on environmental issues, where campaigns to green corporate America have tended to fizzle out.
At the Heart of Things<p>"This [CDP campaign] doesn't appear to directly impact BlackRock as it's voluntary," Moira Birss, climate & finance director at Amazon Watch, told DW. "But BlackRock should certainly be asking for 1.5-degree transition plans of all the high emitting companies it invests in."</p><p>Birss also says that BlackRock is "again absent from this leading initiative" despite claims by its CEO that no company had done more for climate in 2020.</p><p>"Fink claims that BlackRock had 950 'engagements' with companies on climate this year but doesn't provide any transparency on what that means. That's not climate leadership. I would think that if BlackRock leadership could show the impact it is having on climate through these 'engagements,' it would. Instead Fink is making claims about climate action that he can't, or won't, back up," she adds.</p>
Passive Funds Active<p>BlackRock reported healthy third-quarter profits, the recovery in global financial markets helping it end the quarter with a record $7.81 trillion in assets under management. The New York-based company's net income rose 27% to $1.42 billion, while its shares are up 22% this year.</p><p>Supported by an index-fund collection called iShares, it is the world's largest asset manager, with $7.81 trillion of other people's money under its control, a third of it in Europe. This is roughly equal to the world's top 20 pension funds combined. The fund employs 13,900 people spread across 30 countries.</p><p>BlackRock's Aladdin risk-management system — a software tool that can track and analyze trading — is used by the U.S. Federal Reserve and European Central Bank (ECB). Today, $21.6 trillion sits on the platform from just a third of its 240 clients, according to public documents verified with the companies and first-hand accounts. That figure alone is equivalent to 10% of global stocks and bonds.</p>
Massive Political Influence<p>Created in 1988, BlackRock has close ties to the Biden campaign, although the company's investments to influence Washington, mean that Fink has also advised the Trump administration on infrastructure privatization and the COVID-19 pandemic. Fink is reportedly hoping for a position in a Biden administration.</p><p>BlackRock has avoided being designated a Systemically Important Financial Institution (or SIFI) by the U.S. Treasury's Financial Stability and Oversight Council (FSOC), set up by Dodd-Frank financial regulations, which would require it to be regulated by the American central bank. </p><p>The company has spent the last decade lobbying lawmakers, US Treasury officials, and FSOC members with donations. In its Transparency Project report, BlackRock says that it has hired at least 84 former government officials, regulators, and central bankers worldwide since 2004. The world's largest asset manager has also been tapped by the Federal Reserve to oversee three government debt-buying programs designed to fend off economic catastrophe.</p>
By Kenny Stancil
Amid the Global Week of Action for Debt Cancellation and one month ahead of the Finance in Common Summit, climate justice advocates on Monday urged public banks around the world to treat government responses to the coronavirus crisis as opportunities to coordinate just recoveries from the ongoing public health and economic calamities and to simultaneously facilitate just transitions from dirty to clean energy, thereby beginning to "build the world we want."
<div id="65c39" class="rm-shortcode" data-rm-shortcode-id="ac51e8b5bddbfd63c853f644d08e44dc"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1315656759781064706" data-partner="rebelmouse"><div style="margin:1em 0">As we launch the #WorldWeWant campaign on climate impacts, @UN Secretary-General @antonioguterres echoes our call f… https://t.co/5ytx9JD3hh</div> — Climate Action Network - International (CAN) (@Climate Action Network - International (CAN))<a href="https://twitter.com/CANIntl/statuses/1315656759781064706">1602511989.0</a></blockquote></div>
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By Ruby Russell
It was only in the mid-20th century, in the wake of the shattering impact of World Wars and when capitalism and communism were competing for global dominance, that we began to measure the success of an economy in terms of gross national product, or GDP.
Zero-Emissions With Twice the GDP<p>"The Intergovernmental Panel on Climate Change in their <a href="https://www.ipcc.ch/report/ar5/syr/" target="_blank">Fifth Assessment</a>, have 116 mitigation scenarios with a chance of staying below the 2 degree Celsius threshold. All of those scenarios assume 2-3% GDP growth rates," says Jon Erickson, an ecological economist at the Gund Institute for Environment in Vermont, adding that this implies doubling the global economy by somewhere <a href="https://www.dw.com/en/net-zero-by-2050-what-does-it-mean/a-48958487" target="_blank">around 2050</a>.</p><p>These scenarios rely not just on switching to renewables, but also on the large-scale <a href="https://www.dw.com/en/carbon-capture-paris-agreement-co2-emissions-soil-reforestation-biochar-biomass/a-54717755" target="_blank">extraction of massive volumes</a> of carbon from the atmosphere using as-yet unproven technology, which Erickson describes as "wildly unrealistic." </p><p>"None of those models and the IPCC community even bother simulating a scenario where the global economy contracts, stabilizes and maybe even degrows," Erickson says. "Yet that's probably the one realistic scenario that would significantly affect greenhouse gas emissions." </p><p>It is easy to see why the idea that we must keep growing is hard to give up. When economic activity declines and we go into recession, people lose their jobs and are plunged into poverty. </p><p>Yet those arguing for "degrowth" — a managed contraction of economic activity— say it doesn't have to be this way. </p>
Time for a Different Approach?<p>Federico Demaria, an economist at the Autonomous University of Barcelona, who has authored several books on degrowth, says that neoclassical economics — which has dominated economic discourse over recent decades, has "never looked at the question of how an economy could be managed without growth. It only looked at questions like, why do economies grow? If it's not growing, how can we make it grow? Or, how can we make it grow even faster?"</p><p>These have become pertinent questions even — or especially — for wealthy, industrialized economies, where growth has slowed over recent decades. "What the mainstream economists are doing is just trying to relaunch growth," Demaria says.</p><p>A different approach, which aims to rein in growth without inflicting the pain that recession has traditionally entailed, comes from the field of ecological economics. </p>
Embedding Economics in Ecology<p>Neoclassical economic models picture economies as closed systems, with no inputs of materials or energy and no outputs of pollution and waste. But ecological economists insist there is no real separation between economy and ecology. After all, if we destroy the planet that feeds us, economic activity will collapse pretty quickly too.</p><p>In an effort to fix this oversight, Demaria is among those devising <a href="https://www.nature.com/articles/s41893-020-0484-y#:~:text=A%20combination%20of%20market%2Dincentive,mitigating%20its%20environmental%20impact2" target="_blank">new economic models</a> that include factors like emissions and resources use. They are also working in things like social equality, debt, deficits and monetary systems, which have social impacts, and play into cycles of boom and bust.</p><p>Which is why Demaria says their work is attracting attention from surprising quarters. </p><p>"The main idea of ecological macroeconomics is that the economy is embedded into the environment," he says. "The second problem is that the neoclassical models were not realistic — look at the financial crisis; they didn't see it coming because they were completely unable to model it. So central banks, for example, are showing a lot of interest in ecological macroeconomics." </p>
Degrowth Vs. Green Growth<p>Yet mainstream environmentalism is still firmly entrenched in the idea of "green growth."</p><p>The IPCC, the <a href="https://www.worldbank.org/en/news/feature/2019/10/15/delivering-green-growth" target="_blank">World Bank</a>, the <a href="https://www.oecd.org/greengrowth/" target="_blank" rel="noopener noreferrer">OECD</a> and countless think tanks and national governments rely on us being able to "decouple" growth from its ecological impact. And some economies, like Germany, have grown while emissions level off, or even decline. </p><p>Countless <a href="https://www.tandfonline.com/doi/full/10.1080/13563467.2019.1598964" target="_blank" rel="noopener noreferrer">scientific papers</a> have been dedicated to the fierce debate over whether these cases represent an absolute break or just a tempering of the link between growth, emissions and resource-use. </p><p>But proponents of <a href="https://eeb.org/library/decoupling-debunked/" target="_blank" rel="noopener noreferrer">degrowth </a>argue that to date, decoupling has only happened in wealthy economies that have outsourced emissions-heavy sectors like manufacturing to economies like China, and that globally the correlation is still strong. </p><p>As exemplified by the IPCC scenarios, the argument for "green growth" rests on the assumption that technology will save us. By recycling more, swapping energy from fossil fuels to that from renewables, and improving efficiency so we need less of it overall, proponents of green growth hope to keep expanding without sacrificing our planet's ability to feed us and maintain a stable climate.</p>
Increased Efficiency, Greater Energy Use<p>Yet technological advances don't always have the desired outcome.</p><p>When new engines that needed less coal to produce the same amount of energy were introduced in the 19th century, coal consumption didn't fall. Instead, better efficiency increased profits, made products cheaper, and drove up demand, meaning coal use <a href="https://oll.libertyfund.org/titles/jevons-the-coal-question" target="_blank">actually went up</a>. </p><p>This trend — called <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921800905001084" target="_blank" rel="noopener noreferrer">Jevons paradox</a> — has persisted, meaning that improvements in efficiency tend to come with a rebound effect that wipes out any actual energy savings. Similar effects can be seen in resource use, and even labor, as automation has done more to boost consumption and production <a href="https://www.dw.com/en/do-we-need-to-work-less-to-save-the-world/a-53742751" target="_blank" rel="noopener noreferrer">than free time for workers</a>.</p><p>In a system geared toward infinite expansion, opportunities to tighten our belts tend to be seized as new ways to keep getting bigger. </p><p>But degrowthers argue that we do have to tighten our belts — and it doesn't have to be painful. If we could reverse the central logic of economic systems that prioritize growth over human and ecological wellbeing, they don't believe we would miss the furious activity that's keeping a minority of the human population in must-have products and ever-more material wealth.</p>
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By Timothy Rooks
The many wildfires roaring through America's West Coast don't just look scary, they are bad for people's health, bad for public and private lands, and bad for the economy.
Counting Up the Losses<p>The costs around wildfires are multifold. Besides the irreplaceable loss of life and the enormous costs to put out the fires, there are many tangible elements like the damage to vehicles, homes and other buildings. These costs can be roughly calculated by looking at insurance claims.</p><p>Over the years, all of the top 10 costliest wildland fires in the country have been in California. The costliest of all was Camp Fire in 2018, which set insurers back over $8.5 billion, according to numbers tallied by the Insurance Information Institute.</p><p>But the Camp Fire was just one fire. Reinsurer Munich Re estimates the costs for all the wildfires that year to be over $20 billion. So far this year's fires should bring in a similar calculation.</p><p>Currently in California alone, thousands of structures have been damaged or destroyed. The state is known for building on steep slopes in rural areas surrounded by forests that are hard to access. And since the fires are still burning with no end in sight, it is impossible to tell how many will be damaged in the end and what the final costs will be. Add to that the fact that not everything is insured, and many things are underinsured and the actual costs get a little fuzzy.</p>
Counting the Tourists<p>It is important to remember that these numbers just include personal property. Damage done to public lands like parks is not added in. What is a single tree worth or a beautiful forest view in a state park anyhow?</p><p>What can be calculated though is how many tourists stay away based on past visitor numbers. The West Coast is world-famous for its natural wonders, wine country and lively cities, so there is no worse publicity than burning trees and a sky filled with smoke to keep tourists away.</p><p>These frightening images have gone around the world and made a deep impression. A bad reputation is hard to get rid of. The travel industry was already suffering because of COVID-19 restrictions, now a recovery on the West Coast will be even harder. </p>
Fear and Loathing in LA and Beyond<p>Other elements more difficult to tally are the costs of things that didn't happen like canceled flights, trains stopped in their tracks, workers on sick leave with respiratory problems, long-term health issues and other lost economic activity, either because a shop or warehouse burned down or there is no one left there to buy the goods.</p><p>Personal safety is also something to consider. Though U.S. housing sales are on a high, after so many natural disasters California may soon been seen as too dangerous a place to live or do business. In the end people may leave the coast for other, safer places.</p><p>Rebuilding is a lot of work and some may not be up to the challenge and may never come back as happened in New Orleans after <a href="https://www.dw.com/en/recovering-from-katrina-will-new-orleans-become-the-worlds-climate-beacon/a-19443437" target="_blank">Hurricane Katrina in 2005</a>. Higher insurance premiums for risky areas could help with these decisions.</p><p>In many ways these wildfires could not have come at a worse time. Besides scorched land, the coastal states will have less money to spend since their economies have been hit by coronavirus-related downturns. California in particular is dependent on global trade and needs huge sums of cash to run the state, invest in more costly firefighting and <a href="https://www.dw.com/en/us-global-standing-plummets-over-coronavirus-response-survey/a-54939242" target="_blank" rel="noopener noreferrer">beat COVID-19</a>.</p>
Not Out of the Woods<p>The wildfires in California have gained a lot of attention because of the apocalyptic sky around San Francisco. Yet 2015 was the worst year for wildfires, according to numbers gathered on annual wildland fires in the U.S. by the <a href="https://www.nifc.gov/fireInfo/fireInfo_stats_totalFires.html" target="_blank" rel="noopener noreferrer">National Interagency Coordination Center</a>. That year there were over 68,000 fires that destroyed over 10 million acres in the U.S. In a close second place is 2017. Looking at the decades of collected data, the general trend is pointing toward ever more fires.</p><p>So far this year, the fires have not reached the level of 2015. Still experts point out that current higher temperatures, droughts and shorter winters all add to the possibility of more fires. A report issued by the National Interagency Fire Center on September 15 outlined the problem.</p><p>"Generally, most areas across the West received less than 25% of average precipitation in August. The precipitation received was mostly associated with thunderstorms and provided little benefit," according to the report. Not only that, temperatures were generally 2-4 degrees Fahrenheit above normal.</p><p>This all means that the traditional fire season is longer than in the past. Frighteningly, in California it has now been extended to cover all 12 months. For years there has not been a month without a wildfire. These extra firefighting missions cost a lot in terms of manpower and equipment and take time away from fire prevention.</p>
California Has Huge Economic Impact<p>California has the highest economic output of any American state, accounting for around 14% of the entire country's tab. Add in Oregon, Washington State and Idaho and the region accounts 19% of U.S. output. With increasing temperatures, climate change and less cash to invest because of the current downturn, the area needs to prepare for more uncontrollable fires.</p><p>Residents and businesses there will need to put fear aside and get used to higher insurance premiums and stricter building codes, or move to less turbulent places. The hot glow of embers may permanently reshape the dynamic West Coast and turn it an unwelcoming place — that would be an economic tragedy and make these wildfires truly costly.</p>
By Alex Thornton
The Australian government has announced a A$190 million (US$130 million) investment in the nation's first Recycling Modernization Fund, with the aim of transforming the country's waste and recycling industry. The hope is that as many as 10,000 jobs can be created in what is being called a "once in a generation" opportunity to remodel the way Australia deals with its waste.
Waste Mountain<p>The need for a dramatic increase in Australia's recycling capacity pre-dates the COVID-19 pandemic. <a href="https://www.abc.net.au/news/2019-12-27/where-does-all-australias-waste-go/11755424" target="_blank">Australians create approximately 67 million tons of waste a year</a>, and like in many wealthy countries, much of that was sent overseas. That all changed when China announced it was <a href="https://www.weforum.org/agenda/2017/10/china-has-banned-foreign-waste-so-whats-the-future-of-world-recycling" target="_blank">banning the import of a huge range of foreign waste</a> and recyclables. Soon <a href="https://www.weforum.org/agenda/2019/05/malaysia-flooded-with-plastic-waste-to-send-back-some-scrap-to-source" target="_blank">other countries followed suit</a>, and Australia was forced to look for alternative solutions.</p>
Biggest exporters of plastic. Statista
Waste Export Ban<p>Australia has adopted a strategy of taking responsibility for its own waste. Starting in January 2021, it is phasing in <a href="http://www.environment.gov.au/protection/waste-resource-recovery/waste-export-ban" target="_blank">bans on the export of different forms of waste</a>. By mid 2024, Australia's home-grown recycling industry will have to deal with an extra 650,000 tons of waste plastic, paper, glass and tires.</p><p>"As we cease shipping our waste overseas, the waste and recycling transformation will reshape our domestic waste industry, driving job creation and putting valuable materials back into the economy," federal environment minister Sussan Ley said in a <a href="https://uk.reuters.com/article/us-australia-waste/australia-to-set-up-132-million-fund-to-boost-recycling-following-export-curbs-idUKKBN247060" target="_blank">statement to Reuters</a>.</p>
Timeline for Australia's waste export ban. Australian Government
Trash Into Treasure<p>The benefits to the environment of boosting recycling rates are well known – less landfill, less plastic in our ocean, reduced need for virgin materials, and lower carbon emissions. The Recycling Modernization Fund initiative aims to divert more than 10 million tons of waste from landfill, part of an <a href="http://www.environment.gov.au/protection/waste-resource-recovery/publications/national-waste-policy-action-plan" target="_blank">overall strategy to reduce the total waste generated per person by 10%</a>, and push <a href="https://www.environment.gov.au/system/files/resources/7381c1de-31d0-429b-912c-91a6dbc83af7/files/national-waste-report-2018.pdf" target="_blank">Australia's total resource recovery rate from 58% in 2017</a> to 80% by 2030.</p><p>But like many countries, Australia is focusing on the economic benefits of better waste management as well.</p><p>"This will mean Australia converts more waste into higher valued resources ready for reuse locally by manufacturers and brands in their packaging and products," Rose Read, CEO of the National Waste and Recycling Industry Council, <a href="https://uk.reuters.com/article/us-australia-waste/australia-to-set-up-132-million-fund-to-boost-recycling-following-export-curbs-idUKKBN247060" target="_blank">told Reuters</a>.</p>
Green Jobs<p>The great potential of the circular economy to create green jobs is being recognized across the world.</p><p>In the UK, the Waste and Resources Action Program has launched a <a href="https://wrap.org.uk/buildbackbetter" target="_blank">six-point plan which it claims could add $90 billion to the economy, and create 500,000 new jobs</a>. Investment in the circular economy forms a significant part of the <a href="https://www.nytimes.com/2020/07/14/us/politics/biden-climate-plan.html" target="_blank">$2 trillion climate plan that Democratic candidate Joe Biden</a> is taking into November's US presidential election. And the <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_20_940" target="_blank">European Union has put its Green New Deal at the heart of its plans for recovery</a> from the economic shock of COVID-19.</p><p>The World Economic Forum's <a href="http://www3.weforum.org/docs/WEF_The_Future_Of_Nature_And_Business_2020.pdf" target="_blank">Future of Nature and Business</a> report identifies 15 systemic transitions with annual business opportunities worth $10 billion a year that could create 395 million jobs by 2030.</p><p>As is the case with Australia's Recycling Modernization Fund, a combination of private enterprise and government investment can offer ways to get people back to work by building a more environmentally sustainable economy.</p>
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The world is using up more and more resources and global recycling is falling. That's the grim takeaway from a new report by the Circle Economy think tank, which found that the world used up more than 110 billion tons, or 100.6 billion metric tons, of natural resources, as Agence France-Presse (AFP) reported.
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When politicians refuse to take action on climate change, they often use the economy as an excuse. President Donald Trump, for example, justified his decision to pull the U.S. out of the Paris agreement in economic terms.
It is instructive to observe the reaction to the Piketty phenomenon—a 700-page treatise on political economy that became an overnight Amazon bestseller deserving, according to Larry Summers, of a Nobel Prize. It is similarly instructive to note the spectacle of the viral Russell Brand interview with the BBC's Jeremy Paxman in which Brand pretty much shreds Paxman and calls for revolution. I can't claim to have actually read Piketty's tome, but I've read a lot of the reviews, and I have watched the Russell Brand video. Regardless of where you come down on their arguments, the response to Piketty's book and the wide appeal of Brand's rant taken together tell us that trouble is brewing.
However, the trouble is far deeper than what the media is currently hyping. While it is true that the long-term dynamics of unequal wealth distribution are indeed unsustainable and unconscionable as Piketty highlights in Capital in the 21st Century, a reality much less obvious, and yet more “terrifying" (to use a Piketty expression) is buried in the data of those 700 pages.
In the concluding section of his book, Piketty calls r > g the “central contradiction of capitalism," where r is the return on capital invested and g is the economy's growth rate. The latter, Piketty suggests, is what determines wage growth rates. The central contradiction, he elaborates, is that since returns to capital exceed returns to labor is hard-wired into the system, so too is rising inequality, absent wars or depressions.
I for one fail to see how this is the “central contradiction of capitalism." Piketty's discovery, out of his exhaustive search and analysis of the data, is that Nobel prize winning economist Simon Kuznets and his hypothesis of a “Kuznets Curve" was wrong. Income inequality does not, Piketty asserts, first increase as a country develops and then reverse course and decline along some inverted U-shaped curve as Kuznets suggested.
Turns out “the rich just keep getting richer" after all.
Has this ever really been a subject for serious debate? Nothing in my adult experience on Wall Street and the decade since contradicts the “rich get richer" hypothesis. But the story goes beyond r > g. For example, Marisa Meyer's $200mm worth of stock options value (thank you, Dan Loeb, thank you, Alibaba, sorry Yahoo! shareholders) on no initial investment and little tangible progress turning around the operations of Yahoo! is another important part of the story.
I'm delighted to see Piketty reinvigorate the serious discussion on inequality that the Occupy Movement began but didn't know what to do with. But as is typical of mainstream economists of all political stripes, Piketty misses the true contradiction of capitalism (and socialism for that matter), which is the assumption that exponential growth can continue forever on a finite planet. It is an assumption that is based on the flawed theory, in direct conflict with the laws (not theories) of thermodynamics, that the economy is somehow separate and apart from the biosphere. How is it that we continue to ignore the expanding literature on this obvious contradiction, even as accelerating climate change events are now everyday front-page news?
Actually, Piketty unwittingly and indirectly helps to illuminate that fundamental contradiction in a chart that reports the concentration of “slave capital" in the south when slave labor was the “energy source" that powered that region's dominant agricultural economy.
According to Piketty's data, it was neither land nor financial capital but slave capital that comprised the largest share of all wealth, a stunning 40 percent of it. Not surprisingly, that wealth was highly concentrated. If we ignore for the moment the obvious ethical implications of what Piketty's chart reveals—inequality driven to its most violent extreme—we see through to another deeply troubling revelation. Just as the growth of the South's agricultural economy rested on the exploitation of slave capital, as if there would be no negative consequences to the health of the whole, so our current economy's exponential growth depends upon our exploitation of fossil fuel assets and the over taxing of the Earth's resources and waste sinks as if there would be no consequences to the health of the whole. The former violated the requirements of a healthy social system; the latter violates the requirements of a healthy planet.
Fossil fuel assets, in particular, are the modern day equivalent of slave capital. Previously, I estimated that we are facing a $20 Trillion Big Choice, the ethical challenge of our era. The assumption of ever-expanding use and abuse of numerous material resources (including fossil-fuel-based energy), and the overuse and pollution of the Earth's natural waste sinks as the core operating characteristic of our economic system—this is the real central contradiction of our modern capitalist system.
Facing a loss of 40 percent of their “capital assets," the South fought a horrific Civil War. It took the immense courage of a moderate Republican president to see our nation through that moral and economic crisis.
Where is our modern day Abe Lincoln?
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The International Energy Agency (IEA) released today a major new report warning that nothing short of an energy sector revolution is required to protect the world from runaway climate change and a global temperature rise beyond two degrees Celsius.
In what is the IEA’s most urgent call for climate action yet, the World Energy Outlook Special Report 2013: Redrawing the Energy Climate Map advocates a “reorientation of an energy system currently dominated by fossil fuels,” and proposes near-term action to clean up the power sector and halt the increase of global emissions by 2020.
It also calls for “transformational” change in energy generation worldwide in the longer term.
IEA Executive Director Maria van der Hoeven said:
Climate change has quite frankly slipped to the back burner of policy priorities. But the problem is not going away—quite the opposite.
This WEO [World Energy Outlook] Special Report is a timely reminder that climate change must remain a permanent and prominent item on the policy agenda. It seeks to outline the intensive action which we need to start implementing today, without waiting to 2020 or later for a global agreement to take effect.
Compared to 2011, energy-related carbon dioxide emissions in 2012 have increased by 1.4 percent.
A new global agreement aimed at meeting this target will not emerge before 2015 and is not likely to be implemented before 2020.
Meanwhile, the world is drifting further towards dangerous levels of average temperature rise and runaway climate change; the IEA projects an increase of 3.6 to 5.3 degrees Celsius by the end of the century. Scientists warn this level of warming could threaten civilization as we know it.
In its "4-for-2 degrees Celsius" scenario, the report proposes four near-term “pragmatic and achievable” measures to put the world on track to limiting warming to safer levels and could reduce emissions by eight percent on levels otherwise expected by 2020 without harming economic growth.
Targeted energy efficiency measures in buildings, industry and transport would account for nearly half of these savings by 2020 while limiting the construction and use of the least-efficient coal-fired power plants could deliver another 20 percent of these savings—while helping to curb local air pollution.
The report estimated renewable energy generation would increase from around 20 percent to 27 percent over the same period to fill the void created.
Halving methane releases from flaring in the oil and gas industry could provide another 18 percent of the savings and implementing a partial phase of out fossil fuel consumption subsidies would account for 12 percent, according to the report.
The IEA also makes the economic case for avoiding a looming 2017 lock-in for long-term warming above 2ºC. While delaying climate action across the entire energy system till 2020 would save $1.5 trillion, the report estimates that an additional $5 trillion will be needed in low-carbon investment after this date.
Fossil fuel power plants have long life cycles and are therefore exposed to serious risks in a carbon-constrained world, facing early and costly retirement or retrofitting, or even becoming “stranded assets.”
In a report last year, the IEA warned that—to stay below two degrees Celsius—about two-thirds of proven global fossil fuel reserves have to stay in the ground. Yet companies spend vast amounts not only digging up known fossil fuel reserves but by looking for and developing new fossil fuel reserves.
A recent report from the Carbon Tracker Initiative found that the financial industry invested $674 billion in such projects last year alone, and warned that $6 trillion could be pumped into a "carbon bubble" over the next decade.
In response to this dire outlook for carbon-intensive utilities, the IEA promotes a strong global carbon market and carbon capture and storage (CCS) technologies as possible ways to avoid problems and to create a role for fossil fuels in the future energy mix of a carbon-constrained world.
However, in the same report the IEA also warns that the use of CCS “remains distant” as the technology has yet to be deployed at scale, and it could still be many years before the power sector could rely on it, if full-scale deployment ever becomes a reality.
While generally welcoming the IEA’s call to action, environmental groups have upped the stakes.
Samantha Smith, leader of the World Wildlife Fund (WWF) Global Climate & Energy Initiative said:
This is a welcome intervention by the IEA, particularly the focus on energy efficiency standards for lighting, cars and appliances as well as cutting methane losses in oil and gas production. Unfortunately, the other policies are incomplete, not ambitious enough or regionally biased. With the world on track for catastrophic levels of global warming, as the IEA says, these stop-gap proposals simply don’t go far enough.
Building on IEA arguments they argue that the IEA should set a target to cut emissions from coal power 20 percent by 2020—targeting all power stations.
They also call for deeper cuts in fossil fuel subsidies, phasing out both consumption subsidies and production subsidies—those providing incentive for exploring for new reserves—in both developed and developing countries.
According to the IEA, $523 billion was spent globally in 2011—up 30 percent from 2010 and huge in comparison to the $88 billion spent on subsidising clean renewables.
WWF says governments should instead use taxpayer money to boost renewables and fight energy poverty.
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