Showing posts from category economics.
-
Stacy VanDeveer: Will Using Less Oil Affect Petrostate Stability?
›July 12, 2010 // By Schuyler NullIf we were to actually use less fossil fuel, what would happen to today’s petrostates? “If the oil revenues dry up or even decline a little bit you might have a real serious crisis,” said Stacy VanDeveer of the University of New Hampshire, during an interview with ECSP. We spoke to VanDeveer following his presentation at the Wilson Center event, “Backdraft: The Conflict Potential of Climate Mitigation and Adaptation.”
-
The United States and China: Clean Energy Friends or Foes?
›July 7, 2010 // By Joshua Nickell
As the world moves toward clean energy alternatives, companies in the United States and China are working to develop new, more cost-efficient manufacturing processes and increase their shares of the domestic and export markets for new renewable energy technologies. Controlling production lines and growing market share will certainly have important economic implications for both countries. But over the long term, a broader perspective suggests that cooperative initiatives to increase the capacity and reduce the cost of renewable energy technologies may produce benefits on both sides of the Pacific.
At an event co-hosted by the Wilson Center on the Hill and the China Environment Forum last month, John Romankiewicz, a senior analyst for China Clean Energy and Carbon Markets at Bloomberg New Energy Finance, and Ethan Zindler, head of North American Research at Bloomberg New Energy Finance, considered the big picture implications for U.S.-China clean energy cooperation and development.
Coming from an investment background, Zindler said that he looks at clean energy development “not as a social project, but as an industry.” The end goal, he asserted, is to produce clean energy more cheaply than fossil fuels. Zindler argued that if clean energy remains prohibitively expensive and uncompetitive without subsidies, it will be more difficult to implement and less likely to produce the desired environmental benefits.
Romankiewicz discussed China’s current supply of and growing demand for energy, pointing out that China’s power grid has grown by more than 70 gigawatts per year during each of the past 5 years, and that “at some point next year, the total installed capacity of China’s grid will surpass that of the United States.”
While coal and hydropower continue to play a significant role in meeting this growing demand, Romankiewicz noted that China also has set ambitious investment targets for wind farms, solar farms, biomass power plants, and other renewable energy sources.
China Looks to Go Global With Renewables
China is investing in clean energy not only to serve growing domestic energy demands, but also to become a major force in the international market, Romankiewicz asserted. Already, China has made impressive advances in clean energy industries: Of the top 15 wind turbine producers, four are Chinese and only two are American. Of the top 10 crystalline-silicon solar cell producers, six are Chinese.
But how will the United States impact China’s drive to become a major player in exporting clean energy technologies? Romankiewicz argued that breaking into the American market could prove exceedingly difficult for Chinese companies given the stiff competition from U.S. companies and other foreign firms.
The speakers also emphasized the importance of understanding the complex global economic implications of clean energy development. “If the Chinese are helping to drive down the cost… then they make solar less expensive,” said Zindler, “which means you can create more jobs in California or New Jersey.” Romankiewicz cautioned against reading too much into the “Made in China” label on clean energy technologies, as the supply chain could include parts from all over the world.
Though he maintained that focusing on the long-term benefits of clean energy investment in the United States would prove beneficial, Zindler advocated for a modicum of urgency. “I think a lot of opportunity would be missed potentially because there is innovation that doesn’t just come from a lab but comes from building newer and newer assembly lines,” Zindler remarked. But in the end, he characterized the U.S.-China battle for influence in the world’s renewable energy market as “a marathon, not a sprint,” asserting that “we’ve got a long way to go to determine who the winner will be in the clean energy race here.”
Joshua Nickell is a staff intern with the Program on America & the Global Economy at the Woodrow Wilson Center.
Photo Credit: <Wind Turbine Manufacture (in China),” courtesy of flickr user ANR2008. -
India’s Maoists: South Asia’s “Other” Insurgency
›July 7, 2010 // By Schuyler Null
The Indian government’s battle with Maoist and tribal rebels – which affects 22 of India’s 35 states and territories, according to Foreign Policy and in 2009 killed more people than any year since 1971 – has been largely ignored in the West. That should change, as South Asia’s “other” insurgency, fomenting in the world’s largest democracy and a key U.S. partner, offers valuable lessons about the role of resource management and stable development in preventing conflict.
-
Interview With Wilson Center Scholar Jill Shankleman: Could Transparency Initiatives Mitigate the Resource Curse in Afghanistan?
›June 25, 2010 // By Schuyler Null
In the wake of The New York Times article detailing a potential mineral bonanza in Afghanistan, Senators Ben Cardin and Dick Lugar earlier this week published an op-ed in support of a bill that would create “an international standard for transparency in law” by requiring oil, gas, and mining industries to report amounts paid for drilling/mining rights in their SEC filings. A similar program, albeit a voluntary one, already exists – the Extractive Industries Transparency Initiative (EITI). The senators, however, raised questions about the ability of EITI to ensure transparency and accountability of payments for future mining rights to Afghanistan’s government. Joining EITI was a “good first step,” they say, “but too many countries and companies remain outside this system.”
-
Backdraft: The Conflict Potential of Climate Mitigation and Adaptation
›The European Union’s biofuel goal for 2020 “is a good example of setting a target…without really thinking through [the] secondary, third, or fourth order consequences,” said Alexander Carius, co-founder and managing director of Adelphi Research and Adelphi Consult. While the 2007-2008 global food crisis demonstrated that the growth of crops for fuels has “tremendous effects” in the developing world, analysis of these threats are underdeveloped and are not incorporated into climate change policies, he said. [Video Below]
-
Brookings’ “Taking Stock of the Youth Challenge in the Middle East”
›Samantha Constant and Mary Kraetsch of the Brookings Institution have created a handy visual aid to understanding the Middle East’s demographics. The interactive flash graphic shows select economic and demographic information as you scroll over each country, including GDP per capita, youth percentage of the population, secondary school enrollment rate, and unemployment figures. Clicking on each country brings up a more detailed fact sheet that breaks down economic, education, and demographic statistics.
The companion write-up to the map stresses the importance of these figures to youth-inclusive development. Citing the 2009 UN Arab Human Development Report, the authors point out that the region will need to create about 51 million jobs by 2020 to account for youth entering the work force and already high unemployment rates.
The report does however shy away from some of the Middle East’s most difficult demographic challenges. Iraq and the West Bank are mentioned as areas that will continue to have large youth bulges, but Yemen, which has far and away the most troubling demographics in the region, is not mentioned at all. Adding “total fertility rate” as a statistic, which shows the average number of children born to an average woman over her lifetime, might illustrate these trouble areas more clearly. As illustrated by data from the Population Reference Bureau, Yemen (5.5), the Palestinian Territory (4.6), and Iraq (4.4) all have noticeably higher total fertility rates than other countries in the region, which helps explain why their demographic problems will continue.
The inclusion of total fertility rates would also help make a stronger argument for closer attention to be paid to women’s rights issues, as generally better women’s rights translates to lower total fertility rates, which help draw down youth bulges over time. The report only briefly mentions that more research is needed to create better paths for young women to become productive members of society with “greater career opportunities beyond traditional roles.”
The map does mention that information will be updated on a regular basis so it is worth checking back to see what it added to this useful primer.
Sources: The Brookings Institution, Population Reference Bureau.
Interactive Map: “Understanding the Generation in Waiting” courtesy of The Brookings Institution. -
Trillions of Dollars of Minerals? Misusing Geology and Economics to the Detriment of Policy
›Monday’s New York Times article, “U.S. Identifies Vast Mineral Riches in Afghanistan,” triggered a memory of a 70s-era Popular Science magazine cover that screamed “$3 trillion of minerals on the ocean floor!” That article, along with speeches from promoters of deep seabed mining, built up the anticipation that there were windfall profits to be had from the deep seabed. From this gross misuse of geologic speculation came all the difficulties with the negotiations of Part XI of the Law of the Sea Convention — and the United States’ continuing struggle to join the convention.
One of my roles on the U.S. delegation to the Law of the Sea Conference in 1979 and 1980 was to play defense against the misuse of geology and mineral economics in the negotiations, both by countries on the other side of the negotiating table and by seabed mining promoters at home. Part of that task was to gather and accurately “translate” the scientific and economic data from mineral statistics agencies, including the U.S. Bureau of Mines (since incorporated into the U.S. Geological Survey [USGS]), for policymakers and diplomats.
At times I felt like a goalie in the Part XI negotiations, blocking shots being taken by the forwards of the other teams that were promoting seabed mining as an economic bonanza. Unfortunately, by that time, too many groups had a vested interest in portraying the profitability of deep seabed mining and we couldn’t (yet) turn back the clock to a more reasonable approach.
When I read this week’s article in The New York Times, I had the same feeling of policy being manipulated by misuse of geologic data. With some help, I located the original DOD powerpoint presentation. The differences illustrate how science and economics can be misused to cause extensive damage in the policy process—a lesson I learned from the Law of the Sea negotiations.
The New York Times left out two important items from the DOD graphic accompanying the article:
First, the word “undiscovered” was left out; the original phrase reads “known and estimated ‘undiscovered’ resources anticipated by USGS and AGS and using prices as of 12/09.” Not only does that hide the important fact that the resources cited have not yet been discovered, it obscures that the estimates are largely defined by the USGS as either “hypothetical” and “speculative” resources — not the kind of numbers on which to stake a strategy for war and peace.
Second, the article omitted a caveat from DOD’s original powerpoint slide: “USGS agrees with the assertion: ‘At least 70 percent of Afghanistan’s mineral resources are yet to be identified.’”
Therefore, less than 30 percent of DOD’s estimated value is based on tangible evidence of deposits and 70 percent of the estimate is based on hypothetical or speculative resources of uncertain grade and abundance.
The value depends not just on metal content but also on the type of mineral, the grade (percent metal content) in the deposit, the size of the deposit, the distance from fuel and power, the amount of earth that covers the deposit, among other factors. If this report had geological merit as a USGS report, it would have said how much ore was in place at what grade.
Assigning a value to as yet undiscovered deposits is an effective way to influence a policymaker in a powerpoint presentation or generate a headline story from a reporter who has no experience with the terms of art used by geologists. But it has little to do with reality.
So, I drafted these points in response to the story in The New York Times:- According to the USGS, at least 70 percent of Afghanistan’s mineral wealth as estimated by the DOD is hypothetical or speculative, based on geologic theories, not measurement.
- The value estimates are grossly exaggerated by including sub-economic resources because they fail to consider capital and operating costs of recovery and processing to recover ore and convert it to finished metal.
- The DOD assessment fails to note whether the known or hypothetical deposits in Afghanistan are capable of competing economically with known and hypothetical deposits elsewhere in the world.
- Seventy-six percent of the estimated value comes from iron and copper, both of which are already found and produced in many locations around the world in commercially viable mines.
- The DOD values fail to distinguish between economically viable deposits and those that cannot be profitable in the foreseeable future, or to note those that are entirely speculative.
- The headline value of nearly $1 trillion is grossly in error and misinforms policymakers as to the economic potential of mineral deposits in Afghanistan.
Caitlyn L. Antrim is the executive director of the Rule of Law Committee for the Oceans. This article originally appeared in The Ocean Law Daily. To subscribe, please email caitlyn@oceanlaw.org.
Read more on Afghanistan’s mineral wealth and transparency initiatives on The New Security Beat.
Photo Credit: “Sunrise in Afghanistan,” courtesy of flickr user The U.S. Army. -
Sustainable Development
›Are Women the Key to Sustainable Development?, by Candice Stevens and appearing in Boston University’s Sustainable Development Insights series, asks whether gender-conscious development strategies are the missing link in the three pillars–social, economic, and environmental–of sustainable development. She points out that “An increasing number of studies indicate that gender inequalities are extracting high economic costs and leading to social inequities and environmental degradation around the world.” In the policy world gender-conscious initiatives are often more effective as well. “United Nations and World Bank studies show that focusing on women in development assistance and poverty reduction strategies leads to faster economic growth than ‘gender neutral’ approaches.” Stevens finds that achieving greater gender parity may be the key to better governance, increased growth, and a safer environment.
The Role of Cities in Sustainable Development, by David Satherwaite and also appearing in Boston University’s Sustainable Development Insights series, argues that traditional depictions of cities as dirty and unsustainable are inaccurate. Instead, “…with the right innovation and incentives in place, cities can allow high living standards to be combined with resource consumption that is much lower than the norm in most cities today,” he finds. Satherwaite contends that high-density living arrangements can reduce per capita energy consumption, transportation emissions, and costs of public service provisions like hospitals and schools. However, he warns that none of these potential advantages are guaranteed, and city planners must utilize effective local governance in order to make cities safe, clean, and sustainable.
