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Sunday, May 13, 2018

The four ways humanity can avoid climate disaster..

The FOUR Golden Means..

There are four ways humanity can avoid climate disaster: reducing our need for energy, producing energy through more sustainable, low-carbon means, changing the DNA of capitalism to put a price on carbon emissions, and better environmental conservation.

Let’s start with the first point: reducing our energy consumption. There are three major sectors that make up the bulk of energy consumption in our society: food, transportation, and housing—how we eat, how we get around, how we live—the basics of our daily lives.

Reducing Energy Needs for Food

It is forecast that farmers will start investing in renewable algae or hydrogen-based fuels for machinery, and the installation of solar and wind generators on their land. Meanwhile, farming soil and its heavy dependence on nitrogen-based fertilizers (created from fossil fuels) is a major source of global nitrous oxide (a greenhouse gas). Using those fertilizers more efficiently (like via soil testing) is crucial. 

Overusing chemical fertilizers can increase the salinity of soil, making it difficult for plant roots to absorb water. Incorrectly applied chemical fertilizers can damage  plants or increase the acidity of the upper layers of soil, making it harder for some plants to absorb nutrients. Chemical nitrogen fertilizers work best when they are tilled into the soil and lightly irrigated shortly before planting time.

In addition to supplying nitrogen and other nutrients plants need, compost improves the structure of the soil, allowing water to permeate through it more easily and increasing its ability to retain water. Unlike chemical fertilizers, organic soil amendments release nutrients over a period of several years. Legumes form a symbiotic relationship with bacteria in the soil that allows them to draw nitrogen from the atmosphere. Legumes are commonly planted on nitrogen-deficient soils and then plowed into the ground where the nitrogen absorbed from the air is released into the soil as the plants decay.

Eventually, switching to algae based fertilizers will become a major focus in the coming years. To get serious about agriculture carbon reduction, we’ve also got to reduce the numbers of cattle. 

Reducing our need for electricity for homes, offices and factories

Electricity and heat generation produces about 26 % of global greenhouse gas emissions. Buildings, including our workplaces and our homes, make up three-fourths of the electricity used. Today, much of that energy is wasted. We need to watch out for :

·       Do we leave TVs and Computer sockets on at night – this too uses electricity.

·       Do we take the trouble to keep our houses as cool as possible through natural means – via chiks / roller blinds outside and inside our windows, by keeping all doors and windows open when the outside air is cool, such as in most summer nights.

·       Do we optimize the most efficient ways of cooling ourselves – apart from ceiling fans, wall fans placed in kitchens, bathrooms, balconies and stores can help; small mini coolers with honeycomb pads can be wheeled everywhere and use only as much power as a fan. These coolers can easily run on inverters / colony generator back up up also.

·       When using Airconditioners (ACs), do we keep them at a more optimal temperature of say 25 C with perhaps a light fan, rather than keep them at 20-22 and then use blankets for covers in summer nights.

·       The same goes for heaters – blowers and oil heaters are energy guzzlers as they have settings only for 1000 / 2000 watts.

·       Halogen heaters instead have 3-4 rods, each rod varying in wattage use from 125 – 300 Watts. So one can only switch on only as many rods as one needs. They give out light too apart from heat, eliminating the need for putting on a separate light in the evening.

·       People often don’t realize that they lose enormous amounts of heat / cool via their window / door glasses, as glass is a good conductor of heat and cooling. So keeping your glass windows as insulated as possible with chiks / roller blinds / thick curtains when using either cooling or heating devices is a good idea.

·       It is not too expensive to replace your normal single fixed glass panes with double glass panes. The trapped air between two glass window panes acts as a very good insulator. A good carpenter or iron-works person can change your single fixed glass pane to double glass ones. In our homes, the single 3 mm fixed panes were removed from all windows and 6 mm panes installed on the inside, and 8 mm panes installed on the outside, in the same frame where earlier single glass panes were fitted. There is a more than 2 inch gap between the two fixed glass panes now.

·       In my memory in 2016 we paid around 400 INR a sq foot for removal of previous panes, cleaning and painting of the frame, buying of 6 mm and 8 mm glass panes, and installation with silicone injections which seal air in.

·       Window ACs in our house were enclosed in simple, open-able wooden boxes which reduce air-flow between outside and inside when the ac is not in use. To my memory we paid about Rs. 4000 per such box in 2014.

·       Both these measures have reduced noise from outside (like sometimes from a neighbouring club) in our estimation by about 60 % but have also insulated the room/s to the some degree from loss of heat / cold.

·       Putting blankets on your beds and sofas in winter increases their insulation enormously, making you warmer when you use them.

·       Another possibility is to turn buildings into mini power plants by converting their windows into see-through solar panels (yup, that’s a thing now) or installing geothermal energy generators. Such buildings could be taken entirely off the grid, removing their carbon footprint.

·       In India, ofcourse, rooftop solar electricity generation is slowly making its presence felt.

It is estimated that in the US in the coming decades the buildings will triple or quadruple their energy efficiency, saving 1.4 trillion dollars.

Acknowledgement : Some of the above material is adapted from Quantumrun Forecasting. The ideas for energy saving at homes are my own.

Why Governments are so Slow to Respond to Climate Change..

We have all had the Q posed as the title of this post. I found very elegant and simple answers from Quantumrun Forecasting from whose website this post is excepted.

Most of the international organizations responsible for organizing the global effort on climate change agree that the limit we can allow greenhouse gas concentrations to buildup to in our atmosphere is 450 parts per million (ppm). That more or less equals a two degree Celsius temperature increase in our climate, hence its nickname: the “2-degrees-Celsius limit.” To avoid it, the world would have to reduce greenhouse-gas emissions by 50% by 2050 (based on 1990 levels) and by almost 100% by 2100.

Presently, politicians and climate change don’t exactly mix. The reality of today is that even with  innovations in the pipeline, cutting emissions will still mean purposefully slowing down the economy. Politicians who do that don’t normally stay in power.

This choice between environmental stewardship and economic progress is hardest on developing countries. They've seen how first world nations have grown wealthy off the back of the environment, so asking them to avoid that same growth is a hard sell. These developing nations point out that since first world nations caused most of the atmospheric greenhouse gas concentrations, they should be the ones to bear most of the burden to clean it up. Meanwhile, first world nations don’t want to lower their emissions—and put themselves at an economic disadvantage—if their cuts are cancelled out by runaway emissions in countries like India and China. It’s a bit of a chicken and egg situation.

According to David Keith, Harvard Professor and President of Carbon Engineering, from an economist’s perspective, if you spend a lot of money cutting emissions in your country, you end up distributing the benefits of those cuts around the world, but all the costs of those cuts are in your country. That’s why governments prefer to invest in adaptation to climate change over cutting emissions, because the benefits and investments stay in their countries.

Nations throughout the world recognize that passing the 450 red line means pain and instability for everyone within the next 20-30 years. However, there’s also this feeling that there’s not enough pie to go around, forcing everyone to eat as much of it as they can so they can be in the best position once it runs out. That’s why Kyoto failed. That’s why Copenhagen failed. And that’s why the next meeting will fail unless we can prove the economics behind climate change reduction are positive, instead of negative.

Another factor that makes climate change so much harder than any challenge humanity has faced in its past is the timescale it operates on. The changes we make today to lower our emissions will impact future generations the most. Think about this from a politician’s perspective: she needs to convince her voters to agree to expensive investments in environmental initiatives, which will probably be paid for by increasing taxes and whose benefits will only be enjoyed by future generations. As much as people might say otherwise, most people have a tough time putting aside $20 a week into their retirement fund, let alone worrying about the lives of grandchildren they've never met.
And it will get worse. Even if we succeed in transitioning to a low-carbon economy by 2040-50 by doing everything mentioned above, the greenhouse gas emissions we’ll emit between now and then will fester in the atmosphere for decades. These emissions will lead to positive feedback loops that could accelerate climate change, making a return to “normal” 1990s weather take even longer—possibly until the 2100s. Sadly, humans don’t make decisions on those time scales. Anything longer than 10 years might as well not exist to us.
As much as Kyoto and Copenhagen may give the impression that world politicians are clueless about how to resolve climate change, the reality is quite the opposite. The top tier powers know exactly what the final solution will look like. It’s just the final solution won’t be very popular among voters in most parts of the world, so leaders are delaying said final solution until either science and the private sector innovate our way out of climate change or climate change wreaks enough havoc over the world that voters will agree to vote for unpopular solutions to this very big problem.
Here’s the final solution in a nutshell: The rich and heavily industrialized countries must accept deep and real cuts to their carbon emissions. The cuts have to be deep enough to cover the emissions from those smaller, developing countries who must continue to pollute in order to complete the short term goal of pulling their populations out of extreme poverty and hunger.
On top of that, the richer countries must band together to create a 21st century Marshall Plan whose goal will be to create a global fund to accelerate Third World development and shift to a post-carbon world. A quarter of this fund will stay in the developed world for strategic subsidies to speed up the revolutions in energy conservation and production outlined at the beginning of this article. The fund’s remaining three quarters will be used for massive scale technology transfers and financial subsidies to help Third World countries leapfrog over conventional infrastructure and power generation towards a decentralized infrastructure and power network that will be cheaper, more resilient, easier to scale, and largely carbon neutral.
The details of this plan might vary—hell, aspects of it might even be entirely private sector led—but the overall outline look much like what was just described.
At the end of the day, it’s about fairness. World leaders will have to agree to work together to stabilize the environment and gradually heal it back to 1990 levels. And in so doing, these leaders will have to agree on a new global entitlement, a new basic right for every human being on the planet, where everyone will be allowed a yearly, personal allocation of greenhouse gas emissions. If you exceed that allocation, if you pollute more than your yearly fair share, then you pay a carbon tax to put yourself back into balance.
Once that global right is agreed on, people in first world nations will immediately start paying a carbon tax for the luxurious, high carbon lifestyles they already live. That carbon tax will pay to develop poorer countries, so their people can one day enjoy the same lifestyles as those in the West.
Now I know what you’re thinking: if everyone lives an industrialized lifestyle, wouldn't that be too much for the environment to support? At present, yes. For the environment to survive given today’s economy and technology, the majority of the world’s population needs to be trapped in abject poverty. But if we accelerate the coming revolutions in food, transportation, housing, and energy, then it will be possible for the world’s population to all live First World lifestyles—without ruining the planet. And isn't that a goal we’re striving for anyway?
Finally, there’s one scientific field that humanity could (and probably will) use in the future to combat climate change in the short term: geoengineering.
The definition for geoengineering is “the deliberate large-scale manipulation of an environmental process that affects the earth's climate, in an attempt to counteract the effects of global warming.” Basically, its climate control. And we’ll use it to temporarily reduce global temperatures.
Two of the most promising options are : stratospheric sulfur seeding and iron fertilization of the ocean.
When especially large volcanoes erupt, they shoot huge plumes of sulfur ash into the stratosphere, naturally and temporarily reducing global temperatures by less than one percent. How? Because as that sulfur swirls around the stratosphere, it reflects enough sunlight from hitting the Earth to reduce global temperatures. Scientists like Professor Alan Robock of Rutgers University believe humans can do the same. Robock suggests that with a few billion dollars and about nine giant cargo aircraft flying about three times a day, we could unload a million tonnes of sulfur into the stratosphere each year to artificially bring global temperatures down by one to two degrees.
The oceans are made up of a giant food chain. At the very bottom of this food chain are phytoplankton (microscopic plants). These plants feed on minerals that mostly come from wind-blown dust from the continents. One of the most important minerals is iron.
Now bankrupt, California-based start-ups Climos and Planktos experimented with dumping huge amounts of powdered iron dust across large areas of the deep ocean to artificially stimulate phytoplankton blooms. Studies suggest that one kilogram of powdered iron could generate about 100,000 kilograms of phytoplankton. These phytoplankton would then absorb massive amounts of carbon as they grew. Basically, whatever amount of this plant that doesn’t get eaten by the food chain (creating a much needed population boom of marine life by the way) will fall to the bottom of the ocean, dragging down mega tonnes of carbon with it.
That sounds great, you say. But why did those two start-ups go bust?
Geoengineering is a relatively new science that’s chronically underfunded and extremely unpopular among climate scientists. Why? Because scientists believe (and rightly so) that if the world uses easy and low cost geoengineering techniques to keep the climate stable instead of the hard work involved with reducing our carbon emissions, then world governments may opt to use geoengineering permanently.
If it were true that we could use geoengineering to permanently solve our climate problems, then governments would in fact do just that. Unfortunately, using geoengineering to solve climate change is like treating a heroin addict by giving him more heroin—it sure might make him feel better in the short term, but eventually the addiction will kill him.
If we keep the temperature stable artificially while allowing carbon dioxide concentrations to grow, the increased carbon would overwhelm our oceans, making them acidic. If the oceans become too acidic, all life in the oceans will die out, a 21st century mass extinction event. That’s something we’d all like to avoid.
In the end, geoengineering should only be used as a last resort for no more than 5-10 years, enough time for the world to take emergency measures should we ever pass the 450 ppm mark.
An addiction gets harder to quit the longer you have it. The same can be said about our addiction to polluting our biosphere with carbon. The longer we put off kicking the habit, the longer and harder it will be to recover. Every decade world governments put off making real and substantial efforts to limit climate change today could mean several decades and trillions of dollars more to reverse its effects in the future. 
We shouldn’t have to resort to geoengineering to fix our world. We shouldn’t have to wait until a billion people die of starvation and violent conflict before we act. Small actions today can avoid the disasters and horrible moral choices of tomorrow.

Saturday, May 12, 2018

What I just Discovered about Climate Change..

I read a great deal on climate change.. yet some of the information by Quantumrun Forecasting on their website and excerpted below, was new to me, or perhaps it made more of an impact because of the way it was simply presented.. 

Feedback loops are already coming into play.. it really is our last chance.. 

Feedback loops, in the context of climate change, is any cycle in nature that either positively (accelerates) or negatively (decelerates) impacts the level of warming in the atmosphere.

An example of a negative feedback loop would be that the more our planet warms, the more water evaporates into our atmosphere, creating more clouds that reflect light from the sun,which lowers the earth’s average temperature.

Unfortunately, there are way more positive feedback loops than negative ones. Here’s the list of the most important ones:

As the earth warms, ice caps in the north and south poles will begin to shrink, to melt away. This loss means there will be less gleaming white, frosty ice to reflect the sun’s heat back into space. (Keep in mind that our poles reflect up to 70 per cent of the sun’s heat back to space.) As there is less and less heat deflected away, the rate of melting will grow faster year-over-year.

Related to the melting polar ice caps, is the melting permafrost, the soil that for centuries has remained trapped under freezing temperatures or buried beneath glaciers. The cold tundra found in northern Canada and in Siberia contains massive amounts of trapped carbon dioxide and methane that—once warmed—will be released back into the atmosphere. Methane especially is over 20 times worse than carbon dioxide and it can’t easily be absorbed back into the soil after it’s released.

Finally, our oceans: they are our biggest carbon sinks (like global vacuum cleaners that suck carbon dioxide from the atmosphere). As the world warms each year, our oceans’ ability to hold carbon dioxide weakens, meaning it will pull less and less carbon dioxide from the atmosphere. The same goes for our other big carbon sinks, our forests and our soils, their ability to pull carbon from the atmosphere becomes limited the more our atmosphere is polluted with warming agents.

We need to urgently help farmers with drought proofing farming

We are told that chances are, the Eastern part of India will receive more rain that before because of climate change. But Quantumrun points out that a warmer climate means our most farm-able soil will also suffer from higher rates of evaporation, meaning the benefits of greater rainfall will be canceled out by a faster soil evaporation rate in many places around the world.

Modern farming tends to rely on relatively few plant varieties to grow at industrial scale. We’ve domesticated crops, either through thousands of years of manual breeding or dozens of years of genetic manipulation, that can only thrive when the temperature is just Goldilocks right.

For example, studies run by the University of Reading on two of the most widely grown varieties of rice, found that both were highly vulnerable to higher temperatures. Specifically, if temperatures exceeded 35 degrees during their flowering stage, the plants would become sterile, offering few, if any, grains. Many tropical and Asian countries where rice is the main staple food already lie on the very edge of this Goldilocks temperature zone, so any further warming could mean disaster.

Acknowledgement : The above post is adapted from Quantumrun Forecasting.

The Importance of Remittances to Developing Countries..

A 2010 Study pointed out that The Human Development Report of 2009 estimated that about 214 million people, or roughly 3.1 percent of the world’s population, lived and worked outside the country of their birth in 2008, up from 120 million in 1990. Given the difficulties in the definition of a migrant across countries, this may be an underestimation of the real stock of migrants in the world.

The migrants from developing countries to other developing countries constituted 47 per cent of total migrants from developing countries in 2005. Migration therefore may no longer be considered as a “South-North” phenomenon, as often assumed. Many countries in South-east Asia, for instance, are heavily reliant on cheap migrant labour from neighbouring countries. In contrast, the majority of migrants from high-income Organization for Economic Cooperation and Development (OECD) countries go to other high-income OECD countries (85 per cent).

Remittances have become significant private financial resources for households in countries of origin of migration although they cannot be considered as a substitute for foreign direct investment (FDI), official development assistance, debt relief or other public sources of finance development. There has been a 15-fold increase in remittances to developing countries since 1988 with remittances increasing from $20 billion to $328 billion in 2007. A study  from 2000-2010 found that remittance flows have become as large as foreign direct investment flows to developing countries. The World Bank estimates that remittances through informal channels could add at least 50 percent to the globally recorded flows.

While remittances cannot be considered as a substitute for FDI and other official development assistance, it may ease short-run foreign exchange constraints at times other financial flows decline due to external factors. Two factors – namely, time spent working abroad and total amount of money saved abroad – have positive and significant effect on the likelihood of migrants becoming entrepreneurs on their return to the home country. The households receiving international remittances spend more on investment goods, especially on housing and education. 

A World Bank study in 2005 showed that a 10 per cent increase in per capita official international remittances will lead, on average to a 3.5 per cent decline in the share of people living in poverty. A study found that in 2000, remittances helped reduce the national poverty rate by 4.2 per cent in El Salvador. A study in Lesotho showed that if the remittances were set to zero, the poverty head count index would increase by 26 per cent. Another study found that remittances have stronger impact on poverty reduction if they are above the threshold of 5 per cent of GDP of the country.  

The pace of migration from India accelerated in the post-economic reforms of 1991. The Ministry of Overseas Indian Affairs has registered the presence of non-resident Indians in 180 of the 183 countries of the world. The numbers have varied from just two in Lebanon to almost a million in the United States. Estimated at over 30 million, India ranks second to Chinese Diaspora. There has been an annual average growth trend of 16 per cent in remittances during the period 1990–2008. The surging inflow of remittances to the Indian economy has received much attention worldwide as it emerged as single largest recipient with more than one tenth share in global remittances. Remittances grew steadily as a percentage of GDP – from less than 1 per cent in 1990 to 3 per cent in 2000 and 6 per cent in 2008.

The 2010 study showed that the official data on the state-wise emigration clearance pointed to Kerala is the state with highest immigration clearance in India in 2008. The share of Uttar Pradesh had increased drastically in recent years, and has become second only to Kerala during 2008 and up to March 2009. On the other hand, the share of major states such as Tamil Nadu, Andhra Pradesh and Maharashtra in the total immigration clearance had experienced a declining trend in recent years.

Around 20 per cent of total officially recorded remittances in India are received by Kerala. Although the average per capita consumption in Kerala was below the national average until 1978–79, by 1999–2000 consumer expenditure in Kerala exceeded the national average by around 41 per cent.

Acknowledgement : This post has been excerpted from a UN Report of 2010, 'Impact of Remittances on Poverty in Developing Countries'.

Should India follow the East Asian Development Model ?

A study compares between East Asia and South Asia on the level of economic development and draws some lessons for South Asia.

 In 1960, GDP per capita in South Asian countries was higher than in some East Asian countries, such as China and Indonesia. The table below illutstrates what happened next :  

 Even though East Asia and South Asia are in the same region, began the second half of the twentieth century in a similar economic situation and are well connected with each other, it is to be explored why has there been such a wide discrepancy in the economic development between the two sub-regions.

The development performance of many East Asian countries has showed that economic development is possible even without utilizing the colonization process, which helped propel the economic progress of many European countries until the twentieth century. Several European countries colonized different parts of Asia, Africa and Latin America in the past during the time of their economic development. They heavily exploited the natural and human resources available in their colonies. In this context, one can ask whether the East Asian Development Model serves as an alternative to the Anglo-Saxon development model.

During the initial stage of economic development, some East Asian economies, such as Japan, the Republic of Korea, Singapore and Taiwan Province of China had a number of common policy approaches, including, among them, protection of domestic firms from foreign competition through import substitution, the provision of direct and indirect subsidies and the use of preferential foreign exchange facilities and undervalued exchange rates, as well as large-scale fixed investment supported by ample domestic savings. Those economies had strict capital control regimes until recently. In addition, they pursued active industrial policies. 

The second-tier of newly industrialized countries, such as Indonesia, Malaysia and Thailand, also followed similar approaches to propel their economies. An important impetus in kick starting the development process in those countries was the crucial role of the government as a developmental state. It is argued that there was a “nationalist” State with a developmental vision that had the capacity to identify “strategy switching points” once diminishing returns set in. Another researcher similarly argued that the transformation of the East Asian sub-region could not be attributed to the results of free trade and unregulated markets. 

The East Asian Development Model basically includes (a) a pro-investment macroeconomic policy, (b) control on luxury consumption, (c) strict controls on foreign direct investment, (d) infant industry protection with export promotion, and (e) a productivity-oriented instead of an allocation oriented view of competition. 

Political stability and credibility are also important for economic development since unstable politics generates greater uncertainty, which, in turn, makes economic activities subject to constant revisions. The Keynesian notion of “animal spirits” and “investor confidence” can only emerge in stable political environment. During the rapid growth phase, authoritarian or at least semi-authoritarian regimes had ruled these countries. Governments in the East Asian countries have, in fact, remained strong enough to exercise widespread control and to even take potentially unpopular decisions if they were considered to promote economic development. The governments of those countries have been effective due to strong bureaucracies, which are organized under a strict meritocracy and have attracted highly capable graduates from top universities by offering competitive pay. Many South Asian countries, on the other hand, have been constantly marred by political instability and internal conflict, resulting in a weak government and bureaucracy.

 Under the guiding role of the State, East Asian countries encouraged high investment, export-led growth and a focus on the manufacturing sector to absorb excess labour from rural and traditional sectors as a way to boost labour productivity. The East Asian Development Model is in fact a state-guided development model which does not let the market identify the areas of comparative advantage. Instead, government plays an active role through industrial policy, development planning, technology transfer and selective incentives. A researcher argued that state coordination led to an investment boom — utilizing credit policies, subsidies and tax policies. Both the Republic of Korean and Taiwan Province of China provided these incentives for selective increases in investment spending.

The study concludes by saying : 'The development experiences of East Asia show that the governments played a constructive role as a developmental state. In South Asian countries, until recently, governments had been involved significantly in economic affairs. Before the adoption of economic liberalization in the 1980s and in the beginning of 1990s, South Asian countries had pursued economic policies similar to the ones applied in East Asia. These included promoting import substitution, setting up a licensing system, regulating the financial system, disbursing concessional loans to domestic industries, maintaining favourable exchange rates to promote exports, developing state-owned enterprises and setting a high tariff wall to discourage imports. Despite this, the South Asian economies failed to grow at the same level as those experienced by East Asian countries. It has been argued that the failure in South Asia was due to the absence of rapid growth in agriculture, an equitable income distribution and substantial accumulation of human capital. 

More importantly, East Asian governments did pursue an active industrial policy to develop the manufacturing sector and technology transfer with human capital development. In contrast, South Asian governments were weaker than those in East Asia and the development process was fragile in the sub-region due the weak interlinkages in the economy. It appeared that the governments of countries in South Asia failed to identify “strategy switch points” to lead to greater growth. Instead, they mainly relied on the exports of simple and labour-intensive manufactured commodities. During the controlled regime, rent-seeking activities directed at unproductive sectors were rampant in South Asia and thus the countries did not succeed in expanding exports after applying import substitution programmes.

Based on the experience of East Asian countries, economic development requires high investment, the construction of infrastructure, the expansion of health facilities and quality education, adoption of technology and innovative practices, and job creation inside the economy. The government should play an active role in promoting those areas although in many instances, it may not be in a position to do so. For the private sector to thrive, a congenial environment for economic activities with adequate physical infrastructure must be in place. Even by adopting a changing scenario, the countries of South Asia, taking into account the experiences of the countries in East Asia, should increase investment in their economies, follow an export-led policy, and develop human capital and physical infrastructure. In addition, the countries in South Asia need to think about the productive use of remittances. Moreover, managing conflict is also a key public policy issue to ensure the future stability and growth in South Asia.' 

Acknowledgement : The piece above is summarized from a 2013 paper : ECONOMIC DEVELOPMENT IN SOUTH AND EAST ASIA: EMPIRICAL EXAMINATION OF EAST ASIAN DEVELOPMENT MODEL by Prakash Kumar Shrestha

Friday, May 11, 2018

Poverty Reduction - the International Experience

Last year, an Oxford University study said that the share of people living in extreme poverty has declined continuously for two centuries; and it has never declined faster than in recent years. "This long decline is one of the greatest achievements of humanity", it said.

It went on to say that a claim that often comes up in discussions of extreme poverty is that the share of people in extreme poverty is declining only because international institutions deliberately choose a poverty line that is much too low. It is suggested then that "true poverty" in the world is actually increasing. However the study says that this allegation is unfounded. 
The USD 1.9 a day per person expenditure poverty line translates to about 700 USD a year per person. If we position the poverty line higher - at 1,000 USD per year, in 2003, 48% of the world population was below this poverty line; and ten years later, in 2013, 29% was below this line. 
If we place the international poverty line much higher at 4,000 USD, then we see that in 2003, 80% of the world population was below that poverty line. 10 years later: 67%.
We can also look back over a longer time period - of 33 years, from 1981 to 2013, which also this study reports on. Much of the globally comparable poverty data became available in 1981. In that year, a little over 30 % of the people of 'Non-Rich countries' (all countries of the world save the 24 developed ones - Western & Southern Europe, UK, US, Australia & New Zealand) earned USD 1100+. In contrast, in 2013, such people comprised nearly 70 % of non-rich countries. 
In 1981, more than half the people in non-rich countries earned just uptil USD 1.9 a day. By 2013 this percentage had dwindled to just 13 % !
A study describes how the performance of developing countries against poverty is quite diverse. Inequality comes  into the story in efforts to explain this diverse performance. Amongst growing developing countries in terms of mean household income, those experiencing falling inequality see the $1.25 a day poverty rate falling at a median rate of about 1.30% points per year versus a median fall of only 0.42 % points per year for countries with rising inequality.
For example, Botswana in Africa has experienced tremendous income increases, even by global standards, but the growth has been transformed to only a minimal decline in poverty. In contrast, Ghana, also in Africa, has succeeded in translating its relatively modest growth to considerable poverty reduction. The difference in the levels of income inequality between the two countries appears to explain much of this disparity in performance.
Bolivia’s case is even more illustrative. While the country’s mean monthly income increased slightly from 175 dollars in 1990 to over 200 dollars in 2005, its poverty rate actually rose from 4.0 percent to 20 percent over the same period. The main culprit was the considerable increase in income inequality.
Based on cross-country African data, a study found that poverty is more sensitive to income inequality than it is to the level of income. 

It is noteworthy that poverty fell less in India during 1981-1995 and in 1996-2005 than in the South Asian region generally for each of these sub-periods. Moreover, poverty reduction in India during the latter period was about the same as that in Sub-Saharan Africa (SSA), despite the fact that India’s GDP growth was much faster than SSA’s. 
In fact, when the time period of early 90s to 2010 is considered, reasonably strong GDP growth resulted in substantial poverty reduction in most developing nations save India and Iran. But in these two large countries and a few small ones, strong GDP growth was accompanied by only modest poverty reduction either because the growth did not result in similar increases in income or because inequality increased to thwart the transformation process.

In fact looking at the figures above, South Asia seems to have the lowest co-relation between GDP growth to improving incomes of the poorest people. 

What does rural poverty look like in India ?

"India is by far the country with the largest number of people living under the international USD 1.90-a-day poverty line (224 million), more than 2.5 times as many as the 86 million in Nigeria, which has the second-largest population of the poor worldwide," a World Bank report said.

I have been thinking about what the USD 1.9 per person per day poverty line established by the World Bank actually means in the case of India. On the face of it sounds like a lot comparatively - Rs. 128 per person per day at market exchange rate. But the World Bank uses purchasing power parity in applying the poverty line to each country, which in India's case translates to 17.12 Rs. purchasing power per US dollar. 

So 1.9 USD is equivalent to a poverty line of 33 Rs. which is similar to what the Rangarajan Committee too recommended to the Government to adopt for rural areas. This translates to Rs. 5000 per month expenditure per family of 5 people. Based on my observations in a group of 10 villages in Chattarpur district of Bundelkhand in 2016, backed by media reports which spike during drought, I can say that rural poverty looks like this (people living at or near the poverty line) :
  • Some families skip one of the two meals routine in rural areas - brunch and evening. 
  • Meals in North India consist of roti (bread baked immediately before eating) and potato vegetable for the most part. Very few households grown their own green vegetables and those few who do, sell them if they can. Poor families have no purchasing power to afford to buy green vegetables and do without. 
  • Dals are had once a week in poor households. 
  • Even if there is milk available from 1-2 cattle, it is sold for use in nearby towns, and is not retained even to make tea with.
  • There is no question of buying fruits and nuts ofcourse.. if your land or your neighbour's has fruit trees, you may get to eat some during the season..  but not everyone has fruit trees.. 
  • Children do go to Government schools but are likely to drop off after some years as families are unable to support them with schooling. 
  • Poor families have few clothes and are inadequately protected during winter. 
  • Polluting kerosene lamps are still the preferred source of light at night when electricity is not available.
  • Families still use open areas for toilet. 
  • There is no money for acquiring skills or investing in a small business. Labour work that is found is intermittent and the wages are small and delayed. 
  • Loans are taken at very high interest from local money lenders in emergencies such as major illness or the repair of one's house.
It is obvious that the poverty line does not allow for even enough nutrition, let alone other needs such as education or health care. In India, children living at $1.90 still have a 60% chance of being malnourished (the very high rates of malnourishment of children in our country, in fact show that poor children are in fact malnourished). An ethical poverty line” has been suggested by Researchers where in order to achieve normal human life expectancy, people need roughly three times the existing poverty line. If this ethical poverty line was applied across the world, some 60 % of humanity would be below it. 

Thursday, May 10, 2018

How did China reduce poverty so dramatically ?

It was in 1990 that the UN set a goal to cut the world’s poverty rate in half by 2015. The goal was reached five years early, in 2010; over a billion people escaped extreme poverty in just 20 years. That’s a remarkable and unprecedented shift.

The drop in poverty from the 1980s to present was mainly driven by just two countries: China and India. China dropped its population in poverty from 88 to 2 %, and India from 54 to 21 %. Sub-Saharan Africa, by comparison, had a 54 percent poor population in 1990, down to 41 percent in 2013. Not only is the decline much smaller than China or India’s, but due to massive population growth in Africa, the absolute number of poor people actually rose by 113 million.

How did China reduce poverty so dramatically ?

It is well known that there was a massive manufacturing influx due to the China’s plentiful cheap labor and increasingly global supply chains, but this alone wouldn’t have yielded the same outcome just anywhere. China got a leg up thanks to three main drivers.

Articles have pointed out that had China been a democracy, it likely wouldn’t have grown as much or as fast as its authoritarian government enabled it to. When making decisions and implementing reforms, there was no need to appease disgruntled voters or negotiate between parties. The government also owned all the country’s land, which made launching new infrastructure projects like roads or bridges relatively fast and barrier-free.

Even if a country’s GDP grows consistently, it’s not going to benefit the average citizen much if the population is growing even faster. The Chinese government introduced its one-child policy in 1979, and over the next 20 years the fertility rate dropped from 2.7 births per woman to 1.4. This resulted in the Chinese population growing 38 percent between 1980-2013. Compare that to India’s 84 percent in the same time period, or Sub-Saharan Africa’s whopping 147 percent.

High birth rates before the one-child policy meant the opening of China’s economy coincided perfectly with a huge working-age population. Children and the elderly can’t pick up and move to cities to work in factories, but people in their 20s to 40s can.

The economic reforms China implemented starting in the late 1970s and its massive investment in education certainly contributed to its drop in poverty, too.

The challenges before Africa

Replicating China’s success, though, will be difficult on multiple fronts, if not impossible. Africans have already begun to leave rural areas in favor of cities, but those cities aren’t equipped to keep up with the influx of new residents.

The Chinese government was able to overcome these limitations fairly quickly. But Sub-Saharan Africa is made up of 46 different countries with 46 different governments, many of which are mired in corruption or even classified as fragile or failed states.

Perhaps the starkest contrast with China, though, is Africa’s population growth. The UN’s medium forecast puts Africa’s 2050 population at 2.5 billion, a number that would strain resources even in an economy dramatically stronger than the continent’s current ones.

China's initiatives in Africa

To reduce poverty, African countries should pour resources into family planning and education for women. They should invest in infrastructure now, when the working-age population is plentiful, to begin positioning the continent as the world’s next industrial powerhouse.

And guess who’s helping? Besides investing heavily in infrastructure projects across Africa, China is running political training programs for African leaders, teaching them the tactics it used to spur development. China has also given tens of thousands of scholarships to African students, and now hosts more of them at its universities than the US or the UK do.

Whether China’s activity is more philanthropic or self-interested is up for debate—but luckily, the two motivators aren’t mutually exclusive. If China can duplicate its success in Africa by helping lift its people out of poverty, making returns on its investments in the process, it’s unlikely anyone will complain.

Acknowledgement : This blogpost is sourced from an article on Singularity Hub : 'World Poverty Has Plummeted—But Will It Ever Disappear?' by Vanessa Bates Ramirez

Surely Congress would have done something Right ?

I had missed this remarkable story till now - Andhra Pradesh (AP) HALVED the no. of poor people over just two years (from 176 lakh in '09-10 to 80 lakh in '11-'12). They did this by crop diversification on farms, branching out into dairying, and by MGNREGA pushing up wages in rural areas. The agriculture growth rate went up. 

The Congress Reddy Government had been in power in AP from 2004 to 2014 – while I had not thought much of Reddy’s Government earlier, I was forced to think it must have done some things right, after all.

No other Indian State came close to this rate of poverty reduction. Some experts compared Andhra Pradesh’s declining poverty rates to those of China, stated to have lifted more people out of poverty in the last 30 years than any country in history. 

In 1981, a staggering 88 percent of Chinese were extremely poor, but by 2013 that figure had dropped, incredibly, to just 2 percent. India’s figures, though not as drastic, are still impressive: In about the same period of time, India’s poor population declined from 54 to 21 percent.

In the 32 years from 1981 to 2013, BJP ruled India for 6 years, and UF / Janata Dal governments for 3.5 years. However the UF / Janata Dal Governments were still supported from the outside by the Congress. So Congress ruled India for a majority of this period - it must have done something right for poverty levels to drop by over 60 % over the 1981 base figure ?

By 2013, only 11 % of the World's Population remained in Poverty !

Last night, my husband mentioned poverty rates across the world have been declining.. I said that there had been recent reversals due to worsening ecological impacts of global warming but he did not think so. I decided to look up the data. 

A 2016 report by the World Bank was very encouraging : In 2013, fewer than 800 million people lived on less than $1.90 a day (nearly Rs. 130 at today's exchange rate). That's less than 11 percent of the global population. As recently as 1990, about 35 percent of all people lived in such extreme poverty. That means about 1.1 billion people rose out of extreme poverty.

The percentage of people in Latin America, East Asia, North Africa and Eastern Europe who still lived in poverty was 5 % and below. But it was still over 40 % in Sub-saharan Africa and 15 % in South Asia. 

Researchers tied future poverty declines to reducing inequality. The countries where inequality declined in recent years included Brazil, Cambodia and Tanzania. Some successful policies employed which in my assessment, India pays inadequate attention to, include early childhood development and nutrition, universal health coverage, universal access to quality education and making cash transfers to poor families.

In 2012, according to Reserve Bank of India data, the States with the highest percentages of population in poverty (upto 40 %) were Chattisgarh, Jharkhand and Mizoram.

The next States with upto 30 % of their population in poverty were Madhya Pradesh, Bihar, Orissa and Assam.

The States with the least poverty in India (uptill 10 %) were Kerala, Andhra Pradesh, Punjab and Himachal. 

Tuesday, May 08, 2018

India is a World Leader in Carbon Neutrality where Airports are Concerned...

But this story seems to have been missed not only by the Indian press, but the international press too.. 

What is Carbon Neutrality in the context of Airports ?
Boeing 757 Air Europe
San Diego Air & Space Museum Archives
Budapest airport became the latest airport to be accredited carbon neutral in April this year. As an industry site explains

"Airports are at different points on this journey to become cleaner and more efficient. As the centrepoints of a complex web of aircraft movements, technical operations and surface access transport, airports can address their CO2 emissions in a variety of ways. These can include better insulation and energy efficiency, switching to green energy sources, investing in hybrid, electric or gas-powered service vehicles, encouraging employees, passengers & visitors to use public transport, working with airlines & air traffic management to reduce runway taxiing times and implement green landing processes and much more."
Convair 880 165-62 Swissair in flight 13Mar64
San Diego Air & Space Museum Archives
Another industry site says : "Not only did these airports measure their carbon footprint (Level 1), managed and reduced their emission (Level 2) and engaged partners and clients to do the same (Level 3), they are now offsetting their own (carbon) emissions" (that is Level 3+ : Carbon Neutral level which the Budapest Airport just achieved).

But thats not the story the media may have missed. What they have missed - or chosen not to highlight anyway, are the factoids below. 
Air plane over Jamuna Future Park 2014 /
Aashaa / CC-BY-SA 3.0

India is a World Leader in Airport Carbon Neutrality 

  • Out of 39 Carbon Neutral Airports in the world, four are Indian ! The airports in Delhi, Hyderabad, Bangalore and Mumbai have been accredited as carbon neutral. 
  • Delhi Airport was the first airport to be accredited carbon neutral in the whole of Asia Pacific !
The developed nations - other than Europe, havent been that interested
  • Even today, there is not a single airport that has been declared carbon neutral in China, Japan, Korea, Singapore, or any of the South East Asian Tigers - or even in some of the richest countries in the world in the Middle East - UAE, Saudia Arabia, and others. 
  • ONE airport in Australia has been declared carbon neutral - none in New Zealand.
    Air Canada Airbus A319-114 on approach to LAX
    / Timo Breidenstein /GNU Free Documentation License.
  • In the Asia-Pacific region, other than India and Australia, only one other country's airport has a carbon neutral accreditation - Jordan, which is a poor country, with per capita GDP one-fourth that of the world average. 
  • In fact, entire continents are able to showcase just one airport each as carbon neutral accredited - North America, South America and Africa !
Boeing 767 over Mount Rainier, circa 1980s
Seattle Municipal Archives / CC-BY-SA 2.0
  • The country with the largest number of airports in the world - the USA (in North America), has just ONE airport accredited carbon neutral. 
As a Continent, Europe leads in Airport Carbon Neutrality
  • 30 out of 39 airports worldwide to have received carbon neutrality are in Europe. 10 of  these airports are in a single country - Sweden. 
  • India has the most airports accredited for carbon neutrality after Sweden. The next countries with the most airports accredited are the UK and Turkey - three each.
The History of the Programme

The Airport Council International (ACI), Europe Annual Congress in 2007 saw Europe’s airports commit to reducing their CO2 emissions, with the ultimate goal of becoming carbon neutral. ACI EUROPE commited to developing a tool to help airports achieve this goal. In 2009, it launched the Airport Carbon Accreditation programme. Within months, Stockholm Arlanda Airport became the first airport in the world to achieve the highest level of accreditation: 'Neutrality'.

Air New Zealand Boeing 737-219 (ZK-NAR), 1979
Daniel Tanner / CC-BY-SA 4.0
In 2011, Airport Carbon Accreditation was extended to airports in the Asia-Pacific region, in partnership with ACI ASIA-PACIFIC. In 2012, Swedavia became the first national airport group to achieve full carbon neutrality across its suite of 10 airports in Sweden. Airport Carbon Accreditation was extended to Africa in 2013 in partnership with ACI AFRICA. Also in 2013, Airport Carbon Accreditation was judged one of the top 3 low carbon projects for Europe. 

The programme was FINALLY launched in North (and South) America in 2014, in partnership with ACI-NA, a full five years behind Europe, and 3 years after Asia Pacific.