Paul Hohnen: a better physically connected Europe could deliver multiple benefits

In the Financial Times today, Paul Hohnen* writes about the ‘hard realities of climate change’ showing across Europe, with the historic drought in Italy and Spain being only the latest example. He continues:

What seems increasingly clear is that Europe, with or without Britain, needs to invest hugely in climate abatement and adaptation infrastructure.

 A better physically connected Europe, in the form of enhanced inter-country electricity grids (for sharing surplus renewable power) and upgraded water catchment and distribution systems, could deliver multiple benefits.

In addition to reducing the risks to food, water and energy supplies, now and in the future, a grand European project to become collectively more resilient to energy and water stress could be just what is needed to give Europe the new and positive shared narrative so urgently needed. Not to mention the jobs, economic growth and technological innovation involved.

The EU’s enormous political and economic achievements over the past six decades are at risk on multiple fronts, including the environmental.

An ever closer power and water infrastructure union would help demonstrate why the European project is as relevant as ever.

*Mr Hohnen was trained as an international lawyer, closely involved in the 1992, 2002 and 2012 UN sustainability summits, as well as in a wide range of climate change and other global treaties. He worked from 1975 to 1989 as an Australian diplomat at the OECD in Paris (global economic, development and environmental issues), at EU institutions in Brussels, and in Fiji and Sri Lanka. He was with Greenpeace International (1989-1997, as Head of Climate Policy, later Director, Political Division), and Strategic Director of the Global Reporting Initiative (GRI). An independent consultant since 2004, his clients have included government ministries, intergovernmental agencies, business and non-profit organisations.

Read his views on the broader canvas in Reasons to be both hugely disappointed and very excited

 

 

 

k

Advertisements

Universal basic income (UBI)

Amazon has revealed its latest plan to automate American workers out of existence with its futuristic machine controlled grocery store.

According to a study by Ball State University’s Center for Business and Economic Research, the use of robots and other manufacturing efficiencies was responsible for 88% of the 7 million factory jobs lost in the United States since peak employment in 1979.

The Economic Security Project (ESP) – a coalition of over 100 technologists, investors, and activists – has announced that it is committing $10 million over the next two years to explore how a “universal basic income” (UBI) could ensure economic opportunities for all.

Elon Musk, the iconic Silicon Valley futurist, predicts “There is a pretty good chance we end up with a universal basic income or something like that, due to automation.”

With political uncertainty across the Western world highlighting rising levels of economic inequality, many others across the political spectrum are considering adopting UBI in the future, giving everyone a guaranteed minimum payment. In the 21st century to date there have been pilot projects in America, Canada, Namibia, Uganda, Kenya, Brazil, Holland, Finland, Italy and Scotland, described briefly in Wikipedia.

UBI – one of three main economic reforms?

James Robertson shared news (scroll down to 4.The Practical Reforms) of a meeting of the North American Basic Income Guarantee Congress at which there was co-operation between supporters of two of the three main reforms in total money system reform – land value taxation and basic income. Alanna Hartzok, General Secretary of the International Union for Land Value Taxation, expressed a hope for future meetings at which supporters of all three policy proposals could discuss the relationship between reform of the money supply, introduction of land value taxation and the replacement of welfare payments by a citizen’s income.

UBI – life enhancing?

Just as Green parties everywhere have said for many years, Elon Musk expects that UBI will enhance life with ‘ownwork’: “People will have time to do other things, more complex things, more interesting things and certainly have more leisure time.” Others, however, believe that without the need to pay for rent and basic necessities, people will not be motivated to work and will not make good use of their basic income and free time. Cynics will – and do – dismiss ‘the happiness agenda’ (Layard, Norberg-Hodge) and the recent Landmark study which found that most human misery in the Western world is due to failed relationships or ill-health rather than money problems and poverty.

If accompanied by a more comprehensive education?

The findings indicate the need for a broader education, giving some concept of good marital and parental relationships, an understanding of the country’s social and taxation systems and the development of expertise (until the Plain English Campaign succeeds) in interpreting official forms and negotiating online applications.

Increasing apprenticeships and retraining for those who become redundant is worthwhile but far more input is needed. The Sure Start focus involving parents and children from the earliest days was working very well until funding was cut by the coalition government in 2011, instead of building on its success.

Harrow mothers campaigning after 4 Sure Start centres had been given notice to quit

There are now 1,240 fewer designated Sure Start centres than when David Cameron took office – a fall of 34 % according to figures obtained by the Labour Party in a Freedom of Information request. The North East and London have seen the biggest fall in numbers, with over 40% of centres closing. The closure rate is increasing countrywide and councils have listed other centres which may well have to go this year.

Compensating for the cost of UBI

A total audit would balance the expense of an enhanced Sure Start programme and the cost of UBI over time, by quantifying:

  • reduced expenditure on the NHS and prison service due to the improvement in mental and physical health
  • and lower expenditure on policing and social services due to less stressful household and neighbourhoods, diminishing the intake of legal and illegal drugs and reducing crime.

So, in the foreseeable future, will 3D printers and robots take care of the necessities? And will basic income lead people to begin to improve relationships with each other and the rest of the natural world?

 

 

 

h

Fioramonti: growth is dying as the silver bullet for success – this may be good thing

In May, Lorenzo Fioramonti*, Professor of Political Economy, University of Pretoria, wrote an article for The Conversation, republished in Quartz. He opens: “GDP as a measure of growth fails to account for damages caused to the environment by industrial activity”.

In his new book “Wellbeing Economy: Success in a World Without Growth” he points out that the “growth first” rule has dominated the world since the early 20th century. No other ideology has ever been so powerful: the obsession with growth even cut through both capitalist and socialist societies”.

Edited extracts

He asks: “What exactly is growth? Strangely enough, the notion has never been reasonably developed” and presents a view beyond that limited to an increase in overall wealth (common sense): “Growth happens when we generate value that wasn’t there before: for instance, through the education of children, the improvement of our health or the preparation of food. A more educated, healthy and well-nourished person is certainly an example of growth”. He then outlines the paradox: “our model of economic growth does exactly the opposite of what common sense suggests”. Here are some examples:

  • If I sell my kidney for some cash, then the economy grows.
  • If a country cuts and sells all its trees, it gets a boost in GDP. But nothing happens if it nurtures them.
  • But if I educate my kids, prepare and cook food for my community improve the health conditions of my people, if a country preserves open spaces like parks and nature reserves for the benefit of everybody, it does not see this increase in human and ecological wellbeing reflected in its economic performance.

But if it privatises them, commercialising the resources therein and charging fees to users, then growth happens.

Preserving our infrastructure, making it durable, long-term and free adds nothing or only marginally to growth. Destroying it, rebuilding it and making people pay for using it gives the growth economy a bump forward. Keeping people healthy has no value. Making them sick does. An effective and preventative public healthcare approach is suboptimal for growth: it’s better to have a highly unequal and dysfunctional system like in the US, which accounts for almost 20% of the country’s GDP.

Wars, conflicts, crime and corruption are friends of growth in so far as they force societies to build and buy weapons, to install security locks and to push up the prices of what government pays for tenders.

The earthquake in Fukushima like the Deep Water Horizon oil spill were manna for growth, as they required immense expenditure to clean up the mess and rebuild what was destroyed.

Disappearing growth

However, Fioramenti brings the good news that growth is disappearing; economies are puffing along- even China, the global locomotive, is running out of steam. And consumption has reached limits in the so-called developed world, with fewer buyers for the commodities and goods exported by developing countries.

Energy is running out, particularly fossil fuels, and global agreements to fight climate change require us to eliminate them soon. Measures to mitigate climate change will force industrial production to contract, limiting growth even further.

The future of the climate (and all of us on this planet) makes a return of growth, at least the conventional approach to industry-driven economic growth, politically and socially unacceptable.

Fioramonti continues: “Decades of research based on personal life evaluations, psychological dynamics, medical records and biological systems have produced a considerable amount of knowledge about what contributes to long and fulfilling lives. The conclusion is: a healthy social and natural environment.

As social animals, we thrive thanks to the quality and depth of our interconnectedness with friends and family as well as with our ecosystems. But of course, the quest for wellbeing is ultimately a personal one. Only you can decide what it is. This is precisely why I believe that an economic system should empower people to choose for themselves. Contrary to the growth mantra, which has standardised development across the world, I believe an economy that aspires to achieve wellbeing should be designed but those who live it, in accordance with their values and motives”.

He points out that even the International Monetary Fund and mainstream neoliberal economists like Larry Summers agree that the global economy is entering a “secular stagnation”, which may very well be the dominant character of the 21st century – an apparently disastrous prospect for our economies, which have been designed to grow – or perish.

But it is also a window of opportunity for change. With the disappearance of growth as the silver bullet to success, political leaders and their societies desperately need a new vision: a new narrative to engage with an uncertain future.

This article is part of a series to be published following the release of Lorenzo Fioramonti’s new book: Wellbeing Economy: Success in a World Without Growth (MacMillan South Africa). Lorenzo Fioramonti does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above. The idea that the economic “pie” can grow indefinitely is alluring. It means everybody can have a share without limiting anybody’s greed. Rampant inequality thus becomes socially acceptable because we hope the growth of the economy will eventually make everybody better off.

 

 

p

m

Not ‘commercially viable’? Fracking: environmentally, socially and financially a bad investment

The decision to sell its share in Third Energy, announced by Barclay’s chairman will be welcomed by many. Mainstream media, however, are failing to report this; five pages were searched and all witnessed to publicity coming only from campaigning groups – a snapshot of the first page may be seen below.

Third Energy, a Barclays subsidiary, which had a licence to frack just south of the North York Moors national park has “not become a profitable investment”. This is due to local opposition, which delays companies’ progress, according to Barclay’s chairman John McFarlane, speaking at the bank’s annual general meeting.

Barclays’ has now announced that it will sell its stake in fracking company Third Energy “in due course”.

Steve Mason of local campaign group Frack Free Ryedale said in a press release: “Clearly fracking is a bad investment environmentally, socially and financially. Where is the long term future of this industry? Why would you put money into an industry that is increasingly rejected by communities and could get banned at anytime?”

 

 

lll

Moving towards a new, balanced, green economy

Dr Christine Parkinson’s recently published book sets out the following series of measures which could move us towards a new, balanced, green economy:

  • introducing greater incentive schemes to encourage businesses to develop, use and market greener technologies and to penalise those who don’t. Examples of this could include: using and developing renewable forms of energy; phasing out motor vehicles which use petrol or diesel and introducing those that run on easily-accessible clean energy;
  • investing in research institutions which have the ability to develop innovative solutions to today’s climate-change problems;
  • introducing legislation to reduce the use of the motor car, such as restricting the number of cars owned by each household, unless they run on clean energy;
  • phasing out coal-fired power generation, ending fossil fuel subsidies;
  • introducing a carbon tax on those companies who continue to use fossil fuels;
  • rebalancing the economy, so that the rich are not rewarded for irresponsible behaviour that adds to the carbon load;
  • setting targets for meaningful reductions in carbon emissions by an early date, as suggested by Desmond Tutu in his petition (chapter 1) and ensuring that the calculations for this are correct;
  • phasing out nuclear power and nuclear weapons worldwide and re-channelling the money saved into the incentive-schemes and investments mentioned above;
  • proper funding of those institutions regulating the tax system, so that tax evasion and avoidance is properly penalised;
  • shifting the tax system to penalise those activities which need to be discouraged, such as greenhouse gas emissions and the accumulation of wealth;
  • banning certain household appliances and gadgets, which are not necessary and only add to the carbon load;
  • establishing a new institution, which will monitor the use of fossil fuels by companies and promote, and provide support for, the use of greener forms of energy;
  • encouraging less air travel, by raising awareness about the damage this is doing to the planet and encouraging airlines to invest instead in technologies that do not damage the planet;
  • working globally with other partners to reduce deforestation;
  • re-balancing international trading systems, so that goods and animals are not transported unnecessarily across continents and seas, adding to the carbon load;
  • encouraging countries worldwide to be self-sufficient in terms of goods and resources, so that goods are not imported which can be produced internally;
  • re-thinking and re-balancing entirely transnational trading systems;
  • working globally to find a better means of international co-operation in working jointly to reduce and reverse that damage that is currently being done to the planet;
  • encouraging partnerships between local government and local cooperatives and social enterprises;
  • encouraging the setting up of local groups (3G groups), where individuals can meet together to share what they are doing to reduce their carbon emissions and to encourage each other to keep going with it, even if the majority of others are still in denial (3G stands for three generations – the amount of time we have left).

She continues: “Some of the ideas above are already being worked on, and others are not about changing the economic system but about reducing carbon emissions, but I hope these are a starting point for others to add to, if we are really serious about taking meaningful anti-climate-change measures before it is too late”. 

* 

“Three generations Left” can be ordered direct from the publishers, using this link. Whilst much of the book is viewable on this website, she would prefer you to buy a copy as any profits from the sale of this book will be used to fund her son’s work amongst slum children in Uganda.  Last year was a difficult one for this project (Chrysalis Youth Empowerment Network), as due to the devaluation of the pound post-Brexit, monies sent from the UK to Uganda had lost a fifth of their value. Contact:  ChristineEP21@gmail.com.

 

 

 

 

Basic income

Readers who are unaware of the basic income concept can find an outline here.

As Ontario, Canada’s largest province, became the latest to announce a universal basic income three year trial (read on here), we read that a privately-funded, short-term pilot program is being run by this Silicon Valley accelerator, Y Combinator, in California.

The goal is to see how people react in the U.S., says Sam Altman, President, Y Combinator Group. The program gives “unconditional” payments to selected residents of Oakland. The administrators write, “we hope basic income promotes freedom, and we want to see how people experience that freedom.” If it is successful, the plan is to follow up the pilot with a larger, longer-term program”.

Altman says: “50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.”

The Dutch universal basic income proposal is for UBI to replace other social security benefits. It would be paid for with revenue from a number of taxes, including a 30% tax on business profits, tax on air pollution, and a higher tax on “big fortunes,” according to Johan Luijendijk, co-founder of the Basisinkomen 2018 advocacy group, which argues that UBI would be affordable because it would replace other government support programmes.

Replacement or supplement?

Over the years in Britain the writer had always heard of UBI as a replacement proposal – but now she reads Professor Karl Widerquist, founder of Basic Income News, describing the Dutch proposal as unique.

The Basic Income European Network (BIEN) agreed at its general assembly in Seoul (in 2016) that universal basic income should not be a replacement of other social services or entitlements, but instead should work in combination with other services. Widerquist in an email with CNBC, is reported to have said universal basic income “is not ‘generally considered’ as a replacement for the rest of the social safety net. Some see it primarily as a replacement. Others see it as a supplement, filling in the cracks.”

The Swiss campaign for the basic income referendum

Earlier this year, a draft report, tabled by a Member of the European Parliament, Mady Delvaux-Stehres, warned that preparations must be made for what it describes as the “technological revolution” currently taking place, including provisions for the “possible effects on the labour market of robotics”. The report which urges member states to consider a general basic income in preparation for robots taking over people’s jobs passed by 17 votes to two.

Ms Delvaux-Stehres said: “We ask the commission to look at what kind of jobs — or more precisely what kind of tasks — will be taken over by robots. There needs to be a discussion about whether we need to change our social security systems. And even whether we have to think about universal revenue, because if there are so many unemployed people, we need nevertheless to insure that they can have a decent life”. 

However the recommendation to “seriously consider” basic income was rejected for inclusion in the final report, with 328 MEPs voting against the recommendation, 286 MEPs voting in favour, and eight abstaining from the vote.

A study by Oxford University’s Carl Frey and Michael Osborne estimates that 47% of U.S. jobs will potentially be replaced by robots and automated technology in the next 10 to 20 years. Those individuals working in transportation, logistics, office management and production are likely to be the first to lose their jobs to robots; according to the report universal basic income may be necessary.

 

 

 

Brexit: moving away from globalisation towards self-reliance’  

Colin Hines draws attention to Green MEP Molly Scott Cato’s publication and launch of  a report by Victor Anderson and Rupert Read: Brexit and Trade Moving from Globalisation to Self-reliance’

Although it regrets our leaving the EU and wishes we wouldn’t, the report is written as an alternative approach assuming we are outside the EU.

Its Executive Summary states:This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.

Hines continues: “As I am aware it is the first time a report from a politician isn’t clamouring to retain membership of the open border Single Market”

It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. Indeed the report actually calls for ‘Progressive Protectionism’ rather than a race to the bottom relationship with the EU – see page14:

Reducing dependence on international trade implies reducing both imports and exports. It is therefore very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’. X1V reference adds: ‘For detailed proposals on how this could and should be done, see http://progressiveprotectionism.com/wordpress/

Also ground-breaking in Green Party literature of late is its discussion of the arguments for and against managed migration.

Its sensitive handling of this contentious issue for many in the Greens does mark an important step forward and hopefully will help to start an internal debate about whether or not the party should reconsider its open borders approach.

This recent Daily Telegraph article with Iain Duncan Smith and Nigel Lawson frothing to get rid of key environmental regulations shows how impossible any green future will be under a hard Brexit.

Hines feels that we won’t leave the EU and central to that happening will be a realisation across Europe that to see off the extreme right they must manage internal migration and protect domestic jobs. At that point the reasons for supporting Brexit for most are no longer valid.

He ends: “This timely report makes a crucial input to this debate, one that will rage for the next two years”.