31 December 2010

Answers Still Blowing in the Wind

Technical reports about wind-power present a classic picture of statisticians dealing with the unpredictable. Aside from a helpful opening sentence in a BERR advisory note informing us that 'The UK is a very windy country' and a range of pseudotechnical concepts, it is hard to get accurate figures about how much of our electricity could realistically be generated from windpower. But what is fairly clear is that we have a lot of wind 'resource' availabile and, because we have a large Atlantic coast, the wind blows relatively more consistently here than in Denmark and Germany, which both have considerably more installed capacity than we do (Germany has 16.2% of the global total compared to our 2.6%).

This year's annual Ethical Consumerism Report indicates that spending on most areas of fair trade and ethical goods shows large increases (organic food is the exception), but the report's funders Co-operative Financial Services identify renewable energy an example of area that has 'failed to make significant progress'. So what is holding us back, and what can be done to break through these barriers?

Assuming that we are not going to have a government that will see this as an opportunity to create jobs and reduce our carbon impact and thus provide state investment to the sector, we will have to rely on a combination of good will and financial incentives. So in order for this market to take off we need what a technologically constipated economist might refer to as a 'triple coincidence of incentives'. We need the right sort of wind (fairly consistent and not gusty), where people consume large amounts of electricity and where there is spare capital for them to invest in the hardware.

In an earlier post I argued that the main hurdle to be overcome - the resistance of local communities to 'unsightly' windfarms in their vecinity - could best be addressed by a co-operative model but it seems that, even with the generous terms currently available via the feed-in tariff, we still do not have the right model to garner sufficient support to see the response from local communities that would enable us to match Germany's capacity over the next five years or so.

One disincentive for local communities is that cost of the environmental reports needed to get a planning application on its way, when the possibilities of success are still unknown. This might amount to £40,000 or so that must be found from local small investors, who may just be throwing their money away. What we need is a group of Public Interest Planners who can afford to do this work pro bono and, where this is relevant, provide templates for the parts of the reports that are not site-specific. A Community Renewable Energy Toolkit for England and Wales, along the lines of that already produced by the Scottish government, could also help the process.

But rather than knowledge or expertise it may be the financial engineering that is most necessary. On this front, I heard an interesting pitch recently from Tim Helweg-Larsen, formerly of the Global Commons Institute and now at the Public Interest Research Centre. His model, called the Energy Bank, connects well-intentioned investors with local communities in windy places, at least achieving a double coincidence. Whether this turns out to be more successful than the payments offered to smooth the path to planning permission in reluctant communities remains to be seen.

27 December 2010

Any Economy So Long as it is Colourful

Henry Ford coined the adage that best describes the ethic of the mass production-mass production era of the 20th century: ‘Any customer can have a car painted any colour that he wants so long as it is black.’ I think we usefully adapt this pithy phrase to help us vision the economy of the future. In this case it can be as colourful as human creativity can encompass but it has one fundamental limit: the energy limit. To put an exact number of the reduction in energy that we are looking for is a speculative process, but we need to reduce our current demand by something between 70 and 90 per cent.

This number is based on estimates in the Zero Carbon Britain report about what we need to do to achieve global equity by 2050. The exact figure requires assumptions about how energy intensive it is to construct and maintain renewable energy generation facilities; the likelihood of technology advances increasing energy efficiency vs. rebound effects; the contribution to carbon sequestration made by changing land use; and many other factors that cannot be convincingly quantified.

Although many reports about social responses to climate change can feel fairly prescriptive in fact what we are looking for is creative and imaginative responses. You can have any economy you want so long as it is a low-energy economy. My work as a green economist is about visioning the most rewarding and satisfying economy we could create for the global human community while keeping within these planetary limits. Anybody is perfectly at liberty to create another vision, and in fact since Nature’s way is one of diversity we are likely to have a variety of different local economies within and between the present nation-states of the world to replace the stultifying uniformity of the globalised monoculture. Designing future economies, and devising the political pathway to follow to arrive at them, offers both a challenge and an opportunity.

25 December 2010

A sideways look at Christmas

I have had a couple of near misses with poet laureate Carol-Ann Duffy. First a colleague hosted the post-funeral party for the local and much-loved poet U. A. Fanthorpe. A bevvy (could that be the word for a collection of female poets) arrived at the house and drank their way through the contents of the wine cellar, which given the nature of the occasion was entirely understandable. The further activities of her eminence are best kept under wraps.

Then my son was part of the winning University Challenge team last year (I think this is the first time I have mentioned this?!) and who else should be booked to present the rather kitsch prize than Ms Duffy herself?

Carol Ann Duffy's most famous colleciton is The World's Wife, a wry look at the world from the perspective of famous men's spouses. Shortly before being given the top job she wrote a poem from Mrs Scrooge for the Guardian. She turns out to be a role-model for our times and the poem a gift. The ghost of Christmas Past has a message that is an appropriate one for this blog:

'But then she heard a cracking, rumbling groan
and saw huge icebergs calving from the floe
into the sea;
then, further out, a polar bear, floating,
on a raft of ice.
"The Polar Ice Cap melting," said the Ghost,
"Can mankind save it?"
"Yes, we can!" cried Mrs Scrooge. "We must!"
"I bring encouragement from Scrooge's dust," replied the Ghost.
"Never give up. Don't think one ordinary human life
can make no difference - for it can!"'

22 December 2010

Higher Education Accountability

As the debates over student fees have ebbed and flowed I have missed once again the skills of the accountant. What nobody has explained adequately to me is how the government's plan will ensure that money flows in in these straightened times, and exactly how it will also flow out.

Will Hutton has assisted on the second point, by offering some figures in his report on 'fair pay' in the public sector. Two points leap immediately to the critical mind: since national bankruptcy has resulted from the behaviour of the private sector, perhaps we should start our pay policy there; and how can any person reasonably accept Hutton's conclusion that a differential of 20-to-1 within organisations can be fair. Time for a new dictionary, not to mention a new moral code.

For myself and my colleagues in the universities there is no surprise that the differentials are highest in our sector. We have long been scandalised by the salaries and the expenses-paid trips enjoyed by our bosses. Hutton found that the average salary for a vice-chancellor is £200,000 and the median salary is some 15 times that of the lowest paid academic salary. Of course that is far from the lowest salary in a university, which also has a huge number of cleaners, caterers and other support staff on poverty wages.

The fattests of gowned cats are found, unsurprisingly, in the self-selected elite who call themselves the Russell Group, where the differential is 19 to one. These very same professors and administrators who are calling for students to pay three times as much to enjoy their skills are part of the reason why a university education is no longer affordable. Universities pay their managers more than all other sectors, with vice-chancellors earning more than four-star generals.

In these 'times of austerity' these salaries will be hard to afford, but how will raising student fees help? Since the increase will only affect the 2012 freshers, no money will flow back to the Treasury until 2016. Here is where accountants could be so useful. The details are decidedly murky at present, and when they are published no doubt we will all be looking elsewhere, but it appears that this money will be marked as an asset rather than a liability, thus reducing the deficit by actually shifting it onto the individual debts of young people.

With the additional help of some financial wizardry, the government may also be able to bring money into the public coffers sooner than 2016 by making the debt of our young people available for sale. This method of using securitization of our children's futures to help pay for support to the banking sector is the story that was missed while we watched the enraged students attempting to smash their way into the Treasury.

19 December 2010

Easing Eurozone pressures

Richard Douthwaite, of the Dublin-based think-tank FEASTA, has produced a useful paper offering solutions to the Eurozone crisis from an Irish perspective. The solution, which he terms 'deficit easing', is similar to that proposed by the more radical proponents of the Green New Deal, i.e. that money is created by governments to be invested in the transition to a low-carbon economy. This will support economies otherwise facing depression, while making our basic support systems resilient to climate-related weather shocks.

Since, as shown in the graphic, all the countries of the Eurozone are in debt, and therefore engaging in austerity measures, any policy designed to grow or trade our way out of the economic decline cannot be effective. The second graphic shows how all the debt, both public and private, is interconnected. So a collective solution is the only hope of success.

Richard's paper has the clarity and conviction that would be expected from one of the world's leading alternative economists. I would be inclined to add two small additional points. The first is the political point made by Robert Peston, who fished around in a lengthy and probably extremely tedious report from the Bank of England to find the nugget of data: in 2009 public support for the banking sector amounted to £100bn. This is more than half the so-called 'structural deficit' and indicates the cost to all of us of not finding a structural solution to the banking crisis.

Second, Richard's paper surprisingly makes no references to the link between financial expansion and resource exploitation. He has argued this elsewhere and would I'm sure be in agreement but it is important that all radical economists keep this planetary perspective in mind - and continue to draw attention to it - when proposing our monetary solutions.

14 December 2010

Putting the 'n' into Tories

With Christmas approaching I have thought of a new party game. Well, ok, it was really Jim Naughtie's idea, but why not claim the credit since he seems somewhat embarrassed about his creativity?

What we can do, which is sure to cause more of a warm glow than those awful cracker jokes, is to find genital substitutes for the names of the Tory cabinet ministers. David Cameron has been so helpful here by choosing the phallic Mr Willetts and by appointing Mr Hunt to the Culture Department. Willetts can actually be mistaken for two titillating organs, since according to that lexicographical bible Krek Waiter's Peak Bristle in the South-West it is the popular name for the female breast.

Other examples of cognomen syndrome gratefully received.

12 December 2010

Ideas Merchant Facing Institutional Challenge

This has been a week of mysterious coincidences. On Wednesday I made a presentation about co-operatives to a delegation from the Technical University of Chongqing who were visiting my own institution. This troubled me on many levels. It indicated the limitation of the globalised approach to HE: I simply could not identify a ground on which to make my approach to these people. I had utterly insufficient knowledge of their cultural and social understandings.

I was not a party to the reason for their visit and so was left to assume that we were hoping they would send us thousands of students and help keep us solvent in the competitive-global-knowledge-economy. Aside from my concern about the carbon impact of this strategy, I did not become an academic in order to train Chinese businessmen to be more effective capitalist managers. I sold them the idea of co-operatives as a means of negotiating over the value of labour production. I believe that they left unconvinced, and I cannot be sure whether I made them more or less likely to make a formal link with our university.

Given this experience at the sharp-end of the academic barrow, the violent debates over the shifting of the costs of higher education away from the public purse and onto individual students were gratifying. The general conclusion appears to be that this level of our national education has moved fully into the market. This will, according to David Willetts, improve the quality of teaching. Education is a product like a potato or a sports car. If others offer better or cheaper education (potatoes/cars) I will be forced to become a better teacher.

Although Willetts is fondly known as 'two brains' he appears to have practical experience of only one side of the teaching relationship. I think this shows in his approach to policy. My experience tells me that the awareness that your time is being bought by your students undermines the trust and respect that a teaching relationship requires. Far from seeking out more time with their professors, my experience suggests that students believe they have bought the degree when they arrive; turning up and being troubled with new ideas or, worse still, expected to actively engage with theoretical concepts is an affront to their consumer rights.

Much as Darian Leader so cogently argues for psychotherapy, education cannot be turned into a product. An education that is bought and sold will always be a poor education. Watching your students check their mobiles during a lecture, and wondering whether they are calculating if you have earned the £26.49 they paid for you since you entered the room, is a dispiriting experience that saps the confidence and encourages the sort of teaching that appears to be offering value for money: voluminous handouts and regurgitated facts.

Perhaps most important of all, real education is not always an enjoyable experience. Genuine education is emancipatory and revolutionary, which may be a reason why Conservatives distrust it. The good educator challenges the student's world-view and this cannot always be a comfortable experience. You know you are teaching successfully when you see a furrow begin to appear on the youthful skin of your students' foreheads. This connotes the performance of 'thinking', an activity that has been increasingly rare in universities since the advent of the market.

10 December 2010

Anarchy in the UK

Yesterday was the anniversary of the birth of Peter Kropotkin, and we celebrated by drinking a toast to him in our local Stroud Brewery ale. As we heard from Stroud's leading anarchist Dennis Gould, Kropotkin had an extraordinary life. An aristocrat by birth, Kropotkin was engaged to undertake a geographical survey of Siberia. What he saw there - the appalling suffering of the people and their struggle for survival - revolutionised his worldview. He became caught up in the struggles for justice in his homeland towards the end of the 19th century.

Kropotkin was also a scientist, who extended Darwin's theory by arguing that 'mutual aid', or the human inclination towards co-operation rather than competition, was what he called 'a factor of evolution'. His studies of how small-scale communities might be viable are not theoretical but full of earthy detail. His sociological studies give us an insight into the working-class communities of industrial London. But he was capable of rhetorical flourishes too. Here is his stirring conclusion to the 1888 essay 'The Wage System':

And these voices will be heeded. The people will say to themselves: 'Let us begin by satisfying our needs of life, joy and freedom. And once all will have experienced this well-being we will set to work to demolish the last vestiges of the bourgeois regime, its morality, derived from the account book, its philosophy of 'debit' and 'credit', its institutions of mine and thine.

Kropotkin was forced into exile first in France and then in London. He returned to Russia following the revolution but strongly disapproved of the authoritarian nature of the Bolshevik regime.

This biography may seem miles away from the violence we saw on London's streets yesterday, but perhaps what links them is the simple word: freedom. To many, anarchy is the nihilistic violence that typified the punk movement. To Kropotkin it meant the freedom to live a dignified life and to aspire to the highest levels of self-expression within self-governing rural communities.

Riots of this level of violence on the streets of our capital and within yards of the 'mother of parliaments' are a rare occurrence and people do not undertake them lightly. The abandonment of higher education is merely the taper; it is the loss of democracy that spurs people to such action. It does not take a university-level education to understand that none of the parties who competed for our votes a mere eight months ago offered us this in their manifesto. When our representatives scorn our views, political mobilisation is the only possible response.

The political crisis that has been developing since the financial crisis broke in 2008 is more reminiscent of the events of the early 19th century than anything I can remember in my lifetime. The events that led to the mass mobilisation are strikingly similar: a loss of autonomy over livelihood, political disempowerment, and a government that serves its own rather than the national interest.

Shelley, who was a trenchant critic of the economic oppression of his times, even identified the creation of artificial value in the money system as one of the sources of injustic that drove the street protests. In his poem 'The Mask of Anarchy', written following the Peterloo Massacre in 1819, he included the stanza:

'Paper coin - that forgery
Of the title-deeds, which ye
Hold to something of the worth
Of the inheritance of Earth.'

In his day it was the debasement of paper money that enabled exploitation; in ours it is the ceding of the power of money creation to a self-serving banking system.

To merely condemn the actions of violent protestors, the automatic response of the powerful, is too simplistic. In an important Quaker testimony we are advised to:

Search out whatever in your own way of life may contain the seeds of war. Stand firm in our testimony, even when others commit or prepare to commit acts of violence, yet always remember that they too are children of God.

What history teaches is that when people witness blatant injustice in the distribution of resources and are deprived of a political route to right this wrong, then violence is an inevitable response.

8 December 2010

Rethinking Resilience

The word resilience is going the way of sustainability - becoming so over-imbued with meaning that it becomes meaningless. I recently heard a presentation by somebody who was basing a whole research project around meanings of sustainability. It seems to me the time would have been better spent organising a Potato Day like the one we have coming up in Stroud.

For surely, resilience is about getting down and dirty in your local environment. It seems to me a contradiction in terms to travel away from home, as I do, to conduct academic research into what resilience or sustainability might mean. For the record we should be clear that these two are not the same. Sustainability is an approach to life that is respectful of the planet and all the species who enjoy it today and may enjoy it into the future. Resilience is a much more limited concept, which seeks to elucidate our relationship with natural systems.

The reason resilience is useful as a concept is that it has a fixed, physical definition, which we can use by analogy to explore what we are doing in planning our transition to sustainable living. Wikipedia defines resilience as 'the property of a material to absorb energy when it is deformed elastically and then, upon unloading to have this energy recovered.' This strikes me as a wonderfully inspiring definition if we apply it to our human communities. When they are challenged by environmental or social change, rather than fracturing, they can adapt to the stress temporarily and then unleash creative energy in response.

In these days of unexpectedly harsh weather, the word resilience has crept into many journalistic reports as an expression of what has limited our response. The suggestions for change focus around the expenditure of more energy and money, much as the proposed response to the environmental crisis apparently needs more technology.

But true resilience lies in the design of systems, not their technological sophistication. Because there will always be situations where the road between Glasgow and Edinburgh is likely to become impassable on some days of the year, an economy which requires large numbers of people to travel between these cities is not resilient by design. The large distances we travel for work and to acquire provisions are examples of poorly designed, non-resilient systems. Building resilient communities can enable sustainable living precisely because it will mean embedding deeper into your local environment, a key feature of the bioregional economy that will offer a resilient and a sustainable future.

3 December 2010

Render unto Ceasar

Now that we are officially in Advent perhaps it is inevitable that your mind turns to Jesus, or perhaps I am just trying to make up for the fact that we have a Toy Story 3 advent calendar in the house this year and I want to believe there is something more meaningful about our foremost national festival. Whatever it is, I thought I would share my growing suspicion that Jesus may have been a green economist.

Of his many quotable quotes perhaps my favourite is 'Consider the lilies of the field, how they grow; they neither toil nor spin, yet I tell you, even Solomon in all his glory was not arrayed like one of these.' This message, like John Ruskin's 'There is no wealth but life', seems redolent of the awe for life's abundance which guides a green approach to the economy. It is also a message against the Protestant work ethic and in favour of a relaxed approach to provisioning that is necessary for the sufficiency economy we are seeking to build. And the beards, long hair and sandals were an obvious clue.

But what about the harder edges of economic life? Did Jesus have anything to say about those? I am partial to the bits of the bible where Jesus ceases to be the rather effete, kindly 'new man' emblazoned on so many Sunday-school walls and really loses his rag. When he rages against the money-changers for example, or berates his friends for dropping asleep when he was in his hour of soul-searching crisis at Gethsemane.

I think Jesus might have been rather smarter about money than he has been given credit for. Remember, 'Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s', Jesus's response when asked whether his followers should pay their taxes to the Roman authority. Last night we had Mary Mellor here in town and she adeptly explained why taxation and money issue are two linked roles of the state, and why Jesus was quite right to say that taxes should be paid back to the issuing authority.

As Mary explains it, you cannot start an economy unless you have something to circulate: issuance of money must precede deposit. The history of money is a history of political authorities from Croesus through Medieval kings right down to the Bank of England issuing money and then taxing it back. The problems we are facing today result from the failure to understand the role taxation plays in enabling circulation, and the privatisation of this right to issue currency (the right of 'seignorage') so that it now belongs to the banks.

Because money now originates in the private sector the public sector cannot exercise the seignorage function and so has to rely on taxation alone to fund expenditure. If the state issued money directly then taxation would be used to prevent excessive circulation and the resulting inflation, rather than being a means to acquire money for investment. Since the UK state will not widen quantitative easing to encompass this function, it can only initiate monetary circulation and enable economic exchange through going into debt itself. Osborne's ideological resistance to this basic economic fact and his determination to eliminate the deficit means that he will choke off limit monetary circulation and destroy the economy.

The other biblical story about currency was Jesus's outburst in the temple, when he attacked the money-changers. Here he was rather less on-message, since temple money might be seen as skin to a local currency. It was exchanged for the national currency but could only be spent within the temple precincts, much as the Stroud Pound can only be spent in Stroud. However, Jesus's objection seems to have been to the inflated prices that were charged for what the temple traders were selling - mainly animals doomed to unpleasant, sacrificial deaths - so as long as pounds sterling and Stroud Pounds are exchanged one-for-one we should stay on the right side of doctrine. Somehow, though, the thought of the advent of Jesus to the Stroud Pound stall, upturning our tables and throwing a wobbly in the middle of town is a peversely appealing one.