Developing Countries and Climate Change

I often hear discussion about developing countries and their need for resources in order to allow them to develop as the world begins to increase the price of carbon in order to combat climate change and mitigate its impacts. Some thoughts below:

If developing countries haven’t managed to do their dirty development in the last 50 years, what reason is there to expect that they will manage to develop before we have new energy sources? They cry about their ability to develop being hampered by a climate deal which doesn’t dump boatloads of money on them, but aside from a few choice examples, there is little development to speak of! Would we not simply be better off to spend the money that would be sent to the developing world on programs to encourage the development of non carbon energy sources and then simply let the developing world acquire the new technology in the same manner that they acquire modern technology?

I do not find argument that because the West has benefited from the past emissions of green house gasses, we have a moral responsibility to help those countries which will be worst affected by it while having the least capacity to adapt very compelling. The West benefited from colonialism, slavery and post colonial dictatorship, yet none of those injustices have managed to convince Westerners that they have some sort of responsibility to help the developing world. In fact, I think the green house gas argument is even less valid because the developing world has benefited from the wealth generated by developed world emissions. There would have been no green revolution in India if America hadn’t been rich enough to fund research which had no great domestic benefit. There would be no cell phones or internet, two technologies frequently referenced as driving real development. There would be no outside resources for dealing with HIV/AIDS or any of the other tropical diseases which are no longer prevalent in the West.

Aside from India and China, no developing world country, or even the entire rest of the developing world emits enough green house gasses to matter in the grand scheme of things anyway, so why should we care what they have to say. Listening to more people simply makes negotiations harder for an insignificant potential reduction in emissions. Even if there were support for a transfer of funds to developing world countries, sending money to China and India seems like a hard sell. Countries building aircraft carriers and sending people into space don’t strike me as worthy candidates for Western largess.

China’s Emerging Entanglements

I was reading an article today on China’s involvement in Afghanistan. It spoke of the economic commitment made in paying to open a profitable copper mine while bearing no security responsibilities in the country. This combined with some reading I have been doing on the history of US foreign relations has me thinking about some interesting parallels.

China has been making deals with regimes which are unsavory in the eyes of Western powers in order to receive resource concessions, which Beijing views as of paramount importance to its economic security. Britain and the United States both displayed similar drives for secure resources during their rise to global power. The difference this time, is that China does not seem willing to back up its stake with anything more than money. That’s great, but what happens when the unsavoury regime that China is currently backing is overthrown by a different one. Or what happens when the country ends up being destabilized by domestic violence. China can’t expect the international community to defend its resource interests wherever they lie. Will China be willing to commit troops to protect its assets? To build military bases and airfields in distant corners of the globe? Is it possible to manage this under the rubric of “peaceful rise”? What threat is there of these assets being nationalized if a more accountable government comes to power?

As with many things here, I think that China is treading a fine line, and perhaps sooner than many people expect, the government will have to make real decisions about their involvement in the world. Words and cash only go so far, especially in places where governments have very little to lose. Maybe China is willing to spend the money that will be necessary to prop up friendly regimes in most of the regions where it has resource interests, but that seems like an expensive proposition when there are so many pressing domestic demands.

I guess much like with industrial development, China is well within their right as a sovereign country to not learn from anyone else’s history and make all the same mistakes to the world’s detriment.

US Health Care Debate

I’m sure that most, if not all of you are being driven insane by the health care debate in the US. I haven’t really written anything specific about it because it just depresses me too much, but I want to get two things down that I’m shocked aren’t being shouted from the rooftops in the US.

The first involves fears that “some bureaucrat is going to get between me and my health care”. Well, if you have private insurance, there is already a bureaucrat getting between you and your health care. The problem is that they are an insurance company bureaucrat whose incentives are aligned with denying you care. The less they approve, the more money they make. Sure government bureaucrats may be apathetic, but at least their incentives aren’t aligned to oppose yours! Give me the apathetic government bureaucrat over the private sector bureaucrat that gains by denying me care!

The second more recent issue is the Democrats ploy of putting in a public option which can be opted out of by the states. I find it crazy that congresspeople are able to object to this. Why should you override the wishes of the states? If you are so confident that the people don’t want a public system, let the states prove you right. The only basis I can see for this objection is ideological which seems unacceptable when it comes to something as basic as health care. How are those up in arms about this option not simply being branded as blatant ideologues, bent on denying choice to American citizens?

WMD Terrorism Musings

I got to thinking on the weekend about terrorist attacks using a WMD. I occasionally ponder what would happen if America were to be attacked in such a manner. My train of thought generally doesn’t end well for the world’s Muslim population or for any Westerner who isn’t a fan of crusades. But it occurred to me recently, that the first use of a WMD by terrorists may not in fact occur in America, or even Europe.

I came to this thinking for a number of reasons. First, getting a weapon to America is likely more difficult than getting it anywhere else in the world. The weapon must at the very least pass through a port in the country of origin, then an American, or at least North American port, and subsequently be moved undetected to the target location. That presents many opportunities for discovery. In addition, all the travel takes time, which adds to the possibility that the loss of material may be discovered and actions taken to recover it. This makes getting a WMD to America much more difficult than to a target in Eurasia.

Europe would likely be the target of greatest opportunity was the attack not destined for America. Still, the EU border represents some degree of an obstacle, and getting it to the UK (which in my mind is likely to be the preferred target) would be even more difficult. This leaves Russia and China as potential targets for domestic WMD terrorism. My thoughts turn to Russia for a number of reasons.

First, Russia has many more nuclear weapons than China, and seemingly less control over its military, making the potential for sale to terrorists more likely. Second, Russia has a much more restive population if my analysis of the situation counts for anything. This trend is likely to continue as the white Russian population declines and Islam gain more prominence in the country. If the Russian economy continues to experience turbulence, there may be more aggrieved people willing to resort to terrorism, and more Russian military officers willing to conduct shady deals in order to enrich themselves.

These domestic problems, coupled with the difficulties of shipping WMD material outside the borders where it was procured lead me to believe that the world’s first act of WMD terrorism may be more likely to occur in Russia than in the West.

Canadian Currency Conundrum

There is an article in this week’s Economist regarding the value of the US dollar and its impact on economic conditions in other countries. My interest here is specifically regarding Canada and currency markets. The article contains the following paragraph:

Others have resorted to talking their currencies down. In a statement released after its monetary-policy meeting on October 20th, Canada’s central bank said the strength of the Canadian dollar would more than offset all the good news on the economy in the past three months. The currency’s strength would weigh on exports, said the bank’s rate-setters, and mean that inflation would return to its 2% target a bit later than previously forecast. Foreign-exchange markets took the hint: the Canadian dollar fell by 2% against the American one after the bank’s statement.

I was a bit shocked when I read about this last week. I’ve written previously about some of my concerns on a rising Canadian dollar. My concerns were much more related to the Canadian dollar rising for reasons other than a relative decline of the US dollar, but the end result is the same. Canadian competitiveness is harmed, and the economy will suffer because of it. What disturbs me is that the people who are the big players in the market seem to be obvious to this fact without the governor of the Bank of Canada telling them so.

Now maybe a movement of 2% was in fact due to new, specific information contained in the report, but I would think that if there was any independent analysis happening, this information should already have been priced in. The fact that it is not happening makes me concerned for future financial stability. If I’m seeing issues long before the people actually trading the currencies do, there are problems. Either I need to switch careers to currency trading, or currency traders need to start reading my blog.

Music Pricing

There is an interesting article in this weeks Economist on maximizing value from downloadable music sales. There were some numbers in the article I found very interesting:

“The exercises showed that even a uniform price per song that maximised revenue among the students was quite high—$2.30 in 2008 and $1.46 in 2009.”

So between 2008 and 2009 the amount people were prepared to pay for a download decreased by almost 40%. What is the implication of this for the recording industry? My read of it is that the quality of music has declined, and that people are willing to pay far less for new music. Now a one year gap seems too short for such a dramatic decline in price, and I suppose much of that shift could be due to changed spending priorities in the wake of the great recession, but it still leaves some interesting questions.

I would be interested to see if music were grouped by the year in which it was released, how much people would be prepared to pay for a song from that year. I wonder if in fact there would be a downward trend over the decades. I’m sure there is a PhD thesis as well as a looming threat to the music industry’s business model in there somewhere.

Emissions by Food

The NYT has a very interesting article on Sweden's attempt to put carbon emissions information on food. It makes me pretty sad about my eating habbits.

I would be curious to see it on a per calorie or per "recommended daily intake" as I don't think you get quite the same nutritional value out of one "serving" of beans as you would get out of a "serving" of beef, but who knows, at least this is a start.