Fiasco in Copenhagen: The Winners and the Losers

After the American Century Posting 203

The Climate Summit has been an enormous disappointment to just about everyone I know. But such failures are not merely misunderstandings. Some people want them to happen, because it was to their advantage that no meaningful agreement be reached.

Who benefits when there are no real controls on carbon emissions? Nations that produce oil, gas, and coal. This turns out to be Russia Venezuela, Nigeria, and of course the Middle Eastern oil states. Norway gets high marks for taking a stand for CO2 controls, but then, the Norwegians are a moral and democratic people who produce 99% of their electricity from hydro. One can certainly not say all three things about any of the other oil producing states.

Other beneficiaries are all those who doubt the reality of global warming, notably a large contingent of the Republican Party. Sarah Palin is presumably also delighted. But has Palin asked herself why she is siding with the Chinese government on this issue?

China surely regards itself as a winner at this summit. It refused to budge at all on what it sees as its right to increase CO2 emissions by at least 40%. It is investing in solar power and windmills, and building lots of atomic plants, but being efficient is not yet on its agenda. China also got to throw its weight around and show it could not be forced to do anything it did not want to do, such as allowing inspectors in to see just exactly how much CO2 it is producing. (I wonder if before long we will have some sort of remote sensing devices that might remove this particular objection.)

The opposition to the current Danish government also is a potential winner in this fiasco, as the Danish Prime Minister earned low marks for his behavior. With the two political blocs in a virtual dead heat, this magnificent display of diplomatic ineptitude might tip the balance. One can only hope.

Curiously, I think President Obama emerged as a bit of a winner too, in the sense that for the first time he brought the US into an active discussion of global warning and looked for ways to create a compromise. He was hampered, however, by the scientific stupidly of the Republican Party, which seems genuinely challenged by such things as the theory of evolution, physics, modern biological research, and of course global warming itself. But then, these are the sort of people who, in the State legislature of Indiana, passed a law saying that Pi should not be 3.1417. That clearly is a silly number, and so they decreed that Pi should instead be 3.2. Indiana's pilots and civil engineers did not take note, fortunately. Fools with that sort of self assurance are a genuine menace.

Strange bedfellows are these "winners": Danish socialists, Middle Eastern dictators, Hugo Chavez, the American Republican Party, the Russian oil interests, the Nigerians, the Chinese oligarchy. A wonderful bunch, really. Perhaps they should hold their own summit and see if they have other shared interests. I would love to see Sarah Palin "paling around" with the Russians.

As for the losers, that would be everyone else, particularly low lying nations, most of Africa, the Arctic regions. Quite possibly nations will disappear beneath the waves and millions of people might die because of this failed summit. But no one will be called to account.

So let us blame 2009, a rotten year for many people, and hope that 2010 will be a year that does not benefit anyone who "won" in Copenhagen.

Copenhagen Climate Crunch and Danish Democratic Style

After the American Century posting #202

It appears that the Danish attempt to formulate a text for the Climate Conference has been rejected. What is going on?

If you have been trying to follow the Copenhagen Climate talks, the proceedings may seem puzzling. Literally for days the delegates waited for a text to discuss. It was being prepared by the Danish hosts, they were told. Yet, in fact, the delegates had themselves prepared documents for discussion, which the Danish leaders wanted to ignore. Stalemate. Inaction. Secret discussions behind closed doors. Frustration among the delegates, who felt that the Danish leadership was ignoring them, with feelings running especially high among the African and Third World nations.

Unfortunately for the rest of the world, the Danes do not understoand or practice democracy in the same way as most other countries. In the Anglo-Saxon world and its former colonies, for example, the person who chairs a meeting should attempt to remain neutral, give all parties an equal chance to speak, and attempt to steer the meeting toward a vote, where there will be winners and losers, but where there will also be a majority decision.

In contrast, Danish leaders who chair a meeting attempt to impose their will on the group, even if it appears to be an open discussion. They want to steer the meeting not merely toward a vote but to a consensus where the outcome of the vote is obvious to all before it is taken. For those steeped in the English or American parliamentary traditions, or something like them, the Danish way of chairing a meeting seems undemocratic, secretive, irritating, high-handed, and counter-productive. To put this another way, most meetings in the Anglo-Saxon world abide by Roberts Rules of Order. Danish meetings, in my 25 years of experience, absolutely do not abide by any such rules.

In the Danish Parliament (Folketing) the coalition in power seeks to impose its decisions on the nation, often with surprisingly little public discussion. The real discussion goes on in private, in party caucuses and in coalition partner meetings. All members of a party are expected to vote the same way. When they emerge from behind their closed doors, they have all their votes lined up and they proceed to ram through the desired law with what I call "symbolic discussion." The result is already known beforehand.

I am not a delegate at the world climate talks, but from the outside it certainly looks as though the Danish leadership, steeped in its own ways of doing business, is trying to make the rest of the world play by Danish rules. And the rest of the world is not buying it. China in particular made it clear they were not going to dance to a Danish imposed tune.

To put this another way, the Danish leadership arrogated to itself too many roles. It wanted to be the host, the chair of the meeting, and also the chief negotiator. They wanted to wear too many hats, and acted according to a democratic model that others are not accustomed to. One could see this last night. The Danish Prime Minister had invited hundreds of wold leaders to a gala evening, to see the Royal Ballet and take some expensive refreshments. But the Prime Minister could not play his role there as host, because he was at the conference all evening, in his roles as chair and negotiator.

The talks are now in their final two days. One hopes that the very real Danish talent for finding compromises (albeit usually behind closed doors) saves the summit meeting from failure. If China and the United States are willing to act together (a very big If), then a historic compromise may emerge. But one thing seems certain. The Danes cannot expect to impose their text on the rest of the world.

Will we get a binding agreement? Will its standards be at least as high as those agreed upon in Kyoto? In other words, will it really make a difference in slowing down global warming? At this moment, it is hard to tell.

One thing we do know for certain: these world leaders came separately in their private jets.

University IT: Technological Catch 22

After the American Century Posting #201

Once I was in a supermarket checkout line when a particular jar of jam just would not scan and its code was unrecognizable when the clerk put the numbers in by hand. Result? He refused to sell me the jam. He could not sell something that did not exist in the system. The jam was right there, and we all know roughly what such things cost. But I could not buy it, or rather, he could not sell it. These (il)logical impasses have a name: Catch-22, from the novel of the same name. Following the rules, you end up paralyzed, unable to change the situation.

Something similar has happened today, as a result of my university's decision to upgrade (well, change) the email system. The result is that I will no longer be able to get emails at home, unless (and here's the catch) I upgrade my home computer to MS Office 2008+. This will cost me money and time.

Ideally my employer should reimburse such an expense. However, the Danish government has passed a new tax law, to whit: anyone who gets a portable computer, new software or email support from an employer must pay $600 in tax, every year. Besides, even if the law suddenly were overturned, my employer has no money for such things. Indeed, it has never even provided me with a flat screen much less an entirely new computer in the office! My screen was one of the first televisions, and was left behind by retreating Germans after World War II.

So, should I bite the bullet and pay for a home upgrade? Not so fast. If I do that, then my antiquarian office machine will be running 2004 software and my home machine will be five years ahead of it. In my experience, constantly shifting between two systems causes corrupted files, loss of data, and occasional freeze-ups. Besides, that 2008 MS-system for Mac has lousy reviews.

Nevertheless, to minimize problems, should I upgrade both home and office machines, at my own expense? That is actually not allowed. The university may not have any money, but it reserves the right to control what software gets into the campus system. In short, even if I wanted to spend lots of my own money, there apparently is no solution.

So, my emails are paralyzed, never to arrive in my home in-basket, a bit like that jar of jam, which remains forever in the supermarket checkout. I must give up the delights of reading emails from students and administrators in the evenings and weekends, just like I gave up that jam.

I suppose that giving it up helped me to lose just a tiny bit of weight. Come to think of it, getting no campus emails may slim down my working hours. And when I am at conferences and on research trips, no need to look at the frantic last minute requests from anyone on campus, because I just won't be hearing from them. They will be stuck in check-out.

But as for you, loyal friends and readers, I can always be reached at my non-campus email address. And that, actually, is the solution. Forget IT on campus, get yourself a free account with Google or HotMail or Yahoo or wherever. That was also the only solution in Catch-22, Joseph Heller's novel. Get out of the clutches of the system. Make your own jam.

Military Spending and Global Warming

After the American Century Posting # 200

The climate conference has now reached the crucial stage, where money must be pledged by the rich nations to help the poorer nations develop without excessive CO2 emissions. The EU has put $10.6 billion on the table, offering it over a three year period. They have made the most generous pledge so far, which amounts to $3.53 billion per year. The amount needed is far greater and a subject of discussion.

To put these figures into perspective, consider what the world is spending on armaments: $1.4 trillion every year. Without even doing the math in detail, you can see that the nations of this world are spending more than 100 times as much on weapons as they are willing to spend on global warming. Time to get the priorities right.

The two biggest CO2 polluters, the United States and China, also have the world's two largest military budgets. The US is by far the largest, at $602 billion, while China "only" spends $84.9 billion.

Some of the "poor" nations who want to be paid for curbing their CO2 growth are also spending large sums on arms. The United States spends about 4% of its gross national product on its Defense Department, far too much in my view, but a smaller percentage than some others. Angola uses 5.7%, Armenia 6.5%, Macedonia 6%. Saudi Arabia uses 10% of its budget for the military, which is about $38 billion.

In the next week, when the discussion of global warming focuses largely on money, keep these figures in mind. I suggest that no "poor" nation that spends more than 2% of its GNP on the military should be given any funds to help with global warming. And I suggest that no nation spending more than 3% of its GNP on the military should be taken seriously when it says it cannot afford to pay more to solve this problem.

This posting is #200 on After the American Century

Obama's Nobel Prize Address: The Just War & The Four Freedoms

After the American Century Posting # 199

President Obama has given a major speech on the occasion of receiving the Nobel Prize. He began by admitting quite frankly that he was at the beginning of his international labor and rather a surprise winner of the prize. He then confronted what many see as a contradiction: that he is currently the commander in chief of the American armed forces which are engaged in two wars.

To his credit, he did not mention George Bush. It would have been fair enough to blame him for the unnecessary invasion of Iraq, at the least. Rather, Obama made the case for just war, when diplomacy fails, and provided a summary of his foreign policy, linking it to Woodrow Wilson, John F. Kennedy, and Martin Luther King. In doing so, he specifically rejected the "realist" approach to foreign policy, which tends to be embraced by Republicans more than Democrats.

One aspect of this speech will be striking to most Europeans. Obama spoke several times of evil, a word that one might more expect to hear from George Bush. In Oslo, Obama declared: "Evil does exist in the world. A non-violent movement could not have halted Hitler's armies. " and later said: "We make mistakes, and fall victim to the temptations of pride, and power, and sometimes evil. Even those of us with the best of intentions will at times fail to right the wrongs before us." This is not far from the language of the Lord's Prayer. Such language is not unusual from an American politician. But "evil" is seldom heard in mainstream European politics, which are far less religious in tone.

Part of the explanation for this difference is structural. In Denmark, the Queen always ends her yearly speech on New Year's eve with the same words: "God protect Denmark." This is the ordinary language of a European monarch, but it is less common for the European politicians to ask for the Lord's protection. The American president, however, must play both roles.

However, Obama does not merely mention "evil" in passing, in a formulaic way. The core of his argument that war is necessary and unavoidable is rooted in the belief that some men are beyond the reach of reason or diplomacy. While he referred to Ghandi and King and clearly admires their idealism, ultimately Obama presented himself as hard-headed idealist. He is closing down the prisons at Guantanamo Bay. He promises to ophold the Geneve Conventions and to the honor Human Rights. But he also sees a world where wars and conflicts remain unavoidable.

He does not see the same world as George W. Bush, however. Obama sees the greatest hope for peace in international cooperation, in standing together against regimes that oppress their own people, that seek to acquire nuclear weapons, or that threaten other states. His foreign policy is one of enlightened self-interest that echoed President Franklin Roosevelt's Four Freedoms. In his speech, Obama argued that freedom of speech, freedom of religion, freedom from fear, and freedom from want when achieved in any nation ultimately enhance the security of its neighbors and by extension the rest of humanity. He may not have mentioned Roosevelt by name, but by employing his language, Obama aligned himself with core values that guided American foreign policy before the Cold War, and made them appear equally useful today.

Global Warming NOT the Only Problem with Fossil Fuels

After the American Century

During the next three weeks we will hear a great deal about the problem of global warming. I do believe that global warming is taking place, that the actions of human beings contribute to it, and that it lies within our power to do somethning about it. But put aside that entire discussion for a moment, and consider what other reasons there might be to cut back on burning fossil fuels.

Not all countries produce oil, coal, and/or natural gas. Advanced industrial nations that lack supplies are not coincidentally in the forefront of finding alternatives. Germany has virtually no oil or natural gas, and its more accessible coal has already been mined. Therefore Germany finds it highly interesting to develop wind turbines and solar power, and indeed has been one of the leading countries in both sectors for years. France, in much the same energy situation, has more nuclear power than any other nation. More than 80% of its electricity comes from nuclear plants. Sweden has no oil, and it relies on nuclear power and hydroelectric dams.

In contrast, countries like the United States and Britain which have oil fields and coal mines have been far slower to develop alternative energies. One can take this argument further, and say that within the US, places without fossil fuels like New England, New York, Oregon, and Washington are far more supportive of wind and solar energy than are states with coal fields. Montana, Illinois, Wyoming, and West Virginia together supply 55% of US coal production, and they are not supporting the shift to alternatives. One finds the same resistence to change in the biggest oil producting states, Texas, Alaska, and Lousiana.

Without going into arguments about global warming, it seems obvious that the current energy regime favors fossil fuel exporting regions and in effect imposes a tax on those who import oil, gas, and coal. Half a century ago the cost of these energy sources was so low as to be almost a negligable part of the total cost of production. This is no longer so. Fuel prices, over the long term, have risen and can only continue to rise as demand increases. Already in Russia, more than 20% of the gross national product (GNP), comes from oil and gas exports; in Nigeria 35%; in Venezuela 27%; and so on for all the major oil producers.

It is always a good idea to "follow the money." Most of the world's powerful economies - the US, Germany, France, Italy, Spain, South Korea, Japan, Australia, China, and India - are all net importers of oil and gas. The United States imports almost 12 million barrels of oil every day. Japan imports a bit less than half that. China imports "only" 2.9 million barrels a day, but this figure is rocketing higher, as its citizens now buy more cars every month than consumers in the US. The major industrial nations need alternatives, and in the next two decades they will probably develop them.

There is one other argument in favor of a shift to alternative energies. Quite simply, the world's reserves of oil, coal, and gas are not infinite. Why keep paying a premium to use someone else's well, when it is drying up?

Afghanistan

After the American Century

Imagine you are in Obama's inner circle. You have inherited Bush's foreign policy, including the two wars in Iraq and Afghanistan. What do you do? Pulling out immediately would invite the Taliban and Al Qaeda back into the country, and it would also expose the new president to fierce criticism from the Republicans. No president wants to lose a war in the first year of his administation, and no American politician can survive very long if he seems be doing favors for Osama Bin Ladin. But if the Americans are going to continue to lead an army in Afghanistan, what are the realistic possibilities for success? This was such a difficult issue that the Administration took a year to decide.

The answer has now been made public, and in essence it is to escalate the war for almost two years and then begin to pull the troops out. This resembles in some respects the "solution" to the Iraq situation, which conceivably still could work. The idea seems to be that a nation torn apart by centuries of religious, ethnic, and tribal differences can and will pull itself together if given a timetable for withdrawel, support in developing new democratic institutions, and the promise of control of its own destiny. But will the Iraqi or the Afghan people will take responsibility for their own fate if they know that soon all the foreign troops will leave? The answer is still unclear in Iraq. On the positive side it was long a secular state (albeit a dictatorship) and the presence of vast oil reserves gives it an economic foundation and a good reason not to let civil war paralyze exports. On the negative side, the Kurds want indepdence, the religious factions tend to kill each other, and Iran is not a model neighbor.

Unhappily, things are less promising in Afghanistan, which is a far less developed country than Iraq. Under the Taliban it had one of the world's most repressive, fundamentalist regimes. And it does not have oil. Rather, the proverbial undiscussed elephant in the room, and a rather sweaty demanding elephant at that, is the drug traffic that has been a central part of the Afghan economy for a long time. Afghanistan produces about 90% of the world's opium. Worse, the size of the poppy crop has been growing not shrinking. (For more about that click here)

This is not a new or casual illegal business, nor one that be eradicated easily. Profits from opium sales are a central source of funds for the Taliban and also for semi-autonomous local leaders. Farmers can make more money growing poppies than anything else, and if they do so they also gain protection from powerful neighbors.

However, the Obama speech about Afghanistan did not discuss this aspect of the problem very much. In one passage declared, "To advance security, opportunity, and justice - not just in Kabul , but from the bottom up in the provinces - we need agricultural specialists and educators; engineers and lawyers. That is how we can help the Afghan government serve its people, and develop an economy that isn't dominated by illicit drugs."

This is surely correct. At least in theory something like a special Peace Corps for Afghanistan ought to have been part of the Afghan strategy from the beginning. George Bush failed at the arts of peace in both Iraq and Afghanistan, however, leaving Obama with two very large problems to solve without much capital to do it after saving a collapsing banking system.

But where are these agricultural specialists and educators and engineers going to come from? How can they work effectively in an environment permeated by the opium trade? Who will protect them day to day? Who is going to pay their salaries and guarantee them medical treatment for the rest of their lives if they are maimed or wounded? Unemployment may be high, but it will be hard to recruit people for such dangerous work. Yet it is essential work. If Afghanistan remains focused on producing opium, it will have a large renegade economy that pays no taxes, works against the state, and funds war lords and insurgents.

Iran Dishonors Itself, Again

After the American Century

No other nation has ever sunk so low since the Nobel Peace Prize was first given a century ago. In 2003 the recipient was Shirin Ebadi, an Iranian lawyer who has championed democracy and freedom of speech. She put the prize itself in a safe deposit box for safekeeping. Now the prize has been taken, not by bank robbers, but by the Iranian government itself. The government has also stopped paying her pension and blocked access to her own bank accounts. Last year it forcibly closed her law offices. The rule of law is not the strong point of this regime.

The world already knew that they lied about their capacity to produce plutonium. The world already knew that its June elections were irregular, to say the least. The world already knew that the Iranian government brutally suppressed the demonstrations against the flawed election. And it already knew that many of these same peaceful demonstrators have now been condemned to death or life imprisonment. And the world also knows that Iran's falsely elected president, whom I refuse to name here, has repeatedly said that the Holocaust never happened, while denouncing Israel's right to exist.

Now the regime in Iran has signaled its contempt for the Nobel Peace Prize, by stealing it from Shirin Ebadi. No government has ever done such a thing. This is not really a government, however, but a fundamentalist dictatorship that will stop at nothing to suppress its people.

This outrage apparently is connected - in the minds of the Iranian regime - with its current defiance of the UN on the production of plutonium. It seems signal that they do not care what anyone else thinks about them, that indeed they are spoiling for a fight and would like to drag the Peace Prize into it. Perhaps they imagine that they have dishonored the Prize. All they have done, again and again, is to dishonor themselves.

It appears that the Iranian regime is trying to provoke someone to take action against them.

My sympathies go out to Shirin Ebadi and to the Iranian people.

The Weakening Dollar

After the American Century

For much of the twentieth century the American dollar was the benchmark currency. Whenever a crisis arose, world investors moved money into the dollar. For decades, the dollar was a good investment for anyone living in an inflation-prone economy, like those in Latin America or Africa. Likewise, because the dollar was stable, it was the preferred currency in the oil market.

The apparent rock-like stability of the dollar began to weaken already in the 1970s, when President Richard Nixon took the dollar off the gold standard. Until then, at least for very large investors, one could redeem dollars in gold. After then, the dollar was a little less rock-like, but on the whole was the preferred currency in any crisis. One could see this again in the wake of the financial collapse during the fall of 2008. Even though American banks were largely responsible for the sudden downturn, many people around the world instinctively moved money into the dollar.

Those days are over, and probably over forever. Rationally speaking, the dollar is not a smart investment at the moment. It has been declining in value for months, and has reached its lowest point in 14 years against the Japanese yen. The current interest rate on dollar savings accounts is also very low, so that even assuming the dollar's decline ends soon, nevertheless, the rate of return is better in the Euro zone.

The Chinese, meanwhile, are keeping their currency artificially weak, as a way to stimulate exports and continue building up already massive foreign reserves. In effect, the United States is letting its currency fall in value for the same reason, to stimulate exports and dampen the desire for imports. But China is way ahead in this race to the bottom, while Japan and Europe are both being hurt. Because China and to a lesser extent the United States have weak currencies, both Japanese and European goods cost more - forcing some factories to close or to move overseas where labor costs are lower. Japan and Europe have higher unemployment and fewer exports because their currency is too strong.

This is a dangerous game for all concerned. As President Obama pointedly told the Chinese leadership on his state visit, Asian economies need to play by the same rules as the rest of the world. Asian consumers, particularly in China, need to buy more, and their currencies should be worth more, to bring the world's economic system into balance.

For the United States, the danger is that it will soon be forced to increase interest rates in order to fund its growing national debt. This will increase the dollar's value, but it will also slow or halt economic recovery. This in turn will reduce American demand for foreign goods, as the economy stagnates.

Unfortunately, precisely this scenario (in which the US weakens) might be what China wants. For if it comes to pass, then China's massive holdings in American dollars will increase in value, while the US itself will grow slowly or not at all. The Chinese economy might then outpace US growth by 5% or more per year, until, in perhaps a decade, perhaps less, the US currency would enter a more definitive decline.

I hope this scenario is wrong. Should it prove at all accurate, then the dollar's reign as the world's reserve currency might not last longer than about 2020. Clearly this is not a happy thought for anyone with a pension or investments in the United States. Just as importantly, the relative decline of the US economy vis-a-vis the rest of the world will soon necessitate a major realignment that takes account of new players: Brazil, India, Indonesia, and most of all, China.