From Democracy Now A pair of climate scientists are calling for what some may view as a shocking solution to the global warming crisis: a rethinking of the economic order
S&P 1800 — sure seems a little bizarre considering we were trading below 700 five years ago, but you have to trade the market you are in, not the market
By Larry Swedroe at Seekingalpha When Professors Eugene Fama and Robert Shiller were each awarded this year’s Nobel Prize in Economics (along with Lars Hansen) for their work on asset
From Democracy Now
A pair of climate scientists are calling for what some may view as a shocking solution to the global warming crisis: a rethinking of the economic order in the United States and other industrialized nations. Kevin Anderson and Alice Bows-Larkin of the influential Tyndall Centre for Climate Change Research in England say many of the solutions proposed by world leaders to prevent “runaway global warming” will not be enough to address the scale of the crisis. They have called for “radical and immediate de-growth strategies in the United States, EU and other wealthy nations.” Anderson says that to avoid an increase in temperature of two degrees Celsius (3.6 degrees Fahrenheit), the world would require a “revolutionary change to the political and economic hegemony.”
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: Frédéric Chopin, here on Democracy Now!, democracynow.org, The War and Peace Report. When we flew into Warsaw, we flew into Frédéric Chopin Airport. Yes, we’re broadcasting from the U.N. climate change summit here in Warsaw, Poland, the country of Copernicus and Marie Curie—the first metal she named, polonium, for Poland, and then, of course, radium.
We turn now to a pair of climate scientists who are calling for what some may view as a shocking solution to the climate crisis: a rethinking of the economic order in the United States and other industrialized nations. Their names are Kevin Anderson and Alice Bows-Larkin. They work at the influential Tyndall Centre for Climate Change Research in England, as well as the University of Manchester.
They were featured in a recent widely read article by Naomi Klein headlined “How Science Is Telling Us All to Revolt.” According to Anderson and Bows-Larkin, many of the solutions proposed by world leaders to prevent “runaway global warming” will not be enough to address the scale of the crisis. They have called for, quote, “radical and immediate de-growth strategies in the U.S., EU and other wealthy nations.” Anderson has said that to avoid an increase in temperature of two degrees Celsius—that’s 3.6 degrees Fahrenheit—the world would require a, quote, “revolutionary change to the political and economic hegemony.”
Kevin Anderson and Alice Bows-Larkin are here in Warsaw at the U.N. climate summit. We welcome you both to Democracy Now! It was rare to be able to actually sit across the table from you, because I know you don’t fly. You came here by train, Dr. Anderson.
KEVIN ANDERSON: Yes, that’s the case. We haven’t flown for—I haven’t flown for eight years. And Alice is something similar, I think.
ALICE BOWS-LARKIN: Yeah.
AMY GOODMAN: Because?
KEVIN ANDERSON: Because the carbon dioxide emissions from flying, I mean, it’s sort of emblematic of modern life, for the wealthy few of us, that it symbolizes what we do, day in, day out. We don’t think twice about burning more and more carbon. So it’s important for us to make—it’s a symbolic gesture. But then, hopefully, that catalyzes action with other people to also say, “We, too, can make those sorts of changes.”
AMY GOODMAN: And so, how long did it take you to go from England to Poland by train?
KEVIN ANDERSON: It’s 23 hours from Manchester to arrive in Warsaw. But during that, we got a night’s sleep, and we managed to work the rest of the time on the train and have a meal. So, you know, it’s civilized, comfortable form of travel.
AMY GOODMAN: So, talk about the dire situation we’re in and whether you feel that is expressed here at the U.N. climate summit.
KEVIN ANDERSON: Well, we’ve been in a dire situation now. It’s, I really think, since the late 19—well, the early 1990s, when we started to recognize this is a very severe situation. We’re now 20 years on from the Earth Summit in Rio in 1992. Emissions are 60 to 70 percent higher than they were then. And the situation just gets worse every single year. We’re now at the point where this magical number of two degrees C, or 3.6 degrees Fahrenheit, temperature rise, which really is the threshold between acceptable and dangerous climate change, so going above that temperature we start to see many, many really very, very dire impacts. We’re at the cusp of being able to make those changes. If we don’t do it in the next few years, we’ve literally left it too late. We will have gone beyond that sort of temperature threshold. We’ll have locked the future, our own children’s future, and for the rest of the planet, into high temperature changes, changes in precipitation, changes in weather, that we will not—well, most of us will simply not be able to deal with.
AMY GOODMAN: Dr. Bows-Larkin, tell us what two [degrees] Celsius, or 3.6 degrees Fahrenheit, and four degrees Celsius looks like.
ALICE BOWS-LARKIN: Well, at two degrees, you’re facing the widespread mortality of corals, many more extreme weather events, you know, more flooding, droughts and so on. But the problem is that we’re not on track for two degrees. You’d be forgiven for thinking, listening to the negotiations, that we are on track for two degrees and that’s something that’s reasonably straightforward to attain. The emissions profile, the emissions levels at the moment are more on track with a four degree of warming than a two degree of warming. So that means that much greater impacts is the kind of level or the—that’s where we’re heading for at the moment.
At four degrees, you’re going to be seeing much more devastating consequences, up to things like 30 percent reduction in the wheat yields and rice yields in low latitudes; 80 centimeters of sea-level rise, which will be absolutely devastating for people in coastal, low-lying communities—so much greater impacts at four degrees than two degrees.
And remember, these are global average temperatures, that the sea—the Earth is made up much more of sea than land. Temperatures rise more slowly over the sea. So, on land, those temperatures are higher. So, two degrees, on average, might be three or four degrees when you’re on land. And then, four degrees average temperature—you know, the thing that we really experience are things like heat waves and so on. We experience weather. And so, if you’re in a city and you experience a heat wave, maybe you’re going to be looking at more like eight to 10 degrees warmer in a heat wave on that hottest day of the year than we experience at the moment. So if you’re in New York or Chicago, for example, imagine 10 to 12 degrees or eight to 10 degrees warmer than the hottest days. Very extreme temperatures. And we just can’t—we don’t know we can adapt to that sort of level. And it will be devastating to ecosystems.
AMY GOODMAN: Dr. Anderson, you say we need “radical and immediate de-growth strategies.” What exactly does that mean?
KEVIN ANDERSON: In the short term, the only way we can get our emissions down is to actually reduce the level of energy we consume. Now, we can also put low-carbon energy supply in place, you know, power stations that are renewable—wind, even nuclear, as well. These are all very low-carbon power stations and other energy sources. But they take a long time to put in place. And we now—we’ve squandered the opportunity we had to make those changes. So, we still need to do that, but it’s going to take us 20, 30 years to do that. So what we need to do in the interim is to reduce the amount of energy we consume, and therefore reduce the amount of carbon dioxide that we emit.
S&P 1800 — sure seems a little bizarre considering we were trading below 700 five years ago, but you have to trade the market you are in, not the market you want. Right now, that means long equity positions have paid in spades. That said, at some point a return to sanity would seem likely. When the trend reverses itself, those who will be rewarded could actually include the patient, long term investor (a group of people likely out of the market at present.)
Lumber (our favorite long for the past two years) still looks bid. Gold and silver bottomed? Maybe, but grains and softs seem like better ideas to me. More to come…
By Larry Swedroe at Seekingalpha
When Professors Eugene Fama and Robert Shiller were each awarded this year’s Nobel Prize in Economics (along with Lars Hansen) for their work on asset pricing models, the financial media immediately began to focus on the different views the two have about bubbles.
What’s a bubble? Can we define it? Do we know one when we see one? When asked these type questions Fama’s response is that the term drives him nuts. On the other hand, Shiller provides a very long definition with a checklist which includes rapidly rising prices, mass media coverage, and investors showing emotions, like envy and regret, for failing to have participated. Why’s there such a difference in views? Hopefully the following will help you think about the issue.
I think a good place to start is with the term “irrational exuberance,” which we might define as unsustainable investor enthusiasm that drives asset prices up to levels that aren’t supported by fundamentals. The first reference to the term is believed to have been by Alan Greenspan, former chairman of the Federal Reserve, in a December 1996 speech, “The Challenge of Central Banking in a Democratic Society.” In that talk, Greenspan stated that low inflation reduces investor uncertainty, lowers risk premiums, and implies higher stock market returns. At the time the S&P 500 was at 744 (SPY). It closed 1996 at 741. With earnings of $40.63, the price-to-earnings (P/E) multiple was 18.2. Were we in a bubble? Remember, if you state something is a bubble that implies that you expect stock prices to come crashing down as the bubble bursts.
From David Einhorn of Greenlight
The amount of media and market attention focused on whether the Federal Reserve will taper its quantitative easing (QE) would border on comical if it weren’t so serious. In August, the San Francisco Fed published an economic research paper that estimated that the $600 billion spent on QE2 added a meager 0.13% to real GDP growth in late 2010 (about $20 billion) and that the benefit fades after two years. Given that, what practical difference does it make whether the Fed buys a monthly $85 billion or $75 billion or no additional securities at all for that matter?
We maintain that excessively easy monetary policy is actually thwarting the recovery. But even if there is some trivial short-term benefit to QE, policy makers should be focusing on the longerterm perils of QE that are likely far more important. Here are some questions that come to mind:
How much does QE contribute to the growing inequality of wealth in this country and what are the risks this creates?
How much systemic risk does the Fed create by becoming what Warren Buffett termed “the greatest hedge fund in history”?
How might the Fed’s expanded balance sheet and its failure to even begin to “normalize” monetary policy four years into the recovery limit its flexibility to deal with the next recession or crisis?
No one is sure what the Fed is focused on. After spending several months bracing the market for fewer QE donuts, the Fed decided that it was premature to taper. Even a token reduction (from a baker’s dozen to a dozen?) was ruled out despite the fact that the economic trajectory has not materially changed. We responded the next morning with our own stimulus by ordering jelly donuts for the entire office.
Call me chicken little, but I think the top is in… happy halloween!