Monday, August 30, 2010

India's infrastructure challenges

A recent article from the NY Times titled "A High-tech Titan Plagued by Potholes" discusses India's dire need of civil engineers to fulfill its long-term infrastructure goals. Software engineering and IT have taken off in India - they are far more profitable industries (better salaries) than civil or structural engineering.

"Young Indians’ preference for software over steel and concrete poses an economic conundrum for India. Its much-envied information technology industry generates tens of thousands of relatively well-paying jobs every year. But that lure also continues the exodus of people qualified to build the infrastructure it desperately needs to improve living conditions for the rest of its one billion people — and to bolster the sort of industries that require good highways and railroads more than high-speed Internet links to the West."

Both China and India are world's fastest growing economies. China however, unlike India, is rapidly advancing its infrastructure projects; high speed rail, hydro-electric dams, wastewater treatment plants etc. India has a long way to go especially in terms of bringing about infrastructure (like public transportation) that could boost its tourism industry and help improve living conditions for the country's poorest.

Along with the desire for civil engineering, urban planning will also be critical for India in the coming decades. From an environmental perspective, infrastructure improvements -- like those being done in China -- will bring about numerous environmental benefits including improved health and sanitation, a reduction in national carbon emissions and an improvement in air pollution in the urban areas.

What should India do? Any thoughts?

Friday, August 27, 2010

Would you support a driveway tax?

News from the Kansas City Star reports that the City Council of Mission, Kansas, has approved a driveway tax.

A driveway tax is simply a fee that charges you based on how much traffic your property produces. Currently in Mission, Kansas, sales and property taxes raise revenue to finance roads. Alas, such revenue has not been sufficient enough to maintain the roads. With the tax, households and businesses are going to share a larger financial burden - the fee is expected to raise $1.2 million a year to help finance $38 million in road improvements during the next 10 years.

"The City Council on Wednesday night approved a new fee charging every homeowner $72 a year and small businesses $3,558 a year beginning in December".

Engineers have calculated that a single-family home generates about 9 1/2 vehicle trips a day. Target Store (virtually ubiquitous across America) generates about 8,500 trips a day. McDonald’s is predicted to produce 2,700 trips.

A driveway tax is not common in the U.S. In fact, the only state that has been progressive with such a tax is Oregon. 18 cities in Oregon have adopted it. This comes at no surprise considering Oregon is more green and progressive in its thinking.

As you could imagine, the newly passed tax has witnessed negative reactions from the business community. Unsurprisingly, they are concerned that in a time when the economy is recovering, the tax would simply hurt small businesses.

Like London's Congestion Charge Zone, these sort of eco-taxes are always jurisdiction dependent; what works in one city might not work in another. A driveway tax may be appropriate for Mission considering that roads there are deteriorating and someone has to pay for them. I agree with Felix Salmon's assessment of this, it is similar to my argument of the BC carbon tax being too low. In short, if a driveway tax is introduced in your city, it should be set at a rate that can actually change behaviour. The formulas predict that the tax will cost 2 cents per trip; that is way too low to bring about any meaningful reduction in driving.

The driveway tax for homeowners in Mission will be $72. This is irrespective of how many trips you do in a day. Thus it is a uniform rate which is problematic because it discriminates against those who drive less, those who bike, take public transit or walk to their final destination. It is understood that the city needs revenue to ameliorate their streets, but those who drive more (produce more traffic from their property) should pay more. It is unfair to discriminate against those who take greener methods of transport.

Those who do take greener methods should be guaranteed some sort of incentive to encourage the continuation of sustainable transport and change behaviour of current motorists. This way, revenue is still being collected while simultaneously changing behaviour and getting people to think about the environment.

Key message
: The next decade will see even more green taxes. It's 2010, times are changing and we are going to have to adapt. Creating a win-win for the environment and the economy will require full participation of citizens; this can eventually lead to sustainable urban solutions.

Wednesday, August 25, 2010

China's nine day traffic jam...

And you think your daily commute on the 401 is bad. Imagine being stuck on that road for over a week. That, sadly, is what is has come to on one of China's major expressways.

Two days ago, the CBC reported that a traffic jam had entered its ninth day of existence and is well over 100 km long. It could very well still be jammed up. According to the Chinese government, the jam occurred due to insufficient traffic capacity and maintenance issues. So basically, there are too many cars and too few roads.

One might think you could simply jump off the expressway and take another route home, but the jam is so solidly backed up that even that won't work. And really, you can't do much else except wait it out. So what exactly might you do for several days on the road?

Food and drink is very much available as vendors have set up shop to appease the stuck drivers. But a quick review of supply & demand theories will lead you to understand why the food is far from affordable. I'm sure gas is being sold to the poor souls who run out, but again, probably far from the normal price. And we can only hope that most cars aren't idling the whole time.

Emergency vehicles must be screwed, too.

Urban planning institutes and consultants frequently release reports citing the added costs of traffic congestion to the economy, usually in the billions. But North American traffic congestion is nothing compared to what China is experiencing. And apparently, this isn't the first time it has happened.

It won't be the last, either. China is growing outrageously fast in almost every dimension of its existence. People there are getting richer and wanting more cars. Building the infrastructure to house the cars doesn't happen quite as quickly.

So, here are the typical solutions: more public transit, congestion zone charges, toll highways, carbon taxes and voluntary drops in vehicle usage. Forgive me for being so blunt, but I don't think China really cares that much. Of course, they are implementing all sorts of programs like this. But will they trump the sheer desire to own and drive a car, especially as the economy grows at 9% per year? Doubtful. One can only hope that some lessons are learned from this jam and the future ones that take place.

Tuesday, August 24, 2010

Water in China Part III

Image above: The Yangtze River. China's longest river, 6,397 km in length. The Yangtze River flows across 13 provinces, with many branches, such as Min River, Wu River, Xiang River, Han River, Huangpu River and more.

Image credit: Odd and Funny Blogspot.

**Lcd: litres per capita per day**

This post will conclude the three part series of water in china. You can read part one here, and part two here. Most of this information is derived from Peter Gleick's publication titled "China and Water".

China is slowly starting to introduce water pricing to induce conservation. Such measures in water management have already been brought about in places like Guelph, Ontario. For a long time, water utilities have been subsidized by the Central government which has reduced the need to encourage water conservation. But now, with sustainable water management as a long-term national goal, Chinese cities are slowly implementing water pricing. In Beijing, price for domestic water use have more than doubled 4 yuan per cubic meter. For water intensive activities such as commercial car washing, it cost 45 yuan per cubic meter.

In Shenzhen (Southern China) local government officials have called for initiatives to recycle water, introduce rainwater harvesting and cut back on overall water use. Price-driven quotas are being introduced in Southern China, which means that urban homes that use more than 210 lcd (Canadians use about 343 lcd) will have to pay a surcharge on additional use. The more you consume past the 210 maximum, the more you pay for.

Separate quotas are being imposed on the various water users which includes industrial, agriculture, residential and commercial. The key point is that local governments in Southern China (where water is more abundant) are adopting flexible pricing systems based on different water users; this is an important step because the industrial and agriculture sectors use lots of water and constitute a greater share of GDP output. The greatest cuts need to happen in the residential sector; but this can only happen with education and good incentives to use less. Moreover, Northern cities should follow Beijing's initiatives and adopt smarter pricing systems. Northern cities have less water than southern ones yet they are slower to bring about water management initiatives. Reducing national water use requires participation from each city.

According to Peter Gleick, China has invariably experienced poor public participation grades for water projects and water policy. The Three Gorges Dam is notorious for its non-existent public consultation process which led to the displacement of 1.3 million people. Gleick writes:

“A major environmental law passed in China in 2003 for the first time ostensibly encouraged public participation in environmental decision making. This law, the Environmental Impact Assessment (EIA) Law requires all major construction projects to undertake an impact assessment". Further, it states “The nation encourages relevant units, experts and the public to participate in the EIA process in appropriate ways”. In addition, the law states that “the institutions should seriously consider the opinions of the relevant units, experts and the public” and “should attach explanations for adopting or not adopting the opinions".

Sounds like a well thought out law; however, its effectiveness is questionable. Some citizens have taken many matters into their own hands; some have sued chemical plants to force compensation for health and environmental damages (due to polluted water supply) or to make more environmental information accessible to the public. With China's explosive growth -- in economy and population -- and with the indispensable role water plays for economic growth –through dams, wastewater, agriculture, irrigation and forthcoming desalination—it is clear that it is a extremely valuable resource that will shape China’s future.

With sensible pricing structures being introduced, and with wastewater treatment plants helping provide cleaner water, the test for China will be whether it can engage more of its citizens in an equitable and efficient manner. Public participation should not be viewed as a hindrance to dam construction; citizens are demanding that such construction be built in a way that minimizes harm to their livelihoods and that effective compensation measures are in place for those affected by it.

As Gleick says “Sustainable water management has long taken a backseat to the Chinese for economic growth. With supplies dwindling, the Chinese will start conserving it through pricing and through desalination construction" (which is problematic but necessary considering China’s population).

Patricia Adams, an executive director of Probe International says that cities like Beijing can't keep going further with larger engineering projects to take water from other peoples' watersheds. "Beijing needs to implement regulatory and pricing regimes that reflect the scarcity of water in their own watershed and induce conservation and watershed rehabilitation". Clearly, the country needs some sort of water education program to inform people not only about conservation but about the impact of certain chemicals and contaminants to reduce health impacts from exposure.

Key message: If China truly wants to achieve sustainable water management, it will need to ensure that its central governments puts pressure on local governments to develop the legal, technological, and institutional tools to clean up water pollution, reduce wasteful and inefficient uses of water, restore natural ecosystems, and develop sustainable sources of supply.

** China is spending 500 billion yuan (77 billion Canadian) on the South-North Water Diversion Project. It will be completed by 2050 and is the largest scheme of its type in the world. It will divert about 44.8 billion cubic meters of water per year from various rivers. Hopefully, this project is accompanied with extensive water conservation education and with water pricing systems. You can read about this project here.

Thursday, August 19, 2010

Want cheap energy? Get prisoners to generate it...

The new coalition British government is in trouble. They have inherited a massive deficit and are looking to cut as many costs as possible.

The Globe & Mail reports that instead of figuring it out themselves, they have opened the floor to suggestions from members of the public. Among the thousands of options thrown out there are ditching the monarchy, selling off the Queen's swans for meat -- she owns most of the swans in the U.K. -- and even significantly cutting foreign aid. But quite a few suggestions involve using Britain's 100,000 prisoners, specifically getting them to generate electricity on treadmills and rowing machines.

A crazy idea? The Globe thinks so, but I disagree. Using fitness equipment to generate electricity is not a brand new idea. Some gyms throughout Europe and North America have already adapted their cardio machines to generate electricity for the building. After all, there is a lot of energy being used that could be captured as electricity. A hotel in Denmark even offers its guests a $36 food voucher to ride a stationary bicycle for 15 minutes and produce 10 watts of electricity. Sign me up. In comparison, Ontario's feed-in tariff offers less than a dollar for 100 times as much electricity from renewable energy projects. I think I know where the better deal is...

And prisoners typically work out a lot more than most other members of societies, so the potential is there. Whether or not it would produce enough electricity is another issue altogether. And how much would it cost to set up the necessary infrastructure to run a system like this? Another question one might raise is if prisoners are forced and scheduled to work out under this system, or whether working out will remain voluntary?

It is doubtful to get far off the ground, but it's nice to hear that when pursestrings get tight, clean energy get a little cooler.

Wednesday, August 18, 2010

Matt Kahn's new book: Climatopolis

Matt Kahn, who blogs at Environmental and Urban Economics, has written a new book called Climatopolis. The book is going to be released in September 2010. Based on some reviews that I have read, and a presentation that Kahn delivered at a February 2010 USC Conference on Cities and Urban Growth, the book seems to be quite informative and highlights the significance of human adaptation to climate change in urban environments.

Many professionals studying climate change (scientists, geographers, economists) have discussed climate change mitigation i.e. driving less, carbon pricing to reduce our emissions, decreasing electricity consumption etc. We don't hear as much about adaptation which is a more risky subject because of the uncertainty surrounding climate change. But emissions are likely going to continue to rise so adapting to the consequences and/or preparing for them will be of utmost importance.

Kahn says "Many people are fixated on how we can reduce greenhouse gases, and acting like adapting to a warmer climate is still in the sci-fi future. But we've passed the point of no return. Certain urban places — like Los Angeles — will suffer. But I'm optimistic that Los Angeles will also adapt."

On water: "Climate change is going to make water both scarcer and more in demand, but charging so little for water is actually exacerbating the water shortage problems. "People need pricing signals or they won't respond to shortages."

I couldn't agree more.

I'll provide a review when I read the book. With 60 percent of the world's population living in cities by 2030, it is fair to say that cities will have to make the critical adaptations to avoid catastrophe and to plan for posterity.

Check out the following links for more information about his book:

Climatopolis Webpage

Kahn's preview of his book

Kahn's presentation at the USC conference where he introduces themes from the book. It's 35 minutes long but really funny.

A review from Publishers Weekly on Climatopolis

Capitalism is our best defense against climate change

Energy Intensity in China

Image Credit: South China Morning Post

Energy intensity is a macroeconomic measure of the energy required per unit of economic output. It is commonly expressed as units of energy per unit of Gross Domestic Product (GDP). For China, it is the amount of energy needed to produce each yuan of economic output.

According to official figures from Beijing, last year China burnt the equivalent of almost 108 tonnes of coal to produce each million yuan of economic output.

From 2005 to 2009, energy intensity fell by 16 percent in China. Do not be totally deceived though. The output of the service industries - retail businesses, media, financial services and banking all use much less energy than manufacturing and industrial businesses. The service industries have started to rise of late and have formed a greater share of overall economic output. As a result, energy intensity tends to decrease as a natural consequence of economic growth.

Energy intensity remains relatively high because of China's large-scale infrastructure projects such as high speed rail construction and hydro-electric dams. When energy is priced at a lower amount, there is less of a need to conserve and use it more efficiently. The Germans have been efficient in almost every aspect of their economy.

In Germany, conservation of energy has not necessarily slowed down economic growth. Using energy efficiently has led to better allocation of it, which leads to better transmission and distribution of electricity across the nation. This keeps the economy going (it's amazing how much you can save with smart energy allocation) and does little harm to the environment.

Another example: Italy 's annual energy intensity of 122.8 tons of oil equivalent makes it the most energy efficient country in the G8 and one of the most energy efficient in the industrial world. This is mainly due to the traditionally high energy prices which have resulted in more efficient company and consumer behaviours. No one likes higher energy prices (whether you're an industry or household resident). But higher prices force you to innovate (and conserve) and design products that are less energy intensive. This drives competition and overtime, the entire economy benefits and people adjust accordingly.

China’s wasteful industrial and chemical plants are what keep energy intensity high. They help keep economic growth in check but have negative ramifications on the environment. Adopting environmental regulations would risk slowing down such growth. It seems that the Chinese Communist Party is content with how the economy is growing (now the world's second largest) but be critical and ask yourself if such growth is truly sustainable given the population size, political system, increasing numbers of university graduates and outstanding human rights cases.

Key message: Through innovation and smarter design, energy efficiency will get better in China, but it is going to be an extremely difficult task given the current economic growth.

Tuesday, August 17, 2010

Tolling Cross-Harbour Tunnels in Hong Kong

has become a hot issue lately. Specifically, the Western Harbour Crossing –one of Hong Kong’s three Victoria Harbour crossing tunnels-- is increasing its toll rate.

“Fees for private cars, taxis, and light buses using the Western Harbor Tunnel (WHT) will increase HK$5 to HK$50, HK$45, and HK$60 respectively, and single-decked buses and double-decked buses will each see HK$10 and HK$13 toll rises”

“The company faces increasing operating costs and need to raise sufficient cash flow to repay debts and earn a reasonable return. To ensure continuous viability, the company needs to adjust the level of its tolls”.

The Western Harbour Crossing is private, unlike the Cross Habour Tunnel which has been operated by the government since it was built in 1972. What’s the issue? The issue is that all three cross habour tunnels have different toll rates. Instead of discussing the price differences between types of transport modes, I will use “private cars” to illustrate the rate difference:

Eastern Harbour Crossing (private): $25 per car
Cross Harbour Tunnel (CHT): $20 per car
Western Harbour Crossing (private): $50 per car

For more info see here.

Which one do you think has the highest usage? You probably guessed correctly, the CHT. I live fairly close to the tunnel and have witnessed the egregious traffic congestion. Indeed, its capacity is 78,500 and it has over 120,000 cars passing through it everyday. The Western Harbour Crossing has about 50,000 cars go through it everyday and a capacity of 118, 000.

From reading the newspaper it is quite evident that the public is not content with the toll increase. They argue that it is already too high and hence why the western tunnel is severely underused. Given that the CHT is used the most –because it is the most central, convenient and cheapest—the City needs to figure out a way to redistribute traffic to increase efficiency and alleviate the pollution problem associated with idling cars around the CHT. The government could also choose not to intervene and let the market take care of itself. Overtime, it’s possible that people will adjust and start using the western tunnel because of their frustration with congestion and long-waiting times at the CHT.

But, a toll increase could risk even fewer cars using the tunnel. Usually, if you want to increase demand and usage of a road/tunnel, you lower the price, not increase it. There have been many solutions put forward by HK citizens. The one that makes the most sense is a peak hour tolling system for the CHT. In short, the busiest hours in the morning and evening would have a higher toll rate simply for the purpose of decreasing traffic congestion. Despite Hong Kong's impressive public transit system, there are still a lot of cars on the road. While peak hour pricing may seem like a progressive idea, it certainly has merit and could complement Hong Kong’s sustainable development goals.

We need to keep three things in mind (or more) when we talk about tolls. 1) Prices must be adjusted to maintain an optimum speed for reducing pollution. Intense traffic congestion at the CHT means long line-ups of cars and a greater concentration of pollution. 2) Drivers using the shortest and most convenient route should pay for the privilege. As mentioned, the CHT is the most convenient because it is centralized; thus it should definitely be priced accordingly. 3) Extra revenue from the increased tolls could be used for the replacement of new buses with cleaner fuel or to subsidize private tunnels like the western tunnel to help with traffic redistribution.

Last, toll increases also risk fare increases for taxis and mini-buses. These methods of public transport also use the cross harbour tunnels. Thus, toll increases produce ripple effects that could be mitigated with some sense of progressive imagination.

Key message: Hong Kong has three cross harbour tunnels that have different toll rates. They also have drastically different rates of usage. Introduce peak hour pricing for the most congested cross harbour tunnel as an experiment to see what happens.

Sunday, August 15, 2010

A concerning glimpse into the future of Canada's hydroelectric sector

While clean energy companies throughout Ontario are jumping for joy in response to the province's renewable energy policy, one of Canada's largest private hydroelectric firms is feeling a pinch. Brookfield Power owns and operates more than 850 MW of hydroelectric energy projects throughout northern Ontario and plenty more in other parts of Canada and the United States. Despite the dependability of hydro compared to other 'green' technologies -- it has a typical capacity factor between 50% and 80%, meaning most hydro projects will be running at full capacity 50%-80% of the time, compared with wind and solar that are around 35% and 13%, respectively -- Brookfield Power's production has fallen 40%-50%. Yikes.

The drop has been blamed primarily on an unordinarily dry year leading to very low water levels in northern Ontario. Annual variations in water levels are not uncommon, but as Brookfield's situation indicates, it can be pretty damaging economically: profits have fallen almost 50%. In stark contrast, the prairies have seen much higher precipitation levels than normal this year.

Some might be able to shake off one bad year, but as climate change threatens the historical predictability of Canadian weather, the Canadian hydroelectric industry could be in trouble. And as provinces like BC, Ontario, Quebec and Manitoba continue to expand their hydro generating capacity, you might wonder whether they're getting a bit nervous.

Rapid Conflict Prevention Support

Earlier this summer, I read a book called Economic Gangsters: Corruption, Violence, and the Poverty of Nations by Raymond Fisman and Edward Miguel. The book draws on number of correlations between seemingly random things that have important policy implications in economic development.

While Enviro Boys does not directly write about international/economic development, the book reveals important ideas that pertain to climate change which we know is a global issue that requires expertise from several disciplines. I wanted to share one concept from the book that has the highest degree of relevance to this blog. The concept is called Rapid Conflict Prevention Support (RCPS) which is a form of aid that targets countries suffering temporary income drops due to poor weather or commodity price declines. It would provide immediate financial aid to such countries to help stabilize sectors of the economy before conflict erupts.

One of the rationales of this idea stems from Chapter Five titled “No Water, No Peace” where the authors discuss the country of Chad and its complete dependence on rain-fed subsistence agriculture. When the country goes through intense droughts, farmers suffer as their crops die and this affects the entire country's economy. Research from Miguel and his NYU colleagues found that a 5% drop in per capita income due to drought, increases the likelihood of a civil conflict in the following year by nearly one half. Thus when water does not fall from the sky, not only does the economy suffer but there is a risk of greater instability.

To partially remedy this problem, the authors discuss the merits of RCPS as it could provide temporary public work jobs for unemployed young men; the group most likely to participate in armed violence. The authors suggest how donors of RCPS would be able to track rainfall and famine conditions through publicly available websites. As the authors write "Rwanda relies heavily on coffee export earnings to provide for its people, so when the world price of coffee plummets, so do most Rwandans' income. In this way, a sudden drop in key commodity prices acts a lot like a drought, leading to an unexpected decline in income that leaves the population desperate and violence-prone". Miguel explains how potential donors of an RCPS program could track coffee prices on the Chicago Board of Trade and respond to falling prices accordingly.

Similar to large scale environmental issues, the need for prevention is far more critical and cheaper than dealing with the aftermath – floods, droughts, earthquakes or whatever else it may be. Forecasting precipitation, monitoring commodity prices or even an imminent earthquake are not always easy to predict. As such, there is a need for some precautionary mechanism to ensure that matters are not worsened when the event actually happens. Miguel’s RCPS idea would use economic indicators to identify nations most likely to suffer future strife, increasing aid before violence erupts. Such prevention is better than a more costly cure.

Sure, there might be some corruption that takes place through a program such as RCPS, but in a time when droughts are bound to get worse, RCPS can provide immediate funds to help prevent and or alleviate the economic hardship. It could supplement investments in education and infrastructure for long-term sustainability.

If you want to learn more about this topic (and other topics in violence, corruption and poverty) read their book; it's very insightful and a fun read in general. They identify a number of remarkable correlations and provide policy solutions such as RCPS.

Check out Edward Miguel's Bloomberg article here.

Wednesday, August 11, 2010

Gwynne Dyer on Russia's grain ban

I came across an article yesterday in the South China Morning Post written by Gwynne Dyer. The title “Russia’s grain ban is just the beginning” reminded me of Dyer’s pessimistic and gloomy outlook on climate change and how the world is going to cope with it. During my time at Trent, Gwynne Dyer visited the university and delivered two public lectures - lectures I found supremely entertaining, very informative and a little bit scary considering his predictions on what climate change is going to do to our world.

I thought I would post his article to give you a taste of his writing. Dyer thinks big (with pessimistic forecasts) but pulls you into considering climate change from a new perspective. He has written 9 books on topics ranging from military history, climate change and international relations.

**Gwynne Dyer has granted Enviro Boys permission to publish this post on the blog**

“Russia’s Grain Ban is just the beginning”
By Gwynne Dyer

It cannot be proved that the wildfires now devastating western Russia are evidence of global warming. Once-in-a-century extreme weather events happen, on average, once a century. But the Russian response is precisely what you would expect when global warming really starts to bite: Moscow has just banned all grain exports for the rest of this year.

At least 20 percent of Russia’s wheat crop has already been destroyed by the drought, the extreme heat—circa 40 º C for several weeks now—and the wildfires. The export ban is needed, explained Prime Minister Vladimir Putin, because “we shouldn’t allow domestic prices in Russia to rise, we need to preserve our cattle and build up supplies for next year”. If anybody starves, it won’t be Russians.

That’s a reasonable position for a Russian leader to take, but it does mean that some people will starve elsewhere. Russia is the world’s fourth-largest grain exporter, and anticipated shortages in the international grain market had already driven the price of wheat up by more than 80 percent since early June. When Putin announced the export ban, it immediately jumped by another eight percent.

This means that food prices will also rise, but that is a minor nuisance for most consumers in the developed countries, since they spend only about 10 percent of their income on food. In poor countries, where people spend up to half their income on food, the higher prices will mean that the poorest of the poor cannot afford to feed their children properly.

As a result, some will die—probably a hundred or a thousand times as many as the 30-odd Russians who have been killed by the flames and the smoke. But they will die quietly, one by one, in under-reported parts of the world, so nobody will notice. Not this time. But when food exports are severely reduced or banned by several major producers at once and the international grain market freezes up, everybody will notice.

Two problems are going to converge and merge in the next 10 or 15 years, with dramatic results. One is the fact that global grain production, which kept up with population growth from the 1950s to the 1990s, is no longer doing so. It may even have flatlined in the past decade, although large annual variations make that uncertain. Whereas the world’s population is still growing.

The world grain reserve, which was 150 days of eating for everybody on the planet 10 years ago, has fallen to little more than a third of that. (The “world grain reserve” is not a mountain of grain somewhere, but the sum of all the grain from previous harvests that is still stored in various places just before the next big Northern Hemisphere harvest comes in.)

We now have a smaller grain reserve globally than a prudent civilization in Mesopotamia or Egypt would have aimed for 3,000 years ago. Demand is growing not just because there are more people, but because there are more people rich enough to put more meat into their diet. So things are very tight even before climate change hits hard.

The second problem is, of course, global warming. The rule of thumb is that with every one-degree C rise in average global temperature, we lose 10 percent of global food production. In some places, the crops will be damaged by drought; in others by much hotter temperatures. Or, as in Russia’s case today, by both.

So food production will be heading down as demand continues to increase, and something has to give. What will probably happen is that the amount of internationally traded grain will dwindle as countries ban exports and keep their supplies for themselves. That will mean that a country can no longer buy its way out of trouble when it has a local crop failure: there will not be enough exported grain for sale.

This is the vision of the future that has the soldiers and security experts worried: a world where access to enough food becomes a big political and strategic issue even for developed countries that do not have big surpluses at home. It would be a very ugly world indeed, teeming with climate refugees and failed states and interstate conflicts over water (which is just food at one remove).

What is happening in Russia now, and its impacts elsewhere, give us an early glimpse of what that world will be like. And although nobody can say for certain that the current disaster there is due to climate change, it certainly could be.

Late last year, Britain’s Hadley Centre for Climate Change produced a world map showing how different countries will be affected by the rise in average global temperature over the next 50 years. The European countries that the Hadley map predicts will be among the hardest hit—Greece, Spain, and Russia—are precisely the ones have suffered most from extreme heat, runaway forest fires, and wildfires in the past few years.

The main impact of global warming on human beings will be on the food supply, and eating is a non-negotiable activity. Today Russia, tomorrow the world.

Monday, August 9, 2010

Canada's national climate change policy takes another hit...

Just over a week ago, the momentous climate change bill sitting in the United States Senate was dropped. As The Economist put it, "the idea of a cap on America's emissions died with barely the bathos of a wimper." The already diluted bill had been sitting in the Senate for a few months but wasn't getting all that far. And the Democrats, already looking to be thumped during this November's midterm elections, aren't willing to spend whatever political capital they have left on another controversial bill.

So for now the Americans wait. Again. Will a national climate plan, as envisioned by Barack Obama or otherwise, ever come to fruition?

Sadly, with the news from our neighbours to the south, Canadians are left to ask themselves the same question.

Canada's national climate change policy up to this point has largely -- though not formally -- been tied to the United States. Whatever they do, we'll follow suit. When cap-and-trade was in vogue, it was cool here, too. But since little ever formalized in the US, next to nothing has progressed in Canada.

At least some action is being taken by subnational governments. A few weeks ago three provinces -- Ontario, Quebec and British Columbia -- and seven states -- California, New Mexico, Arizona, Washington, Oregon, Utah and Montana -- released an international emissions trading plan set to begin in 2012. It is part of the Western Climate Initiative and although the plan is not outrageously ambitious -- 15% cut in emissions by 2020 at 2005 levels -- it is better than nothing. Other provinces and states are choosing to do their own thing and hopefully this will demonstrate that a coordinated, national effort is not necessary.

The Economist believes that there is some room for a carbon tax to join the fray in the US. The Environmental Protection Agency now has the authority to regulate carbon dioxide and other greenhouse gases, so it could, theoretically, impose a carbon tax, regardless of whether congress likes it or not. But that would be a bold move and one the Obama administration would have to tread carefully.

But say a national carbon tax is introduced in the United States. Would Canada follow in stride? If the current Conservative government is still in power, it is highly unlikely. After all, they defeated Stephane Dion's Liberals handily after lambasting the idea of a national carbon tax. With another government? Perhaps. Or maybe the federal government will be happy with the handful of provincial schemes.

In any case, the standstill in the United States won't help Canada battle climate change one bit. 

Sunday, August 8, 2010

Some thoughts on the B.C. Carbon Tax

On July 1, 2010, British Columbia raised the carbon tax rate on a litre of gasoline by 1.12 cents to 4.45 cents per litre and by 1.27 cents to 5.11 cents per litre of light fuel oil. The carbon tax is now at $20 per tonne of CO2, which marks an increase of $10 per tonne since it was introduced on July 1, 2008.

For a quick refresher on the B.C. carbon tax, see here. In short, it is tax levied on the use of fossil fuels, so as to discourage the production of carbon dioxide.

“During the first two years of the carbon tax, some $848 million has been collected. The corresponding personal and business tax cuts have returned over $1 billion to British Columbians. That is $232 million more returned to British Columbians through tax cuts than was collected from the carbon tax”. -B.C. Government

I have three points that I want to make:

1) The carbon tax needs to be better adjusted to help lower income households adapt. Currently, the B.C. Low Income Climate Action Tax Credit is paid quarterly and provides $105 per adult and $31.50 per child annually to compensate for the carbon taxes they pay. Keep in mind that energy efficiency home retrofits are not cheap. Lower income housholds will only make the changes if they have a compelling economic motivation to do so.

It would be far better if the government gave compensation measures which would provide a greater amount of capital. Compensation measures such as lump-sum redistribution can provide low-income households with a single payment, rather than a series of payments. This can help households make the necessary consumer changes all at once and assist them with budgeting for less carbon intensive products and making more efficient use of energy.

Middle and higher income households are more likely to shift to energy efficient appliances (or to public transit) if they know it will save them money in the long-term. Lower income households live from pay check to pay check worrying more about how to keep their houses warm than how to reduce their household's carbon emissions.

2) According to CBC, the Sightline Institute, a Seattle non-profit research group, found a 10 per cent increase in per capita gasoline sales in the province in 2009, the single largest increase in B.C. in at least 30 years. This seems paradoxical considering the carbon tax was implemented in 2008. This also suggests that the current rate is not high enough. Carbon tax experts like Marc Jaccard have argued that carbon taxes need to hit $200 per tonne of CO2 if the Province wants to achieve its GHG targets. Such an increase will surely change consumer and household behaviour on carbon intensive activities i.e. driving, air conditioning use, home heating etc. Though, that figure is really high and would have serious economic ramifications if phased in too quickly.

3) Corporate and income tax cuts are necessary but equally important is that of investing in public transit, renewable technology and green jobs. The B.C. government has not been very transparent about how it is using revenue from the carbon tax to provide funding for the aforementioned items. Cities like Vancouver and Victoria would benefit immensely from such funding. It would generate more resources for the Greenest City Action Team in Vancouver as Vancouver has aspirations to become the world’s greenest city by 2020. With the amount of revenue coming in from the tax, the sustainbility opportunities --from investing in clean technology and public transit to green roofs and composting-- are extensive and wide ranging.

Key message: The carbon tax has a lot of room for growth in B.C. Let’s start with helping lower income households make the necessary adaptations (such as direct compensation measures) to green their homes.

Some links on the Carbon tax:

CBC Article: http://www.cbc.ca/canada/british-columbia/story/2010/06/30/bc-carbon-tax-increase.htmlB.C.

B.C. Governemnt: http://www2.news.gov.bc.ca/news_releases_2009-2013/2010FIN0040-000788.htm

The Policy Note: http://www.policynote.ca/bcs-carbon-tax-turns-two/

Saturday, August 7, 2010

Development charges and the urban growth fund

In June 2009, I was reading a book by Jeb Brugmann titled Welcome to the Urban Revolution: How cities are changing the world. It was very thought provoking and well-written providing an excellent analysis of the historical, contemporary and future salience of cities in shaping the world. The book presents a thorough overview of the connection between high density areas in the developing world and the influence this has on establishing both local markets and globalization.

Here is excerpt from the book that inspired a section of my honours thesis and a fourth year research paper:

“There are two aspects to density in the growth of cities. Proximity reduces time and energy and therefore the cost required to move people and materials around to achieve any objective. Take an urban water system. If we are building a water system for a suburban neighbourhood where homes are 120 feet apart versus a downtown neighbourhood where homes are twenty feet apart, we have to use one hundred feet of extra pipe for each home in the lower-density neighbourhood. If each neighbourhood has one hundred houses, then a higher-density neighbourhood saves an impressive two miles of pipe – not to mention the costs for installation and maintenance and for pumping the water through it. But in my city, a person living in a low-density neighbourhood pays the same rate for water as the people in my high density neighbourhood. The water department loses money on the low-density neighbourhood, and our neighbourhood must help make up the difference through our water rates and tax payments”.

Jeb is referring to Toronto in this case. While this sort of system may not be true for all jurisdictions, it nonetheless provides an illustration of the link between density and public service payments associated with housing location and water distribution.

To remedy this inequitable system, and to encourage growth in urban areas, I wanted to share a proposal with you. As I learned from my research, in Peterborough, when developers want to build sub-divisions in the fringes of urban areas, they are required to pay development charges for the houses to cover the costs of piping installation, water delivery, treatment and storage. Why? Because it costs the City's water utilities a lot more money to build additional (and longer pipes) and to deliver the water to those homes because they are farther away from the water treatment plant. Longer distance from the plant means more money. So in theory, the development charges cover these infrastructural costs.

Under my proposed system, sub-division developers would continue to pay the respective development fee per sub-division lot. However, 10-15 percent of this charge would go toward an “urban growth fund” used to encourage and subsidize developers wishing to build in the city’s built area (i.e. areas that are already paved over and could use redevelopment).

To illustrate a fictitious situation, let’s say a developer was paying $5,000 per lot in development charges. The sub-division has about 200 lots. Therefore, $5,000 x 200 lots = $1,000,000.
Therefore, 0.15 x 5000 (per sub-division lot) = $750. $750 per lot x 200 lots (total number of lots in subdivision) = $150,000. Thus, of the $1,000,000 raised in development fees from the sub-division, $150,000 would be directed towards the urban growth fund.

This would be used to subsidize developers wishing to build in the urban growth area and overtime, this can significantly alleviate pressure on public service provision. Remember, even if the development charge is paid by the developer, over time, it still costs more money and uses more energy to distribute water to those homes farther away from the system. The urban growth fund is for long-term sustainability to encourage more urban development and to keep public service provision more efficient and more local.

The $5000 figure is simply an arbitrary fee; the cost of the development charges for each sub-division could be different and set by the city. Setting the development charges for each sub-division can be raised or lowered depending on the topography of the sub-division’s land, distance from public facilities (water, wastewater and electricity), amount of impervious cover already on site and other factors as well. I propose the arbitrary fee of $5000 to illustrate how revenue could be generated, especially if the city wishes to intensify land uses and create a more compact urban form.

The proposed urban growth fund can raise significant revenue and provide more budgetary flexibility for a city. This could be one solution for cities (such as the one Jeb describes) to ensure that water departments are not unfairly charging higher water rates for those high-density neighbourhoods while concomitantly encouraging more urban growth (which could save costs in the long-term). Whether such a system would ever materialize is up for debate; I figure there are many policy tools we could use, but putting them into practice can be a difficult and laborious process.

Key message: Water rates in any jurisdiction should be adjusted based on density and proximity to water mains and pipes; this is an equitable approach to public service provision. If a jurisdiction has set suburban development charges for public service provision, then it would be wise to redistribute some of this revenue to mechanisms that can encourage more urban growth and overtime reduce pressure on undeveloped land.

Thursday, August 5, 2010

Keep a wary eye on 'Industry-Led' initiatives...

An environmental controversy is brewing in Manitoba. A new Eco-Fee is likely to be introduced on consumer products, specifically electronics. When you go to Best Buy to purchase your new flatscreen TV, you will be hit by an additional fee that could be upwards of $25.00. The fee will appear on your receipt below the subtotal, similarly to a tax.

But here's the thing. It isn't a tax. At least, not a government-issued tax. It is a fee imposed by industry.

Presently, much the recycling and disposal costs in Manitoba are covered by the provincial and municipal governments, funded through provincial and property taxes. But new rules will soon have industry footing their share of the bill, which happens to be most of it. And since companies can't grab from your property tax bill, they will be funding many of the costs by charging consumers a separate fee.

Having industry incur the costs of recycling and disposing of products it creates is a step in the right direction, but the Eco-Fee issue sparking in Manitoba is illustrative of a wrong turn that is all too frequent in environmental policymaking. Two parties hate regulation: industry and the government. Industry, of course, doesn't like the hassle and added costs of government interfering with its business. Government, commonly misperceived as control freaks, generally don't want the hassle and costs of policy creation, enforcement and monitoring. So when something needs to happen -- say, industry paying for disposal of their products -- a common policy takes form: the 'industry-led initiative'.

Such an initiative is generally brought about by a "Stewardship" association, which is basically a group of companies. They see the writing on the wall, and instead of accepting government regulations, they come up with their own plan; "we'll do it, just in our own way". It is usually less strict than regulations would be and are typically voluntary in nature. Both government and industry win out. The environment loses.

Many industry-led initiatives are great and get the job done. But in the case of eco-fees, it isn't the best method. We need only look at the debacle in Ontario. Huge consumer backlash occurred when similar eco-fees were introduced by Stewardship Ontario. Thanks to a very poor information campaign by the industry association, lots of people thought it was a new tax by the government and became known as a secret tax. This was even more problematic given the new and unwelcome Harmonized Sales Tax the province was implementing. Stewardship Ontario and the province threw tantrums each other's way, more consumers got pissed and the fee has since been pulled.

What should have happened is a full blown extended producer responsibility program whereby industry would simply incorporate the added costs of disposal into the cost of the product, rather than a deceiving fee. For industry, the formula would be simple. Make your products easier to safely dispose of and it can be cheaper, attracting more customers.

An air pollution argument against density

Civic Exchange, a well-known think tank in Hong Kong, argues that increasing density through constructing taller buildings might actually do more harm than good. Their reasoning, which is based on Hong Kong's geography, is contrary to what many urban planners and scholars advocate as “building up” is the urban planner’s dream.

The think tank explains how more densely developed and poorly ventilated neighborhoods with insufficient open space and blocked ventilation corridors, can absorb more heat which intensifies the urban heat island effect. In essence, with less ventilation and more impervious cover, less rainwater is absorbed into the ground and thus the temperature will feel warmer in the urban area.

The tall buildings that form the concrete jungle, will contain more of that heat which really intensifies air pollution as the wind is blocked by the buildings and thus the dirty air is trapped and inhaled by the public. Because the temperature in the urban area increases, it will inevitably be warmer and lead to a greater need for air conditioning. Hong Kong has many areas that have bad air pollution and high density (Mong Kok for example, with high levels of nitrogen dioxide and over 130,000 people per square kilometer).

With complete dependence on air conditioning, this results in more electricity consumption and emissions of hot air; both of which increase the urban temperature. Thus, this leads to a vicious cycle of pollution causing activities (driving and profligate AC use) which warms the temperature in the urban area where people live, and people need cool air to live comfortably which will release more pollution and then repeat the cycle again and again and again.

Higher density through taller buildings means more people living closer to public transit, amenities and social infrastructure. Thus, greater density can lead to more supply and help satisfy demand. This can help lower housing costs for the poor. But, it all depends on design because if those buildings are too close together (lots of examples of this in Hong Kong) then they can block ventilation corridors and thus there are greater air pollution exacerbation risks.

Civic Exchange calls for decreased plot ratios to improve ventilation. In essence, by decreasing a building's plot ratio, the developer is forced to construct smaller units to abide by the zoning laws. Smaller units might take the form of smaller buildings with less people and therefore lower density. My argument: decreasing plot ratios will inevitably make real estate more expensive by constraining supply and increasing demand; this has been argued by Ed Glaeser time and time again.

It is extremely tricky to decrease a building's plot ratio in a City that has such constrained land supply. Where I do agree with the think tank is their vehement support for more open and green space in Hong Kong. This would mean that municipal zoning laws would require more open space around a development. Having more open space for the public to enjoy is a great idea. It will also expand ventilation corridors thereby allowing wind to pass through the concrete jungle more naturally.

Maybe a quick lesson from their publication and this analysis is that buildings (commercial and residential) must be subject to providing recreational and open space in greater quantities. Depending on the jurisdiction, there should be mandated requirements for constructing open space when building a development. Indeed, this is challenging because there is only so much room. Higher plot ratios, as analyzed by the Civic Exchange will not help the air pollution problem in Hong Kong. It is those high density areas like Mong Kok that need to witness the construction of open space such as public parks and sports facilities to prevent further development from exacerbating the air pollution problem.

Key message: Would such urban planning and policy making mean that there is a trade-off between lower density (potentially keeping housing costs unaffordable) and better air quality?

Tuesday, August 3, 2010

Ultimate Frisbee: Peterborough's Hidden Environmental Gem...

Frisbees are most commonly associated with college kids, hippies and beachgoers. That a sport, ultimate frisbee, could be built around the flying disc might baffle some. I am often laughed at by friends in the hockey, football crowd when they try to picture it.

But when chatting with a fellow environmentalist last night over a few beers, he was equally astonished when I told them that Peterborough's ultimate frisbee league is the most environmentally-focused social network I've come across in all of Peterborough. Having been involved for a few years I had never really tried to organize my thoughts and figure out why. So here it goes.

Ultimate frisbee, by its very nature, encourages social cooperation. The game is not refereed and is instead officiated through a complex honour system. The level of obnoxious competitiveness synonymous with many other sports is non-existent as the game lives by something called the Spirit of the Game, summed up by the Ultimate Players Association:


Ultimate has traditionally relied upon a spirit of sportsmanship which places the responsibility for fair play on the player. Highly competitive play is encouraged, but never at the expense of the bond of mutual respect between players, adherence to the agreed upon rules of the game, or the basic joy of play. Protection of these vital elements serves to eliminate adverse conduct from the Ultimate field. Such actions as taunting of opposing players, dangerous aggression, intentional fouling, or other 'win-at-all-costs' behavior are contrary to the spirit of the game and must be avoided by all players.

These 'rules' reflect something of a social contract in which the greater good is prioritized over any individuals. Such an approach is similar to that of the socially progressive and social justice movements, which have traditionally had a strong tie to environmentalism.

Driving is discouraged through a variety of league policies that encourage carpooling, walking or taking bikes, most notably the Carbon Flip, where the beginning disc flip -- similar to a coin toss in other sports -- is not 50/50, but determined by the number of non drivers on each team. Those that enter the league without a hint of environmentalist cares are almost forced to adopt a certain approach to the world during an ultimate frisbee game. This may have as much to do with the type of people playing ultimate in Peterborough as the game itself.

The makeup of Peterborough's players is extremely diverse. It is neither limited to a bunch of hippies nor is it an exclusive club for the rich and famous. I was astonished when I joined my first team to find out it was full of doctors, professors and engineers. Yet any social class system built entirely on household income is non-existent in the Peterborough Ultimate League. The people are generally adults under 40 -- with some exceptions --, an age bracket that seems to be more environmentally conscious that its elders. Many people I've played with are teachers, professors at Trent and Fleming -- two very eco-conscious schools, -- civil servants at the Ministry of Natural Resources, NGO folks and local business owners with green companies.

So you want to find the real movers and shakers in the 'green' world of Peterborough? Just look for a frisbee.

Photo: Tourne Disc

The return of cheetahs to India

Image: Quantum-Conservation.org

We don’t blog about wildlife too often, but I was intrigued by a recent article in The Guardian that reported the precipitous return of cheetahs to India. Indeed, the cheetah is to return to India more than 60 years after hunters shot the last three on the subcontinent.

Sites are currently being picked for the reintroduction of the animal. Eight cheetahs are being brought into India from countries including Iran, Namibia and South Africa. The budget for the reintroduction project is around £500,000 ($816,000 Canadian). Cheetahs will help restore the grasslands of the country and put pressure on state governments to enforce wildlife protection to ensure the animal's sustainability.

Wildlife, specifically tigers, have been adversely affected by poor wildlife protection policies across India. Conflicts between poor local communities and tigers, corruption and smuggling tiger parts to east Asia are only some of the reasons why the tiger population has shrunk drastically. India's population growth has also put immense pressure and stress on the tigers effectively encroaching on their territory. In fact, the tiger population shrunk from 3,600 in 2002 to 1,400 in 2010.

There is widespread enthusiasm for the return of the cheetahs; however, experts have noted that the herds of deer and antelopes --that once provided the cheetah’s diet-- are long gone. Thus, they think such a reintroduction –while a matter of national importance—is futile and bound to fail given the harsh conditions. Nonetheless, this decision, led by Indian Minister for the Environment, Jairam Ramesh, is critical because the cheetah is the only animal to have become extinct and such reintroduction signifies a renewed commitment to wildlife preservation.

The three reintroduction sites are the Kuno-Palpur Wildlife Sanctuary and Nauradehi Wildlife Sanctuary, in the central state of Madhya Pradesh, and Shahgarh in the desert near Jaisalmer, Rajasthan. "All three sites will aim to sustain a population of more than 100 cheetahs and create a tourist business" that will benefit local communities among other things.

Key message: India’s commitment to wildlife protection has thus far been less than impressive. While it is easy to criticize the reintroduction of the once extinct cheetah, I commend the country on its renewed interest to this very important matter. I hope that tigers will also receive more respect and be provided with more space, unmolested by human stresses.