New Earth Nation Chief Economist Laurence Brahm was recently interviewed by Mark Hand of SNL and as you will read the New Earth Institute is advising China on environmental economics and Laurence is on the front line of the fight against climate change.
Here is the link to that story with a clip from the article below: https://www.snl.com/InteractiveX/Article.aspx?cdid=A-30170805-15148
China’s banking sector senses ‘massive’ green financing opportunities, adviser says
By Mark Hand
China’s banking sector sees renewable energy and other green technologies as huge investment opportunities, but the nation’s regulators are lagging in producing clear guidelines that could spur a much larger infusion of capital into the sector, according to a long-time China expert.
There is little familiarity with renewable energy and environmental technologies among China’s banking regulators, Laurence Brahm, an adviser to China’s Ministry of Environmental Protection and author of the new book “Fusion Economics: How Pragmatism Is Changing the World,” said in an interview.
The entire governmental structure, from banking regulators to environmental policymakers, would benefit from a transformation similar in scope to the government restructuring that allowed China to shift from socialism to a more market-based economy in the 1990s, Brahm said. During that decade, there were supra-ministries that had overarching powers to guide the economy.
“Maybe the Ministry of Environment, Ministry of Water Resources and sections of the planning ministries should be recombined to create a supra-environmental guiding ministry that could then work with the banking regulatory authorities and come up with the type of policies that could drive more clean environmental growth,” he said.
Brahm’s comments come as an adviser to China’s Ministry of Environment through a position created under a European Union dialogue agreement. “I’ve effectively been hired and appointed by the European Union to be the international adviser within the Ministry of Environment in China,” he said.
He said he recognizes that China already is witnessing significant investment in renewable energy technologies. But coal remains the dominant power generating fuel. Seventy percent of the nation’s electrical energy output comes from coal, while renewable energy — mostly wind and solar — accounts for only 0.7% of the energy output, he noted.
“Here is the twisted irony and potential business opportunity: at the time of this writing, renewable energy accounts for less than 1 percent of China’s energy needs, while China now leads the world in both investment in renewable energy and production of renewable and energy-efficient systems,” he writes in his book. “For the communist government, cleaning up the environment and reducing the carbon footprint is in its self-interest. For the rest of capitalist China, it is a business opportunity. That’s where the fusion economics comes in.”
China’s banking sector fully “senses that a massive green financing opportunity is sitting right in front of them, waiting to be grabbed,” Brahm writes. But it is not clear to these bankers how this will happen. “At the Ministry of Finance, one official commented quite frankly, ‘China should use economic crisis as opportunity and get rid of outdated enterprises and push green,'” he writes.
In the interview, Brahm, who has a home in Beijing, confirmed the accuracy of the regular news reports coming from China about the terrible pollution problems in its major cities. “Throughout the year, the skies are thick with pollution. It is toxic air. It is almost something that you would imagine out of a science fiction movie, a post-nuclear world-type scenario,” he said.
China has a “catastrophic crisis” with its environment, Brahm said. Some 60% of all surface water is so toxic that it is unfit for human contact, while 70% of underground water is already undrinkable, he explained.
One of the primary causes of this environmental devastation, according to Brahm, was a “blind fixation” with high growth that began in the 1990s. The drivers of the high growth were fixed asset investments and polluting industries that were fossil fuel-based. “China’s leadership for the past decade has judged everything based on GDP,” he writes. “Therefore, each province invests in abundant infrastructure to meet targets.”
The nation’s dependence on fixed asset investments has brought with it high energy costs, which is leading to inflation and rising production and transport costs. The popular outrage over the nation’s environmental destruction and its impact on physical and mental health across the country “represents the call of China’s people upon its new leadership to rethink this hypergrowth model in favor of something more holistic,” he writes.
China will need to grow on the basis of fixed asset investment, but officials need to change the nature of that investment away from building new things to repurposing those things that the nation already has, he said.
A new financial architecture
In China, coal is cheap, while solar and wind capacity remains small. The nation also must solve issues over the quality of energy output and scale. But none of these obstacles “are anything more than a simple technical or technological issue that can be addressed through finance and investment,” he writes. “In fact, all of the obstacles to the mass adoption of renewable energy as a nation-wide priority can be viewed as industrial opportunities,” he adds…
Here is a recent publication below from Laurence from the first issue of NEO magazine and the link: http://www.joomag.com/magazine/neo-magazine-summer-2014/0080763001405308165
by New Earth Nation Chief Economist, Laurence Brahm
COMPASSION AND PRAGMATISM MUST REPLACE A TIFFANY TWISTED WORLD ORDER
Enter the Decade of Protest
New York 2011: As New York City police evacuated peaceful demonstrators of Occupy Wall Street (OWS), I reflected on events participated in over the previous weeks. One of the most poignant was when protest leaders from Cairo’s Tahrir Square joined us at Occupy Wall Street. The energy was exuberant. Their presence underscored a historical crossroads that the western mainstream media simply missed in their reporting, yes one of those surging trends that the starch-shirted analysts failed to portend. The year 2011 marked something that will be remembered by future generations as the decade of global protest.
Since 2011, from Tunis to Madrid, Athens to New York, global protests have spread without regard to region, race, religion or generation, as people across our planet joined hands to express outrage at an unjust order that is blatantly hypocritical. Declining economies, loss of jobs, poor infrastructure, lack of trust in government, unnecessary wars, and a manipulated media top their list. And at the time of this writing in 2014, these waves of protests continue to spread.
Regardless of the political spectrum – left or right – both sides have lost jobs. Protestors decry unemployment and home foreclosures, unprecedented since the Great Depression. Within span of a mere decade, America’s financial might was exhausted by unnecessary wars and fiscal stimulus wasted, rewarding bailouts to bankers gone rogue. For Americans, the snuggly Wall Street–Washington coterie has become as much a symbol of incompetent government, politics of oligarchy and economic squandering as Mubarak and his military cronies had become to the Egyptian protesters.
Across our earth elderly, looking ahead without benefits or hope, feel ripped off. The youth, strapped with debt to pay for an education that cannot even secure them a job, demand a say in their future that is being determined by others, in fact taken away from them. Everyone is fed up with a system that has pushed itself to its own brink. Ideologically driven wars have bankrupted the nations that started them. Drones are sent to bomb schools by nations that cannot afford to build schools for their own children. Money is being printed on the back of debt that will saddle generations to come in order to pay for it all – and with it the bonuses of those already grossly wealthy investment bankers and politicians who have created all this mess. Yes, those politicians who refuse to recognize the already clear scientific warnings of climate change, because they are behest to multinational corporations that enrich themselves in the most profitable business of all – fossil fuels. These same politicians wave their finger at the world and talk of the need for governance and transparency, while sending the poor off to fight wars that their children will only play on video games — funded through the global market offering of another junk tech stock that will be traded just like an oil derivative.
In this decade of protest, people across our earth have responded to the dysfunctional politics by occupying public space, engaging in non-violent disobedience and forming transparent ad-hoc governing councils in open areas or locally where they are creating community economies of their own. Essentially, people are taking the power back! They are espousing issues, but do not promote cartoonish politician personalities, an antithesis to the political arrangements decried. And the messages are being sent through unedited live news streams via the Internet.
The peaceful revolution has already gone global. And from it arises a new earth consensus.
These protestors demand more than just a new swap of politicians. They call for reconstructing our global financial architecture. This requires new economic models to replace outdated ones, fundamental policy changes and a re-assessment of underlying assumptions and values that have long been taken for granted without question or consideration.
Protestors across the planet, regardless of back- ground, creed or birth, have united in a single voice. We have all had enough! It is time to change the rules of the game. That game — the existing world order, the Washington Consensus blind belief in neo-liberalism taken to the extreme, globalization of everything – cannot continue because our planet’s resources simply cannot sustain it. And the increasing numbers of people falling below the poverty line — and extreme poverty line — will not tolerate it. The rules have to change.
To change the economics, it means changing the assumptions, which really means changing those Tiffany twisted values that underlie it all.
We need a new consensus!
Enter the New Earth Consensus
We need a New Earth Consensus. Built on principles of compassion, care and consideration for our fellow man and environment, not predicated on unbridled greed. It is time for all us to real- ize that we are all sharing planet earth, a single satellite in the orbit of our vast universe. If the mechanics of this planet fail to work, sustaining glaciers, ocean levels and arable land mass and forests (yes water-food security and the very lungs of our planet), then we will not have a planet to live on. And we cannot get off of this satellite and land anywhere else (all of NASA’s space exploration research funding has been diverted to imperial folly wars). Somehow, we must think above it all, drop differences, join hands, and make our future work.
That will require pragmatism and compassion, planning with vision and sequencing the steps to get us out of this mess and into a new paradigm, yes a workable framework that can sustain our existence and all of the natural biodiversity that we need to exist together. We are not alone. All things are interconnected. We must recognize the economic law of the inter-connectivity of everything.
Our policy makers and economists need to consider the totality of their decisions, not just the narrow lobbying interests that are funding them. We the New Earth Consensus need to come forward with a fresh economic paradigm that combines the idealism of a vision that we want for our children’s future, with the pragmatic steps that can take us there in real time. Lets call it pragmatic idealism. Rather than adhering to old mantras of greed and self-interest – the “invisible hand” will bring all markets to equilibrium if left alone (so deregulate finance and let the bankers take us all to the cleaners) — we need a few fresh ideas that can become principles of a new economic paradigm. Lets try:
Fusion Economics: Reject ideologically based economic theory. End debate over socialism versus capitalism. Instead opt for pragmatism. Freely combine planning with market to achieve result that better people’s quality of life and utilize resources in a more rational way to sustain our planet.
Diversified Localization: Community revival, local businesses, cooperatives, micro-finance, and local currency issues are all part of diversified localization. Empower people by getting capital to communities (rather than only to banks who just speculate with Fed bailout funds issued on the back of more debt) and the austerity that has crippled Europe.
Pragmatic Idealism: We can pragmatically harness business in its many forms to achieve social transformation and conservation of resources. Enter social enterprise and impact investment.
Compassionate Capital: Investment does not have to be for profit alone. People are not only motivated by greed (the classic Milton Friedman assumption). Care for others and concern for one’s community and environment can be equally important motivations. Social enterprise and micro- finance are creative approaches using compassionate capital.
Conscientious Consumption: Consumers can purchase or boycott with conscious and affect corporate behavior. We have the power to demand that the corporate sector adopt renewable and efficient energy, recycling, non-genetically modified foods, and socially responsible practices through the sheer power of organized boycott.
Environmental Economics: Investment into conversion of energy grids from fossil fuels to renewables combined with fiscal and credit policy that will drive business to use renewable and efficient energy. This approach will drop actual carbon output levels while creating jobs and business opportunities in multiple sectors that can scale renewable and efficient energy technology, water conservation, recycling, organic agriculture, while reducing fossil fuels absolutely. (This is not to be confused with trading carbon or pricing natural re- sources sometimes called the “green economy”).
These ideas are only part of growing matrix of often separate yet interconnected movements, running in parallel, but coming into an inevitable synergy and convergence that will change the economic architecture of our planet. Some of these ideas come from villages and ghettos, others are being driven by business and financial leaders who have a vision and want to change what they know is not right.
Civil society is creating grass roots business to support the ideals they wish to achieve (and the social, medical, and renewable energy projects that are essential to our survival). Meanwhile there are executives in boardrooms who suffer frustration, knowing themselves that this system is not right, and certainly will not assure a future for their children either. So they have to do something too.
Anatomy of an Emerging Consensus
Our global youth are joining hands across national boundaries with technology that knows no limits and can hack any firewall that imposes boundaries. They will form transnational movements that do not recognize national limitations and as these congeal and form critical mass, will one day demand to sit at the table with national leaders. From the Himalayan Consensus, African Consensus, Barcelona Consensus, to a New Earth Consensus that seeks to embrace us all, the power of our planet’s youth demand a voice in a future that belongs to them, not us.
Activists across the developing world have come to the realization that standard economic measures overlook key components of well-being and stability. Thus, new measures and programs emerged from Asia coming together as the Himalayan Consensus, linking micro-finance pioneered by Muhammad Yunus, and “gross national happiness” championed by Lyonpo Jigmi Thinley, former prime minister of Bhutan. From these and many other like pioneers three principles have emerged: protecting ethnic diversity and local identity; achieving sustainability through local businesses while empowering individuals through micro-finance; and giving back to the community while prioritizing environmental protection.
Likewise, an African Consensus, as a fresh approach to development, could be seen emerging from the 2011 World Social Forum in Dakar, Senegal, against a backdrop of protests erupting across North Africa, underscoring the need for change. In West Africa civil society had been creating small-scale businesses supporting social- environmental programs and community development to provide an alternative to the misused aid funds and IMF and World Bank conditions that had effectively supported a system of impoverishing the population while propping up elitist leaders. With 40 percent of African productivity coming from the informal sector, Africans have simply bypassed corrupt dysfunctional governments and failed international aid programs.
The African Commission on Human and People’s Rights Forum, with NGO representatives from 54 African countries, adopted the African Consensus Declaration in Gambia on April as a fresh economic paradigm. Moreover, they declared ethnic identity and the right to water as universal human rights, and pointed to extreme poverty as the cause of violence, extremism and even terrorism.
Back in America, after the crushing of Occupy groups across the country, mainstream media depicted the movement as broken. Actually, it is not gone. It is just incubating. People have gone back to their communities and have turned protest into action, setting up community social enterprises, co-ops, and programs to re-invigorate urban ghettoes – essentially doing what our politicians have failed. America’s progressive economic movement is proposing the exchange of commodities and services, creating localized sustainable businesses. Because bank and venture capital financing goes into speculation – the great Wall Street bourse — there is a quest for creative financing solutions for small local businesses, essential for reviving communities.
Meanwhile, some executives in corporations that Occupy rallied against are also reflecting and re-thinking their role in order to survive. Are their goals just profits, shareholder values or management bonuses? How a corporation contributes to sustainability – what it does for its communities, the environment or employees – should that be measured, too? New corporate responsibility schemes will need to be hashed. Green technology and social enterprise funds will have to be launched. Otherwise we will boycott their products. In the end, government must respond with trade policies and fiscal incentives that guide corporations toward new patterns of behavior. Otherwise we will need to change those governments too.
Austerity as such, applied in Europe in accordance with the prescription of the IMF and the weakness of the European Union to stand up for European interests, is not stimulating economies. How- ever, the intuitive activism of self-interest to keep capital at home and re-invigorate communities is having a marked effect.
Communities are going it alone and seeking their own solutions in the void of political leadership and in the lack of financial creativity from a neo-liberal order that has been in-breeding ideas for too long. In Spain alone some 20 local currencies have been issued along the lines of America’s “Berkshire Bucks” — for the same reason. Keep capital in the community. Empower people with the means to empower themselves.
These local initiatives are not anti-business. They are anti the established neo-liberal order, which do not want them to have the right to have their own businesses, at least locally. This is a grass roots financial response to a top down cementing of communities with shopping malls and globalized brands, a system that judge retail by the stock price and the options in that stock being traded. It is about the upward power of diversified localization responding to a downward push of monolithic globalization.
The parallel, yet different reactions occurring on multiple levels are a response to the same predicament. Grass roots communities want to keep capital at home. Nations are seeking to do the same. A new financial and trade architecture is being constructed independently yet simultaneously among communities, and emerging economic powers such as the BRICS (Brazil, Russia, India, China and South Africa). They are responding to the neo-liberal monolithic globalization model that has already run its course.
A New Earth Consensus Unites!
A new financial architecture is being constructed that does not see free capital flows as necessarily benefiting economies. It does not see extreme market fundamentalism as a panacea for all economic order. It does not see a flat world but rather one that is round, uneven, requiring local solutions to local predicaments and also to a global one. It is calling for capital back to communities, back to people, back to ways of life that are local. It is calling for an end to a monolithic order envisioned by a few for their own benefit. The response is occurring on multiple levels at the same time in diverse regions. It is happening locally in America too.
Governments must reexamine their own responses, too. Stimulus to create rapid consumption does not solve economic hardship because too much consumption is one of the problems. We share a planet of diminishing resources. So consumer behavior must change as well. Stimulus funding needs to be invested into communities, education, upgrading infrastructure and power grids that accommodate renewable energy – all of which will create new jobs.
Meanwhile emerging global configurations like BRIC, G20 or G77, continue to shift the tectonic plates of global financial order. Their economic rise could create a new global financial order by the sheer weight of their economic momentum, different values and more realistic – rather than theoretic – experience with development.
Protest in itself is not enough. Yes, civil disobedience in its multiplier forms is absolutely necessary to force key issues into the face of a media that is owned by those same corporate and banking interests that own the politicians they give airtime to. However, we must also present rational and constructive frameworks and lay the foundations of new and pragmatic systems so that a New Earth Consensus arising from the different consensus movements across this planet can parallel and then displace the old consensus that has already had its time. History moves on. We must continue to re-invent ourselves, and our systems, to keep up with the change that we in fact have created.
The shocking and widening gaps between rich and poor, and the apocalyptic crisis of climate change, and outcomes of those systems we have been relying on for decades, which no longer work. It is time to dismantle that old architecture and rebuild systems that are more equitable for all, and can ensure the sustainability of this planet.
This is about the democracy of people’s economics at work, voices and action of people in communities across this planet coming together in common purpose, putting idealism to work in a practical way. If we connect the dots, and look at these independent grass roots and community efforts as a whole, respecting their differences and diversity, we will realize that all of these progressive economic movements — what the mainstream calls “those alternatives” — have already in fact become a new mainstream. And so dawns a New Earth Consensus. And we are it!
Laurence Brahm is Senior Economist of the New Earth Institute, a global activist, international lawyer, and author. He is a spokesperson for both the Himalayan and African Consensus movements. His forthcoming book “Fusion Economics: How Pragmatism is Changing the World” will be published in October 2014.