How can the outside world help Africa? There is no easy answer. ... The latest aid-givers' consensus is to identify “good” countries, still quite a small bunch, and let them spend the cash as they see fit. Yet time and again, good guys—most recently, Ethiopia's Meles Zenawi and Uganda's Yoweri Museveni—slip back into old despotic ways, putting aid-givers into a quandary. By punishing governments, are they not hurting the innocent poor?It seems to me that Africa is crying out for outcome-based policy. A Social Policy Bond regime would inextricably tie rewards to outcomes. In Africa that is an urgent need. Also important is that Africa's problems are so desperate that the continent's wellbeing can be accurately targeted by quantifiable indicators, such as literacy, infant mortality, longevity etc. (That's not always true in the rich world.) We see in Africa (and North Korea ) governments' total cynicism: they are quite happy to bargain away their citizens' lives for a few more years in power. We need ways of mobilizing people to remove government corruption, or to bypass or, failing that, to undermine recalcitrant governments, in order to achieve basic human needs for their people. Social Policy Bonds, whether backed by concerned in the west, or by wealthy individuals or NGOs, would do generate incentives for such a mobilization. The current political system is failing. True, 'there's no easy answer', but motivating people to channel their ingenuity into finding answers has hardly yet been tried.
30 April 2007
27 April 2007
In March EU leaders agreed to set a binding climate change target to make biofuel - energy sources made from plant material - account for 10 per cent of all Europe's transport fuels by 2020. But the European Commission has admitted that the objective, which aims to cut carbon dioxide emissions, may have the unintended consequence of speeding up the destruction of tropical rainforests and peatlands in South-East Asia - actually increasing, not reducing, global warming. SourceThis shows the stupidity of targeting irrelevant numerical indicators. Humanity is not interested in how much transport fuel comes from plants. What we are concerned about is climate change. So why don't our 'leaders' target something meaningful, like climate stability? Why not target a real outcome, instead of one of the supposed ways of reaching it? Several answers spring to mind: the need to maintain the revenues of agribusiness corporates; government's reluctance to relinquish control over means as well as ends; government's long history of thinking a handful of experts knows more than the entire population about how to achieve social and environmental goals. In this instance these answers are probably all valid. It's particularly depressing, though, that the result will be to accelerate the irreversible sacrifice of yet more of our precious heritage to the perceived interests of the road lobby.
26 April 2007
Nearly four years after [US] Congress pulled the plug on what critics assailed as an Orwellian scheme to spy on private citizens, Singapore is set to launch an even more ambitious incarnation of the Pentagon's controversial Total Information Awareness program -- an effort to collect and mine data across all government agencies in the hopes of pinpointing threats to national security. Wired
I've long suspected that as policymaking become more and more removed from people, the resulting social stresses will lead in one of two directions: either malign or benign dictatorship. One cause of the widening gap between politicians and the electorate is the perhaps inevitable targeting of numerical indicators by governments of more than several hundred people. Unfortunately the targeted indicators are often implicit; chosen because they are readily available rather than because they tell us anything about societal well-being.
The targeted indicator par excellence seems to be Gross Domestic Product per capita. Singapore is perhaps the most focused exemplar of this subordination of virtually everything to quantifiable economic indicators. I can't fault the logic of the Singaporean Government's interest in the TIA - given where it, and most of the rest of us, are now. As society becomes increasingly seen as an adjunt to an economic system, the loss of community and possibility of social collapse call for government - never slow to expand its role - to provide a solution. If that government is both benign and prescient, then something like the TIA becomes inevitable. Not the worst option by any means, but regrettable all the same.
24 April 2007
So my thought, or hope, is that the lobby groups who would be inclinded to oppose Social Policy Bonds would see the writing on the wall. The bonds mean the democratisation of policymaking. Lobby groups who want to see Social Policy Bonds fail would suffer public opprobrium and, more to the point, they would be doing so very openly. Lobby groups could still influence policy, but not in secret.
22 April 2007
… CO2 emissions and only from certain plants in certain sectors of the economy. The scheme looks only at limiting emissions from a few industries, rather than looking at how to reduce net emissions from the whole economy at the lowest net cost. Source (pdf)As well, and unlike even Kyoto, investment in CO2 ‘sinks’ do not count. Of course, the theory might be flawed, but what about the practice? Open Europe’s conclusion is that the ETS represents "botched central planning rather than a real market." Carbon trading has not resulted in an overall decline of the EU's carbon dioxide emissions. So even its own narrow terms, the ETS has failed.
This is typical. Projects like the ETS and Kyoto push all the right buttons. They make us feel good because it looks as though we’re doing something. They give the illusion of success; they point the finger at countries that don’t subscribe to them; they involve the creation of bureaucracies of (often) hard-working, well-meaning people;, and they allow the rest of us to relax, because a lot of people are doing something positive. But they aren’t. The agreements continue, the organisations that administer them go from strength to strength; but the targeted outcome to which these organisations are allegedly supposed to be contributing? No impact whatsoever. The outcome has been hijacked by a political process that rewards activity above all else. And it will continue to be like this until we subordinate all such activity to the outcome that society - not government agencies nor other organisations, but real people - want to achieve.
20 April 2007
There will be no blaring headlines, no anguished hand-wringing, no serious debate about the costs and benefits of controlling the causes of these deaths by violence. That’s for one simple reason: they were the result of road accidents. On average 119 people die every day on American roads. Worldwide, road deaths are estimated to be 1.17 million per annum, with over 10 million crippled or injured.
What is it about road transport that makes us irrational? An infantile wish for high speeds? The erotic symbolism of entering an enclosed body and moving it along? I don’t know, but figures show that even in the US car ownership is about 50 per cent, which means that at any one time much less than half the world’s population has access to a car. But cities today are designed not for human beings, nor even for public transport, but for cars and their drivers. Our physical and social environment is being sacrificed for the car: well it looks that way. The irrationality of it all is more striking in developing countries, where the vast majority of people see very little return from the massive investment in road transport being undertaken by their governments. Their children are killed or injured, their air is poisoned, their climate is being altered irreversibly, their communities destroyed – for what? I know; it’s not just for the sake of the wealthiest fraction of their population who can sit in air-conditioned comfort while they scoot around the cities. There are benefits for all from a complex market economy.
My concern is that most people have little real say in how their economy develops. The construction industry – and not just in the developing world – is a byword for corruption. My previous blog was about the subsidies implicit in allowing people to park their cars in a public space. But there are other perverse subsidies that benefit road transport: those that encourage oil extraction and consumption (thankfully these are coming down in most countries). There is very heavy bias, more generally, in favour of the large and global as against the small and local. (Scroll down this page for the excellent publication Small is beautiful, big is subsidised.)
Social Policy Bonds would re-orientate policy. Transport is a means to various ends, not an end in itself. People should choose the social and environmental outcomes they want to achieve with public funds. Politicians whose interests are largely dictated by corporate lobbyists, get away with road-building programmes because politics today is about image, spin, gesture and deceit. Political debate centres on arcane discussion about legal niceties, and institutional funding and structures. Give people access to policymaking, by centring the debate on outcomes, and public participation would be much higher.
To be sure, some of us might choose a transport system that is based on privately-run chunks of metal zipping around killing more people more than any number of gun massacres, that devastates our physical and social environment, and that requires the transfer of large amounts of funding to unstable and repressive regimes several thousand miles away. But let us make such choices explicitly, and with our eyes open.
17 April 2007
For the occasion of the closure day of the Geneva Motor Show, some 10 activists from different organizations were planning to do a small demo at the inside of the Geneva motor show, deploying a banner to point out the hypocrite discourse of the car manufacturers. As a preventive measure, Police Detectives of the Geneva Canton have taken the whole group of activists and the camera crews in their presence in custody, and kept them for more than 8 hours for questioning. Jeroen Verhoeven, Coordinator of the 4x4network and participating in the action, has been hand-cuffed and taken away to the police station for questioning. The activists have been charged of being “the alleged authors of threats alarming the public”, even if the action did not take place! In order to avoid any dissident voice at the motor show, the activists have been phone-tapped, hand-cuffed, strip searched, their DNA and fingerprints have been taken, and video material, laptops and mobile phones have been seized by the Geneva Police.” UK Indymedia (my emphases)On a related note, I was pleased to see a fellow Wellington (New Zealand) blogger respond to a comment in the local paper about a "bus lane policy that will strip residents of their rights to park cars on busy thoroughfares".
Excuse me? When did it become a "right" to store one's private property on a public thoroughfare? Tom BeardThis is no trivial question. Recent research seems scanty, but in 1992 the World Resources Institute (MacKenzie et al cited here) estimated the value of this ‘right’, for the US alone, to be $85 billion per annum, assuming an average value for a parking space of $1000 per year. The authors argued that parking should be considered part of the normal costs of operating and owning a car and that the free supply of parking is effectively subsidizing the use of cars and trucks. (The same study concluded that road transport subsidies in the USA amounted to around $174 billion in 1989 or 3 per cent of GDP with road users covering only about 20 per cent of public expenditures and costs.)
16 April 2007
It used to be a matter of good intentions gone awry. Now it is plain fraud. … The reason governments are so enthusiastic about biofuels is that they don't upset drivers. They appear to reduce the amount of carbon from our cars, without requiring new taxes. It's an illusion sustained by the fact that only the emissions produced at home count towards our national total. The forest clearance in Malaysia doesn't increase our official impact by a gram. If we want to save the planet, we need a five-year freeze on biofuels, ‘The Guardian’, 27 MarchI was inclined to think insanity, but Mr Monbiot is probably more accurate when he calls it fraud. He goes on to say that fuel suppliers in the UK have been ordered to ensure that 2.5 per cent of the fuel they sell is made from plants. If not, they must pay a penalty of 15p a litre. By 2050, the British Government wants 33% of UK fuel to originate in crops, while President George Bush announced ‘that he would quintuple the US target for biofuels: by 2017 they should be supplying 24% of the nation's transport fuel.’
These ludicrous targets are government at its worst. They have nothing to do with any meaningful outcome for ordinary people, and everything to do with pandering to the wishes of large agribusiness corporates, and getting something in the media that appears to show concern.
15 April 2007
[N]ever before had Americans found themselves so articulate while also failing to convey any sense of what actually happened. … The Iraq war, untidy and unkempt to say the least, has produced an even more stunning mass articulatenesss….. New books, magazine articles and blog entries go on endlessly about Bush and the neo-cons, how they skittled the war in Iraq because they were incompetent or because of their bad planning. If only the administration had listened to…. First Puppet, Now Scapegoat, 'London Review of Books', 30 November 2006It’s not Mr Thomas’s main point, but one issue raised is: how can the experts get it so wrong? Well, Mr Thomas goes on to say that as far as the ‘Bush, Cheney and their friends’ were concerned: ‘Whether democracy in the Middle East thrived or failed – that doesn’t seem to have mattered…’ I’m not sure I agree with Mr Thomas on that, but regardless of what one thinks of this particular failure, there are plenty of other, less spectacular, but equally appalling policy disasters at a time of unprecedented articulateness. There are knowledgeable experts on virtually every subject. Sometimes their facts or interpretations appear to conflict, but more often, I believe, the increasing volume of available information fails to improve policymaking because either:
- the real drivers of policy are ideological (as seems to be the case with Bush et al), or
- the rising tide of information is rendered next-to-useless by the increasing complexity of our society and environment.
Social Policy Bonds do both: they target explicit, transparent goals, and they make rewards contingent on achieving those goals. By contracting out the achievement of social goals to the market, they maximise the efficient use of our scarce resources. There might still be failures: bringing peace and democracy to the Middle East is a lofty and probably an extremely remote goal. Under a bond regime, it might never be achieved, but what is certain is that US taxpayers would not then have to pay for the failure.
13 April 2007
A climate model suggests that chopping down the Earth's trees would help fight global warming. … The reason for this is that trees affect the world's temperature by means other than the carbon they sequester. For instance forests, being generally green and bristly things, remain quite a dark shade even after a blizzard.The article is reporting on a study led by Govindasamy Bala, of the Lawrence Livermore National Laboratory, in California, and it doesn’t mention many other ways in which trees might warm the climate. For me the implications are that, with our very limited knowledge of the causes of climate change, we ought to target not the ways in which we currently think we can stabilize the climate, but the goal of climate stability itself. We simply don’t know enough about the mechanisms underlying climate change to make policy today on how to stabilize the climate.
The scientific complexities of climate change are analogous to those of a social system, and our policymaking cannot cope with great complexity. It cannot reliably identify the cause and effect in complex systems, and it certainly cannot cope with rapidly expanding knowledge, nor with the diversity inherent in large geographical areas. It’s too quick to identify a causal relationship, and then base policy on it. The Kyoto agreement is one such response to climate change. Whether Dr Bala’s study is right or wrong on the question of trees and climate change, is not the point. What is crucial is that our policymakers have some degree of humility, and create policies that don’t assume they know the entire truth.
Instead of promoting what are thought to be the means by which a goal is to be achieved, they should reward the society’s desired outcome. When it comes to climate change, instead of rewarding the planting of trees, or whatever seems, with current science, to be ways of reducing our net emissions of greenhouse gases, it should target climate stability, and let the market decide on the best ways of achieving that goal. These ways will not be obvious, and they will vary with time according to circumstances that we cannot anticipate. Rewarding successful achievement of society’s goals, as under a Social Policy Bond regime, encourages a wide range people to find diverse, adaptive and efficient ways of achieving social and environmental goals. Leaving such an exploratory process in the hands of politicians and bureaucrats just isn’t going to work: society and the environmental challenges are now just too complex for an approach that was devised (and worked very well) in the late 19th century.
11 April 2007
Officially, 53% of Pakistanis are literate. Others say the figure is nearer 30%. Literacy, often defined as no more than the ability to write one's name, is as low as 3% among women in some rural areas.The byline to the article sums it up: ‘Pakistan's madrassas may be less of a problem than its mainstream schools’. With its population of 160 million, Pakistan’s disastrous educational system is both distressing in itself, and a likely source of further misery. It’s a problem that doesn’t seem amenable to the current policy mix. Some years ago I proposed that private organisations and individuals take the lead and issue their own Female Literacy Bonds, based on the Social Policy Bond principle. My handbook (pdf) for such entrepreneurs or philanthropists, explains how the bonds could be of interest to all:
• If you are cash-rich but time-poor and know what you want, then you could get together with some cronies and do as suggested: set up an escrow account and issue your own bonds. If you are less wealthy you could swell the redemption funds by depositing your spare cash into escrow account set up by others.
• If you have more energy than money you could buy some Female Literacy Bonds, and then work to raise female literacy in Pakistan. Your bonds would appreciate in value if literacy levels rose quickly. You could even borrow on the strength of the expected increase in capital value of your bonds, in order to finance literacy-raising projects. You could co-operate with other bondholders and finance those activities that you think will be most efficient in raising literacy.
• If you are already involved in trying to raise literacy in Pakistan you could contact holders of Female Literacy Bonds and if they believe your activities are efficient in reducing conflict they will find it worthwhile to help finance your existing projects.
09 April 2007
A bleak picture of the corrosive effects of ethnic diversity has been revealed in research by Harvard University’s Robert Putnam, one of the world’s most influential political scientists. His research shows that the more diverse a community is, the less likely its inhabitants are to trust anyone – from their next-door neighbour to the mayor. Financial Times, 8 October 2006This is an oldish article, but the conclusions of the research cited are relevant. It’s worthwhile asking whence the impetus in favour of immigration arises, and what are its long-term effects on the social fabric of the countries receiving and losing migrants? My own view is that our governments have tended to regard our social environment very much as they have looked at the physical environment: something that can be run down for as long as an obvious emergency can be avoided, so that the financial figures look good.
Immigration is one subject on which buy-in is especially important. If people feel they haven’t been consulted about who is allowed into the country they live in, then the result will be, as Professor Putnam’s research indicates, negative. Consultation on such a sensitive subject could make a lot of difference: not necessarily to the immigration statistics, but to the far less quantifiable, but at least as crucial, matters of attitudes and trust.
We’re fast losing the habit of such consultation. National policy is decided by professional politicians whose policies are mainly expressed in terms of institutional structures and funding, a proliferation of micro-targets, or arcane legalistic discussion. Absent from such policymaking are outcomes that are meaningful to citizens. Government instead is concerned mainly about the means of achieving its (very often) unexpressed or mis-expressed goals. To reconnect politicians with its electorate, I have long advocated Social Policy Bonds: not only because of their likely efficiency gains, but also because they start out with an explicit statement of a meaningful policy goal. By doing that, they encourage greater public participation in policymaking. When it comes to hosting migrants from many different cultures and backgrounds, such participation, and the buy-in it generates, are essential.
06 April 2007
[P]erhaps most surprisingly, growth no longer makes us happier. Given our current dogma, that's as bizarre an idea as proposing that gravity pushes apples skyward. Bill McKibben, Reversal of Fortune, ‘Mother Jones’ March/AprilIn our individual lives we make choices for ourselves, and if we don’t think more income or wealth is worthwhile, we trade more for a better quality of life. Things go awry when those decisions are taken out of our hands. Most western governments target growth above all else. Since they have around 40 per cent of national income to spend and the power to create statutes that heavily influence much of the rest of our lives, governments’ goals play a big part in society’s sacrifice of (in Mr McKibben’s terms) better for more.
Of course, governments’ goals should be close to those of the people they are supposed to represent. But, as with all big organisations, institutional goals tend to take over. Growth and complexity tend to go hand-in-hand, as does complexity and the gap between people and their government. So there is a self-reinforcing cycle that leads to the disengagement of people from politics, and the substitution of politicians’ goals for those of ordinary people. They two sets of goals are quite distinct: and the choices of governments, given their huge economic and legal power, quite critical. One disastrous result is environmentally harmful subsidies, which mainly benefit large corporations at the expense of the physical and social environment, small businesses and ordinary citizens. Most of us would probably trade off some of the more measurable indicators of economic wellbeing for an enhanced quality of life. But the choice is largely out of our hands: it’s made by our governments on our behalf and they have every interest in maintaining their symbiotic relationship with large corporations. So when it comes to a choice between more and better, it’s more every time.
Social Policy Bonds are not just about efficiency: they’re about subordinating government policy not to the wishes of large businesses, but to outcomes that are meaningful to, and chose with the participation of, ordinary people. Under a Social Policy Bond regime, government would articulate people’s wishes and raise revenue for their achievement, but the actual goals, and the ways in which they would be achieved, would be decided by wider society. The benefits are not just greater public participation in choosing policy goals, but greater efficiency in achieving them.
05 April 2007
The report estimates that around 270-290 million Euros in known annual subsidies are being handed down to the transport sector in EEA countries, (which include the 27 EU Members and Turkey, Iceland, Liechtenstein, Norway and Switzerland). The effect of these subsidies is to reduce the costs of transport to users.
Apart from helping destroy the environment, such subsidies also represent a transfer from taxpayers to wealthier citizens, who use the transport infrastructure disproportionately more than the poor, as they have better access to transport and more time in which to use it. Meanwhile:
There is little prospect of slowing the growth in China's oil consumption, because the government is committed to a car-led policy of development. The World Bank's Mr Dollar has recently described this as “a very questionable development choice”—though it had earlier been conceived with the World Bank's backing. (My emphasis.) Source (subscription)
02 April 2007
It’s a natural reaction to the same top-down approach that, at the global level, despite all the treaties and blandishments has led to nuclear proliferation and the frightening prospect of nuclear catastrophe. And it’s that same approach, which at the national level in most developed countries, has generated soaring crime rates, failing educational and health systems, and the entrenchment of an underclass.
Leaving climate change to the government is just not good enough. And this not a criticism of government employees, who in my experience are almost all hard-working (sometimes to a fault), and undoubtedly well intentioned. The problem is that these employees are reacting perfectly rationally to the incentives on offer from the institutions that employ them. And these incentives are perverse. They have little to do with actually solving meaningful problems, and far more to do with the prime, over-arching goal of all institutions: that of self-perpetuation.
The outcome we should be targeting is some definition of climate stability, which should include indicators of plant, animal and human wellbeing as well as climatic variables and the rate of change of those variables. Targeting climate stability means that we don’t prejudge the best way of achieving it. This is, in my view, Kyoto’s most glaring flaw: it supposes that the best way of tackling climate change is to reduce anthropogenic greenhouse gas emissions. There is no evidence for this, even though the evidence that links such emissions to climate change appears convincing – with our current knowledge.
The point is that this knowledge is rapidly expanding. We are learning more and more about the links between greenhouse gas emissions and the climate, and about ways in which we can prevent or mitigate climate change. Kyoto is a single, one-size-fits-all, top down, fossilised, supposed solution to the climate change problem. But the climate change problem is so huge, and so urgent that we need instead a mosaic of approaches, that can adapt to our rapidly growing knowledge.
We also need to enlarge and motivate the pool of people prepared to do something to tackle climate change. Currently there is probably more human ingenuity devoted to marketing cans of dog food than there is to finding ways of preventing or mitigating climate change. The fact is that the rewards to a successful pet food campaign manager can be in the millions of dollars, while someone trying to generate new ideas for tackling climate change that don’t fit in with Kyoto will have difficulty getting attention, let alone adequate funding. This points to the need to divert some private sector resources away from trivia and towards solving our most urgent environmental problem.
Recently the Virgin corporation has seen that gap, and offered a reward for the best ideas to remove CO2 from the atmosphere. This is getting closer: we need to target a stable climate however that goal is to be achieved. We cannot afford to let the bureaucrats who run the Kyoto industry dictate the pattern of the world climate: we cannot afford the waste and inefficiency of brainpower that people will expend on gaming Kyoto.
There’s more. We also need people to buy in to solving the climate change problem. Kyoto doesn’t do this. Just the opposite in fact: most people instinctively resent imposed pseudo-solutions originating in remote bureaucracies. Kyoto has become politicized; so much so that anybody who questions it is assumed to be an environmental vandal. (This itself is indicative of Kyoto’s limitations: people who are secure in their beliefs don’t feel threatened when those beliefs are questioned.)
It is for all these reasons that I believe Climate Stability Bonds would be an improvement over Kyoto. Climate Stability Bonds would be backed by the world’s governments. They would be redeemable once a specified climate stability goal had been achieved and sustained. They would be freely tradable and their value would rise or fall as the targeted goal become more or less likely to be achieved. The goal could be specified as a combination of climate and other indicators. The bonds would not prejudge the best ways of achieving their goal. They would reward the achievement of climate stability, however it is achieved. Investors in the bonds would have incentives to respond quickly and appropriately to new knowledge about what is causing climate change and to new ways of dealing with it. Governments would be the ultimate source of finance for achieving climate stability, but the private sector would allocate society’s scarce resources.
A Climate Stability Bond regime would express its aims in terms that people can understand. Its explicit goal would be climate stability. If people understand what a policy is all about, they can participate more in its development, refinement and implementation. This matters hugely when, as with climate change, government will probably have to rein in activities to which we have become accustomed. Kyoto discourages buy-in because it is focused entirely on one single policy: the cutting back of net anthropogenic greenhouse gas emissions which, at best, will do little to prevent climate change and despite being ineffectual will impose heavy, and up-front, financial costs.
Climate Stability Bonds, on the other hand, have a comprehensible, meaningful goal: the achievement of climate stability. They would channel the market’s incentives and efficiencies into the solution of our most urgent environmental problem. But with their focus on a targeted outcome, rather than a supposed means of getting there, they would also encourage greater public participation and buy-in to the solutions they generate. We need a widely supported, coherent, and efficient response to climate change. Climate Stability Bonds have all those features. Kyoto has none.