Poverty vs Global Warming

By Anonymous

A comment made by the protagonist in our Aspen case got me thinking: in countries like India that don’t have the existing infrastructure, we have a chance to do it right the first time. It got me thinking about two directly opposing dilemmas: global warming vs global poverty. How do we reconcile the two? Can we really try and tell India with a straight face that coal is a bad idea when hundreds of millions live in poverty?

Let’s explore a couple facts, and by no means is this anywhere near a complete list (taken from https://www.advancedenergyforlife.com/sites/default/files/Clemente%20Energy%20Poverty%20White%20Paper.pdf):

· 25,000 children die every day primarily from lack of clean water, sanitation, food, and adequate medical care. The key to obtaining each of these is energy

· There are 4 million deaths per year from household air pollution, primarily due to use of primitive stoves burning wood, coal, charcoal, and the like

· The chart below further shows a correlation between life expectancy and access to electricity:

And the issue of poverty is wide-spread, as can be seen in the map below:

Source:

The countries that stand to lose from global warming are the industrialized countries, not the developing countries. It is clearly going to be on the shoulders of wealthy world to come up with the solutions. But the wealthy world does not need to come up with solutions that reduce their greenhouse emissions so much as solutions that enable the developing world to have fast and cheap access to electricity, at least as fast and cheap as coal.

As I have mulled on this, there are a few solutions that come to mind. The obvious ones that are already being done: movement away from coal and toward natural gas and improvements in technology in solar/wind/nuclear. One other thought I’ve had that I haven’t been able to shake, but have nowhere near the scientific background to fully understand, is the removal of carbon dioxide directly from the atmosphere. Dr. Keith has come up with some clever solutions around this, but where we seem to be falling short is having a wide-scale use for the CO2. Trees and plants use carbon dioxide as a critical input for their growth…is there something we can learn from this? If there is a real market (not a phantom carbon-trading market) for carbon dioxide where it can be used to make real and useful things, this might be able to become a big part of the solution.

And finally, the last piece that would need to come together to make this happen fast, is that industry and the government needs to come together to invest money wisely, money that will pay returns. There is a potentially significant loss to the US economy due climate change from to India & China’s increase in coal use. It is only sensible that the US and certain US industries should fund some of the innovation to come up with the solution. Beating down the offenders of greenhouse gas emissions (i.e. coal and oil/gas) is not the answer. They will simply fight back, and it’s not their fault that consumers use/need the stuff. I would propose that is rather should be on the shoulders of those who have something measurable and significant to lose if global warming is not stopped. And if we think a while about it, that should be a long and powerful list.

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About macomberjohnd

HBS Finance faculty interested in sustainability in the built environment including devices, structures, townships, and cities.

3 Responses to “Poverty vs Global Warming”

  1. By John Macomber

    Very powerful dilemma posed between “two goods” (or two bads). LCA did not provide all the answers? Unfortunate that the author feels it better to be anonymous among peers. On the other hand the public anonymity is beneficial to us, since it frees blog posts to be more daring or provocative than might be comfortable in class. By the way, there are several essays where the author asked me not to post them at all, and that’s fine.

    Considering the matter of economic development – or more specifically human development – and the need for cheap and abundant energy is central to getting anywhere on issues of deforestation, water quality, and air pollution (before even discussing carbon). Examples:

    New York Times points out that Narendra Modi, new PM of India, has first mission to bring half a billion people out of poverty. Maybe not his first mission, but ahead of mitigating carbon and particulates.
    http://www.nytimes.com/2014/12/05/world/indian-leader-favoring-growth-sweeps-away-environmental-rules.html?_r=0

    World Bank New Senior Director of Energy and Extractives on Challenges and Opportunities points out how developing countries benefit from extractive industries.
    http://blogs.worldbank.org/energy/new-senior-director-energy-and-extractives-challenges-and-opportunities?cid=EXT_WBBlogSocialShare_D_EXT

    Neither of these are exactly oil robber barons seeking to pad profits from fossil fuels.

    Business leaders like us, especially with the diversity of experience and points of view in the IBEE class, are challenged to find a path to optimize human development in the medium term – trying to bring billions out of poverty – and optimizing the experience of life on earth in the long term, if concerns about acidification of oceans, expanding particulate pollution, sea level rise, and of course potential atmospheric warming have probability of greater than zero of occurring.

    As you have heard me say before, we can all rail against bad politicians (or against robber barons or against UN type redistributionist cabals) and go on our way. But just complaining about politicians essentially absolves us in the room of any need to do anything besides complain. Not sufficient in my view.

    Personally as you have also heard me say, one of the potential win wins (or at least not lose-loses) is around constructing buildings and infrastructure that are

    a) less vulnerable by virtue of being more resilient and located out of harm’s way and which

    b) use the basics better: let’s at least not waste energy, water, food, and our time in transport…

    (And in the glossy scenario, these also c) provide good returns to financial investors).

    This is not the whole answer of course but it has been a path at least for me to combine research and investment in human development, environmental considerations from the vantage of resource efficiency, and economic development. There are plenty of avenues in products, services, development, investing, consulting, manufacturing, academia, and military to work on these issues or to be aware of them as you consider markets for whatever services or products you are involved with in your next jobs.

    A side benefit to actually accomplishing any of the above would be that there might be slightly less call to engage in water and energy wars, a dark downside that some of you have blogged about trying to mitigate.

    Further HBS education:

    Q3 Energy
    http://www.hbs.edu/coursecatalog/1105.html

    Q4 Building Cities: Infrastructure and Sustainability (same time slot as Q3 “Energy”)
    http://www.hbs.edu/coursecatalog/1487.html

    Q3 & Q4 Reimagining Capitalism: Business an Big Problems
    http://www.hbs.edu/coursecatalog/1524.html

    • Affordability, Security and the Environment

      By John Macomber

      Here is an excerpt from an interview with an oil co CEO (John Watson of Chevron) regarding economic development, fossil fuels, and climate. He’s trained as an economist and has an MBA from Chicago Booth of about the same vintage as Rebecca, Forest, and me.

      Interpretation can vary a lot depending on one’s prior point of view. What do people in class think are flaws in the argument? Or personal action to take if persuaded by the argument?

      “Underlying Watson’s bullish outlook for the oil industry is his unwavering economist’s belief that the rise of the middle-class across the globe will shape priorities as governments try to strike a balance between affordability, security and the environment.

      “…Watson says his conviction doesn’t clash with his understanding of the risks of climate change. ‘….Every country is going to make these choices, and my observation is that most countries are choosing affordability first and then they’ll have to take a look at all three of these issues and strike a balance…For the foreseeable future, alternatives such as electricity from solar panels and motor fuels from soybeans will be too intermittent, expensive and scarce to seriously compete with oil and gas,’ he said, citing more than a decade of Chevron research into the matter.

      ” ‘Yes, we have environmental challenges in our sector…But our sector is vital to the way of life that we have. As we transition to cleaner fuels over a long period of time that are affordable to everyone, we can still contribute a great deal.’ ”

      Bloomberg story here:
      http://www.bloomberg.com/news/2014-10-17/chevron-s-watson-sees-secure-future-in-global-oil-thirst.html

      • The Age of Oil has been an Age of Inequality

        By John Macomber

        Another point of view.

        [Interpretation can vary a lot depending on one’s prior point of view. What do people in class think are flaws in the argument? Or personal action to take if persuaded by the argument?]

        “The age of oil has been an age of inequality, of staggering wealth and abject poverty. The discovery of hydrocarbons has often brought fortune to the few and misery to the masses. The phenomenon of the ‘oil curse’ is well-documented: many oil-rich countries suffer distorted economic development, financial instability, repressive authoritarian rule, stifled human rights, soaring poverty and pervasive corruption…

        “We need to hasten oil’s demise – for the sake of our warming climate and collapsing ecosystems, and in the service of democracy, poverty alleviation and justice….It will be technically possible to meet the world’s energy needs, and give the Majority World’s growing populations equitable access to the energy the rich world currently hogs, using a combination of existing renewable technology and energy efficiency….

        “As Naomi Klein argues in her new book This Changes Everything, ‘we have not done the things that are necessary to lower emissions because those things fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have been struggling to find a way out of this crisis.”

        [This post was written by Jess Worth, a UK-based writer, editor, and campaigner, and was originally published in the November 2014 issue of the New Internationalist magazine. Linked here from “This Changes Everything,” a blog affiliated with the Naomi Klein book of the same name]

        http://thischangeseverything.org/ending-the-oil-age/#more-1101

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