on May 3, 2009
James Speth, in The Bridge at the Edge of the World, writes a book that lands somewhere between a scholarly treatise on the planetary environmental effects of supporting seven billion humans and an anti-capitalist, anti-growth, anti-multinational corporation rant. One can have the highest of ideals, and the wrongest of approaches, simultaneously. The Bridge at the Edge of the World may be the best example of this since Ralph Nader's run for the presidency in 2000 led, without a doubt, to Bush's victory in Florida. Nader, by getting ideologically sidetracked, led to an eight year stonewalling of any serious attempt to deal with the ongoing environmental catastrophe that Speth so clearly articulates. Speth's distracting focus on the highly debatable hypothesis that capitalism is the root of most environmental evil may deny him the very converts to the cause that are so urgently needed at this tipping point in human history.
Point of view is important, and before any potential flamer turns his/her acetylene torch on this review, consider this: I became sold on the idea of global warming in 1971. I'm a lifetime Sierra Club member, monthly contributor to the Nature Conservancy, drive the most fuel efficient car on the planet (a 2001 Honda Insight that I bought used), am an all weather (neither sleet, nor snow, nor rain, etc.) bicycle commuter on my 18 mile round trip commute to work. Were you to visit my home, you'd sweat in the summer, shiver in the winter, as my heat pump worries about unemployment. I actively campaigned for(including, ugh, canvassing), and voted for, Obama. I eat organic oatmeal for breakfast, and I frickin' listen to NPR. In short, I have some creds. And yet I feel this book is a disappointment.
Speth's book is strongest when he sites environmental data, and when he hammers away (and the guy does tend to hammer) at the widely accepted assumption that GROWTH is synonymous with GOOD. His discussion of the underlying assumption that economic growth is for the good of mankind, much less the planet, is the best argument for doing a horrified double-take on the growth=good religion in...maybe forever. But Speth is much wobblier when he attempts to interpret economic data, and weakest when he attempts to attribute environmental catastrophe to any one economic system (in this case, exclusively to capitalism).
Speck spends much of his book discussing the role of capitalism and its role in environmental desecration. History would not disagree that captalism has not been kind to the planet, it would simply add that neither has any other system. Point being that HUMANS, and even more importantly, large numbers of humans, regardless of chosen economic/governmental system, run rough shod over fragile Mother Earth. The Mayans who drew up their famous calendar well before capitalism had been articulated, appear to have died out through exhausting of their resources (aided by some climate changes). The buffalo of Oregon (yep, there were), disappeared long before white men settled there. Cause? Indians, using horses that had escaped from the Conquistadores, used this new technology to become more efficient killing machines, wiping out the most western of the buffalo herds. These guys were capitalists? Say what? Ireland's forests (about 5% of the original forests remain) weren't cut down by capitalists many centuries ago. Africa's forests have been cut down for cooking fuel and agricultural replanting, secondary to population pressure, not capitalistic logging companies, not multinational corporations. Let's look at socialism: the biggest environmental disasters in the history of this planet, from Chernobyl to the Aral Sea, to the deforesting and desertification of the sub-Sahara, are not exclusively related to capitalist, nor any other economic system. They are related to man, to there being an awfully large number of us on our fragile home planet, and to the increasingly refined and reproduceable knowledge about the nature of that most dangerous of all primates: homo Sapiens.
Kudos to Speth for his review of environmental data that document the horrendous body blows that we, the most rapacious of the great apes have been delivering to the planet. Kudos for questioning the assumption that material/economic growth is good for humans, much less the planet. Kudos for expressing cogently a sense of terrific urgency, the "fierce urgency of now" (yes, he does quote that speech). Kudos for Speth's adult life of a long, dedicated, and skillful fight to heal my favorite planet. Raspberries for his vague call to a "new level of human consciousness", complete with references to Stage 1, Stage 2, and Stage 3 levels of consciousness. Loud raspberries for drastically narrowing the potential members of an urgently needed audience that will not be able to swallow his attribution of all environmental evils to a single economic system, rather than our primate nature, a virtual lack of incentives to change our behavior, and active opposition to slowing the most malignant type of growth: human population expansion.
Nader had some great stuff to say in 2000 (and before, and since). Too bad that the air he breathes is a bit rarefied for mortals. His rigid focus on certain ideals led directly to eight years of delay in the most influential country on the planet coming to grips with the issues that face us. Speth, in this flawed book, has taken the stage at an exquisitely vital time in our history, and has delivered an analysis that the old bogeymen of capitalism and its bastard children are the root cause of our crumbling ecosphere. Unregulated capitalism and its bastard children really ARE bogeymen, AMONGST MANY OTHERS. This is an "all hands on deck" moment in history, Speth's flawed analyses and language may guarantee that many skillful, energetic, principled people will remain in their berths until the water laps at the portholes to their staterooms.
Thomas Friedman's Hot, Flat, and Crowded got some Palin-loving, drill baby drill chanting, Escalade-driving acquaintances of mine to back up and say "What the hey?!? This is serious!!!" The Bridge at the End of the World will unlikely have any such effect.
on February 6, 2009
The Bridge at the Edge of the World
James Gustave Speth's The Bridge at the Edge of the World, even though it was written in 2007 and 2008, does not refer to the great economic crisis now unfolding. That's a bit surprising, given the nature of the intellectual ground he covers, environmental and economic. Still, it is a book from "The End of an Era," and marked forever in its own way by premonitions and indicators of pending crisis and disaster - his own and from the many books he covers. He notes them piled high in the corner of his study: from Richard Posner's Catastrophe: Risk and Response, Jared Diamond's famous Collapse to James Howard Kunstler's The Long Emergency - to give you a taste. However, given Speth's even temperament, it's not surprising that he finds that there's plenty of opportunity in a great crisis. He refers early on to Milton Friedman's observation that big changes happen during great crises, and the direction of the change is guided by the "`the ideas lying around,'" although Speth makes it clear he won't be picking up many of the deceased conservative economist's preferences. Instead, he takes us on a grand tour of a wide range of more progressive ones, and indeed they form a good part of the hopeful sections of the book. But before we cover some of these key ideas, let's see what led our author to give his book such a dramatic title, one which I've caught myself mispronouncing as the Bridge at the End of the World rather than the Edge.
There are many notes in Speth's long alarm call - and rallying cry. We'll start with the two major ones that break through the prevailing policy fog. The crisis Speth sees - "the escalating processes of climate disruption, biotic impoverishment, and toxification..." - stems from the fact that the scope, dynamism and power of globalized capitalism is overwhelming both the environment - and the environmental movement. He dramatizes the situation by giving us a series of charts, labeled the Great Collision, 1750-2000, and they all have similar curves, rising dramatically from unremarkable earlier trends to alarming heights in the 20th century, and most steeply, since 1950. These charts of the collision, between population and economic growth and increased consumption of key resources: water, paper, fertilizer and the cost they impose: nitrogen loading in coastal zones and depleted fisheries, species extinctions, loss of tropical rain forests and woodlands...and much more...are meant to drive home the message: the modern economy is a rampaging growth machine with huge costs...unsustainable impacts for the environment. Behind the economic mechanisms lie crucial ideas and assumptions, none more powerful than what historian J.R. McNeill has identified in his environmental history of the 20th century, Something New Under the Sun as " `...easily the most important idea of the twentieth century...the overarching priority of economic growth...'''
Here's how Speth assigns the responsibility for the crisis, to both the economic and political system:
A mutually reinforcing set of forces associated with today's capitalism combines to yield economic activity inimical to environmental sustainability. This result is partly the consequence of an ongoing political default - a failed politics - that not only perpetuates widespread market failure - all the nonmarket environmental costs that no one is
paying - but exacerbates this market failure with deep and environmentally perverse subsidies. The result is that our market economy is operating on wildly wrong market signals, lacks other correcting mechanisms, and is thus out of control environmentally. (Page 8).
Transferring the Costs to You....
The news daily punctuates the points Speth is putting forth. Think of the coal ash and Chesapeake Bay stories of the past few months. Ripping the mountain tops off West Virginia to get at the coal seams below and throwing the massive debris into adjacent streams and valleys with legal impunity, despite the Clean Water Act, and common sense, and the shamefully unresolved issue of what to do with the mountains of toxic coal ash breaking through repeatedly fallible containment systems...all are blatant externalities imposed largely on the environment and nearby residents but not on the cost of coal or the companies themselves. Isn't coal a great bargain? Not only is it one of the main culprits in over-heating the planet, it is literally burying us with its by-products while also creeping into our lungs. The Chesapeake is not recovering for many reasons, but one of the main ones is that it is carrying a nutrient load of nitrogen and phosphorous seven times greater than its pre-human development baseline. Some of the excess nutrients fall from the smokestacks of the great coal burning power plants that dominate the greater DC region. Some comes from auto emissions, municipal sewage treatment plants, 50,000 obsolete septic systems in Maryland alone, the completely unnecessary ladling out of suburban lawn fertilizers, and, the greatest contributor, the animal and poultry industries concentrated in the Shenandoah Valley of Virginia, Lancaster County, Pennsylvania, and the Big Chicken operations of Delaware, Maryland and Virginia, especially impacting water quality in the lower bay. Aside from improvements in water quality treatment at the vast chicken processing plants (slaughterhouses, that is) the problem of disposing of the vast amounts of chicken manure generated...is externalized largely to the subcontractors who raise the chickens and the farmer's fields which receive most of the nutrient generating wastes. As we will see, the political system has simply not had the will to make either farmers or the chicken industry carry their fair burden of paying the costs of cleaning up the environmental abuses they "externalize." Indeed, whenever government has moved in even the slightest way to tighten up on chicken wastes, it has been public tax dollars which have been picking up the vast majority, if not all, of the financial burden. (Much more on this to come...)
An Impoverished Nature
One passage on the loss of biological diversity, and I think it unfortunately applies all too well to the Chesapeake Bay too, struck me with overwhelming force - and bleakness. I think it's enough to make some throw in the towel, which is certainly not the intent, in substance or tone, of Speth's book, but I think he put it in for precisely the effect it had upon me. It comes from MIT professor Stephen Meyer. Here's the blunt force trauma for you:
Over the next 100 years or so as many as half of the earth's species, representing a quarter of the planet's genetic stock, will functionally if not completely disappear. The land and the oceans will continue to teem with life, but it will be a peculiarly homogenized assemblage of organisms unnaturally selected for their compatibility with one fundamental force: us. Nothing - not national or international laws, global bioreserves, local sustainability schemes, or even `wildlands' fantasies - can change the current course. The broad path for biological evolution is now set for the next several million years. And in this sense the extinction crisis - the race to save the composition, structure, and organization of biodiversity as it exists today - is over, and we have lost. (Page 36).
Well, should we be so surprised at the thrust of this spear of biological despair thrown by Meyers, if, as Speth maintains, "...the climate convention is not protecting climate, the biodiversity convention is not protecting biodiversity, the desertification convention is not preventing desertification, and even the older and stronger Convention on the Law of the Sea is not protecting fisheries?" (Page 72.) No, we should not be surprised, especially since "today's mainstream environmentalism - has proven insufficient to deal with current challenges and is not up to coping with the larger challenges ahead."
Now this is very sensitive ground Speth is venturing upon. Even as he correctly concedes that the current "movement" is not succeeding, he doesn't want it to stop doing what it is now doing because it is the only "holding action" (my term) in town, and we don't quite know what to shift our focus too. Except that it will be broadly more political and inclusive to be effective, reaching out to movements for social and economic justice in a way that we haven't seen before - at least on any broad scale; we know there have been eddies and small currents in this general direction for some time: the new Apollo Alliance for green energy and jobs being the most prominent...and the important work in urban areas done by folks like Majora Carter.
Stop Being Predictable
When we said earlier that Speth had wandered "off the reservation" a bit, this is what we partially had in mind: "But it is time for the environmental community - indeed, everyone - to step outside the system and develop a deeper critique of what is going on...if we want to transform that system for the better, we should stop being predictable and become agents of change....George Bernard Shaw famously said that all progress depends in not being reasonable. It's time for a large amount of civic unreasonableness."" (Page xiii).
"Weak, Shallow, Dangerous & Corrupted..."
Before elected officials reading this become too worried about an "angry" Gus Speth, let me reassure them that he remains eminently reasonable and well tempered. And he remains a committed capitalist, although he is clearly heading towards what many in the center and on the right would call social democracy or perhaps even socialism, even though he explicitly rejects the "S" word as a model. The best way to demonstrate that is to show you a couple of powerful statements - Speth at his most forceful - I'm not sure angry is the proper term. He knows that government, properly understood, will be the institution through which we will attempt to change "the operating instructions" for the way capitalism currently behaves. But that government will have to be a very different one from the one he sees in Washington (and from the one being put together by the "change agent," President Obama?), and will have to be informed and invigorated by powerful new citizen movements and energies. So here is our "fiery" Gus Speth:
In the United States today, the government in Washington is hobbled, corrupted by money, and typically at the service of economic interests, focused on the short-term horizons of election cycles, and poorly guided by an anemic environmental politics, a poorly informed public, and a pathetic level of public discourse on the environment.(Page 63)... Democracy in America today is in deep trouble. Weak, shallow, dangerous, and corrupted, it is the best democracy that money can by. The ascendancy of market fundamentalism and antiregulation, antigovernment ideology makes the current moment particularly frightening, but even the passing of these extreme ideas would leave deeper, longer-term deficiencies. It is unimaginable that American politics as we know it will deliver the transformative changes needed. (Page 217). (My emphasis.)
The Nightmare Ahead
In the very last chapter, which has the same title as the book itself, Speth takes on the psychological charge about gloom and doom, and what is sure to be the accusation that he is longing for a great crisis, prompted by such passages as this: "Unfortunately, the surest path to widespread cultural change is a cataclysmic event that profoundly affects shared values and delegitimizes the status quo and existing leadership. The Great Depression is a classic example." He does this by properly wading into what passes for grand debate in the environmental movement, The Death of Environmentalism controversy with Michael Shellenberger and Ted Nordhaus, whom readers may recall chastised the mainstream environmentalists for not broadening the movement to counter the right, and for relying upon a threat-based psychology to mobilize folks. These two authors reminded their readers, in short, that "Martin Luther King, Jr., did not proclaim `I have a nightmare.'" Here's how Speth deftly handles this important facet of policy shaping:
My reply to them was that he did not need to say it - his people were living a nightmare. They needed a dream. But we, I fear, are living a dream. We need to be reminded of the nightmare ahead. Here is the truth as I see it: we will never do the things that are needed unless we know the full extent of our predicament. (Page 234).
Let's step back a bit and put Dean Speth's thoughts into perspective, from where we are now, at the beginning of 2009. In many respects, the nightmare is here, but it is the great financial and economic crisis, not the global climate or environmental crisis that is washing over everyone. Yet it offers a grand opening for the optimistic and opportunistic side of his work, and ours, because the depth of this crisis is likely to do two major things he has cited as part of the recipe for great change: delegitimize the political and economic status quo, and jeopardize the role of unrestrained consumption as the driver of growth in the US and in the global economy. The deflation of the greatest credit, debt and speculative bubble in world economic history has traumatized not only the banking system, the credit system and Wall Street; it has also traumatized the consumer, who is in a state of shock, and make no mistake about it, that consumer and his/her old bad habits are very central to the diagnosis and "cure" in Speth's book.
A Dangerous, Even-Tempered Man?
So what is Speth after, and why did prominent politicians avoid his jacket cover like the book carried the plague? Well, we've given you a couple of good reasons with those quotes on the temper of government - and they could apply equally well to Annapolis, Trenton or Albany - as to Washington, DC. But what makes Speth an especially dangerous "even tempered man" at this time is his call for "changing the operating instructions" for capitalism as we know it, and challenging the primacy of growth as the measure of all economic and social policy, a daring revival of the lost debate from the 1970's which many readers may remember. We know that debate did not end happily for the environmental community and he does take note of that outcome.
By calling for changes to the current "operating system," Speth is criticizing the Darwinian force of market fundamentalism at the core of capitalism, the ruthless drive to minimize costs, especially labor costs and "labor" itself if that is necessary, to maximize profits, to transfer every possible financial burden to external sources, like the common air, water and soil, (a really primitive and original form of "outsourcing," don't you think?) and to maximize the subsidies, tax breaks and other inducements from the various layers of the weak and broken governments...keeping them tame and "in line" by the much celebrated "mobility of capital" - in sum - by what Thomas Friedman famously called the rules of the "Golden Straightjacket"... and, especially, we might add, for matters at hand here, constructing an ideological system where the supposed regulators of private economic activity think first not of the common good, but of the bottom line and "push back" potential from those they are supposed to be regulating. (And their own future employment through the gates of the "revolving door.")
MoCo as a "Little Nation-State"?
The threats and challenges of reformers and governments who want to alter this system are additionally kept in check by the great unifying and clarifying message: we need growth, endless growth, and this is the only formula by which to do it... anything else would threaten the entire system....And, I might add, from my own professional environmental career, and lest I make governments out to be too much the victim here, local, county and state governments, even the good reformist ones, mimic the worst aspects of this style of predatory capitalism by behaving as "little nation states," ready to steal and hoard all the private sector growth generators they possibly can from their neighbors, to the vast detriment of effective regional environmental planning and regulation. The comic aspects of this for a home rule state like NJ, with 566 local governments, border on the ludicrous, and would make for a great documentary film entrant someday at the Sundance Festival, were not the negative environmental (and human) consequences so huge. When it has really done the environmental job, as in the Pinelands or the Hackensack Meadowlands, NJ has ditched this system for a vastly different one, tempering, in much the ways Speth recommends, the all-economic "drive" signals with a broader range of human, environmental and civic values. It's not hard to imagine what the "findings" and "value" section of future land-use legislation to really protect the Chesapeake Bay would read like...I've written similar ones for a real NJ State Plan, not the paper tiger one that was on the books back in 2001. You can hear the Maryland County executives howling already.
Corporations: I Thought They Were Going Green
But what's that you say: haven't there been powerful counter trends to this Darwinian economic uber alles script? Rather prominent trends like the "Corporate Greening Movement, Green Building (LEED) and Corporate Social Responsibility" currents, and also broad recognition that as societies grow wealthier, they eventually respond to their "proudly won" higher levels of environmental destruction by reducing their pollution levels, trends held out by so many as their fondest hope for China and India in curbing green house gases, and also known technically as the environmental Kuznets curve?
Speth is on top of these trends, and addresses them all, and to show us his moderate bono fides, he notes that he can now in good conscience recommend corporate environmental careers to his students, something he didn't do in the earlier decades. That's not a trifling matter, given the thrust of the main theses of his book. But these are trends, not transformations at the core system we've sketched above, and many are driven by the newly won recognition of the future impacts of global warming on various corporate bottom lines, especially in the insurance industry/financial sectors. In his very good chapter 8 on "The Corporation: Changing the Fundamental Dynamics," Speth cites two works, Berkeley business professor David Vogel's The Market for Virtue and Resources for the Future's Reality Check to the effect that no, these are not the fundamental changes we are looking for, welcome as some of the improvements they bring are. File them under the category, neatly put by political philosopher Richard Falk in the final chapter, as "`a snapping at the heels of the system.'"
An Intellectual "Whole Earth Catalog"
So what does this Speth character want, if these trends are not good enough? In many ways, The Bridge at the Edge of the World is its own small version of an intellectual Whole Earth Catalog, briefly summarizing the explorations that have been ongoing yet virtually hidden from sight during the past 16 years or so. So we get many good book reviews, with generous quotes from the authors in our journey through 237 pages of text and then very substantial notes. He's therefore covering environmental economics as well as the traditional version, sociology, religion, politics, psychology, anthropology...all the fields that would bear on the possibilities of major cultural and economic changes.
Yet my audience needs a short-hand version and a clearer sense of what he's after than this description, and he provides it in the Introduction, and that should give some additional reassurance that indeed Speth wants to be more grounded than his former teacher Charles Reich may have been with his famous The Greening of America (1970).
So how does Paul Hawken, Amory and Hunter Lovins' Natural Capitalism sound to you? Speth bullets the following "strategies for the new economy" from their book:
* Radically increased resource productivity in order to slow resource depletion at one end of the value chain and to lower pollution at the other end.
* Redesigned industrial systems that mimic biological ones so that even the concept of wastes is progressively eliminated. (This is what the new field of industrial ecology is all about.)
* An economy based on the provision of services rather than the purchase of goods.
* Reversal of worldwide resource deterioration and declines in ecosystem services through major new investments in regenerating natural capital. (Page 12).
Then, on the very same page, Speth begins his journey into those social and political realms that most "professional" environmental organizations and leaders have been reluctant to discuss, much less to champion, however they may feel about it personally. It is an American flavored journey towards European and Scandinavian social democracy, broadly defined: measures for more income security, health care, the rebuilding of a sense of community, more leisure and time for family, greater economic and political equality. He reminds us that "if you raise these social issues in the councils of our major environmental organizations, you might be told that `these are not environmental issues.' But they are."
Humanizing the Corporate Gyro
Because Speth presents the modern corporation as the dynamo of modern economies, he spends considerable time exploring how their increasingly narrow focus on growth and quarterly returns might be broadened to include environmental and social goals. This is an important section of the book, and what is presented may come as a surprise to those who are immersed in "inside" the Beltway politics, where such fundamental changes are more than off the table - they're not even on the horizon. So Speth homes in to a particular compass reading that finds that "the major change in the nature of the corporation that is needed now, and that will be essential in the future, is to change the legal mandate that requires the corporation strictly to pursue its own self-interest and to give primacy to maximizing shareholder wealth..." (Page 180).
To give you a sense of the risks that Speth is taking in this discussion, I recommend that the next time you are at a political fundraiser, try bringing up anyone of the following items he lists as paths for governmental action to "humanize" the goals of the corporation (Pages 178-179):
* Revoke corporate charters
* Exclude or expel unwanted corporations
* Roll Back limited liability
* Eliminate corporate personhood
* Get corporations out of politics
* Reform Corporate lobbying
Merely listing these policy lines and comparing them to our everyday political experience shows how far we have to travel. Only the last item could really be considered as a "here now" issue. Speth does a particularly good job of filling in our blanks with the writings and discussions that are taking place in a "different" reality, one far-removed from the versions presented on CNN or in The Washington Post. Here are the titles that caught my attention from three chapters near the end of his book, from "Capitalism's Core, A New Consciousness," and A New Politics:"
Peter Barnes, Capitalism 3.0: A Guide to Reclaiming the Commons (Berret-Koehler, 2006); Robert Dahl, On Political Equality (Yale Univ. Press, 2007); Thomas Homer-Dixon, The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization (Island Press, 2006); William Greider, The Soul of Capitalism: Opening Paths to a Moral Economy (Simon and Schuster, 2003); Gar Alperovitz, America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy (John Wiley and Sons, 2005); Kirkpatrick Sale, Dwellers in the Land: A Bioregional Vision (Univ. of Georgia Press, 2000); Benjamin R. Barber, Strong Democracy: Participatory Politics for a New Age (Univ. of Calif. Press, 2003); Paul Hawken, Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw it Coming (Viking, 2007).
As this is being written just in the afterglow of President Obama's inauguration, it is clear to all that the crisis which lurks between the covers of The Bridge at the Edge of the World is here. The banking system is, as our good friend Nouriel Roubini declares, "effectively insolvent," and the losses he is currently calculating come in at a catastrophic $3.6 trillion for U.S. institutions alone (see [...] )
The Financial Crisis as a Teachable Moment
Now it seems to this reviewer that the changes hoped for by Speth in capitalism's "operating system" are not going to be ushered in tomorrow, or next year, despite a crisis that is likely to leave transformations at least as large as the New Deal did before we are through. And, as we indicated earlier, this is no mere "jump starting" with cables to bypass a weak economic battery. But because the crisis originated on Wall Street and in the financial system and the engine fires of bad debt continue to burn out of control, it is reform directed there first that we must look to begin the long process down Speth's path. And that is a logical place to start, rather than in non-financial corporations that feel that they didn't do anything wrong and are very happy to play by the old rules Speth says are leading to that great collision between market fundamentalism capitalism and a sustainable environment. One only has to read Esther Kaplan's fine article in The Nation on how the business community is reacting to the threat of labor law reform presented by the Employee Free Choice Act to see that we are not going to leap into a better age easily or quickly. She quotes Bill Samuels of the AFL-CIO as saying "`I get the sense that this is more important to them than even taxes or regulation...this is about power. And the business community is not going to give up power willingly.'" Wal-Mart CEO Lee Scott is quoted as summarizing the stakes this way: "`We like driving the car, and we're not going to give the steering wheel to anybody but us.'" From that, I would guess he's even opposed to alternating drivers on long trips. One US Chamber of Commerce Official is quoted as saying "`This will be Armageddon.'" (at [...] ).
Needless to say, the signals being sent haven't been lost on our new President, and it will be fascinating to see how he handles his campaign promises for the bill against these barometers of business recalcitrance. Look for a major postponement, and major disappoint for labor. For a least a year, maybe longer.
Yet properly addressing the financial crisis could provide a major teaching moment for our new President. That's why we're supporting the calls for a new "Pecora Hearing" to get at the root causes, including all the regulatory failures. If conducted thoroughly, they will cover the interconnections between lop-sided Wall Street pay and short run incentives, the complete abdication of public responsibility by the for-profit "ratings agencies" and the entire tilting of American business pay and incentives towards the short-run, quarterly scoring system promoted and centered on the old Wall Street. These directions should not come as a surprise to any of readers who have been following up on our reading lists, especially the books by George Soros, Kevin Phillips and Robert Kuttner. This seems the best and most logical way to begin to get at the values in the corporation's "operating system" that Speth says need reformation. And because the old business model at the major banks is completely broken, the nature and directions of where they invest under a yet-to-be articulated new one is the opening pathway to so much of the greener economy that we all long for. A very different investment model could be then both the lever and the teacher (because it conveys values) to get at a broader corporate universe.
A Dress Rehearsal for Cap-and-Trade Troubles?
But the grand opening wedge presented by the financial crisis is likely to have complex and perhaps not so positive ramifications for something close to most progressive hearts, including Speth's: we're thinking about the dramatic fall in world oil prices since their July of 2008 peak and the implications for passage of any type of sweeping cap-and-trade legislation. Because of the dramatic drop in world economic activity, energy prices have plunged, an amazing reversal of the market signal they were sending in July. "Follow the market's signal" is no guide to energy reform under these circumstances. And the intensity of the broader economic crisis is likely to give every industry sector opposed to grand global warming relief a potent rallying cry for postponement, if not burial. In California, the construction industry says it can't comply with the new engine standards placed on its heavy machinery by that state's ahead-of-the-curve air quality regulations. Speth is a supporter of cap-and-trade in a way this writer is not. I'm skeptical based not only on that system's troubles in Europe, but also on the complexity level and the evidence of fracturing coalitions in January of 2009, when the National Wildlife Federation (NWF) broke from Environmental Defense's and World Resources Institute's alliance with major companies like General Electric, DuPont and GM in the U.S. Climate Action Partnership. (See the Washington Post article at [...] ) NWF is a good weathervane for this type of proposal; if they jump ship because a bill's too weak - then it usually means it won't come close to getting a given job done.
And interestingly enough, I think Speth undermines his own support for cap-and-trade with his walk-through of what it will take to achieve an 80% cut in CO2 levels by 2050. Here are some of the daunting numbers and questions he poses himself: It will require
the carbon dioxide intensity of the U.S. economy to decline by about 7 percent each year for the next forty years, using exponential rates of change. ..Can natural gas be substituted for coal and oil fast enough to reduce carbon dioxide emissions per British thermal unit (Btu) of fossil fuels used by 1 percent each year for forty years? Can a switch to renewable energy drive fossil fuels' share of U.S. energy use down by 2 percent each year between 2010 and 2050? Can U.S. energy efficiency improve by 4 percent a year over this period?...Energy efficiency in the United Stated did improve by 3.5% a year for a short while in the early 1980's when energy prices were high, but for the three decades from 1970 to 2000 as a whole, the rate has been about 2 percent a year...it is like running up a down escalator - a very fast down escalator. Perhaps it can be done. I am doubtful, but here is a key point: it is not being done today, and no government that I know of is systematically, adequately promoting the universal, rapid, and sustained penetration of green technology, at home and abroad, on the scale required. Governments are, however, profoundly committed to promoting growth. (Pages 114-115).
Speth tosses out another major obstacle to the fast and easy passage of a grand cap-and-trade bill, something he calls "the preemption of political space." It is an accurate insight that government can only take on a limited number of major issues at one time before they push, or preempt other trying to crowd in. One can argue that given our circumstances and President Obama's popularity, that we might expect another great "100 days" like in 1933. But I think that the economic crisis is going to preempt broad climate change bills for a while, perhaps quite a while. That doesn't mean that green infrastructure and investment bills won't form a good part of the short and medium term "stimulus package." That seems to me the more likely path, given the banking crisis, the economic crisis and the Middle East crisis all sitting on Obama's desk at 8:00 AM on Wednesday, January 21st. We'll know more in the next 30-60 days.