Following up on Jeff's post, there have been a few recent articles in the New York Times reporting on how China plans to become the world's leading producer of electric cars. Citing air pollution and the increased importing of foreign oil as two of the primary concerns that electric vehicles would address, the idea is also promoted as a key to China's international competitiveness. While it is unclear how this will help them address the problem that they've had with meeting the safety standards of the U.S. and European countries, it seems likely that they'll be able to make inroads as a supplier of batteries to those markets as increased production reduces the manufacturing costs.
The articles mention several of the factors that will both help and hinder the process. On the positive side, commutes in China are usually intracity, and often slow due to the traffic congestion. Many consumers are buying cars for the first time, and won't necessarily notice (or care) that the cars are less powerful than gasoline powered vehicles. And Chinese law makes it difficult for consumers to sue automakers over safety issues. To help with the adoption, the government is offering subsidies to the consumers of such vehicles, up to $8800 for taxi fleets and local governments.
There are several major challenges to overcome as well. The vehicles are predicted to be twice as expensive as conventional vehicles, and still significantly more expensive even with the maximum rebate. The majority of the people in urban areas live in apartments, and thus infrastructure will need to be created to allow the vehicles to be charged. And because much of China's electricity comes from coal, it will not reduce the pollution problems as much as it might otherwise. However, as we've learned in class, it's easier to clean up pollution at a few thousand point sources than it is to clean up millions of tailpipes. It's also easier to change the generating source later on than it would be to replace millions of vehicles if they were to wait on this.
Overall, it looks like China is very interested in making rapid inroads into this market, both at home and internationally. It will be interesting to see how Detroit responds to this new challenge, and whether it will even be able to.
Web sources:
China Outlines Plans for Making Electric Cars
China Vies to Be World’s Leader in Electric Cars
Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Saturday, April 11, 2009
Friday, April 3, 2009
US Climate Change Policy-Learning from the European Union
While debate on the merits of scientific evidence of climate change and its potential costs and effects continues to persist in the United States (US), contentions that concerns are unwarranted appear to be waning as public support for a national climate change policy strengthens. In May of 2008 a poll commissioned by the non-partisan Presidential Climate Action Project and conducted by Harris Interactive found that 66 percent of Americans believed that the next President of the US should have a policy that addresses climate change. Public support for actions on climate change, the recent change in presidential administrations to one favorable of such measures, the increasing number of local and state climate change actions, and the increasing number of climate change-related bills proposed at the federal level all demonstrate the high likelihood that the US Congress will pass and implement a comprehensive climate change policy during the next few years (although the economic recession facing the US has made such major policy less likely). The majority of the bills proposed in the last US Congressional session (13 of 15) proposed some form of a cap and trade system for reducing GHG emissions while two bills proposed a tax on emissions [1]. This follows concerns over the political unattractiveness of a carbon tax despite assertions that a tax provides a stronger market mechanism to reduce GHG emissions.
The Future of US Climate Change Policy
As it appears that the US is likely to pass some form of federal carbon regulation in the coming years and this form of regulation is most likely to come in the form of a cap and trade system it is necessary to identify and assess the issues involved in designing an effective cap and trade system. Although the US has been ardently criticized, as the world’s greatest emitter of GHGs (although China has reportedly passed the US recently in terms of annual emissions), for its inaction on this matter its status as a laggard in establishing national climate change policy presents the opportunity to analyze the effectiveness and learn from the first major international attempt to regulate carbon dioxide (CO2) emissions (the most significant GHG) with a cap and trade model, the European Union’s Emissions Trading Scheme (ETS). While the ETS has received much acclaim for its efforts to tackle climate change, criticism abounds regarding its actual effectiveness in achieving emission reductions, its ability to keep costs manageable, and its ability to ensure the economic competitiveness of those affected. It is important for the US to address such concerns prior to designing such policy as it has been estimated that such a policy could entail costs estimated at 1-2 percent of national income [1].
Structure of European Union Emissions Trading Scheme
The ETS uses a cap-and-trade model similar to that used by the US to reduce sulfur dioxide emissions. Under the ETS national authorities for each EU-25 member state determine the number of allowances and distribution of allocations to each installation. The individual and collective “cap” placed on the number of allowances by each member state establishes a limit on emissions for each country and the entire regime. This cap intends to create a limited supply of allowances, allowing the market to generate a price for allowances that will lead to intended emission limits. Allowances can be traded by regulated entities with excess allowances for a given year or period to entities that fail to meet their emission limits through their own allowance allocation. Entities covered by the ETS can also use emission credits generated by emission-saving projects [2]. Therefore, market drivers for the choice of method for meeting emission goals include the cost of allowances, the cost of carbon credits, and the cost of failing to meet emission limitation or reduction requirements for a particular year.
Experience and Effectiveness of the EU ETS to Date
In order to assess the effectiveness of the ETS one must first identify its goals. Essentially, the ETS has two primary goals; to develop an effective carbon market and to abate emissions at capped amounts. Additionally, the intention of the warm-up phase (of which most current analysis is based) was to learn from both the successes and failures of the program and adapt policies to ensure future success. In this regard, it appears that Phase I has been useful for discovering program weaknesses particularly with regards to allocation changes that have been enacted for Phase II with National Action Plans (NAPs) providing fewer allowances [3]. While many critics point out the crashing of the trading price of carbon in 2007 as an indication of the failure of ETS this criticism fails to recognize that one of the primary purposes of Phase I was to determine the appropriate number of allowances to allocate. Only if member states failed to adjust allocation after such findings were made could one conclude failure.
Implications of the EU ETS for US Climate Change Policy
As the US designs its climate change policy it should draw heavily on the experiences of the ETS to avoid similar growing pains in developing effective climate policy. Lessons that can be learned from the ETS follow:
A “warm-up phase” can provide valuable insight for climate policies that deviate substantially from the EU ETS. If the US were to implement climate policies that deviate significantly from the EU ETS, particularly if a significant portion of allowances are auctioned or additional sectors such as transport are included in regulations the US should initiate a preliminary regulatory phase prior to the first commitment period. This would allow the US to exhibit a cautious initial approach and learn from its policies in a manner similar to that of the EU. If US climate policy aligns with that of the ETS such a preliminary phase may be unnecessary.
Emission abatement is heavily impacted by allocating allowances that accurately reflect emission limits. Several pressures led to the over-allocation of allowances by ETS member states [3]. By allowing member states to set their own allocation amounts and distribution, domestic pressures from industry and the public to lessen the negative impacts of climate policy has influenced allowance allocations. Although the European Commission is required to assess the NAPs of member states this has been inefficient overall in identifying allocation of allowances. A centralized approach to CO2 regulation should lead to greater ambitiousness and success in meeting emission limits [4].This demonstrates that the US should, at least initially, develop its domestic policies independent of an international climate regime and ensure integrity and transparency in its initial allocation of allowances through a delegated entity.
Accurate data on emissions is required to set an effective emissions cap and prevent over-allocation of allowances. ETS experienced high transaction costs and much delay by having a baseline emission cap set at 1990 levels because adequate data on emissions levels did not exist at that time [5]. It is widely agreed among researchers and experts that data availability limits allocation choices and partially contributed to the drop in ETS allowance prices to near zero [6]. It is essential for the US to set its baseline cap to a more recent year to avoid similar data limitations. For this reason, the baseline year of 2005 has been commonly used in proposed federal climate bills.
It is unclear if allowance pricing failures can be resolved through a partial or full auctioning of allowances. The initial failure of the ETS to price CO2 at levels sufficient to achieve emissions limits or reductions under a full allowance system suggests that some degree of auctioning could be necessary. This argument has been expressed by many ETS member states and has led to the concession in Phase II for member states to auction up to 10 percent of their allowances [5]. Some researchers have noted that downstream consumers should bear roughly the same energy costs under a cap with a 100 percent auction, 100 percent free allocation, or a tax on CO2 because the price of the allowance or tax represents the opportunity cost of emitting another unit of CO2 [1]. The primary disadvantage of auctioning is that it creates immediate substantial costs to regulated entities that could create economic turmoil. The primary advantage of auctioning is such immediate pricing signals should lead to more immediate actions to limit or reduce emissions. Additionally, free allocation can create and transfer new wealth to some participants while an auction can generate revenue that the federal government can use for purposes related to carbon reduction goals and to ensure industries or individuals are not unequally burdened by carbon regulation.
As this appears to be the most contentious issue among economists and policymakers in the US regarding a cap-and-trade carbon regulatory scheme such a decision should take a cautious approach [7]. While President Barrack Obama has shown support for a 100 percent auction system the impacts of such a system are unclear. The US should consider the initial experimentation of a partial auction system with the flexibility to adjust the number of allowances auctioned periodically.
The ETS provides clear evidence of impacts of carbon regulation on some sectors, but not all, particularly the transport sector. The ETS does not appear to have had significant negative effects on regulated industries. However, not all industries or sectors are covered. The EU’s decision not to include the transport sector in the ETS indicates the apprehension that is felt with regulating this industry. This indicates that inclusion of the transport sector US climate change policy will be similarly contentious and difficult to manage during the first stages of such policy. It is unclear what impacts CO2 regulation will have on this and other sectors not regulated by the ETS.
Transparent monitoring and verification is essential to successful carbon regulatory policy. As expected, independent verification of monitoring and compliance of regulated entities under the ETS has provided assurance that reported emissions are accurate and allows for accurate assessment of the effectiveness of the cap and trade system. The US should follow such a scheme.
A cap and trade program must cover a long enough time period to influence technology investment decisions. During the three-year preliminary phase of ETS little adoption of carbon-reducing technologies or less carbon-intensive power generation technologies was exhibited. It appears important for the US to set long term emission reduction goals to influence such investment decisions.
Linking nations in an emissions trading scheme causes inefficiencies and difficulties with emissions trading. This finding indicates that the US should develop a centralized approach to carbon regulation initially rather than linking with the EU-25 or other nations. Success has resulted from emissions reduction credit schemes when projects have been available, but this has not always been the case under the ETS. Price harmonization of carbon prices among countries provides an alternative to direct linkage by harmonizing marginal costs among countries with carbon regulatory schemes [8].
Conclusion
The EU ETS provides significant insight into the challenges faced in developing successful carbon policy. According to initial findings from the ETS it appears that ensuring optimal allocation of allowances is the primary determinant of the success of a CO2 cap and trade system in terms of effectively pricing carbon allowances and abating emissions. By adopting a centralized domestic approach, the US can overcome many of the difficulties felt by the EU’s multinational approach. By learning from the initial successes and failures of the ETS the US has the opportunity to avoid incurring high costs without achieving significant results.
References not hyperlinked above:
[1] Joseph E. Aldy and William A. Pizer, Resources For the Future, “Issues in Designing U.S. Climate Change Policy,” Discussion Paper, June 2008, RFF DP 08-20.
[2] European Union, “Combating Climate Change: The EU Leads the Way.” Europe on the Move Series, Luxemburg: Office for Official Publications of the European Communities, 2008, p. 12.
[3] Frank Convery, Christian De Perthuis, and Denny Ellerman, “The European Carbon Market in Action: Lessons From the First Trading Period. Interim Report.” MIT Center for Energy and Environmental Policy Research, March 2008.
[4] Jon Birger Skjaerseth and Jorgen Wettestad, EU Emissions Trading: Initiation, Decisions-Making and Implementation (Ashgate Publishing Company: 2008), p 188.
[5] A. Denny Ellerman and Barbara K. Buchner, “The European Union Emissions Trading Scheme: Origins, Allocation, and Early Results.” Review of Environmental Economics and Policy, vol. I, no. I (Winter 2007).
[6] A. Denny Ellerman, Barbara K. Buchner, and Carlos Carraro, Allocation in the European Emissions Trading Scheme: Rights, Rents and Fairness (Cambridge University Press: 2007), pp. 339-341
[7] T.H. Tietenberg, Emissions Trading: Principles and Practices, Second Edition, (Resources for the Future Press, Washington D.C.: 2006), 127.
[8] Joseph Kruger, Wallace E. Oates, and William A. Pizer, “Decentralization in the EU Emissions Trading Scheme and Lessons for Global Policy.” Review of Environmental Economics and Policy, vol. I, no. I (Winter 2007), p. 131.
Note: This blog post is a condensed summary of a research paper previously written by myself. If interested in the full paper feel free to email me at csmitty1983@yahoo.com.
The Future of US Climate Change Policy
As it appears that the US is likely to pass some form of federal carbon regulation in the coming years and this form of regulation is most likely to come in the form of a cap and trade system it is necessary to identify and assess the issues involved in designing an effective cap and trade system. Although the US has been ardently criticized, as the world’s greatest emitter of GHGs (although China has reportedly passed the US recently in terms of annual emissions), for its inaction on this matter its status as a laggard in establishing national climate change policy presents the opportunity to analyze the effectiveness and learn from the first major international attempt to regulate carbon dioxide (CO2) emissions (the most significant GHG) with a cap and trade model, the European Union’s Emissions Trading Scheme (ETS). While the ETS has received much acclaim for its efforts to tackle climate change, criticism abounds regarding its actual effectiveness in achieving emission reductions, its ability to keep costs manageable, and its ability to ensure the economic competitiveness of those affected. It is important for the US to address such concerns prior to designing such policy as it has been estimated that such a policy could entail costs estimated at 1-2 percent of national income [1].
Structure of European Union Emissions Trading Scheme
The ETS uses a cap-and-trade model similar to that used by the US to reduce sulfur dioxide emissions. Under the ETS national authorities for each EU-25 member state determine the number of allowances and distribution of allocations to each installation. The individual and collective “cap” placed on the number of allowances by each member state establishes a limit on emissions for each country and the entire regime. This cap intends to create a limited supply of allowances, allowing the market to generate a price for allowances that will lead to intended emission limits. Allowances can be traded by regulated entities with excess allowances for a given year or period to entities that fail to meet their emission limits through their own allowance allocation. Entities covered by the ETS can also use emission credits generated by emission-saving projects [2]. Therefore, market drivers for the choice of method for meeting emission goals include the cost of allowances, the cost of carbon credits, and the cost of failing to meet emission limitation or reduction requirements for a particular year.
Experience and Effectiveness of the EU ETS to Date
In order to assess the effectiveness of the ETS one must first identify its goals. Essentially, the ETS has two primary goals; to develop an effective carbon market and to abate emissions at capped amounts. Additionally, the intention of the warm-up phase (of which most current analysis is based) was to learn from both the successes and failures of the program and adapt policies to ensure future success. In this regard, it appears that Phase I has been useful for discovering program weaknesses particularly with regards to allocation changes that have been enacted for Phase II with National Action Plans (NAPs) providing fewer allowances [3]. While many critics point out the crashing of the trading price of carbon in 2007 as an indication of the failure of ETS this criticism fails to recognize that one of the primary purposes of Phase I was to determine the appropriate number of allowances to allocate. Only if member states failed to adjust allocation after such findings were made could one conclude failure.
Implications of the EU ETS for US Climate Change Policy
As the US designs its climate change policy it should draw heavily on the experiences of the ETS to avoid similar growing pains in developing effective climate policy. Lessons that can be learned from the ETS follow:
A “warm-up phase” can provide valuable insight for climate policies that deviate substantially from the EU ETS. If the US were to implement climate policies that deviate significantly from the EU ETS, particularly if a significant portion of allowances are auctioned or additional sectors such as transport are included in regulations the US should initiate a preliminary regulatory phase prior to the first commitment period. This would allow the US to exhibit a cautious initial approach and learn from its policies in a manner similar to that of the EU. If US climate policy aligns with that of the ETS such a preliminary phase may be unnecessary.
Emission abatement is heavily impacted by allocating allowances that accurately reflect emission limits. Several pressures led to the over-allocation of allowances by ETS member states [3]. By allowing member states to set their own allocation amounts and distribution, domestic pressures from industry and the public to lessen the negative impacts of climate policy has influenced allowance allocations. Although the European Commission is required to assess the NAPs of member states this has been inefficient overall in identifying allocation of allowances. A centralized approach to CO2 regulation should lead to greater ambitiousness and success in meeting emission limits [4].This demonstrates that the US should, at least initially, develop its domestic policies independent of an international climate regime and ensure integrity and transparency in its initial allocation of allowances through a delegated entity.
Accurate data on emissions is required to set an effective emissions cap and prevent over-allocation of allowances. ETS experienced high transaction costs and much delay by having a baseline emission cap set at 1990 levels because adequate data on emissions levels did not exist at that time [5]. It is widely agreed among researchers and experts that data availability limits allocation choices and partially contributed to the drop in ETS allowance prices to near zero [6]. It is essential for the US to set its baseline cap to a more recent year to avoid similar data limitations. For this reason, the baseline year of 2005 has been commonly used in proposed federal climate bills.
It is unclear if allowance pricing failures can be resolved through a partial or full auctioning of allowances. The initial failure of the ETS to price CO2 at levels sufficient to achieve emissions limits or reductions under a full allowance system suggests that some degree of auctioning could be necessary. This argument has been expressed by many ETS member states and has led to the concession in Phase II for member states to auction up to 10 percent of their allowances [5]. Some researchers have noted that downstream consumers should bear roughly the same energy costs under a cap with a 100 percent auction, 100 percent free allocation, or a tax on CO2 because the price of the allowance or tax represents the opportunity cost of emitting another unit of CO2 [1]. The primary disadvantage of auctioning is that it creates immediate substantial costs to regulated entities that could create economic turmoil. The primary advantage of auctioning is such immediate pricing signals should lead to more immediate actions to limit or reduce emissions. Additionally, free allocation can create and transfer new wealth to some participants while an auction can generate revenue that the federal government can use for purposes related to carbon reduction goals and to ensure industries or individuals are not unequally burdened by carbon regulation.
As this appears to be the most contentious issue among economists and policymakers in the US regarding a cap-and-trade carbon regulatory scheme such a decision should take a cautious approach [7]. While President Barrack Obama has shown support for a 100 percent auction system the impacts of such a system are unclear. The US should consider the initial experimentation of a partial auction system with the flexibility to adjust the number of allowances auctioned periodically.
The ETS provides clear evidence of impacts of carbon regulation on some sectors, but not all, particularly the transport sector. The ETS does not appear to have had significant negative effects on regulated industries. However, not all industries or sectors are covered. The EU’s decision not to include the transport sector in the ETS indicates the apprehension that is felt with regulating this industry. This indicates that inclusion of the transport sector US climate change policy will be similarly contentious and difficult to manage during the first stages of such policy. It is unclear what impacts CO2 regulation will have on this and other sectors not regulated by the ETS.
Transparent monitoring and verification is essential to successful carbon regulatory policy. As expected, independent verification of monitoring and compliance of regulated entities under the ETS has provided assurance that reported emissions are accurate and allows for accurate assessment of the effectiveness of the cap and trade system. The US should follow such a scheme.
A cap and trade program must cover a long enough time period to influence technology investment decisions. During the three-year preliminary phase of ETS little adoption of carbon-reducing technologies or less carbon-intensive power generation technologies was exhibited. It appears important for the US to set long term emission reduction goals to influence such investment decisions.
Linking nations in an emissions trading scheme causes inefficiencies and difficulties with emissions trading. This finding indicates that the US should develop a centralized approach to carbon regulation initially rather than linking with the EU-25 or other nations. Success has resulted from emissions reduction credit schemes when projects have been available, but this has not always been the case under the ETS. Price harmonization of carbon prices among countries provides an alternative to direct linkage by harmonizing marginal costs among countries with carbon regulatory schemes [8].
Conclusion
The EU ETS provides significant insight into the challenges faced in developing successful carbon policy. According to initial findings from the ETS it appears that ensuring optimal allocation of allowances is the primary determinant of the success of a CO2 cap and trade system in terms of effectively pricing carbon allowances and abating emissions. By adopting a centralized domestic approach, the US can overcome many of the difficulties felt by the EU’s multinational approach. By learning from the initial successes and failures of the ETS the US has the opportunity to avoid incurring high costs without achieving significant results.
References not hyperlinked above:
[1] Joseph E. Aldy and William A. Pizer, Resources For the Future, “Issues in Designing U.S. Climate Change Policy,” Discussion Paper, June 2008, RFF DP 08-20.
[2] European Union, “Combating Climate Change: The EU Leads the Way.” Europe on the Move Series, Luxemburg: Office for Official Publications of the European Communities, 2008, p. 12.
[3] Frank Convery, Christian De Perthuis, and Denny Ellerman, “The European Carbon Market in Action: Lessons From the First Trading Period. Interim Report.” MIT Center for Energy and Environmental Policy Research, March 2008.
[4] Jon Birger Skjaerseth and Jorgen Wettestad, EU Emissions Trading: Initiation, Decisions-Making and Implementation (Ashgate Publishing Company: 2008), p 188.
[5] A. Denny Ellerman and Barbara K. Buchner, “The European Union Emissions Trading Scheme: Origins, Allocation, and Early Results.” Review of Environmental Economics and Policy, vol. I, no. I (Winter 2007).
[6] A. Denny Ellerman, Barbara K. Buchner, and Carlos Carraro, Allocation in the European Emissions Trading Scheme: Rights, Rents and Fairness (Cambridge University Press: 2007), pp. 339-341
[7] T.H. Tietenberg, Emissions Trading: Principles and Practices, Second Edition, (Resources for the Future Press, Washington D.C.: 2006), 127.
[8] Joseph Kruger, Wallace E. Oates, and William A. Pizer, “Decentralization in the EU Emissions Trading Scheme and Lessons for Global Policy.” Review of Environmental Economics and Policy, vol. I, no. I (Winter 2007), p. 131.
Note: This blog post is a condensed summary of a research paper previously written by myself. If interested in the full paper feel free to email me at csmitty1983@yahoo.com.
Tuesday, April 15, 2008
China World's Top Carbon Polluter
I wanted to point out this article on the BBC about China. The article says that in a report due out next month, China is officially the top GHG emitter.
I think everyone knew this was coming, or thought it already did, but it is interesting to see researchers come out and say it finally (this time from the Unviersity of California - doesn't say which city). Their data only went until 2004, but they predicted the data forward to the current day. They actually estimate that China surpassed the US in 2006 or 2007.
The article doesn't say too much, but I think the report will be pretty interesting when it comes out.
I think everyone knew this was coming, or thought it already did, but it is interesting to see researchers come out and say it finally (this time from the Unviersity of California - doesn't say which city). Their data only went until 2004, but they predicted the data forward to the current day. They actually estimate that China surpassed the US in 2006 or 2007.
The article doesn't say too much, but I think the report will be pretty interesting when it comes out.
Friday, February 1, 2008
Dubai: Playground of the Rich and Home to Blackouts!?
Three undersea power lines to Dubai have been cut since Wednesday. The third ruptured while repair ships were in route to the first two disrupted cables. This has been a great blow to the international traders that base themselves in Dubai and is causing some noticeable tumult in the trading markets. Coupled with China's recent energy dilemma, I believe the defense thinktanks ought put some sincere effort into futurative strategizing.
This CNN report claims that:
"the [first] two cables damaged Wednesday collectively account for as much as three-quarters of the international communications between Europe and the Middle East, so their loss had a much bigger effect"
Ok. Now, I'm interested.
One person interviewed even mentioned that:
"a similar Internet problem could not happen in the United States. We have all the content here, he said. It's not going to be felt other than we won't get the BBC."
Alright, you've got me. I have to say it.
Since, I'm feeling Machiavellian today and my last blog concerned how we might opportunistically wrest economic dominance from China, I was wondering if anyone has every really considered that not only techy hubs like Dubai, but most of Asia relies on telecommunication lines from Europe to support a large part of their involvement and stock control in Western markets. What happens if someone turns off the cable on purpose?
I mention this only because this article says to me that, in spite of the rising dominance of China as an industrialized force, America still holds significant reigns. After all, the Westernization of the globe could really be called the Americanization of the globe. What would happen if China or Russia, or India suddenly had there new American cultural influence taken away from them?
All I know is that if we ever get into trouble with those nations a sure way to get their attention won't be economic sanctions, but our control lies in our ability to now threaten worldwide telecommunication sanctions.
This CNN report claims that:
"the [first] two cables damaged Wednesday collectively account for as much as three-quarters of the international communications between Europe and the Middle East, so their loss had a much bigger effect"
Ok. Now, I'm interested.
One person interviewed even mentioned that:
"a similar Internet problem could not happen in the United States. We have all the content here, he said. It's not going to be felt other than we won't get the BBC."
Alright, you've got me. I have to say it.
Since, I'm feeling Machiavellian today and my last blog concerned how we might opportunistically wrest economic dominance from China, I was wondering if anyone has every really considered that not only techy hubs like Dubai, but most of Asia relies on telecommunication lines from Europe to support a large part of their involvement and stock control in Western markets. What happens if someone turns off the cable on purpose?
I mention this only because this article says to me that, in spite of the rising dominance of China as an industrialized force, America still holds significant reigns. After all, the Westernization of the globe could really be called the Americanization of the globe. What would happen if China or Russia, or India suddenly had there new American cultural influence taken away from them?
All I know is that if we ever get into trouble with those nations a sure way to get their attention won't be economic sanctions, but our control lies in our ability to now threaten worldwide telecommunication sanctions.
Monday, January 28, 2008
China Frostbitten
China's stocks fell recently after a sudden snow storm left hundreds of thousands stranded at transit stations around the nation. In preparation for the Chinese new year, many families (about 199 million Chinese) are expected to be traveling both by train and plane in the weeks just before and after the Lunar New Year. The government has encouraged provinces to "share" coal and electricity during what will undoubtedly become a very strained period of energy consumption.
Two things come to mind: what an awesome experiment and how will this affect the U.S!? The first of these thoughts is perhaps a bit brutal, but seriously, how often does the world get to see the energy supply in a nation like China stretched to the limit? Of course, a similar experiment occurred to the U.S. following Hurricane Katrina; the outcomes there were often dire and still has the American energy market reeling. Will China be any better suited to deal with such situations? We will have to wait and see.
Furthermore, if China's stocks fall, the question becomes: is that a good thing for the U.S.? I am willing to wage an answer of both yes and no. Our economies are becoming incomprehensibly intertwined. If they do poorly, Americans will definitely feel the effects. China owns in excess of one trillion USD's, and more and more, they are pouring their currency into our economy. Even so, China relies on its ability to supply consumer nations. If that ability to produce becomes hampered, we might gain more independence from their markets, which would definitely be a good thing. As well, if the dragon stumbles, it too may find itself dependent on other nations to supply medical and emergency aid. These are all pluses for the U.S., especially since the ensuing world-wide recession has affected Chinese markets the least until now.
All in all, Americans should sit up and take note. China may soon find itself on the downhill and in need. I say strike while the iron is hot!
Two things come to mind: what an awesome experiment and how will this affect the U.S!? The first of these thoughts is perhaps a bit brutal, but seriously, how often does the world get to see the energy supply in a nation like China stretched to the limit? Of course, a similar experiment occurred to the U.S. following Hurricane Katrina; the outcomes there were often dire and still has the American energy market reeling. Will China be any better suited to deal with such situations? We will have to wait and see.
Furthermore, if China's stocks fall, the question becomes: is that a good thing for the U.S.? I am willing to wage an answer of both yes and no. Our economies are becoming incomprehensibly intertwined. If they do poorly, Americans will definitely feel the effects. China owns in excess of one trillion USD's, and more and more, they are pouring their currency into our economy. Even so, China relies on its ability to supply consumer nations. If that ability to produce becomes hampered, we might gain more independence from their markets, which would definitely be a good thing. As well, if the dragon stumbles, it too may find itself dependent on other nations to supply medical and emergency aid. These are all pluses for the U.S., especially since the ensuing world-wide recession has affected Chinese markets the least until now.
All in all, Americans should sit up and take note. China may soon find itself on the downhill and in need. I say strike while the iron is hot!
Tuesday, January 15, 2008
China Bans Free Plastic Bags
Hi everyone! I have not blogged in a few years, but I hope you all find this article interesting.
In June this year, China will implement a ban on thin (less than 0.025 mm) plastic bags. This measure will reduce the amount of waste and resources used. They are allowing consumers to use “sturdy” plastic bags and cloth bags, and the citizens in China are happy to do so. Similarly, San Francisco has also banned petroleum-based plastic bags in grocery stores. About 5 other countries are making efforts to reduce the amount of plastic bags used.
Currently, the US throws out almost 100 billion plastic bags every year. Most of these bags probably go to landfills so a policy like this one would have huge effects for the US. China is making a great effort and the US should implement this kind of policy too. The policy sounds abrupt and forceful, but this is the kind of action the US government needs to take to make improvements and the US looks like it is already falling further behind.
Do you think this policy will work in the US too?
Monday, July 23, 2007
We should care about China's emissions
It was reported today in the Wall Street Journal that Huge Dust Plumes From China Cause Changes in Climate. The U.S. needs to engage China on emissions related to air quality and climate because there are no borders in the atmosphere between our countries. Their pollution arrives in the U.S. with only a few days' delay.
We care about this river of fumes because they land in L.A. and San Francisco.
As long as we continue to ignore climate change, it gives China a free pass to ignore their emissions, for which we pay the price.
An outpouring of dust layered with man-made sulfates, smog, industrial fumes, carbon grit and nitrates is crossing the Pacific Ocean on prevailing winds from booming Asian economies in plumes so vast they alter the climate. These rivers of polluted air can be wider than the Amazon and deeper than the Grand Canyon.
We care about this river of fumes because they land in L.A. and San Francisco.
On some days, almost a third of the air over Los Angeles and San Francisco can be traced directly to Asia. With it comes up to three-quarters of the black carbon particulate pollution that reaches the West Coast, Dr. Ramanathan and his colleagues recently reported in the Journal of Geophysical Research.
As long as we continue to ignore climate change, it gives China a free pass to ignore their emissions, for which we pay the price.
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