OECD

This is What Collectivism Looks Like: UK Tax Is Eating 70% of UK Families Incomes

December 4, 2012 By 21wire 7 Comments

21st Century Wire says… This is what many in OCCUPY are advocating, ‘More tax!’. So we are at 70% Tax now, is it working well for the people, or should we raise it to 90% and see how that goes!!?? . A new study has found that families in Britain pay some of the highest tax rates in the developed world, compared to other nations like Ireland, Canada and Chile. The research shows that British households with two adults and two children, with one earner, are paying around 73 percent of their income into tax, which is made up mostly of income tax, national insurance contributions and loss of certain benefits.

Social policy charity Christian Action Research and Education CARE said the data meant such a household would take home 27p for every £1 earned, describing Britain as in the “worst place to facilitate the creation of an aspiration nation.” “Our tax system remains very individualistic and insensitive to family responsibility, compared to those of comparable OECD (Organisation for Economic Co-operation and Development) countries,” CARE chief executive said, The report authors say one-earner families and lone parents in Britain are also worse off in the current tax system than they were 20 years ago. By comparison, families in Ireland pay 64 percent tax, while Canadians pay 61 percent. In Germany, families pay about 40 percent tax while the figure for France is only 20 percent. According to CARE’s research, Chilean families with one earner pay only 7 percent, the lowest in the developed world. Source: Press TV

Filed Under: 2012, 2012 Election, Commodities, Common Purpose, Economy, EU, Germany, History, Nazis, New World Order, NEWS, Occupy, Travel, Trends, UK, UK Politics, WORLD NEWS Tagged With: CARE, Chile, Collectivism, families, Occupy London, OECD, socialism, Tax in UK

THE CHINESE CAR BOMB

March 7, 2011 By 21wire 1,073 Comments

By Andrew McKillop 21st Century Wire March 8, 2011 We are facing a very real kind of event horizon. Car industry and car fleet growth is accelerating so fast that we may find ourselves in a “can’t get there from here” resource pinch, with no alternative and no way out, starting with an oil supply shortage. Until very recently exploding numbers of oil- and gas-fuelled road vehicles, including cars, buses, trucks, motorcycles, scooters, mopeds, all terrain ‘fun’ vehicles, and agricultural ‘off-road’ vehicles increasingly used for road transport (Footnote) have drawn much less attention than human population numbers. This is curious given the rate of increase, shown by a few simple figures: in 1939 the world’s roughly 2.3 Billion inhabitants shared a total of around 47 Million motor vehicles. Today’s 6.3 Billion human beings have around 775 Million motor vehicles to fuel, repair, park and run, almost exclusively using petroleum and natural gas. Human numbers increased less than three-fold, but the world’s car population grew by a staggering 1750%.

22 DAYS LATER: Chinese traffic jam in 2010 saw one of the worst back-ups in history.

THE EXPLODING NUMBERS Today’s human population is growing at less than 1.4% per year (giving about 85 Million annual increase), but the world’s car and private motor vehicle fleets are growing at close to 7%-per-year. Production of oil-fuelled motor vehicles is therefore increasing at least 4 times faster than human numbers in percentage terms. In several ‘latecomer’ and ‘catch up’ countries vehicle manufacture is increasing output and utilisation of road vehicles at 10-15 times their rate of human population growth, and at several times their rate of economic growth (Reference 1). One thing is sure: motor vehicles, a key part of Consumer Civilisation, generate dramatic increases in personal consumption of oil and gas, probably in the range of 50-100 times comparing ‘before car’ and ‘after car’ consumption habits or ‘needs’. THE UPPER LIMITS Just as with the ultimate Heat Limit on world human population numbers (see ‘Moral Dilemma’ by Ross McCluney, in ‘The Final Energy Crisis’, Pluto Books, ISBN 0745320929), fixing a true and final limit on human numbers, there are set and final limits on the possible growth of motor vehicles. These finally include the world’s ultimate reserve of petroleum, unless we wish to fantasize, along with then US Energy Secretary Spencer Abraham, by giving any credence at all to his November 2002 statement that the world « will have a total of 3.5 Billion motor vehicles by 2050 ». If this fantasy fleet were to come about – adding about 2.7 Billion more vehicles to the world’s current stock – the fuel requirements for 3.5 Bn motor vehicles, at current average consumption rates (see calculations at end of article) would increase world oil consumption by about 70%. Because it is simply impossible to fuel this Fantasy Fleet on oil and gas, Abraham added that they would ‘of course run to a large extent on hydrogen’ (the ‘large extent’ was not defined by Mr Abraham), and the production of that hydrogen fuel he also of course did not define or explain. To set the ultimate limit for the growth of petroleum and gas-fuelled vehicles we can start with the near-ultimate example of a ‘catch-up’ country in the car business – Japan. Even as late as 1949 Japan still had some 146 500 horse- and ox-drawn carts compared with less than 200 000 trucks (and about 100 000 private automobiles). But through a self-reinforcing, very high gain feedback process of growth, with annual growth rates typically of 15% – 20%, year-in and year-out, Japan’s private car fleet explosively grew from these small beginnings to its first million in 1963, to 5.2 Million in 1968, and to some 26 Million by 1982. Annual growth rates had by then considerably slowed, but fleet size effects still permitted this slowed growth to give impressive annual increases; today’s total number is about 45 Million private vehicles (References Tadashi, Shimokawa, Japan Dept Transport). To get on the growth track, Japan’s administrative élite, even after the culture shock of atomic weapons use against their civilian population, and military rule by US governor MacArthur, had to throw off mindsets dating from the 1918-39 interwar period, when road vehicles were seen as simple ‘feeders’ for short-haul transport to rail, canal, river and coastal shipping points or transport nodes. Japan’s domestic policymakers, at the start of the post-war period under US occupation, thus preferred to spend money on repairing and improving the rail, shipping and public transport sectors. In addition their policy view downgrading road vehicles was reinforced by Japan’s terrain, its dense urban centres, and by Japanese feelings of doubt on the safety of cars: « Because of slow improvement of the country’s narrow, often mountainous roads, the government tended to discriminate against motor transport on grounds of road safety. City streets were often dangerous too. There was strict traffic control, rigorous tests for driving licences and careful inspection of all new vehicles, both home manufactured and imported. A high standard of maintenance was promoted and the manufacture of reliable, safe cars was encouraged » (Ref Shimokawa).

JAPAN: Early years saw public transport planning out-pace the motor car.

The date at which Japanese transport policy switched to outright pro-car can be set as the period of about 1955-60, the period in which animal-powered transport completely disappeared in the agriculture sector, together with the catch-up economic growth that Japan experienced from around 1958. Despite this, however, as late as the early 1960s, Japan’s Economic Planning Agency continued to purposely underestimate forward growth of road needs for the exploding vehicle population (Reference Konno & Okano). Today, as the ongoing ‘restructuring’ of Japan’s national railway corporation proves – that is the effective bailout of an underfinanced, neglected public transport system – public rail transport in Japan, as in its ‘US role model’, is a dwarf compared to the road vehicle sector. As elsewhere in the “liberalized economies” of the aging OECD group of countries, Japan’s national passenger transport depends almost entirely on the existence of oil-fuelled private road vehicles running on oil-based asphalt and bitumin. THE SECOND COMING While the USA, and surprisingly New Zealand, were the fastest growing countries for motorization in the entire period of 1905-1940, achieving ownership rates for private cars of nearly 300 vehicles/1000 inhabitants in 35 years despite starting from a near-zero base (Reference Barker), their growth rates peaked out well before World War 2. These countries, with all the older urban-industrial countries, however experienced a “second coming” from the early to mid 1950s. Countries such as Canada, Australia, Italy, UK, France and Germany, experienced a new car ownership growth bulge in the 1950-70 period. Typical growth rates were around 500% in 20 years, for example the UK with a 6-fold growth in car and private vehicle numbers through 1950-70 (Reference SMMT). At the time of the first Oil Shock of 1973-74 it was only Japan that experienced a strong but short downturn in this ‘motorization’ trend. From no later than 1975-80 the tried-and-tested ‘economic growth model’ of car-based and car-oriented growth- a key concept in economic mythology from the times of Henry Ford in the 1920s USA, was transferred and applied with full force in several non-traditional car owning democracies, and dictatorships of the time, including South Korea, Brazil, Malaysia, Turkey, Iran, the Soviet Asian Republics. Somewhat later (from the later 1980s) but with truly unlimited upside potential, this growth strategy was adopted by China and India. Today, in countries such as Germany, USA, France and Australia there is no difficulty finding 3 and 4-car households, nor 25-mile tailbacks every weekday on every main highway into congested, sprawling and polluted downtown centres. The same is to be found in Sao Paulo, Bangkok, Ankara, Seoul and Kuala Lumpur. Shanghai is already close behind in the race to have daily crawl-ins on its fast expanding auto routes and urban highways. Explaining the “oil demand miltiplier” inherent in motorization, a vast range of products arising from the magic of petroleum-based chemicals industries are essential to the modern private motor vehicle industry, notably plastics and resins. As in Henry Ford’s time – when animal bone and ligaments, skins, wood and wood resins were still extensively used in car manufacture – the economic multiplier impacts of ‘unfettered growth’ of the car industry remain highly attractive to economic planners, resulting in motorization continuing to spread out and away from the core countries of the ageing ‘advanced industrial’ OECD North. EVENT HORIZON: THE ULTIMATE LIMIT There are however distinct limits on the ultimate reach of this tried-and-tested ‘growth strategy’. Today’s private car and small vehicle ownership rate in the USA is around 745 vehicles / 1000 inhabitants, with lower but similar rates (around 500-650 vehicles/1000 population) obtaining in Belgium, Germany, France, UK and other car-saturated economies. Applying the same ownership rate to India or China, and assuming these motor vehicles would, could, may or might be oil or gas-propelled, results in absurd numbers for annual oil or oil equivalent gas consumption. In the case of China’s car fleet we are already, using World Bank data for 1990-99, at the fantastic but real average annual growth rate of about 19%, doubling China’s car population every 4 years. (Footnote/Recent growth). The following is of course a fantasy projection, but its only proviso is that India and China should firstly sustain the growth rates for car production and ownership that were experienced by the USA, New Zealand, Canada, Australia, Japan, France, Germany and other ‘leading industrial nations’, for a period of less than 20 years. If their growth rates are higher, the period needed to attain ‘saturation ownership’ (the USA’s current rate) will of course be lower. If China and India were to achieve this, the entire oil exports of the OPEC group would not even satisfy these two country’s car fleet requirement for oil (or LPG/LNG) ! So the fantasy ‘Hydrogen Economy’ is therefore the only way out for current political and business leaderships – when or if they care to forecast any further out in time than a mere 5 – 10 years. Average European vehicle kilometrage per year EUR-6 (core 6 nations) is 22 000 kms/vehicle/year. EUR-15 average is lower. Both average figures are rising with economic growth and declining real cost of energy. Average vehicle occupancy 1.5 persons Annual mileage averages are not set to fall, nor occupancy figures to rise except by decree- or other draconian measures resulting from real oil shocks, for example oil prices well above $100/barrel. Average fleet-wide car fuel consumption in Germany is 7.9 L/100 kms vehicle but we will assume that this is rapidly reduced, for India and China, to two-thirds of that value, or 5.267 L/100 kms. We will also assume that India and Chinese cars will only travel 18 000 kms/year. Total oil consumption at 5.96 Barrels (948 Litres) per car per year is as follows: Using future population figures (assuming complete zero population growth) of 1 Billion for India and 1.25 Billion for China, we obtain a Future Car Fleet at the ‘saturation ownership’ rate of 745 vehicles/1000 population of 745 Million vehicles (India) and 932 Million vehicles (China). At 5.96 barrels/year for each vehicle their consumption is approximately 5.54 Billion barrels/year for China and 4.44 Billion barrels/year for India… for a grand total of almost exactly 10 Billion barrels/year, and equivalent to 27.4 Million barrels/day. This is about three times the total oil imports of all EU countries in 2002, nearly 3 times the maximum possible production capacity of Saudi Arabia, and slightly more than the total average export volume of the OPEC group around mid-2003. (Calculations by A McKillop) FIGHTING FOR FUEL We therefore have a laughable fantasy, or an insight into exactly why three nuclear armed powers, China, India and USA, are ever more likely to fight amongst themselves, or confront EU importers, including 2 nuclear weapons states for the last oil reserves of the planet. Under any hypothesis – excluding childish technological fantasies and utopias such as those trotted out by Amory Lovins or US Energy Secretary Abraham – there is simply no prospect of China, India, or other countries including Malaysia, Brazil, Turkey, Iran, Ukraine, Mexico, the Czech Republic and other emerging car producers being able to achieve US, West European, Australian or Japanese rates of car production and ownership. The Chinese Car Bomb therefore ticks onward, as each day another estimated 112,190 cars are produced (Reference Motorcity). Each one requires up to 55 barrels of oil equivalent to produce, and must operate on bitumin based highways, on tyres that themselves are about 40% oil by weight. Not only is this explosion of the world car fleet a serious threat to the Earth’s environment, but through its oil demand impact most certainly will become a major threat to international peace and stability. Meanwhile, our friends at Central Planning are still busy debating which is the ideal green dream car. So it looks as if plans to diffuse the Chinese Car Bomb and its little sister- the Indian Car Bomb, will not be underway anytime soon. COPYRIGHT ANDREW MCKILLOP 2011 – Andrew McKillop is guest writer for 21st Century Wire. He has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO. -

REFERENCES AND FOOTNOTES:

Footnote – Offroad and agricultural motor vehicles are in fact extensively, perhaps increasingly used for human and good transport on roads and tracks. This is notably the case in China and India, where the current lack of road motor vehicles incites the usage of agricultural vehicles for human transport (passengers riding in towed trailers). It can be noted that fuel efficiency of these ‘road vehicles’ is very low because of technical reasons, that is vehicles designed for slow speed offroad being used for road transport.

Reference 1 http://www.geocities.com/MotorCity/Speedway/4939/carprod.html. This site provides recent data on worldwide car production (from 1995). The very fast growth rates of car production in several countries (10-15 times their population growth rates) is clear.

References Tadashi, Shimokawa, Jap Dept Transport – M Tadashi, The Motorisation of Cargo Transport in Japan, Hakuto-Shobu, Tokyo, 1982. Japan Dept of Transport for recent data.

K Shimokawa, Japan The Late Starter who Outpaced her Rivals, in The Economic and Social Effects of the Spread of Motor Vehicles, edited T Barker, Macmillan, UK, 1987

Japanese Dept of Transport, White Paper on Transport, Japan Govt, 1984

Reference Shimokawa, as above

Reference Konno & Okano – G Konn and Y Okano, Study of Modern Motor Transport, Tokyo University Press, 1979

Reference Barker – as above

Reference/ Recent Chinese car sales growth - China’s car sales hit one million for first time

[REUTERS DECEMBER 16, 2002]

SHANGHAI: Annual car sales in China have topped the one million mark for the first time as a rising urban middle class crowns the world’s fastest-growing market for foreign automakers, industry executives said on Monday. An official at the China Association of Automobile Manufacturers told Reuters 1.02 million cars were sold in China in the first 11 months of this year, representing a stunning 55.4 per cent jump from the same period in 2001.

Reference SMMT - SMMT (UK Society of Motor Manufacturers and Traders) statistics for 2001 showed the UK having 28.6 million cars and 3.5M commercial vehicles in use. This compares with the UK 1951 car ownership figure of 2.3M, 1971 of 12.35M, and 1981 of 15.63M.

Reference Motorcity – as above. This indicates total production 2001 being about 40.9 Million private cars, or about 112 190 per day, worldwide.

Filed Under: 2012, America, China, Climate Change, Culture, Economic collapse, Economy, Energy, Environment, FOOD, fuel, Germany, International News, Iran, Middle East, money, Nuclear, Oil, Politics, Technology, Travel, Trends, UK Politics, Uncategorized, US Politics, war zone Tagged With: 2020, Bahrain, BP, car production, China, development, fuel, gaddafi, India, japan, libya, nations, OECD, Oil, outlook, Petrollium, public transport, resource, Saudi, Shell, shortage, Tokyo

THE REVISED 2011 HITCHHIKER’S GUIDE TO GLOBAL COMMODITIES

March 4, 2011 By 21wire 380 Comments

As Middle Eastern uncertainties continue, a global economy begins to reveal certain truths

- By A. Ceapach Donald 21st Century Wire March 4, 2011 Metals, food and fuel beat stocks, bonds and the US dollar for a third straight month- the longest winning streak since June 2008. Price rises fundamentally driven by short supplies lifted all soft commodities like the grains, vegetable oils, sugar, cotton and rubber, intensified by investor speculation that violence in the Arab and Muslim world will curb oil supplies… At the same time they provisionally bet that well-protected regimes in the region with few qualms about firing on civil protestors, like Iran’s one-party state, Algeria’s military junta, Saudi Arabia’s absolute monarchy and its smaller look-a-likes along the Gulf coast will keep spending on food imports- to try keeping a lid on their cellphone-wielding youth revolutions. Key commodity indexes like the Rogers International RICI, or the Goldman Sachs GSCI Total Return Index of 24 commodities gained as much as 4 percent in the 28-day month of February – both of them rising for a sixth straight month. Compared to the commodity indexes, measures of global equity and bond performance showed paper wealth did a lot worse. The 45-nation MSC equity index, for example, gained only 3 percent, while indexes measuring government and big corporate bond performance, like MerrillLynch’s Global Index gained less than 0.3 percent in the month. The US dollar, despite heightened geopolitical tension that traditionally helps the greenback pare losses, or gain against other leading moneys fell nearly 1.2 percent in the month.

FLASH MOB MENTALITY: While the North African economy sinks, loans will come pouring in for Europe and the IMF.

Some may argue that further US inaction in North Africa and the Middle East- in its traditional role of saving reliable oil pumping allies, and keeping Arab export platforms for US corporations in business, will likely further erode confidence in the dollar. THE POSITIVE SPIN The business correct explanation of why commodity asset values are powering ahead is emerging economy growth and signs of recovery in the debt-strangled OECD countries. Faster global growth is defined as raising the risk of pushing up raw-material prices until market magic generates new supply.Surprise shocks like the ouster of Libya’s Muammar Khadafi (or civil war in Libya) provide some excitement and opportunity to speculate on oil prices on the way up, when supplies from Libya are cut,and on prices going down when or if Libya’s oil supply is resumed. But the month-on-month rise of commodity prices well before a single Arab dictator had bitten the dust,or fled to Saudi Arabia with a traditional consignment of gold bars in his airplane baggage hold, is a sign of rising threats to the global growth process. In turn this threatens confidence in the all-new No Alternative economy, ushered in by US president Ronald Reagan and the UK’s Margaret Thatcher far more than 30 years back in time and somewhat shop soiled, as it dates from well before cellphones became mass ownership items able to assemble a Flash Mob in very quick time. Linked to the growth of real resource prices with a related loss of interest in paper value and fiat money, central banks almost worldwide, including China and India, Russia and Brazil, are currently raising interest rates and boosting the reserve requirements they set for commercial banks operating inside their territories. Their explanation is to fight inflation and safeguard confidence in their national paper currencies. Equity buying is an immediate collateral victim, due to easy credit being a basic for any paper asset bubble, but not being quite so necessary for a real resource bubble. Underlining this difference, both the emerging countries, and a growing list of developed world central banks are buying fiduciary gold, hundreds of tons of it to back up threatened paper money. These purchases are physical metal – not paper. In turn this sets major challenges for the entire system of gold and precious metals buying, worldwide, which depends on a large proportion of purchases never going physical, that is staying paper. In this cosy system, that shelters paper money and paper equities, gold trading limited to paper gold in the form of Exchange Tradable Funds (ETFs) linked to physical gold but not held by buyers, gold mining shares, long-dated paper futures in gold, and so on. In all cases, physical delivery is either avoided or delayed. Like the rush to buy real asset hard commodities, ever rising physical demand for gold and other precious metals due to fear of inflation and declining confidence in paper money is basically driven by resource shortage and its corollary: not enough production. To be sure, this is couched in market-friendly talk by operators and analysts, who admit the number of hard commodities facing what they call a supply issue has only grown, since around 2005, with the short respite of a 12-month downward blip at the deepest point in the 2008-2009 recession. With no surprise, this problem can only get worse, if the global economy does not re-enter recession at least as deep as 2008-2009. Finding the politician or the TV talking head who says that out loud is like finding a country willing to shelter Colonel Khadafi. NEGATIVE REALITY The last time commodities beat stocks, bonds and the dollar for three straight months was in June 2008 when oil prices hit their absolute highest peak in all time. Similar periods when this happened stretch back to the 1973-1974 Oil Shock and its aftermath. Market folklore always attributes oil price surge to violence in Iraq, the Iranian mollahs, African intrigue and in 2008 Goldman Sachs Co goosing the oil market to bankrupt one of its clients, Semgroup Holdings. Simple supply/demand realities are alwaysignored, but they explain the price surge a lot better. In July 2008 oil futures reached a recordUS$147.27 for the August delivery, and US regular gasoline at the pump climbed to more than 4-dollars for a US gallon (3.785 litres). At the time, and today, average European car drivers paid and pay around US$ 8 a US gallon, but apart of their higher fuel prices are offset by the massive car subsidy payments they get from central governments trying to stem job losses in the car industry and keep consumers doing what they are supposed to do – consume anything and above all pay taxes. This nicely classic Keynesian economic management was hysterically rejected by the Reagan-Thatcher duo more than 30 years ago – and has remained in use for more than 30 years. The reasoning was and is that it is fine, if it works, and we can ignore the ticking resource clock runs because God will provide. By devil’s luck, Thatcher was able to squander UK North Sea oil resources like Reagan squandered Alaskan oil, and today we have the prospect of a vast gas bubble in the shape of shale and fracture gas. This however changes little on the natural resource front. Outside the gas bubble, all the fossil fuels are resource constrained and especially oil and uranium. All the soft commodities, and especially the food grains, vegetable oils, sugar and non-food bio-resources led by cotton and rubber are facing a severe uphill struggle to meet and match ever rising demand – and declining land, water and bio-resources to keep producing more. The non-energy minerals, from aggregates for concrete production through bauxite and iron ore for aluminium and steel, to copper, tin, lead and zinc, and all the high-tech metals including vanadium, chromium and molybdenum, as well the Rare Earth metals have a one-way price track whenever the global economy is not in deep recession: up. FACTS TALK LOUD Whether in or out of ever deeper recession, average OECD iron and steel per capita consumption stays high, at around 750 kilograms a year: one basic reason is the OECD national car fleet average of close to 400 – 450 cars per 1000 population in all 30 member countries. Average cars need about 1 ton of iron and steel, 100 – 175 kilograms of plastics, and 5 tyres which are up to 40 percent oil by weight. From this we get a read-out on car oil dependence: about 4 to 9 barrels per car, only for its construction. Operating the average OECD car then needs about another 9 barrels, every year. Trying these figures out on China and India – at 450 cars per 1000 population – delivers an instant killer hit to any fantasy ideas of the global economy muddling through to its supposed will-of-the-wisp conclusion of Universal Abundance. Not only the oil limit, but limits as basic as iron, steel and rubber supply make it impossible for the Chinese and Indian car fleets to ever reach more than a fraction of the per capita car ownership of the OECD nations today. Any attempt at this impossible goal with regular-type oil powered cars as we know them would generate one-only forecast: worldwide economic meltdown and global economic implosion. This helps explain why government friendly media and our great democratic deciders are so coy and discreet about giving us such a simple, clear and certain proof that you cant get there from here. We never hear a simple basic fact like this for another reason, above and beyond keeping the Consumer Herd both greedy and stupid AKA “confident”: so-called decoupled Asian growth from China and India to Indonesia and Vietnam is our supposed biggest and best hope that the go-go days of global growth could or might come back, inch’allah. Growth of the Asian car market is lauded by each and every OECD leader, almost in the same breath as they whine about oil prices, showing their fantastic hypocrisy is also matched by their wall-to-wall schizophrenia. Like Freddy Mercury told us before he disappeared and died, The Show Must Go On! In Asia this means national car market growing at typical rates of 15 – 20 percent per year. To be sure, keep-the-party going boomers like Renault’s Carlos Ghosn, Tesla Roadster founder Peter Thiel or Wired News editorialists will tell us, hand on heart (and the other in our pocketbooks) that production of $40K all-electric cars will soon be ramped so high it can solve the problem – if the makers get enough free government cash- raked from consumer taxes, and the dumb public stays patient, very patient. SUPPLY PINCH CONSPIRACY- OR REALITY ? Liberal economic doctrine refuses to talk about resource depletion, and only with foot-dragging was able to get around to ideas like the diseconomies of pollution. When the elite discovered these are, in fact, a real nice way to levy new taxes their coming out was sure: in a splendid example of sudden change of mind and an 180-degree flip-round of elite herd mindsets, pollution taxes became media friendly and politically-correct. Straight depletion and disappearance of a resource- like Freddy Mercury being sadly no longer able to fire up the beer swiller mobs at football matches, is however still not accepted as being possible or real world any place under the consumer sun. Trying out simple facts like the estimated 10 000-plus of animal and plant species that are made extinct,every year has little or no traction. Polar bears paddling in slush, because consumers do not rush to buy the latest fuel-efficient roadster, or play churlish and do not adore subsidy-based windmills and nuclear power plants, are however deemed as consumer friendly by the elites. Even the likely near-term extinction of the red tuna is given careful and balanced attention by the media – that is red tuna may not be menaced at all and low-grade tuna can be injected with betadine to turn them red enough to fool average gulpers in designer sushi bars. Human innovation will always triumph, at least in the tacky fairy story of progress-progress-progress that goes along with the greedy, cynical and mindlessdestruction of the biosphere and natural resources to profit the elite. In other words, any talk about straight depletion and disappearance of resources is like they say technical.

OTHER HOLY MATTERS: Obama prays for another round of generous finance from Bejing.

The market is always right (right?), so we check how traders and Ponzi scheme operators respond to the challenge of progress. We find and instant ideology conflict generated by the heroic quest to keep resource supply up, so consumers can have the thrill of throwing more away, also resulting in traders being able to talk up resource prices, through the ceiling, anytime the global economy is not in crash dive to recession. We find that any resource will do: metal prices can be talked up as talking up food, or fuel prices. In February 2011, metals and minerals commodities, from bauxite and iron to technetiumor dysprosium gained close to 4 percent after reports showed Chinese manufacturing is still on a tear and Obama’s heroic spending- of printed and borrowed cash had resulted in US factories starting to lumber out of their recession winter. Rubber prices are now at a 30-year high, to make tyres for the world yearly output of about 70 million new cars and to re-equip the world’s estimated fleet of 950 million units – which by an interesting quirk that shows the effective morality of consumer “civilization” is exactly the same number as FAO estimates for how many persons face chronic or acute food shortage in the world, with about 45 million more in the 8 months since July 2010. As we know, the average sophisticated consumer will tell us that nobody really cares, in those sushi bars hogging betadine-tinted tuna and enjoying it so much. Cotton prices advanced 14 percent in February, driven by domestic production in China, the world’sbiggest importer and consumer, falling more than 6 percent to 6 million metric tons last year, the third consecutive yearly drop. Rising import dependence for China will almost certainly keep world cotton prices powering forward in 2011 and perhaps further– unless there is sharp and steep global recession. Designer T-shirts, as well clothes for the world’s poor will be up in price, which could be grave for consumer civilization as we know it – and maybe don’t love it. The read out and bottom line is always the same: this process will continue until and unless there is global economic recession. Welcome to the No Future our No Alternative friends cooked up and frothed at the mouth about for decades and decades – like an evil spell we now have the chance to smash. In recession, things get clearer to see. Those who profit from other persons’ misery, and the destruction of natural resources and the biosphere, are a lot easier to identify. As the recession deepens, their attempt to save their skins gets more pathetic by the day – making it easier to put them out of their misery, like any rabid dog. COPYRIGHT A. CEAPACH DONALD 2011 - A. Ceapach Donald is a veteran analyst for major state players and the energy cartels. He is a guest writer for 21st Century Wire and has recently received his peerage in the Gonzo Town writers guild.

Filed Under: America, Business, Economic collapse, Economy, Egypt, Energy, Environment, Euro, FOOD, fuel, Geology, Libya, Middle East, money, Politics, Propaganda, REVOLUTION, Uncategorized, US Politics, World Bank Tagged With: commodities, Egypt, energy, EU, Flash Mobs, gaddafi, global, Global Nuclear Energy Fund, green, Khadafi, libya, Middle East, north africa, OECD, Oil, recession, Solar, stocks, Tunisia, US

ARAB REVOLTS HOLD OFF A NUCLEAR SUB-PRIME FALLOUT

February 26, 2011 By 21wire 195 Comments

By Andrew MacKillop 21st Century Wire February 26, 2011 - Top and bottom, or truth and beauty quarks interest nuclear physicists, but the mutually assured destruction of both the top and bottom, namely- both the North and South parts of the global economy. It came very close indeed, programmed and running to schedule right until the end of December 2010. Using the lever of nuclear power and the ‘creative’ financial assets generated around them, the intended mechanism featured a massive finance bubble driven by a construction spree of new, industry standard, Chernobyl-sized (900 MW and over) reactors right across the Southern emerging and developing countries, scheduled to take place between 2010-2020.

M.A.D. aka 'MUTUALLY ASSURED DESTRUCTION'- Formerly the stuff of Cold War games, later becoming playground rules for Wall Street and City speculators.

The lynchpin target for this so-called “Nuclear Renaissance” was the entire Middle East and North African region– the Arab world, including outlier countries such as Sudan and the Central Asian muslim republics. As late as mid-year 2007, France’s President Sarkozy could crow about French success in selling its nuclear power to his respected, or at least petrodollar-flush fellow head of state, received with pomp and circumstance at the Elysee Palace(with tent and gorilla bodyguard)… Mr Muammar Gaddafi. INFLATING THE BUBBLE The nuclear bubble plan originated inside a small, shadowy core group of global finance and geopolitical players. The earliest coming out the so-called plan to build more nuclear reactors through 2010-2020 than in any previous period in history, took place at the UN’s Copenhagen Climate Summit in December 2009. Upon exposure, the first plan experienced its first defeat. Even as vaguely sketched out, or alluded to by the four heads of state of leading nuclear suppliers- Obama, Merkel, Sarkozy and Brown (succeeded later by Cameron), it was promptly met with disbelief and outright hostility by leaders of China, Russia, India, Brazil and others. Bruised but undeterred by this first failure to sell the scam, its pilot group continued its work through 2010. Their members included the likes of George Soros and his foundation, the World Shift Network, including pro-nuclear activists like Al Gore, nuclear boomers coordinated by the WNA (World Nuclear Association) and by a string of finance industry and institutional players led by the IMF, World Bank, the US Ex-IM Bank, as well as some notable major Ponzi scheme finance operators like Goldman Sachs Co. and its finance industry allies. They were frequently joined by the other three heads of government of the top 7 core nuclear industry supplier countries. Together they comprise the present 46-nation NSG-Nuclear Suppliers Group, hatched in 1974. UNDERSTANDING THE NUCLEAR BUBBLE Understanding why the attempt at floating a massive nuclear finance bubble – one which is approximately 10 to 50 times the size of the US sub-prime housing bubble – was doomed to either economic failure, or financial failure, or government debt and monetary failure- or all three, one only needs a flashback to the nuclear industry’s first finance bubble and meltdown, the period around 1974-1979. But at least as important, we have to add another cause of near-certain failure, along with the potential menace of massive loss of life, almost open-ended economic loss, and the ensuing environment damage. Until the Arab youth revolt started sweeping the entire Middle East and North Africa (MENA) region in January 2011, the key geographic region for selling nuclear reactors and creating the new “Nuclear South” – was MENA. One may ask the question: who in their right mind, 6 weeks later at end-February 2011, would suggest it is still a nice, progressive and productive, secure and useful idea to sell industry standard, Chernobyl-sized nuclear power plants to countries like Libya, Egypt, Algeria, Morocco, Jordan, Syria,Saudi Arabia, Kuwait, UAE, Iran, the Central Asian republics, or any other civil war-prone country of the region, like Sudan ? At this moment in time any fast forward scenarios for the MENA region remain cloudy, but above all, they are troubled. Today, few could tell you the sell-by-date for remaining regimes in place in these countries.

California's Diablo Canyon nuclear power plant completed in 1973, but earthquake fears delayed online deployment until 1981.

Apart from minor details like nuclear power plants being likely early collateral damage in civil wars of the region with massive destructive potential, the collapse of friendly dictators in the region heavily weakens another basic need of the nuclear bubble scam – for the borrowing parties to remain inexistence throughout the life of this global Ponzi scheme that was going to be operated, using nuclear assets in the South as the underlying security. Why the plan or scheme to off-load, dilute or dissolve unpayable OECD debt with this scam had to be big- and would have started big, is as simple to understand as flipping through debt and deficit statistics and forecasts for the leading economies of the OECD group. Any so-called “reserve currency” or money, whether in paper dollars, paper euros, paper yen or any others, today faces mortal threat of meltdown. The traditional central banker’s game of turning the printing press and crossing one’s fingers has been shaken to its core of confidence by the global financial and monetary meltdown- a disaster which was triggered by the US sub-prime housing scam. NUCLEAR SUB-PRIME DWARFING THE HOUSING BUBBLE The nuclear sub-prime bubble, we can be sure, was schemed as an operation tens of times bigger than the global housing bubble. The scheme was promoted as an “energy independence” and/or low-carbon plan for emerging and developing countries of the South, but under the table featured a huge off-load of debt from the OECD super-debt countries which could supply the necessary nuclear tech, fuel and engineering services – and above all the finance packages. The scam would have spread its wings the encompass government debt, currency and credit default swaps, SIVs (Structured Investment Vehicles) and a string of interest rate and other derived products, only limited in size and arcane complexity by the same cynical imagination of the nimble minds who gave an unsuspecting world the US sub-prime bubble – and crash. THE FIRST ASSET BUBBLE In market jargon anything that goes North is growing and profitable, while going South means losing money, likely going out of business. Turning this around in geographic terms, the nuclear sub-prime scam was conceived with a Southern base, but for the world nuclear industry ‘going south’ already happened- its first asset bubble still remains as a trace memory, haunting analysts and industry advocates. The first time the industry almost died on its feet started exactly when the NSG was first founded by the original 7 pro-nuclear OECD countries, including the 3 Western members of the UN Security Council. Between 1974-1979 the industry rode a massive upsurge in asset values with reactor costs rising almost daily as the whole nuclear supply chain from uranium mining, enrichment and fuel fabrication, through reactor building and waste handling suffered double-digit annual inflation. By 1978 US Westinghouse (now Toshiba-Westinghouse) was forced to declare force-majeure on its uranium fuel supply contracts, and then on all of its new orders, reactor building and completions. POPULAR NUCLEAR MYTHS Elsewhere in the NSG world, financial meltdown became a threat, followed by a reality much more dire than core meltdown– as the core business of nuclear industrial players became too hot to handle. The reason was simple. The 1973-1974 oil shock generated a wave of panic in decider mindsets right across the developed OECD North, at a time when the only users of nuclear power along with communist Russia and communist China. The atom in economic folklore became the quick fix silver bullet able to shield their oil-based economies from oil price rises, despite the fact that an average intelligence child with a two-dollar pocket calculator could show, and can show today, that nuclear power saves little oil- or indeed, no oil at all. Uninterested by such tiring details, governments and corporate deciders stampeded into their farcical attempt at saving the economy with atomic power. Reactor orders exploded. Inflation followed, and financial meltdown naturally ensued, creating what the nuclear industry still calls its ‘nuclear winter’ – stretching from the early 1980s until the late 1990s, during which a single reactor order or completion was a hailed and rare event! NUCLEAR SALVATION So looking back we can see clearly that through 1974-1979 the exploding track of reactor and nuclear costs was exactly the same as what has happened through 2006-2011 to date. Selling nuclear salvation from high-priced oil to know-nothing heads of state, was then, and still remains today, an easy task in the run up to, and after-glow from the recent all-time high barrel price for oil (US $ 147 on the US NYMEX in 2008). This, we can note, was likely goosed by Goldman Sachs Co. The record price peak also included a 15-20 dollars special GS Co. premium specifically designed to bankrupt its client and victim, Semgroup Holdings, which was advised to bet, and lent funds to bet on falling oil prices… by Goldman Sachs. READY, STEADY… OOPS Primed and ready for the second nuclear asset bubble – this time a super-production – the world finance industry teamed with a mix and match of new-time, and old-time nuclear boomers through the years 2006-2009. This new Atomic Rat Pack ranges from the loony fringe of global warming hysterics like Jim Lovelock, James Hansen and Al Gore, to Whole Earth Catalog changeling and businessman Stewart Brand, completing his coming-out by discovering he’d always loved nuclear power all along but had been too shy to say it. More important for the hard-sell in the South, heads of state of the 7 key NSG countries, Sarkozy and Merkel, soon joined by Obama and Brown, fell over themselves to sell the atom to literally any country at all– in Sarkozy’s case to his friend and highly respected head of state Muammar Gaddafi back in 2007. The list of nuclear-possible or likely countries in the South at end 2010 makes a lurid read. In all cases the projects include (or included, as of end 2010, the probable end of this scam) big or very big civil reactor orders, for industry standard 900MW and larger power reactors. Apart from the MENA and the Muslim world, we find a bizarre array of crumbling dictatorships, one party states tricked out as democracies, and banana-or-oil republics, such as: Nigeria, Ghana, Bangladesh, Mongolia, Belarus,Pakistan and Indonesia. Through year 2010, in a flurry of mostly closed-door meetings, the nuclear industry boomers headed by the WNA and leading lights in the world finance industry honed down their strategy for building and launching the ultimate asset bubble. The reason for Southern tilt was not only the lack of debt and sometimes current account surpluses in these countries, but simple facts of life in the North. In the North, environment militants, knowledge and fear of nuclear power, high costs, and the many alternatives to the atom which now include vast reserves of unconventional gas, made their sales pitch a no-go… compared with the home run in the South. In the background, this was further powered by IMF-coordinated attempts to create new mechanisms for re-indebting the emerging and developing countries, and use the South as a place to offload OECD nation debt into a massive new pool of financial paper riding the nuclear asset bubble. Also add here a rather flagging green energy asset bubble. Perhaps the biggest reason we have to thank the cellphone-wielding Flash Mob youth of the Arab world is this: the potential for launching the new nuclear finance scam is now almost zero in the MENA region – the lynchpin for this attempt at out-doing the US sub-prime bubble. The life expectancy of such a scam today is not much more than that of a quark – about 10 to the minus 25 seconds. COPYRIGHT ANDREW MCKILLOP 2011 – Andrew McKillop is guest writer for 21st Century Wire. He has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

Filed Under: 2012, America, Banking, Business, Climate Change, Economic collapse, Economy, Energy, Environment, IMF, International News, Libya, Middle East, money, Nuclear, Politics, REVOLUTION, Science, Technology, Trends, Uncategorized, US Politics, World Bank Tagged With: 2012, Al Gore, Areva, asset, bubble, Chernobyl, crash, debt, gaddafi, George Soros, Goldman Sachs, Green Energy, James Lovelock, libya, MENA, NSG, nuclear, Nuclear Renaissance, Obama, OECD, Sarkozy, subprime, World Shift

YOUTH UPRISING 2011: A PLANETARY 1968

February 24, 2011 By 21wire 585 Comments

By Andrew McKillop 21st Century Wire February 24, 2011 Today’s surging youth-led revolution in the Arab world has common points with the 1968 student’s revolt that rocked developed countries including the USA, France and several other European countries, with lasting sequels – of student and youth unrest – in Latin America, the then-USSR, Japan, developed countries in East and SE Asia, and even Africa during the 1960s and 1970s. THEN AND NOW… But the shared themes and common goals tend to stop there: today’s youth revolt has a planetary dimension, already moving out from the Arab world, and changing as it goes. The uprising, today, may be mostly of young persons but the goals and themes of this much more massive, probably world scale revolt are not only political, but also economic. In turn this likely makes them even more “impossible” than the euphoric hippy-oriented peace and love, anti-war, drug influenced alternate society dreams of the 1968 revolt in the rich world, that carefully ignored such boring old-style issues such as the economy. A key slogan of the French 1968 student revolt summed this up: ”… be reasonable – demand the impossible”. By an interesting time warp, Mouammar Gaddafi’s rise to power was under way in 1968 and was completed in 1969. This part-educated self-declared tribal ruler, himself drug-influenced, at first claimed to be reproducing the power grab of his supposed mentor, Nasser’s mid-rank army revolt in Egypt, and both of these models served elsewhere in Africa- for example in the bloody coup that gave sergeant Mobutu Sese Soko decades of corrupt power in the Congo. This he promptly renamed Zaire, like Gaddafi renamed Libya as the Arab Jamahiriya, but for any average citizen of these 3 countries little or nothing changed for the better and almost everything changed for the worse. The antiquated other-worldliness of these flashback regimes takes us back to the postwar world of two competing superpowers in an abundant oil and other fossil-fuelled era of constant economic growth. The difference with today’s real world is massive and striking. With the fall of the dictator and mass killer Gaddafi, following hard on the heels of Tunisia’s and Egypt’s creaking leaderships being overthrown, a page of history is being rapidly turned, after decades of being frozen into deathlike inertia. But today’s world is vastly different from that of 1968, and the differences do not only include mass cellphone and Internet-based communications. Through 1968-2008 world population almost exactly doubled, adding 3 400 million people. If by some miracle of 1950s and 1960s style economic growth– as in China and India today, the world’s 3.4 billion population increment could consume oil at today’s OECD average of about 12 barrels per person each year, world oil demand would be about 90 million barrels a day more than present. In other words demand would be more than double today’s demand, needing roughly 50 or 60 “New Libyas” to make up the difference.

SPECIAL RELATIONSHIP: Libya was worth approximately 1.4 million barrels a day.

This immediately sets one parameter for the post-revolutionary world of the next 10 years or so, and generates one basic need: learning what is possible to change, and eschewing economic growth dreams of the 1950s and 1960s variety, even if China and India are soldiering along that path. For delirious and malevolent dreamers like Gaddafi, and like the 1968 crop of student and alternate society leaders of the rich world, all and every economic detail was as uninteresting as it was unimportant. In both cases there was however sufficient fat to trim, or existing wealth slopping around the system to permit these almost 18^th century mindsets, more influenced by J-J Rousseau than by Nietzsche or Sartre– or effectively and in reality by Hitler and Mussolini in the case of Gaddafi. Both the type and kind of Flash Mob cellphone and Internet-based revolutions that are possible, today, will be heavily influenced by existing wealth, and the lack of it in affected countries- and as noted the current wave of revolutionary change is potentially global, exactly like the economy. GMO EPOCH AND THE NEW FOOD CRISIS Another interesting flashback to the late 1960s and early 1970s is that period was marked by serious and recurring famine outbreaks which were solved by the one-time, once-only science and technology quick fix called the Green Revolution. Today’s GM crop hybrid “revolution” is far behind in its scope and potential for raising world food output, despite loud claims to the contrary, and for a battery of simple and basic reasons. These start with the fact, using FAO and other data, the world had an average of nearly 1 hectare of arable land per person in 1968, but today has less than 0.25 hectares per person.

THE GREEN REVOLUTION: Monsanto and GMO giants work to create global food markets for their products.

Food shortages- even famine, therefore has a short fuze today. As the initially joyful Flash Mob youth rebellion in some countries (Tunisia is in fact the only one) are followed by increasingly bloody and lengthening struggles we can easily fear these will degenerate into, and generate, long civil wars. Prolonged breakdown of civil society is a sure and certain threat. During civil wars, all through history, famine is the common fellow rider able to further intensify the loss of life and trigger further, more bloody struggles and massive flows of refugees. It is likely- but not certain, that this parameter is understood by leaders of the developed world, somewhat rocked and shocked by the rapidity and intensity of events in the Arab world since this new start of 2011. The non-ideological dimension is also troubling – so troubling that conspiracy theories are flocking to fill the void: obviously Iran is behind the Bahraini uprising, to inflict collateral damage on Saudi Arabia and deprive the west (and China, India and more than 100 other importer countries) of Saudi oil. Egypt’s uprising, when it is not the fruit of CIA and US Joint Chiefs of Staff plotting, is surely the result of Hamas infiltrating Egyptian youths’ minds using Facebook. Tunisia’s revolution was almost certainly remote-controlled by neighboring ex-Algerian islamic terrorists, when it was not the product of French socialist intellectuals and trade unionists. And so Western conventional wisdom goes. Gaddafi’s very welcome downfall poses problems for cobbling rosy conspiracy theories, but with time these will flourish. We might suggest his downfall could or might be linked to Wikileaks, like any other unexplained geopolitical event, inch’allah. But in all cases of revolt in the Arab world no conspiracy theory can claim the objective is to deprive the world of food supply. Taking simply Egypt, Algeria, Saudi Arabia and Morocco, these 4 countries import more than 45 percent of world total wheat export supply. As traders in their exuberant excesses of panic and euphoria reasoned, in their own way through February 21-23, any prolonged civil strife in the Arab food importer countries could crater demand, and therefore a rigorous sell-off was needed. To be sure, the long-only bets will be back in a few days. Much more important and more grave, the world is in a long-term process of depriving itself with food. Rebellion, revolt and revolution inside countries totally dependent on food imports is a dangerous signal not only for their citizens but for the world. The list of urgent measures in these countries – and in the huge number of countries outside the Arab world but like them heavily dependent on food imports – starts with the development of farming and food production. To date, this basic need is almost inaudible, along with other economic realities. THE FOOD AND JOB CRISIS One sure cause or intensifier and accelerator of today’s Arab revolt is the twin – in fact interrelated – crises of not enough food and not enough jobs. To be sure, citizens listening to the high-flown delirium of a megalomaniac like Gaddafi, or a despot like Mubarak or Ahmedinejad of Iran will be less than thrilled by the ranting rhetoric, when they do not have enough to eat and their job outlook is close to zero. We can suggest that rising strains, and coming fractures in the world food production and supply system will initially be good for democracy but the best-before date on the packaging will be short. The massive rate of urban growth in the Arab world, both due to and causing rural and agricultural under-development, low productivity and poor paid jobs outside cities, is only an extreme version of the same general process in all developing and emerging countries. Inside the fast-growing cities of the entire world outside the OECD countries, which count for 15 percent of world population, the growing capital intensity of low paid manufacturing jobs, to play a humble export platform role in the global economy, also chokes off job growth. Solving both these crises is the challenge for the world that arises from the ashes of the fossil regimes of the Arab world, in Africa and elsewhere, set in a moment of time that disappeared decades ago. Returning again to their time, in the 1960s and 1970s, we can take a swift look at Mao’s failed but deadly rural development and regeneration revolution, and the extreme war crimes of the Khmer Rouge forced return to village living in Cambodia. Both these acts of criminal folly were failures. Their total body count was perhaps as high as 40 million – the same as the total death toll from World War 2. What is important and usually missed out in analyzing these sombre events is that both were either directly, or in major part driven by an attempt to solve chronic or acute food shortage – and create jobs. We are currently offered a bizarre, even eccentric mix-and-match of supposed Green Growth, and intensified consumer society growth economy, by institutions and agencies such as World Bank, IMF, the UN development and economic agencies and some major private corporations. We might ironically think that the dreamers producing these concepts for the economic way ahead are working on a basis that if one fails the other could work, if God wills. The gravest problem is that neither can or will work due to these models being totally antinomic or exclusive. Case in point: at this moment in time, when the post-uprising civil societies of countries experiencing the Flash Mob youth revolt need support, advice, help and direction, the policy void in the OECD developed countries is a grave threat to recovery and sustained change in the world.

LES FLASH MOBS: Tunisian youth takes to the streets with calls for reform.

SOME CONCLUSIONS The rate of change since the start of January 2011 is high and may be growing, not weakening. The Arab revolt now means what it says: anti-regime movements now span almost the whole Arab world, from Morocco to Yemen, and can likely soon spill over and spread to African countries, Iran, Armenia, the Central Asian republics, and perhaps China. All the autocratic and unelected governments unable or unwilling to solve the basic issues of food and jobs will now suffer rising popular opposition and the risk of overthrow by mass uprising. By contagion, this movement could spread to the elected governments in many countries which are unwilling or unable to solve exactly the same challenges and can lose what remains of their own popular credibility and support. Unlike the student revolts of 40 years ago, and totally unlike the rock-solid economic growth of the time, during les Trente Glorieuse, today’s weakened and fragile global economy is exposed to a host of challenges always bringing the economic issues closer to the surface. These as we said, start with the basic issues of failure to feed large chunks of humanity, or employ the youth of nearly all countries, whether rich or poor. Given the resource pinch, geopolitical climate change concerns, rising threats of major ecosystem collapse and heightened awareness of these economic constraints the way forward is both complex and difficult. This however does not mean we can avoid grasping the nettle: on the geopolitical front, endlessly avoiding the basic humanitarian need to eliminate toy-sized Hitlers (many of whom serve at the pleasure of Western powers) like Gaddafi- is returning home to roost. The coming storm of refugee, economic, security and energy problems for the whole Europe-North Africa region, and beyond, is a clear proof of this. Exactly the same applies to meeting the nested challenges of feeding humanity and creating sustained employment within resource and ecological limits, that is within a set of sometimes clear – and often growing – constraints and limits. Time is short, and the heavy weight of avoided and ignored problems over several decades, the ultimate in laisser faire, shows that finally action is the only choice. COPYRIGHT ANDREW MCKILLOP 2011 – Andrew McKillop is guest writer for 21st Century Wire. He has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO. -

Filed Under: 2012, America, China, CIA, Culture, Economic collapse, Economy, Egypt, Energy, FOOD, fuel, GMO, History, International News, Iran, Israel, Libya, Middle East, money, New World Order, Politics, REVOLUTION, Russia, Trends, Uncategorized, US Politics Tagged With: 1968, 2011, Ahmedinejad, Algeria, Arab, Bahrain, Ben Ali, China, Congo, crisis, democracy, Economy, Egypt, Flash Mob, Food, French, gaddafi, GMO, green, India, Iran, job, Khmer Rouge, libya, Mobutu Sese Soko, mubarak, Nasser, OECD, population, revolt, revolution, Saudi Arabia, student, Tunisia, uprising, urban, USA, youth

“RECONSTRUCTING” CLIMATE CHANGE

September 7, 2010 By 21wire 642 Comments

“The IPCC may therefore be allowed to die a timely death. Its budgets can be cut or frozen, and its transition to the added status of becoming a full-blown UN agency pushed further back…“ By Andrew McKillop Sept 8^th 2010 21st Century Wire Through the whole year of 2009, building up to the failed Copenhagen “climate summit”, climate change was heavily promoted by a small but powerful group of Organisation for Economic Co-operation and Development (OECD) political leaders and their corporate, press and media elites as a major challenge to the planet and to our way of life. It was also the big signal for selling Low Carbon energy: everything from nuclear power and wind farms to landfill methane gas recovery or electric cars. Anything not needing oil or seeming not to, was a great big emerging and breaking business opportunity. By midyear 2010, however, the climate change and green energy transition to “a new ecological society” theme had imploded and fallen off the teleprompters of the few political leaders who had taken this theme as serious, and had invested political “face” or capital in it. Climate change almost disappeared from public view. The USA’s voluntary but legally binding CO2 emissions trading exchange, the CCX in Chicago, announced that it was scaling back its activity, and possibly going out of business, as the traded value of a ton of CO2 fell to 10 US cents. The UN IPCC has since swivelled back into view with the role of scapegoat: its climate experts panel had delivered the wrong newsbytes and soundbytes to the few but important politicians who ran with the climate change ball up to 2009. By 2010 it was a ball and chain, the IPCC needed reform, and the IPCC’s communication needed serious reconstructing. Reconstruction of news, science data, other views and different opinions is a long-term stalwart in modern society and its politics. From organizing public support for wars, even when the public itself may be attacked or subject to economic loss, to ensuring that political leaders are re-elected, or that women start smoking and the public keeps buying the consumer products which rack up the highest profits, the role of “communication” is primordial. Communication and Public Relations (PR) are most basically propaganda, because the underlying facts and reality have to be reconstructed to make the message easy to sell. The climate change theme of 2009 was an example of this process, but in its quest to serve its masters and lever up its own prestige, the UN’s own IPCC had gone too far in reconstructing climate science and data.

Pre-climategate halcyon days: it wasn't long ago that Gore and Pachauri were collecting their world-saving allocades.

THE CRITICAL PR MOMENT The window of opportunity for “saving climate change”, and perhaps relaunching it as the new dominant social, political and business theme, is narrow and likely already closing. For climate change this is a critical moment. The largest of its lies, or “enhanced truth” in PR newspeak have been exposed, and lesser extremes of generating constant fodder for the press, media and TV to uncritically recycle were also heavily criticised in the Climategate process. This underlines the critical challenge for attempts at saving the Climate Change and Anthropogenic Global Warming (CC and AGW) theme. When a big lie starts being exposed in public, or a previous completely accepted and slickly sold “truth” starts to slip in the opinion polls and lose traction in the minds of average consumers, the theme is in danger. At this time the role of PR is critical. To save the theme, or in ecological parlance to “recycle” it needs a repowering of the propaganda machine. This also needs political leaders prepared to stick their necks out a second time, but due to the presence of new truths and new doubts about the basic reality of climate change also competing for dominance, the so-called public debate is necessarily chaotic and clumsy, unsure and uncertain. The outlook for saving CC and AGW is therefore doubtful. One key fact concerning the failed launch of climate change fear and admiration of green and low carbon energy is that this effort only concerned four major political leaders. To be sure, these were from the four leading OECD ‘Old World’ rich nations, but this was always a minority – or elite political quest. Their year-long and massive PR campaign on CC and AGW, ending in farce and chaos at the December 2009 Copenhagen Summit, was only a minority endeavour. Until December 2009, the four leaders- Obama, Merkel, Sarkozy and the soon-voted-out Brown gave regular interviews where emotive soundbytes of the type “catastrophe”, “saving the planet”, “our last chance” were regularly utilised. Their doomster rhetoric was so extreme it was hard to believe they were much concerned about the trifling problem of their economies being mired in the worst economic crisis since the 1930s Great Depression, according to the equally hysterical International Monetary Fund (IMF). Their handling of the economic crisis tended to confirm this conclusion. The alternatives offered by these four-only leaders was typically confused. Supposedly an “ecological” society totally dependent on “green energy” would arise, perhaps by about 2035, but this magical transformation would just as magically not affect sales of BMW cars, Boeing airplanes or French nuclear reactors in the meantime. CO2 emissions trading would of course vastly expand, but to what end ? How would this cash be “recycled” to build the bicycle-dependent eco-society just around the corner, in an eye blink of time ? Proving the theme was launched in haste, with bad planning and logistics, the missing strands were more substantial than the substance of the magical transformation dangled by these four political leaders at the microphone, through 2009, but dropped like a lead weight in 2010. Since their failure at the Dec 2009 Copenhagen meeting to vendre la meche and obtain worldwide support for a supposed global transition to an ecological society depending on green energy, the four leaders have predictably “walked away” from the issue (this was especially easy for Gordon Brown). Today, the implosion of this new social, political and business theme is starkly evident. RECONSTRUCTING THE PAST With CC and AGW we are still in the “shock” phase following the effective collapse of what was launched as a new and dominant theme. These new dominant social themes are not painstakingly built, using large amounts of funds and the investment of “face” or personal prestige by political deciders and corporate elites for the fun of it. Rather, such new themes are launched to either reinforce existing, or build entirely new economic and financial, business and commercial themes. The personal investment by the four leaders was made clear by the speeches and pronouncements of this four-person OECD launch team with CC and AGW fear and public admiration of so-called ecological lifestyles and alternate or renewable energy, throughout the whole year of 2009. Failure of the launch process was made concrete by the North-South divide, between Old World and ‘New World’, on all parts and components of the new theme. This culminated in open stand-offs between the four OECD leaders and powerful emerging economy leaders, at the ill-fated Copenhagen meeting. Quite shortly after this, culprits and scapegoats had to be found, and this was materialized by the UN’s IPCC group of experts on CC and AGW, who were blamed for various faults. These extended from plain lying, to exaggeration, distortion and more technical failures such as “imperfectly quantifying uncertainties”, yet another example of the incoherent, confused and unrealistic values and goals surrounding the CC and AGW theme. Today, a “decent interval” after the Copenhagen farce and the resignation of its Director, Yvo de Boer, the UN’s IPCC is now fully playing its scapegoat role. It is now in “reform and reconstruction”, and in major part this concerns its communication. The remaining figurehead, Rajendra Pachauri, may however not be forced to immediately quit, given the further loss of prestige for the IPCC that this would inevitably cause, a point well appreciated by Pachauri himself. In a Times Of India interview, 3 September 2010, Pachauri had this to say about what the IPCC is supposed to communicate. Speaking of how he would go about “repairing” the panel’s governance and methods and keep his job, he said: “At the (IPCC) meeting, we dwelt at length on Article 2 of the UN Framework Convention on Climate Change, which says the central objective of the convention is to prevent the anthropogenic interference with the climate system which is in terms of ecosystem, ensuring food security and ensuring that development can take place. These are the three central pillars”. The newspeak or PR speak stands out in this confused mix-and-mingle of dominant social themes. Keywords like “ecological” and “anthropogenic interference” are jumbled with “pillars”, “food security” and economic development, while the now-controversial roles of green energy and energy transition are totally downplayed. This signals that green energy is at least on hold or has already been “recycled” to the waste bin of IPCC “communication”. GIVING UP ENERGY TRANSITION In early 2009, when the four-only world leaders who most openly nailed their colours to the mast or “pillar” of CC and AGW took their supposedly courageous, or foolhardy political decision to launch this totally new theme, world oil prices were still declining from their most recent all-time high of about US$ 145 a barrel, attained in July 2008. Natural gas prices would soon fall even more massively than oil or traded coal prices, due to the recession and the “supply side miracle” of shale and fracture gas reserves, at least in the USA. Due however to the slow-moving process of political thinking (or slow thinking by the persons who write politicians’ speeches), the very high price levels for oil and other traded fossil fuels in 2008 were a “founding fact” to exploit, as a key motivation for preaching energy transition away from oil and other fossil fuels. The global economy had entered recession, also offering the CC and AGW theme as a way to get the public distracted from economic rout. The recession slashed economic growth, energy demand and traded energy prices along with employment, raised government debt and budget deficits to new and extreme highs in the Old World OECD countries – but not in the “decoupled growth” Emerging economies of Asia. The political pressure, as well as economic rationale for “jumpstarting” and “ramping up” green energy was always different in North and South, or East and West: recession sharpened and intensified this. The high oil and gas price driver, or rationale for green energy development greatly declined through the year of 2009, thanks to recession and the gas supply breakthrough. This made the December climate conference a conference too late for the OECD team’s announced goals of creating new and massive funding and financing mechanisms for green energy in the low income countries, mainly in Africa, to prevent them “getting the oil habit” and to siphon off more of their growing oil production. Similarly, the rationale for “ramping up” carbon finance and CO2 credits trading, to generate funds for investing in the Old World’s own transition to green energy also greatly declined in a single year, notably because the “feed through” from trading, to one-the-ground and real world green energy projects was so low. This was quickly reflected, in 2010 by “fledgling carbon markets” showing every sign of being crippled birds unable to fly, even if they chirruped loud and strong in their cash-stuffed nests. To be sure, this left two of the IPCC’s supposed “pillars” – ensuring food security and economic development, but this through using more and more oil and other fossil fuels, as in China and India. World agriculture’s link with and dependence on climate and weather is of course well known, but its extreme, near-total dependence on oil and other fossil fuels is less well known or carefully ignored. Notably in the ‘developed’ Old World North, in the OECD countries, farming and food production can attain extreme highs of oil intensity, as in Japan, exceeding 10 barrels of oil per hectare, per year, of direct farm input oil energy. Food security, very simply, is oil security. Using windmills and solar collectors to raise food output very simply lacks any credibility. Also the IPCC’s role in preaching energy transition away from oil was never direct: the logical framework created to buttress this PR role of the IPCC was complex. It firstly posited large or even near-apocalyptic CC and AGW, established this was heavily due to CO2 emissions by a careful choice of exaggerated data, and the identified mainly oil as being responsible for these CO2 emissions. This was despite the clear and massive role of coal-fired power stations as CO2 emitters, as underlined by James Hansen and the wind-power, nuclear power, and other “low carbon” energy lobbies. The role of natural gas or methane, of which extremely large and fast increasing unburnt amounts are emitted each year, was never given high prominence by the IPCC, and will probably be given less in the future due to natural gas returning, provisionally of course, to the nice-price fold of cheap energy.

The IPCC's latter day version of Nixon? Coming off back-to-back scandals, embattled chief Pachauri remains defiant to the end.

RECONSTRUCTING THE IPCC It is certain the IPCC will be reformed and reconstructed, if only because of the heavy loss of face suffered by the three remaining political leaders of the 2009 four-person OECD leadership team advocating CC and AGW, and accelerated energy transition. From this year, the IPCC will be expected to be more scientific and less controversial, that is less easily faulted and harder to expose. Despite this “new moderation”, Pachauri engaged in “fighting talk”, in his September 3 Times of India interview, seeking a second term as chief of the IPCC, and promising, or threatening: “(I will) certainly shed any inhibitions or feelings of cowardice. I believe this is now my opportunity to go out and do what I think is right. In the second term I may be little more uncomfortable for the people than I was in the first”. While oil prices stay relatively low – and as set by present ‘realistic anticipations’ of political and business leaders this would be anywhere below US$ 90 a barrel – and the OECD group remains mired by extreme public debt and huge budget deficits, the need for massive PR to achieve a quick transition away from oil has melted away much faster than even Pachauri’s melting Himalaya glaciers. Energy transition is now the “long term issue” it always was, and for political leaders, a long-term issue is anything which extends through all or most of their mandate- a cycle which lasts about 4 years. This further places the CC and AGW theme outside the range and out of time for the real world temporal framework of political deciders. The IPCC may therefore be allowed to die a timely death. Its budgets can be cut or frozen, and its transition to the added status of becoming a full-blown UN agency pushed further back. To be sure, the vast quantities of impressively imaginative studies and scenarios produced under its aegis, some of which was the “meat” of Climategate, will continue being recycled in the press and media, on the inside pages, and in TV documentaries at off-peak hours, but as a new and powerful social theme announcing large scale economic, financial, business or commercial action the time has passed and the theme has failed. Reconstruction will shade into destruction – unless the IPCC and budding green energy czars get the windfall gift of much higher oil prices and a raft of climate catastrophes to feed on. ©ANDREW MCKILLOP 2010 Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO. Contact: xtran9@gmail.com

Filed Under: Climate Change, Environment Tagged With: 21st Century Wire, AGW, Al Gore, Al Gore hot air, Andrew McKillop, CCX collapse, Copenhagen 2009, danish text leaks, Edward Bernays, fake hockey stick, Glaciergate, global government, Global Warming, IPCC, Low Carbon Energy, OECD, PR, Rajendra K. Pachauri, UN, University of East Anglia, Yvo de Boer resigns