Saturday, 28 November 2015

Black Carbon

Black carbon is produced from incomplete combustion of organic matter. It comes in a range of forms from soot to charcoal. The aim of this post is to outline the environmental impacts from black carbon; these include both climate and health effects.

Highwood and Kinnersely (2006) suggest 4 ways in which black carbon can impact climate:
  1. Direct effect: Black carbon absorbs solar radiation affecting the earth’s albedo. This reduces the solar radiation that reaches the surface and contributes to global dimming and surface fluxes of heat and moisture.
  2. Indirect effect: Black carbon within other aerosols affects the microphysics of clouds, changing droplet size and frequency of precipitation
  3. Semi-direct effect: Studies of the Indian ocean and South America indicate black carbon increases the atmospheric heating rate and alters humidity. This then affects whether clouds can form and persist
  4. Indirect surface albedo effect: Deposition of black carbon on snow and ice can cause them to melt and lead to warming, particularly in the northern hemisphere. The deposits darken the surface and decreases reflectivity i.e. increasing absorption and accelerating melting of ice and snow cover.  
The World Health Organisation reported on the health effects of black carbon in 2012:
  • Ischaemic heart disease
  • Adult on-set of asthma
  • Atherosclerosis
  • Heart rate variability
  • Arrhythmia
  • Blood pressure
  • May reduce air quality, causing heavy smog and carrying toxic chemicals to the lungs, defence cells and systemic blood circulation (Highwood and Kinnersely, 2006) – e.g. the Great Smog of London, which lead to an approximated upper bound of 10,000 premature deaths

Black carbon is widely thought to have contributed to global warming and many premature deaths. Thus, there has been a demand for cleaner air quality and less black carbon emissions. Next post we will begin to look at the economic implications of one method of controlling such emissions.  

Sunday, 22 November 2015

Emerging Markets of the Anthropocene

Various earth system processes have different planetary boundaries, as stated by Steffen et al. (2015), which may have harmful, irreversible impacts, should they be exceeded. In the table below, the various boundaries to each process are illustrated.
  



The two key core planetary boundaries that are focused on are climate change and biosphere integrity. Climate change has a fundamental importance for earth systems as it affects them all. Biosphere integrity increases resilience to abrupt and gradual change from global processes such as climate change, and is thus of vital importance.  

Steffen et al. also note that the ‘anthropogenic perturbation levels’ of 4 of the earth system processes, already exceed the proposed planetary boundary. These are: climate change, biosphere integrity, biogeochemical flows, and land system change. Therefore, these processes are seen as priorities to focus policies on. Tom Bawden states that the nine threats to life on earth are: biodiversity loss, deforestation, climate change, eutrophication (nitrate/phosphate in water), ocean acidification, freshwater consumption, chemical pollution (e.g. plastics), aerosol pollution and stratospheric ozone depletion. These are key contemporary issues and are also seen as environmental priorities. 

New markets being invested in include alternative energy fuels such as solar power, nuclear power, wind power and geothermal energy. Though they all have their pros and cons, alternative energy sources are being increasingly invested in. There is also an increasing market for cars with lower carbon footprints and electric cars.  Carbon credits are also a dynamic market as a result of the Kyoto Protocol. There are also investments in innovative new methods and initiatives as part of climate intervention, otherwise known as Geoengineering.

For example, projects such as the SPICE project which aims to inject particles into the stratosphere as an attempt to manage and manipulate climate.  The project is now defunct, however there is a widening market for initiatives such as SPICE. However, even if geoengineering is successful to the extent that human activity has little effect on the earth systems, it is only a matter of time until we run out of resources, such as fossil fuels and fish. This has led to issues such as biodiversity loss, which has opened up new markets for fishery management, and driving up the price for certain fish species that are no longer in abundance. 

Whilst new markets may be emerging to combat climate change, I don’t believe any markets will fully disappear within the next decade. It is not in human nature to give up on a practice that harms the earth; instead, we tend to find new, innovative ways to continue to enjoy luxuries. Therefore, I believe markets will only emerge and develop here on, and we will see a growth in aggregate demand and thus the global economy.

Tuesday, 17 November 2015

Population Growth: The Key to Stabilising the Economy?

Steffen et al. (2015) debates whether the Great Acceleration can continue. They argue that the history of economic growth has consisted of periods of recession and boom; otherwise known as the business cycle trend. However, they then draw on Costanza et al.’s (2012) suggestion that the stabilisation of population may lead to a stabilisation of economic growth. I however, am not convinced in the slightest.

The first concept I learnt in economics was that of the basic economic problem: scarcity. The nature of being human is that we always want more. There is always something more we could have, and we strive to achieve this maximum level of happiness through the acquisition of goods. Resources are finite and are thus insufficient to satisfy all human desires. Due to this, the population may begin to stabilise, but human aggregate demand, may not fall. In fact, demand may increase, as there are fewer people to distribute GDP to. Therefore, GDP per capita would be higher (as I’ve stated in a previous post), encouraging people to spend more and fuelling economic growth.

Assets would continue to increase in value, as the economy booms, until such a time when the ‘asset bubble’ bursts, and prices fall dramatically. These exogenous variables have a detrimental effect on the economy, which often leads to a recession. The economy then recovers and the cycle continues. My view is therefore that, regardless of whether or not population is stable, declining, or increasing, the business cycle will continue. By collating UN data, I have created a graph showing population growth and GDP growth for Hungary between 1992 and 2014.




From this graph, it is clear that population growth has been negative since 1992, demonstrating Hungary’s population decline. However, in 1992, GDP growth is shown to be at -3.06%, and in 2004, it is shown to be at 4.79%. This demonstrates that though population is declining, the nation continues to undergo periods of boom and recession, i.e. the business cycle.

So, human population growth rates will not necessarily affect aggregate demand unless population declines significantly enough. The magnitude of effect that human activity is having on earth systems however, may lead to investment and indeed the development of different markets. Next post will discuss emerging markets of the Anthropocene with the focus of prioritising planetary boundaries.

Wednesday, 11 November 2015

An Introduction to the Emerging Climate-Economy System

Looking at past trends, one may conclude that global CO2 emissions and economic growth indicate a highly positive correlation. The reason for this is of course that most CO2 emissions are being produced by fossil fuel combustion. Kellie-Smith and Cox (2011) however, assert that there may be a limit to which these two variables have a positive correlation. Damages due to the subsequent effects of fossil fuel exhaustion – I’m referring to global warming, in case you hadn’t guessed – may in fact now begin to hinder economic growth. Thus, it is even possible that CO2 emissions and economic growth will flip from a positive to a negative correlation.

After some rather lengthy mathematical derivations, Kellie-Smith and Cox, arrive at a complex set of formulae, which predict the critical rates of global CO2 emissions growth that will induce dampened or long-term boom-bust oscillations in human wealth. They assert that presently, at the climate-economy system’s climate equilibrium state, economic growth rates are counteracted by the impacts of climate change on the economy. In this climate state, economic growth rate = rate of decarbonisation. Due to this, it is essential to mitigate to ensure long-term sustainable growth. However, Kellie-Smith and Cox find that decarbonisation may not be enough to mitigate these effects. Conclusively, they argue that more effort needs to be invested in not only mitigation, but also adaptation and perhaps lower but more sustainable rates of economic growth.

So… what affects economic growth? Well, it depends.

Firstly how do we measure economic growth? For the purpose of the rest of the blog, let’s assume the measure is GDP/capita at Purchasing Power Parity (PPP). The reason I choose GDP/capita at PPP is simply because I wish to measure average incomes. Although inequalities and extremities will not be accounted for, this measure will provide some insight into how much the average consumer earns in a country, and thus, how much the average consumer spends relative to the prices of goods in their country; this then contributes to economic growth.

Secondly, there are just so many variables that could affect economic growth including:

  • Demand & Supply of all markets and industries
  • Interest rates, investment & savings
  • Business and consumer confidence
  • Government spending, regime and structure – corruption?
  • War, Famine, Disease, Drought, Natural Hazards
  • Trade openness
  • Infrastructural & other development
  • Post-colonial power relations
  • Access to healthcare, sanitation

When there are so many compounding factors affecting economic growth, I think it is fair to say that it may be incredibly hard to predict future global growth rates. We would have to first assess the magnitude of each variable’s effect on economic growth in different countries, and then further assign weights to countries for how much they could potentially contribute to global economic growth. However, there are some variables, which are quite clearly very important predictors of economic growth, such as aggregate demand. Next post, we shall look at the future of such predictors and what they imply for the future of economic growth.

Saturday, 7 November 2015

The Great Acceleration

Back to economic implications of the Anthropocene… two posts ago we came across Steffen et al.’s socio-economic trends graph (featured below). Upon first glance, it really is quite clear that since the beginning of the Global Acceleration in 1950, the economy has boomed (hence the name I guess). Population has increased exponentially, augmenting aggregate global demand, giving rise to all of these wonderfully booming economies (and the not so wonderful climate change).


 So what to make of all of this data? Well, lets start with talking about population growth, a very controversial issue. You may have come across the UN population predictions graph below based on data, which can be seen here:


The medium fertility assumption is based on projections using the Bayesian Hierarchical model. The high and low variant projections are based on +/- 0.5 of the medium fertility rate assumptions respectively. The wide consensus, including Steffen et al., tends to assume that of medium fertility assumptions. Steffen et al. assert that humanity has passed ‘peak child’, and thus suggest exponential population growth will soon come to a standstill. Assuming population growth has a significant positive correlation with economic growth, if population growth stagnates, will economic growth and all linked socio-economic trends stagnate as well?

On the other hand, rapid urbanisation may initially counteract the effect of levelling of population growth on economic growth. Over 50% of the global population now live in urban areas (Seto, 2010). We are no strangers to the fact that urbanisation leads to more materialistic appetites. In such a society, people (including you, yes you) crave the latest iPhones and other luxuries; this may in itself be enough to sustain economic growth until such a time where these materialistic industries and business stop growing. Urban costs of living are also higher, meaning people may choose to have fewer children, further reducing fertility rates; we may actually see slight population decline as projected by the low UN variant. Coupled with rapid urbanisation, population decline is likely to actually lead to increasing GDP per capita.

As we have exploited resources to the nth degree, some of the finite resources are already beginning to stagnate. For example, Shah et al. (in Molden, 2007) posit large dam construction in the last decade has begun to level off, as there are only a finite amount of large rivers we can dam! This can also be seen in the socio-economic trends ‘Large Dams’ graph. Other resource usage however, has been noted to be on the rise e.g. fertiliser consumption, paper production and water use (also seen in the above graphs). 

However, due to such open trade, it is often found that one country’s economy is inextricably linked to the entire worlds. In 2008, when the Global Financial Crisis hit, it was so detrimental due to globalisation-induced openness of economies and trade. As one country spiralled, all trade partners soon followed. Seven years on, I'm feeling old and the global economy has mostly recovered. However, now we have a different type of global crisis: Climate change. If you’ve watched the videos in my last post, or if you’re somewhat aware of the current global situation, you will know that mitigating and adapting to the effects of anthropogenic climate change requires a global effort. Otherwise, like the financial crisis, all countries will suffer, not just one.

Many social scientists tend to approach this topic by thinking about what needs to be done to avoid damaging Earth Systems further. However, there are so many ideas on the table, I want to consider what these ideas mean for the global economy – will the Great Acceleration continue throughout the Anthropocene? Throughout the next posts I will be exploring the emergent dynamics of the new climate-economy system in the Anthropocene… I hope you’re as excited as I am!

Wednesday, 4 November 2015

#EarthToParis

This post is not of incredible relevance to the angle of climate change my blog is tackling, however, here are a couple of short videos I wanted to share with you on the upcoming COP21 Paris Conference... I hope you found them as inspiring as I did to get involved!