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Investing in people and the planet

 

 

 

The way we run our investments and the way we run our business models and the way that we run our economic models, we are not living within the capacity for the Earth to support human life.

 

Samuel Mann: Welcome to Sustainable Lens, Resilience on Radio, a weekly show on sustainability topics brought to you by Otago Polytechnic. The show is co-hosted by Shane Gallagher and me, Samuel Mann. Each week we talk with someone who is making a positive difference and applying their skills towards a sustainable future. In our conversations, we try to find out what motivates them and what it means to see the world through a sustainable perspective through their sustainable lens. Tonight’s sustainable lens is that of Dr Robert Howell whose new book, Investing in People and the Planet, is published by …

 

Robert Howell: It’s available through Quaker Books, so if you go to the Quaker website and you’ll be able to find it there (quaker.books@quaker.org.nz).
Samuel Mann: So let’s take a few steps back. Where did you grow up?

 

Robert Howell: Napier.

 

Samuel Mann: What was it like growing up in Napier at the time?

 

Robert Howell: It was very interesting because … I went to Victoria University and spent ten years in Wellington then came back to Napier as city manager and when you come back as city manager, you see the city through different eyes. Did you know that the largest storm water pumps in the country are in Napier? And the reason for that is that the earthquake my parents went through – the 1931 earthquake, so that was part of my upbringing but it never did it’s job properly. It only raised the land so far and the water didn’t drain, so coming back and looking at it in different eyes was great. Looking back now, my father wasn’t rich but we were well looked after and we had a reasonably good upbringing. It was Pakeha didn’t take much to do with Maori but it was a reasonable education and some happy times.

 

Samuel Mann: What did you want to be when you grew up?

 

Robert Howell: Originally, I looked at being a minister of religion but I went to university and I guess that was part of my growing up and I didn’t become a minister of religion.

 

Samuel Mann: So what did you do at university?

 

Robert Howell: Well, I did philosophy originally. I’ve got a masters in philosophy and then I went … I had to years in broadcasting and then went the health sector and eventually I joined a small innovative unit that was headed up by management consultants to improve the efficiency of Wellington Hospital and I didn’t know nothing about management and even less about hospitals, I learned a hell of a lot.

 

Samuel Mann: Can I just take another step back. Why philosophy?

 

Robert Howell: Well it was part of the religious stuff, but when I look back now, I guess I had a skill and an innate desire to sort out the basic fundamental questions on life. I wouldn’t have put it like that, they just interested me. So that was part of the philosophy stuff.

 

Samuel Mann: Did you know at the time what you were going to do with it, or didn’t it matter?

 

Robert Howell: No, because I was growing up and searching and the thing about philosophy is that it gave you the intellectual tools to be able to examine the fundamental issues – that’s not the only discipline, of course, but it’s one of them.

 

Samuel Mann: So was it a shock going from answering the fundamental questions of life to improving the efficiency of the health service? That sounds quite operational.

 

Robert Howell: Well, I guess the searching has not stopped and I’ve always tried to be open to new initiatives and I didn’t grow up just by doing philosophy, you don’t grow up. In actual fact, when I got married – being married with my wife for about five years – she had education and sight training and she decided that to keep those alive, when our kids came along, she’d do marriage guidance training and her doing that led me to do that training and I would say part of my growing up was learning those basic skills to be able to relate to people and start talking about my feelings and talking about feelings of others, and those skills were just as important as the intellectual skills that I’d developed with philosophy.

 

Samuel Mann: So what have you been searching for?

 

Robert Howell: That’s a very good question. I guess I was wanting to … Because I was brought up in an evangelical religious framework. Christians like “is there a god and if there is, what is a god?” I decided that the personal, so-called ‘being’ that manipulates the world from outside and that’s part of a method of storytelling. It’s relevant for some people but not for me, and then I guess I wanted to just start learning about some of the ways in which the world worked.

 

Samuel Mann: And if there is a God, what’s he playing at with all the wars and climate change?

 

Robert Howell: Well. I don’t use the term ‘God’ now.

 

Samuel Mann: Okay.

 

Robert Howell: My wife was a Quaker and over thirty years, osmosis took place and Quakers – or one of the attractions of Quakers is that they don’t have a creedal affirmation. They have a lot of emphasis on personal experience. The Maori word for the Quakers of New Zealand ‘te Hāhi Tūhauwiri’ which means the group that stands shaking, blown around, buffeted by the wind of the spirit and I prefer to talk about spirit, rather than god because the term god has been so badly abused. When George Bush says that God led him to go into the Middle East, then I don’t want to use that term. So I talk about a spirit in terms of certain sorts of experiences that have profound impact on one, in terms of thinking about the purpose of life, the mysteries of life, the beauty of life and those sorts of experiences – when you feel one with the world. Doesn’t happen all the time of course.

 

Samuel Mann: How do you mix that with doing the job, whatever it is? Eventually you found yourself back in Napier, running the city. Is it always in your head, is it something you do at home? What’s the relationship there?

 

Robert Howell: Can I just go back to the hospital? I saw that my role in the hospital was to help to work at a practical level, helping people, use taxpayer resources more efficiently. I saw that if I could get a better buck for the way in which the system was run, then that was a good contribution to society. So I was brought in initially in Napier by a reforming mayor to improve it, and we did. So I was seeing my work and during that I developed skills and had training and my PhD was really in how do you measure the community’s health for planning purposes? Which led me to use my philosophical skills to say “what is health?”

 

I rejected the medical model, so I developed a different kind of model for health for those purposes. So it was using the philosophical skills but then embedding it with a more strategic planning framework and I guess I brought, to my work, as a change-agent, as a CEO, as a consultant, as a university teacher, I brought a strategic perspective. So the strategies, strategic processes and how we design and run our organisation. So that’s what I developed.

 

Samuel Mann: Did you do your PhD while you were working?

 

Robert Howell: I was able to … the Hospital Board gave me one day a week  – while I was working – to work on the PhD and I did that for two years. I basically read and then I got a medical research council grant to go to the States for two and a half months, and Britain for two months – that was full time – and then I came back in the light of all that experience and did all the fieldwork and wrote up and that was on a medical research council grant.

 

How I got into the council was that there was no immediate niche for me to get back into the health area – and I was home in Napier – and a new mayor had been elected and he didn’t want a town clerk, he wanted a city manager and he wanted somebody who could reform the council and that was part of my task – very difficult, the council was very divided but we managed to make some significant changes.

 

Samuel Mann: I’m just looking through your CV over the following ten years and there’s a whole pile of stuff in there. You’ve certainly kept yourself busy and working a whole lot of different areas.

 

Robert Howell: Yes, at times it became very awkward. In part, my wife was what I would call a social entrepreneur. So she developed a language school in Napier. She was one of the early pioneers in that area – brought Japanese students – and I met some Japanese people and when I left the council, I developed an agricultural College. College is a bit grandiose. It was really a cross between a community high school and a college, but it brought … We had one-year courses, amongst others and brought Japanese students out, gave them three months English training and then put them on farms – dairy farms – beef and sheep, horticulture and so on – practical experience stuff and then, at the same time, I started links with Massey University and they wanted me to run a course in local government and I linked up with Massey people and we did a lot of reviews of that local government process five years down the track.

 

One of the research projects I did was to look at the way in which governance had been changed because part of the problem of running local authorities is that I was in charge of … I forget how many staff we had now … About a thousand or something like that, a budget of about fifty million. The majority of the Councillors were in businesses that had no more than two or three staff, so the processes of organising a large operation were quite difficult for them and they wanted to get hands-on and really, the whole question of the role a council or a board and its relationship with the stakeholders was the subject of a study that I did, to see whether the reforms in the eighties had made difference … Shorter answer – they hadn’t – but during that process, I did a identified a model by Carver, an American researcher and then I used that subsequently to teach and consult that whole governance area.

 

Samuel Mann: When you’re working in the council, or in fact, any organisation, any business that’s operating at that kind of scale – in the tens of millions of dollars – is it possible to apply those principles that we touched on before the beauty of life and the peacemaking and all that sort of stuff? Does it work in that kind of organisation?

 

Robert Howell: When I first went to the council, I used more of my marriage guidance stuff because the council was divided, so it involved a lot of listening and then putting in the systems to be able to make the organisation more efficient and I think that … I mean, I see strategy and organisational design, if it’s done properly, is good problem solving. What you’re doing is avoiding the fisticuffs conflicts and you’re providing a method of resolving those issues in a nonviolent kind of way. So strategy, for me, is part of a nonviolent process if you like.

 

Samuel Mann: Eventually you found yourself in Auckland doing various governance things and is it about that time you started getting interested in responsible investment?

 

Robert Howell: What happened was that I wanted to get a consulting job with some Anglican trusts about governance, okay? And their basic job was investing, it was a bit of a mess, there were a lot of them. I never got the job, but then I got invited to be the Quaker representative on the CCANZ – the equivalent of the National National Council of Churches. So I persuaded them to set up a committee to look at church investments as a good background for me to do more consulting on this – a selfish as well as an altruistic motive and eventually, that morphed into looking at investment in not just a religious way, but a more fundamental way for everybody and I set up the Council for Socially Responsible Investment that was open to everybody, and if I could take you down where that led me, was that I then began to say “what are the kind of measures that one should look for, to know that a company is being responsible to the environment, as well as to humans – human Earth as well as the human-human relationship?

 

To cut a long story short, that took me to two think tanks. One was a Quaker institute for the future, which was set up in North America by the Quakers and the other one was sustainable Aotearoa New Zealand – based in New Zealand, of course. The beauty of those is that they were multi-disciplinary. There were scientist, economists, lawyers – a real mix of people and I learnt a hell of a lot from those groups. The first one was the state of the Earth for sustaining human life is pretty fragile, very fragile, far more than I ever had appreciated. Secondly, a significant reason why that is the case is because of our economic models and our financial models and the third thing was that that’s related to our ethics, and that was what really interested me in going back to my original philosophy. So I went back and did some philosophical stuff. I started reading stuff that I had sort of touched on about forty years ago, but then read quite widely in that area and what I was able to do was bring a public policy perspective as well as an integrating perspective.

 

So it’s part of trying to get a handle on all of this. It was a very fertile time for me. I’ve done a – what I call – a ‘wiring diagram‘ (see article). It’s on a one page and on the left-hand top are the three or four ethical positions like Aristotle, utilitarianism, the social contract and mapped it out, how over – in Aristotle’s time – over centuries, how they have moved from just being concerned about human-human relationships to include a human-Earth relationship. So all the significant philosophers today, have extended those traditions to deal with those issues.

 

So that was at the top. In the middle was all the economic models and how they have changed and at the bottom was the science and the major scientific discoveries and then I had little dots, related to major changes that had occurred and I found that was my way of making sense – now, I’ve given that as a lecture for over fifty-plus times and people have found it very helpful. So what I was able to do was provide an overview, an integrating perspective, to look at how the science and the economics and the ethical stuff had change in significant ways, but there were gaps, you see? The economic model that we have today is still based on crude utilitarianism and they haven’t made the changes.

 

The other thing that it helped me to do was really, then start to think, “well, what does this have for investment” and then that took me back to the journey that this book is about because this book is … Even though I wrote it in a month and sort of corrected it in about two months, with sending it out and proofreading and all that stuff that you’ll know about … It’s really a summation of what I’ve learnt over the last ten to fifteen years and how about ninety percent of the world’s investments are unethical.

 

I made some surprising discoveries. Did you know, for example, that while the New Zealand government was taking on the French government and the American government and the world generally, over three decades, about nuclear weapons, during all that time government investments were invested in the nuclear weapons industry?

 

Samuel Mann: No.

 

Robert Howell: No, a lot of people don’t. So part of what I’m on about is saying to people there is a connexion between the way you invest and your values and so what I’ve tried to do is make that connexion and to say it’s really important as individuals that we make that connexion and here are the tools to be able to put your values into practise as a taxpayer and as an individual investor. How do you select the KiwiSaver fund that is consistent with your values? How do you sort out which fund – managed fund or insurance company, or bank – how do you sort out whether they are actually caring for people on the planet? How do you get through all the PR hype in simple terms and start to use the power that you, as an individual have, to be able to make those changes? That’s what the book’s about.

 

Samuel Mann: You’ve said ninety percent of the world’s investments are unethical …

 

Robert Howell: Managed funds and sovereign wealth funds.

 

Samuel Mann: … Does unethical there, mean can operate without consideration of ethics or does it mean, somehow bad? Or is bad by definition if you’re not thinking about it?

 

Robert Howell: If you go through my Wiring diagram, that gives you all the sophisticated discussion, but at the very bottom line, for me personally, what it means is one needs to develop a principle for dealing with people – a human-human ethic, and then you need to deal with the human-Earth ethic. So for me, the human-human ethic is based on fairness. That’s the term that I would use. Other people use similar sorts of terms that have got similar sorts of mileage but just in simple terms, that’s the core concept.

 

In terms of human-Earth, I would say rather then exploitation – exploiting the Earth for human utility – one should respect the Earth. There are other terms – Schweitzer used reverence for life, there are lots of other terms, but for me, respect. So I want to then say of the companies that the New Zealand superannuation fund invests in and ACC and the KiwiSaver funds and my bank and my insurance company, the universities, the councils, do they meet those principles? Are they based on fairness? Do they actually abuse people in a fundamental kind of way – and I’ll give you an example with Nucor in just a moment – and do they actually respect the Earth, so that humans can live within the capacity of the Earth to support human life.

 

Now, at the moment, the way we run our investments and the way we run our business models and the way that we run our economic models, we are not living within the capacity for the Earth to support human life. Those are the two fundamental principles and I then have a series of more detailed questions that enable one to tease out whether that’s the case.

 

Just to give you an example of Nucor.  Nucor is the largest steel company in the United States. A number of years ago, it got pig iron from Brazil. That pig iron was produced using charcoal that came from the forests of Brazil from slave labour. A group of people in the United States, including – but there are others – the interface centre for court and responsibility, which is a grouping of Protestant and Catholic and Jewish investors with about a hundred billion under investment. They are the world’s best shareholder activists. So they ring along to Nucor and its management and its AGM and they put resolutions to say to Nucor they would adopt as policy, not to buy any pig iron from Brazil that was produced with slave labour and they also wanted Nucor to fund two groups in Brazil to independently verify that Nucor was doing what it promised to do. Now that took three years of negotiations.

 

So, here is a company Nucor that is using slave labour for steel. It doesn’t meet the human-human perspective. It’s not fair. So that’s one example. Plenty of examples in the human-Earth relationship. All the big Australian banks are invested in coal – fossil fuels. If we don’t get out of coal, if the world doesn’t quickly get out of the use of coal, we are into a two degrees Celsius plus warming. Now that’s got major implications and that’s likely to happen at the moment. That’s likely to happen the decade 2030 – starting 2030. It’s less than fifteen years away. So from a New Zealand point of view, a two degree warming … We have just had, recently, fires in Christchurch. In Auckland we’ve had heavy downpours which have caused quite considerable infrastructural damage. In the North of Auckland we’ve had a nine month drought, okay?

 

You get a two degrees Celsius warming, you’re going to have more droughts, more floods, more heavy rainfall and you’re going to have it more often. That’s going to have a major impact on New Zealanders, it’s going to have a major impact on our economies. Now, that’s just New Zealand, you need to look at what’s the impact in terms of Australia and some of our major partners we sell our milk and various other things to. It’s going to have a major effect on China.

 

So there are a number of companies that are simply not preparing us to be able to deal with this sort of scenario. So there’s an example of how you can apply the principles, in terms of human-Earth and human-human.

 

Samuel Mann: One of my favourite definitions of sustainability is ethics, expanded in space and time, and what I do in some of my teaching is expand on the trolley problem – the train racing down the track and it’s going to kill three people but you can save them but it’s still going to kill one and you can do students’ heads in quite quickly about getting them to the edge of utilitarian ethics, what happens when one of them is you grandmother, that kind of thing. My question is, well if you had a third alternative and you could divert it into a forest, what would you do? And if it’s just an empty forest, then the forest. But what if it’s got the last two remaining orangutan in it? You’ve got a much deeper understanding of this than me.

 

Robert Howell: These are lifeboat choices, aren’t they? Look, when you’re in the middle of a war, it’s really difficult for these choices and so what I would prefer to do is to slow the train down in the first place, okay? This is the strategic perspective that I bring and let me quote you an example of Shell – not my favourite company, but in late 1960s/70s they set up a strategic planning unit.

 

Now, at that time, Shell was saying that strategically we look at the oil that was supplied last year and sold and we had two percent and you had a gradual rise in the graph over a decade or so. The Strategic planning unit was asked to look at some of the strategic options and they said “well, instead of two percent, what if it’s twenty percent, what would we do as a company if all of a sudden the oil increased by twenty percent?” And then they started to say “well, these are the things that we could do.” Then the Arabs came along and did exactly that and Shell was very well placed because they’d done the thinking beforehand to be able to deal with how to respond to that.

 

Except, the shipbuilding sections – the tanker section of Shell – they didn’t want anything to do with this strategic planning stuff, right? And so when the Arabs increased the price of oil, they kept building ships until they had so many ships that they didn’t know what to do with them. They keep falling over them etc. Then they realised that in fact, the strategic stuff was actually relevant. So what I want to say is there are certain things that I can’t do. I think the time for averting significant climate warming … The easy options are gone.

 

I just think we are faced with some very difficult places and people will die and ecologies will die, animals will die. Nothing I can do about that but what I can do is start to encourage fellow colleagues – people like yourselves and people listening to this radio to say “let’s start preparing options for how we’re going to deal with adapting to these situations” and one of the advantages of the Shell analogy is that once you’ve done that, you can actually read the signs. The Shell people in the tanker division weren’t reading the signs and there are people in New Zealand, including our government, who bemoan the fact that another hundred year flood as arrived since the last five years and another one’s going to come and they’re not reading the signs. How many fires do you need, how many droughts do you need?

 

Well, if you start thinking about the scenarios and the signs we’re talking about, then you do read the signs and then you’re in a much better position to start preparing options. Some of those options are going to be very difficult. Can I give you another train analogy?

 

Samuel Mann: Mm-hmm (affirmative).

 

Robert Howell: I’m very critical of the SRI industry – social responsible industry – because I think that they have been captured by a model that’s not valid and that’s the United Nation’s principles that are responsible investment, it’s not a valid definition. A whole variety of reasons I can give for this but I’ll leave those to one side, you can come back to me if you want to. Now, what that means is that the New Zealand Superfund claims in its annual report “we are a responsible investment because we’ve signed up to the UNPRI,” but they’re invested in Exxon Mobil and they’re invested in Rio Tinto and a whole series of other companies that are really notorious for the way they treat people and the way they treat the planet and so the UNPRI is seeming to do something, it’s what I would say walking southward on a northbound train. It gives you the impression that you’re going in one direction when you’re actually going in another direction. That’s my other train story.

 

Samuel Mann: Okay, I’m going to add another one then and – to further extend the space and time thing – if we could have an alternative track where we put the train onto some sort of space time loop, that it disappears for ten years, but then it’s going to come back in ten years and instead of two or three people, it’s going to kill off some large number – a thousand people, what would you do? And it really does my head in to think that I’m the person that’s supposed to know this stuff and my gut reaction is to go for that one. Why are we so bad at the ethics of the future?

 

Robert Howell: If you’ve got two hours with me to go through the psychology of decision-making, I might answer that. Let me give you a couple of suggestions. I think that if you’re a young family with kids, you’re worried about where you’re going to live, how you’re going to pay for your house, how you’re going to get a job that’s going to give you enough, etc., you get focused on the immediate short-term. It’s very difficult to start making significant changes out of that.

 

So you get bound up into the business-as-usual model. So that’s one thing. The second thing is that if you want to move away from the business-as-usual model in the company … I mean, I’ve bought an electric car, I’m getting solar panels in the house, getting more water tanks – because we’ve just shifted where we are in Auckland – but there are certain things that I … If I really wanted to be purely sustainable, I’d find it very difficult because how do I look after somebody who’s sick, who needs an ambulance? The ambulance at the moment uses petrol, so what do I do? Do I deny using an ambulance to take somebody to hospital because it’s using petrol? So, you’re faced with really difficult choices.

 

So what you do … I like the analogy of the good Samaritan. The good Samaritan came along and saw somebody lying in the gutter. The good Samaritan was a Jew, the guy lying in the gutter was not. He helped him. Bound up his wounds and took him in. Didn’t bother to save the world, he just wanted to help that guy. So my suggestion, my focus is, where you have the opportunities to help people in small little ways, do it. Because if everybody did that, then the world would change and that’s why I come back to investments. People say “oh, its too hard, I don’t understand finance” etc. But in my book I try and spell out in very simple terms, what we, in very simple ways, can do to use our little money to actually start making some changes and when you do that for others it’s very powerful. Not sure whether answers your question, does it compare?

 

Samuel Mann: I think so. What it leads me to is a question of can you live ethically, when, as you’ve just described, we almost can’t live sustainably?

 

Robert Howell: Well the short answer is no. The society that we live in at the moment – the food we eat for example, if we’re really honest with ourselves, is the food sustainable? Do we get tomatoes from Italy? If you’re going to the supermarket and then go through as much as you can – because the labeling’s pretty terrible – ‘made in New Zealand from New Zealand and imported stuff’, but if you really did an accurate assessment of our food and how sustainable it was, it wouldn’t be. Well, one of the alternatives is to actually grow your own food, but if you’re a mum with three or four kids, there is some food that you can grow – you can grow your herbs and get a little garden going, but it’s sometimes quite difficult to be completely organic and … You can pay a bit more for organic food, but your choices are limited. So you do what you can and you try and persuade … So, that’s why I say go and start using your money because that’s a way of helping people to make the changes.

 

Samuel Mann: So if it’s so very difficult for us to live sustainably and ethically, is there a pathway to a positive future?

 

Robert Howell: Erm, I think that we all make mistakes. Aristotle talks about ethics in the terms of being an apprentice – which I like – that is that you have to learn how to be good and it takes a while and there are some things that you need to learn at seventy that you can’t learn when you’re twenty. So it’s an ongoing process and there’s some very difficult choices on the way that don’t make it easy. My wife died from cancer two years ago. I thought that I knew how to handle grief because I’d been trained as a marriage guidance counsellor, you see? But I didn’t. So that was a really difficult learning time for me, okay?

 

The year she died, there were some good times but there were pretty difficult times, but the year after, trying to learn to live with her – my close intimate partner for forty-five years … rat-shit year. Terrible. And it really posed, for me, some very difficult, personal, moral questions about should I have a new partner? When? How? My family didn’t want that. A number of people said “don’t do it Robert, don’t do it,” yet losing that companionship was just terrible. So how did I prepare myself for that? Well, I thought I had but I hadn’t. So life throws at you stuff that you don’t know, okay? So, you’re going to make mistakes, that’s life. What you have to do is try and be as resilient and capable. Use the strengths as you can.

 

Samuel Mann: Do you have a word that you use to describe what we need to be doing? Do you use ‘sustainable’, do you just use ‘resilient’?

 

Robert Howell: I think ‘sustainability’ has lost it’s credibility like ‘God’. It’s become a PR term – sustainable companies. Well I want to know what they’re actually doing. I want to know what their ecological footprint is. I want to know what their policies are in terms of human-Earth ethics. I want to know what they’re doing by way of planning for a world that’s going to have two degrees plus Celsius warming. Those are my three questions of the companies. When I go to annual reports and when I talk with banks and so forth, my questions are where are your policies dealing with the human-human, human-Earth relationships and the policies and your codes and conduct, so forth. Secondly, where’s you ecological footprint? Are you actually measuring that? It’s not just CO2 or CO2 equivalent, it’s water use and effect on species and so on. And thirdly, what are you doing to prepare for a two degrees celsius plus warming world? Sustainability and resilience are part of those questions and those stories.

 

Samuel Mann: We’re writing a book of these conversations, we’re calling it ‘Tomorrow’s Heroes’, how would you describe you superpower? What are you bringing to the good fight?

 

Robert Howell: I’m not sure I like the term ‘a hero’, okay? What I would want to say is that if people can learn from the journey that I had, then I’m happy to talk about it. I think that the experiences and the stories and the learnings that I’ve had are not well-known. Not many people know about the government investing in nuclear weapons industries while they were opposing the French and the Americans. So I’m wanting to make those stories known. I’m wanting to alert the people in public office and organising organisations – both public and private – that the world is really facing some very, very serious challenges.

 

The thing that I brought to the think tanks – which composed of scientists and economists and so forth – was a public policy perspective and an ethical perspective. I asked questions like “what are your values and how do you integrate that into the dialogue?” So that’s what I bring. The knowledge of fifteen or so years of strategic perspective, talking about that journey. If that’s of value to people then I’d be happy to be known for that.

 

Samuel Mann: Okay, I’ve got four more questions and four more minutes, so minute per question. Do you consider yourself to be an activist?

 

Robert Howell: Yes.

 

Samuel Mann: You talk about shareholder activists, is that the …

 

Robert Howell: That’s part of it, yeah.

 

Samuel Mann: What’s the activist role you have?

 

Robert Howell: Ah, well at the moment, I’m working with 350.org, amongst other organisations and I’ve been in dialogue with the Auckland council about its investments. I’ve taken them to the ombudsman and I’m providing examples and strategies and things to 350.

 

Samuel Mann: Have you always been an activist?

 

Robert Howell: No, because when I go back to the start of my career, what I felt is that I could best contribute to society if I worked within organisations to help them be more strategic and efficient, getting better value for money – if you got better value for money then that was a major contribution to society. So I’ve tried to do a lot of working with people. One story I haven’t told you about is that in the nineties I initiated a project to work with the Indonesian police bringing nonviolent training to the police in Indonesia and that was working with the New Zealand government to get funding and working with a group in Yogyakarta. So I was working within the system. But I’ve got to the stage now where I think a more public activist advocacy role is necessary.

 

Samuel Mann: Okay, we’re now down to thirty seconds per question. What motivates you? What gets you out of bed in the morning?

 

Robert Howell: There are times when I get pissed off and angry. At times I want to finish on … There’s a bit of stubbornness about me. I don’t like people getting away with hypocrisy and stuff and also I’ve got three grandchildren.

 

Samuel Mann: If you could wave a magic wand and have a miracle occur, what would you like to have happen?

 

Robert Howell: That’s a difficult one. Well, I really would like the government to face up to these issues of climate warming and the fact that our economic model is bust, and start doing a proper dialogue and regulating. I called New Zealand government in New Zealand the Volkswagon of the Pacific because they’re cheating. I’d like them to be honest and engage with not just the money people of New Zealand, but everybody.

 

Samuel Mann: Lastly, do you have any advice for our listeners?

 

Robert Howell: Read my book to be enabled to ask the right questions about which bank you choose, which kiwisaver fund you want, where you want to put your money and join with others to be able to make those changes.

 

Samuel Mann: Thank you very much.

 

Categories
economics politics

Passionate rationality

Gareth Morgan on economics, inter-generational alienation, philanthropy, politics, Putaruru, and motorbikes and cats.

I think the public are pretty well starved for quality…for intellectual contributions that are on par with them not reduced to the lowest common denominator

Shane: And our guest tonight is Dr Gareth Morgan. Gareth was born and raised in Putaruru. He then attended Massey University for four years, gaining the BA honours in economics. In 1982, he graduated from Victoria University with a PhD in economics. He the father of Sam Morgan who is the founder of Trade Me and that’s the New Zealand equivalent of eBay, and was an early Trade Me investor and director. When it was sold to Fairfax Media, Gareth received 50 million dollars, which he donated to their charitable foundation, the Morgan Foundation, which administers the Morgan philanthropic work, and Gareth and his wife Jo Morgan are also UNICEF good will ambassadors.

 

So he worked for the reserve bank in New Zealand for a few years, before founding an economics forecasting company, Infometrics Limited, back in 1983, and Gareth is well known for taking New Zealand’s financial services industry to task for questionable ethics and abuse of investors.

 

So he’s published four works, four books. 2009 was Poles Apart, a book surveying the state of the science around climate change. 2010 was Health Cheque, a book assessing the state of New Zealand’s public health system. In 2011 the Big Kahuna, which is probably his most famous book, and this book investigated the contribution that unpaid work makes to New Zealand’s society, and the consequences and measures of economic production not explicitly recognising such contributions, from community service to care of the young and the elderly.

 

In 2011, he also published another book, Hook, Line and Blinkers, a book assessing the state of the world’s fish stocks and then appraising the state of New Zealand fisheries here. And then in 2013, his most recent book was Appetite for Destruction: Food – the Good, the Bad and the Fatal, and that was with Geoff Simmons, and a book, which analyses the pitfalls of contemporary processed food and the problem with contemporary diets more generally.

 

So most recently, and this is why Gareth is here today, he started a new political party in New Zealand called the The Opportunities Party. Welcome to our show.

 

Gareth: Thanks very much. Nice to be here.

 

Shane: So you’ve had quite a busy life but let’s talk about your childhood. What was it like? What was growing up in New Zealand like for you?

 

Gareth: Well it was a very small town, Putaruru, 4,000 people back in those days, 50 and 60s, it’s still like that. I had a big shock I guess, so it’s a bit like some of these back puddle towns in the Appalachians and southern states of the U.S. and the Rust Belt and the sense of when I was there. There were seven sawmills in Putaruru. So I would work in those during my holidays right through school. In fact, I think I had my first job there when I was in standard four, but I kept doing that all the way through university, then worked in the bush a lot.

 

So I was pretty able in those days, to fund myself, through university. I didn’t need any money from anybody. Such were those sort of harrisome days. But Putaruru has undergone a whole series of shocks and now it has no sawmills. Of course what happen with euthanasia in 1990 there were [inaudible 00:03:07] budgets was that that really hurt low income people, really hurt, and Putaruru was reeling from that shock plus the fact that the sawmills were all closing. And so what’s happened in Putaruru is that the families least able to cope are still there and the families who have the means to move have moved. So Putaruru high school, my school that had 700 when I was there, is down to 300 and that includes the intermediate school these days and of course it’s very low just the whole school as opposed to my day where it wasn’t like that at all because even the capable families or well to do families that are there now all sent their children out to school, to Cambridge, private schools in Cambridge or Hamilton. And even the teachers, only three of the city teachers in Putaruru actually lived there.

 

And it’s had a lot of troubles. The education review board that has been in there because the schools had suicides and things that put stress on these kids, kids bullying and da-de-da. So I think that’s a bit of a microcosm of what’s happened, the worst of what’s happened during the economic adjustment. Let me put it to you this way, they are still waiting for trickle down.

 

Shane: Obviously you see that happening right across New Zealand in the small towns … a big shift there.

 

Gareth: Yeah, I mean, well creative destruction is part of, you know, that’s part of economics and how economies work. Industries, businesses come and go but really I would have thought the role of government in the civilised society has to cushion the impact of those inevitable changes. I’m not saying we shouldn’t have the changes but cushion the impact of those inevitable changes on the most vulnerable people, who tend to be the ones with the lowest skills, the lower wealth, basically the lower capability to adjust themselves. And I think that’s probably where we let ourselves down a bit with the Rogernomics revolution that had to happen, there’s no doubt about that. And of course that was a liberalisation type move, Americans were over regulated and we were, we had a constitutional crisis back in ’84 so Rodgernomics was a response and so I was quite a fan, and still am actually, of liberalising markets. What I’m not a fan of neoliberalism and there’s a very big difference.

 

Liberalisation, as any economist will tell you, is when you move to free and competitive markets. Neoliberalism is when you have free markets but they don’t have to be competitive, in other words they can be dominated by one or two players who in economic [inaudible 00:06:01] extract economic wind because you have no choice but to buy from them. And unfortunately that’s what ergonomics moved on to. Under the Nats mainly but also under Helen Clark’s government, she didn’t pull it back sufficiently. And so as a result of that now we’ve got this rising inequality in New Zealand that’s been, that really took its fist in 1990 when the mother of all budgets in the town of Christchurch under John Key’s government. That’s come under the guise of extreme unaffordability of housing that he has allowed to manifest itself. So rising inequality, rising in probably a ridiculously low affordability of housing is where we are now.

 

Shane: So we have two parts to this question. One is obviously there is a bit, I can hear the upset in your voice when you’re talking about your home town and what happened there. So obviously it’s very personal, you felt personally the effects of those…

 

Gareth: It was just so unnecessary. We had a thriving cross section of community, we had some fantastic people come out of that school, Lorraine Muller the runner, of John Graham who was the head of Auckland grammar, Wayne Smith the All Blacks coach, you know? It was a real, I mean, schools are the centres of communities and so if you start [guessing] the community like we have under tomorrows schools and encouraging people to move to a distant school then those capable are going to do that and there was no evidence whatsoever internationally that that sort of streaming of people into the education system does the people at the top any good at all. There’s no evidence for that but there’s a hell of a lot of evidence that tells you that the people left behind in the residual schools do suffer. And the reasons were obvious. The incomes of the parents tend to be lower, the capability of the parents in the terms of being trustees tend to be lower, they’re lower school people, and so you just do not get the community support of your school and the school is nothing without the community support.

 

So I’m not a fan of tomorrow’s schools at all. I would rather we went to yesterday’s schools and then go straight from there onto the Scandinavian model.

 

Shane: Where would you describe yourself on the political spectrum? Because you’ve done pretty well out of the economy as it happened, you know?

 

Gareth: Thailand.

 

Shane: But at the same time you’re also still pretty upset about what happened and you have described a fairly interventionist approach to the economy. Where would you describe yourself or do you have, how would you describe yourself?

 

Gareth: Some would say I’m indescribable but I would say progressive liberal if you want a label. Or my political pal Jeff Simmons calls us radically centrist and I think we just are keen to do stuff that works so we are very evidence based as a party. Just about every policy we’ve done, we’re offering, has a book behind it and that book will basically be a researcher’s survey of you know the Brains Trust on that particular subject. I’m not putting us up as the geniuses but what we’re doing is saying, “well what is the state of academia on this particular issue?” We’ve actually just released another book called Pennies from Heaven which is all about how do you actually solve poverty in New Zealand so the books keep coming. But others would call it capitalism but I would put it this way, you cannot build sustainable prosperity on anything but a foundation of fairness.

 

Sam: So if you are looking, you conceived the party because obviously there’s a gap somewhere, you’ve perceived a gap in the political spectrum that’s been offered in New Zealand, so where is that gap? Where is it?

 

Gareth: Well there’s no progress so if you want to go backwards you would vote Winston Peters because Pearce essentially harps back to the past all the time he’s worked on, he’s described as an old fashioned conservative. So that’s where you would go with Winston. If you want to go nowhere then it really doesn’t matter vote National or Labour they will give you nothing. And the reason for that is that these are establishment parties with career politicians who basically their mantra is do not disturb or do as little as possible because you could put your voting base at risk. And we’ve seen that with superannuation you know? This is Muldoon’s biggest election bribe, the most successful election bribe that’s ever happened in this country and just remember Winston Pearce lays his craft on Muldoon’s knee.

 

And that’s what, you know, it was a populace policy and here we are 42 years later and we still haven’t dealt with that. That’s the do nothing governments that have fallen. But you know we have to do something about this thing, it’s like a monster, and I just think that people are ready for it and I don’t see anybody offering to go for it. I mean obviously we have the Green’s as well, who I have a lot of respect for, obviously on environmental matters, their economics worry me but we’re not far apart at all on environmental issues.

 

So the decision we made was let’s just put common sense, this is how you go forward in stuff, in front of people now, and they will either say, “yeah run it by us, let’s give these guys a bit of influence” or they’ll say, “nah we quite like no change”. What really concerns me with no change is that we are drifting, you know we are drifting to the inevitable, which is an extreme reaction, which is what you’ve just seen in the U.S. and you will soon see in France and the spectre of that I don’t like at all because that is really polarising across the population. So I’m trying to head that off at the pass but it’s like, hey. We can do these changes in an orderly fashion and we can reestablish our democracy so that these governments that we get actually serve everybody in New Zealand not just sector interests.

 

Sam: So when you think about the kind of person that’s going to vote for you, who is that? What does that person look like?

 

Gareth: Well, we’ve done a couple of gigs so far on the road in Invercargill and Dunedin, they’ve both been big crowds. They’ve both been right across the age spectrum. One thing that’s quite common is people will say to you, “I’ve never been to a political meeting before in my life”, I’ve heard it from every party that’s on offer over the years and you know I’m just woken up by the fact that we could do something. The questions at the gigs have been fantastic so if they ask you a question as, do you think it’s any New Zealander that cares? That cares beyond themselves, beyond their immediate family. That cares about what the future generations are facing in this country.

 

Which is, you know, I’m concerned that my grandkids won’t even be able to afford the blooming rent. Let alone, you know, buy a house. And who actually do care for the people at the bottom of this rising and the quality. So those people, that I’m talking about, are right across the political spectrum so I cannot give you a two dimensional profile of who we’re talking to. I’ve got no idea what’s going to happen at the end of the …

 

Sam: You’re speaking with some passion there. Are economists allowed to have that passion?

 

Gareth: No. That’s why I’m a little estranged from my colleagues. I mean, you know, you look back through all our books and you know, we’ve had help on a lot of these issues from some extremely confident and leading New Zealand academics and global, actually, when it came to the climate one, academics. Quite flawless research, quite flawless. So then I get to this point and I say all right, it’s time to stand up now and do something about this. We’re going to go with the political so the first thing I want, is I want competent team mates.

 

I want a competent team around me so I turn on these people who are all in their own authorities, in their own right, come on you’re getting near the end of your career at the university or wherever, come and give us a hand. Because you are the icon on your treasure map and I want you. God no. Why would I give my, that’s too much. Why would I subject myself to ridicule? And you know, so they are all in the head share and I can’t get them out and it’s exactly the same experience I had when I raised the issue of cats, which you might recall. You know, I had a 40 year economics career and I spent two weeks on cats and what do I get known for? Cats.

 

When I did that it was because, when I launched cats to go, it was because I had been told by DoC and Forrest and Bird actually, that cats were by far the main predator in New Zealand. So I said, “well come on then. Let’s tell the people and the people will do something about it.” Forest and Bird said, “we’re telling the people.” I said, “why?  And they said, half of our subscriptions come from people with cats.” And I said, “but that’s not the point. They’re still sensible people, they’ll know that by confining the cats they can have both so that’s the price of your ethics is it? It all begins and ends at the tail.” Yes. So and SPCA was the same.

 

Okay. So now we’ve made traction on cats and now we’ve got councils doing it. Chipping, something. Whatever it is. Snip and chip in Wellington for cats. Auckland all wandering cats are feral even if they’ve got those on them and a chip so. It’s getting heavy now. Councils have picked it up and they are running with it. so it’s now, four years later, conventional wisdom. But at that time I went with it. It was like the pioneer getting all the arrows in the bag. No one would stand up with you and it’s like this now with the politics. So you wait. If this thing gets momentum they’ll come out of the woodwork, which is fine, everybody’s got to find their own comfort level but to answer your question that’s why I’m a little estranged right at the moment from the economics establishment.

 

Sam: Where do your ethics come from?

 

Gareth: Boy, that’s a hard one. I don’t know, I think it’s emotional. I think when I see somebody, I mean I have a core belief that you should treat other people exactly the same as you want to be treated yourself. So it’s very simple, you know, I’m going to say ridiculously simple and so when I see that not happening it actually emotionally upsets me. I can’t control it, it just happens. So it’s about combining that with the logic, the analytical skills, da-de-da-de-da. All that stuff we are doing at the university, whatever, and trying to get the evidence based to help you to achieve your value set. And actually believe that’s how New Zealanders feel. I think New Zealand’s just traditionally other people who, you know, champion a fair go. And that actually puts us incredibly close to what drives what they call the Scandinavian model on many fronts.

 

We don’t actually mind paying a bit more tax if we had the most civilised society in the world and I think that’s something to aspire to. And obviously so does the rest of the world, that’s why they are banging down the doors to come here.

 

Shane: So what you’re describing is a passionate view of ethics but that’s not what, you know, economists always talk about the rational actor [crosstalk 00:18:39]. So what’s your opinion on the so called rational actor in economics and society?

 

Gareth: Yeah.  Well I think people are rational, not every single one of us. I think if we’re going to use economic balance we have a very high discount rate. Which means, in English, we value what happened yesterday and what we think is going to happen tomorrow a hell of a lot harder than anything that’s a year ago or a year ahead. You understand what I mean? So we don’t look past our noses, how I put that in English, and that can be a real encumbrance in terms of doing things that have a longer pay back period. That’s why I say in the Health Check that you will see politicians prefer to be opening hospitals, cutting waiting lists and opening hospitals, than investing money in prevention. Because there’s no cheer and that’s what you’re seeing with the National Party at the moment.

 

They are announcing these wonderful policies that don’t kick in until world end, you see what I mean? So the discount is actually high, so they say, “well we know that we’ll get you emotionally or swimming holes whether they don’t even have any water in them they’re still a swimming hole by the way. You know the Greens got to get upset about this. But we won’t do that until the year’s up and we won’t do it until New Zealand’s secrets will get us 76. Well the problems sort of were …” you see what I’m saying? So we’ve got this emotional, yeah this is the right thing to do but I’m not taking any risks tomorrow so let’s put it off on the never, never.

 

So they’re trying to straddle the two aspects of our, so to answer your question, the rational being I would rephrase it this way, if crowds get full information, so I’m getting safety in numbers here, okay? I’m not talking about you the individual but you and me and all the rest of us as a crowd, if we get full information then the crowd will elect very rationally. Doesn’t mean to say each and every one of us does but the average will be rational. So yeah, that’s where I come from and that’s why I suppose I’m pretty supportive, or a champion, of free and competitive markets because all of the markets are an expression of a crowd. So you cannot allow the market to be dominated by one or two players. That is neoliberalism. That is what we mustn’t have and that’s what we must address so it’s free and competitive.

 

Shane: So on that matter of good information, one of the things that has been a real issue with the Princes of Brexit Campaign and with Trump’s election in America was being this proliferation of you know what could be called fake news, anyway, what we would call propaganda beforehand. How do we assure, and the fact that the media is often, is now captured by one or two key organisations. How would you address, for instance, that problem here in New Zealand?

 

Gareth: Well don’t let the problems get so extreme that that’s what it drives people to. I mean I can remember when Trump put himself up for nomination for the Republican party and my wife Joann said, “He’s going to win this thing.” And I said, “of course he’s not going to win, the guy’s a moron.” And she said, “Gareth, you’ve spent a lot of time in the Appalachians in the southern states, you know he’s going to win. Because those people are going to run on fear and the people in Washington and California wouldn’t have a clue about how those people feel.” You know? They’re the bullets for the guns in the middle east, you know, cause it’s their kids that go to the middle east. They’ve got no jobs now and the Democrat regime hasn’t delivered them anything in the terms of social services. I mean, you know, it used to be the dream in America to have a three bedroom home in the burbs and you know a Chevy pickup and now it’s a trailer home and a ride on mower, then it’s a John Deere if you’re really doing well.

 

And it’s that complete smashing of what they thought they stood for and the fear that they haven’t won against terrorism and it’s coming their way, to their town any day, that’s actually driven that extreme reaction. Now I’m not saying that’s imminent in New Zealand, I’m not saying that, but what is imminent in New Zealand is the thing that we’re talking about which is, you know, housing. You want to own your own house? Forget it, it’s not going to happen. They’re being bought up by guys like me and on masse, foreigners, on masse and you know land bankers who are surrounding cities now holding hand and choking a city for expansion until the prices are right.

 

So all that does, that sort of stuff, is alienate people. And the one I’m worried about in New Zealand is the intergenerational alienation. I mean I’ve saw, not too happy about towns today like Putaruru and all the rest, but the thing I see looming is this massive intergenerational resentment. I mean my generation was basically born with its head in the trough and still got it in the trough. So we need to wake up. Now the good news with the boomers is that when I talked to them they’re all prepared to invest more in their grandkids than they are in themselves at this point.

 

So I think that the politicians have got it wrong here saying that, you know, we’re not going to change super, we’re not going to do anything to injure the boomers and all the rest of it because they’re our voters, you know? And two things on that. People younger than boomers now dominate the polls, there are actually more of them, problem is that we can’t get the voters out of the bed in the morning to vote, so that’s a real issue and secondly they’re reading my generation wrong. My generation does not want to leave the environment worse than we found it, we don’t want to leave our kids with climate change and we don’t want to leave our kids not even being able to afford their rent. So I think that we’ve got [crosstalk 00:24:36].

 

Shane: But the evidence is that you’re not dealing with climate change, as you say, your generation is buying up all the houses so it’s not that they are reading the generation wrong.

 

Gareth: No. You’re two liberals here. That’s exactly the reality, what you just said, but what I’m obviously going out there and presenting to them is, this is how we deal with climate change, this is how we deal with rivers, this is how we deal with the unaffordability of housing in the inequality game. And my age is saying, “yes, we need to do this. It’s about time.” That’s where I get the optimism from. So we’ll see. September will tell us but you know. So I agree with you but I’m looking forward here. In terms of there’s a mandate here, I suppose.

 

Sam: So how do we switch from fear to optimism? Is there a lever somewhere?

 

Gareth: Well I think you’ve just got to sell the vision and you’ve got to present credible ways to deliver on that vision. And then I think you will get the support and that’s the sort of challenge that, you know, I’ve set myself really. I may be totally wrong and I might be back on my motor boat come September and that’s fine too.

 

Sam: Do you want to be Prime Minister?

 

Gareth: No. I don’t’ actually need a job like that. No. I do have the life of Reilly at the moment and that’s a wonderful life and I want to keep it but I’m very concerned to get New Zealand on the right political, do the right thing basically. I mean I’m not far off from dying now so it would be a tragedy if I walked away from all this work that we’ve done and other people have done having belief in us and all of this, you know, saying “I’ve done all those books and everything and just said I’m satisfied now. What can be done? I’ll see you later.” I think you’ve got to at least just put it out there and the people of New Zealand will say, “Nah. See you later, Gareth.” Or, “We’ll have some of that.” Or, “We’ll have it all.” And see.

 

Sam: But could you stand being a small party with no influence? I mean, those are good ideas, wouldn’t that drive you crazy?

 

Gareth: Yeah, I wouldn’t go into Parliament. So we’ll talk about that, aye? I need for me 10 to 15% for me to feel there’s a mandate for this. Okay? So if we got in that sort of range for things over there then I’d go and roll my sleeves up and try to have a difference on whoever the party, the leader, you know. Coming from the days we’d stay in the cross benches because I think as soon as you go into coalition you lose yourself. You actually lose your identity, which is the main thing so you know, and we can see under and plead the evidence for that so that’s no no for us. And also I’m not into just governing day to day, I mean who the hell would want to deal with some disaster with P in a house or something and the minister has got to come up with smart answer today, forget it. Get that to go as we want, cohesion politics, I’m interested in top seven major, major reforms.

 

Now if we don’t get there and we’re down at naught too, well depends I suppose if you get a list seat but if you’re down in one, this is the way, one level seats and you really are treading water having not a fit. But that’s a building block. That’s a building block isn’t it? Just sit there, I mean that’s for the Green’s. I mean the Green’s are down there and they’re doing blooming well and they’ve put in the yards and they’ve, you know, they’re up to wherever they are in that 8 to 15% somewhere. So that’s a long, so I need people around me who are prepared to do that but it’s not me.

 

I would rather be outside still doing the research on the stuff, still making a hell of a noise, I don’t need the empowerment to be noisy and I’d still be funding that building team. It’s just that I’d get on with my life of Reilly as well. So I’ve got a few personal scenarios there but the main thing now is to get the message in front of people for you, as a public, to make up your mind and then to try and get some decent candidates coming out of the woodwork too, cause somebody said we’re around the electorates, you understand them. And I said we’re somewhere between zero and sixty, it depends on how much talent comes out.

 

And actually Winston Peters said that when he started too, with New Zealand First and he ended up of course taking in people. He found out how shallow the talent pool was, who were prepared to go political I mean, that’s the problem. It’s a very small fraction of the talent in New Zealand who are prepared to put their families and themselves on the line. And he ended up filling his ranks with no talent. Well, I’m not going to do that.

 

Shane: So why do you think that is? Why do you think the people are reluctant to go into politics?

 

Gareth: Because it’s visceral and it’s just horrible. I mean I’ve noticed that already. I mean I, what have we been in this thing? Three and a half months now, we’re babies but I mean it’s stuff like that right.  ACT does an OAA to the electoral commission on us every second day. Just to cause trouble. That’s just the politics that some of these people get off on. That’s like the worst of Facebook, that’s like trolling, it’s no different. You have to put up with that shit. You know that’s my point. You have to be resilient enough to, and I’m not the sort of guy who normally doesn’t react so somebody is awful to me I tend to be awful back with interest and it’s just my natural instinct and people say put yourself above, put yourself above but you can’t get one without the other.

 

You can’t get the sort of compassion of go forward without the passion of reaction. Which is why it’s very difficult. I admire people who have got that capability, I don’t. So you have to be prepared. Like I’ve had a woman working with us, the researchers working with us, who are the most stunning, fantastic academic brains that you could have met. So I say to them, “come on girls, you’ve got to come and help people. You’re the expert in this.” No way are they coming near it and putting their family at risk and themselves. And that’s just the reality of politics.

 

Shane: People say that’s reality but realities can change and there’s just something that the toxic environment, do you think that’s levity created to exclude or do you think … what do you think has created that? How would you change it?

 

Gareth: Well I think it has been amplified by media, I would have to say. Corporate media has definitely amplified this. I mean look at what they’re doing to journalists. They’re losing their ethics, they’re being told to be stars and get a hit or a sound bite with everything they do. You have the celebrity media thing, like the Hosking  type phenomenon or the Paul Henry type phenomenon where the show is all about them and all you are is somebody to walk over, you know, so you come on as the expert and then you get called this, that and the other thing. So that’s what corporate media does.

 

I mean I don’t support Trump in any way, let’s just get that clear, but by golly we’re that. He read that straight away and he just excluded them. And the media in America are still struggling to understand the Trump phenomenon. They’re still having a [inaudible 00:31:52]. They’re still having to come to terms with it. And I’ll never forget that graph on election day when the New York Times was there with all the polls and it started at 8:00 in the morning, a 97% chance that Hillary is going to win this and of course at the end of the day it was a zero percent chance.

 

So that told you what the conventional wisdom, how wrong it was and I actually think we have seen that here already. Where they’re talking about more Labour and National day-to-day, do-nothing, do-nothing stuff. That is not what I’m feeling out there and I’ve only done these two towns but I can tell you now there are people who are very concerned about New Zealand that we are drifting doing nothing and they want change and they want it in a positive way which is what you’re alluding to. So we’re going to have to overcome this toxicity of you know these sort of grubby political movements like ACT and you know John Brash’s  extreme right , those sort of guys. We’ve just going to have to somehow deal with them. And we’re going to also have to go past the commercial media, all the stand there type media, because they just amplify what the corporate owners want them to amplify.

 

Shane: I mean that’s the real issue isn’t it? I mean like here we can have a conversation and we can actually get into some issues really deep, you know, actually get in a deep conversation and explain complex issues that are facing New Zealand or the world but you can’t do that in a two minute interview on national TV can you? And then you wind just butting heads who is the exact opposite [crosstalk 00:33:37].

 

Gareth: And that’s the show and that’s nothing in terms of informing the public. But I feel the public is pretty blooming intelligent when it comes down to it and they recognise that as well. And I think the public are pretty well starved for quality, …for intellectual contributions that are on par with them not reduced to the lowest common denominator so I think there’s a demand, I mean I can see it, I can just see it in the numbers of these people that are turning up. And the pillar I look forward to every night is their questions because they are just awesome. You know, that tells me, man that guys thinking. You know? So yeah, it’s cool.

 

Shane: So the other question, the last question I have, is building your party because you could have done it from the top down. You could have said here’s the party come along. A lot of other parties are going to fill up from the ground as well so how are you finding that as a …?

 

Gareth: Well it’s lonely. We’re seven people, with seven policies, with seven months until election so how’s that for an outsider? But you know I just hope as we get momentum that we get some real talent come out of the woodwork and we actually have seen it on the volunteer base. I mean we did that by election Mount Albert where we got just under five percent which wasn’t bad for a three month old party, I thought, and against two blooming good candidates. Particularly Julie Anne Genter of the Green’s, she’s high quality that woman.

 

Shane: [crosstalk 00:35:09]

 

Gareth: Oh she is. She’s very awesome. And you know Jacinda is not a slouch either so it was a good contest and I only met those three so it was quite a dig. What were we talking about?

 

Shane: Oh just [crosstalk 00:35:26].

 

Gareth: So yeah, the volunteers that we had at Mount Albert were just superb people in terms of just their intellect, you know, that’s the part that really got me just the ideas they had on the poll. And we just had it again here in Dunedin the same sort of thing. So I just feel from the volunteer base that’s coming forward and wants to be part of this, they don’t just want to give out stickers and crap you know? They actually want to engage with the public on stuff, you know, themselves and they want to head discussion groups and have them Skype in and all that sort of stuff. Which is sort of the thing you were talking about, democracy from the grass roots up so it’s coming, it’s just that you know I sat at the beginning of the year or the end of last year thinking “how am I going to do this? Oh, I’m just going to do it and see what happens”, you know? It’s a standard technique for me.

 

Sam: You’ve made a lot of money.

 

Gareth: Yeah, you’re telling me. It’s ridiculous.

 

Sam: Couldn’t you just be off on a yacht somewhere?

 

Gareth: Yeah, I do a bit of that. In 2015, I was only two months in New Zealand, in 2016 I was only four. People think I’m here because that’s the power of social media isn’t it? I can communicate, I can do phone interviews and people not have a clue where I am. So I do have that life of Reilly very much and love, we both love running circles around the world and last year we did Indonesia from the top of Sumatra to East Timor so we’re still pretty active and Joann is planning for us to go from Nigeria to Japan so you know, we’re still pretty heavy in that stuff.

 

But I can’t do that, and if you read any of the travel books I’ve done you’ll find with me it’s not really about the motorcycle it’s about the society and the politics and how do these people get by trying to scrape a living out of bloody rocks and nothing. And you look back at New Zealand and we’re only worried about property prices, it’s pathetic really. Tend to the problem we really had back in NZ. So it’s not enough for me, that life of Reilly I have to, I’ve spent my whole life in this area on economic and social policy so I probably, no matter what happens with the election, I’ll probably still keep doing that work just to keep my intellectual satisfaction going.

 

Sam: What did you want to be when you grew up?

 

Gareth: I hope that never happens. But the answer to that, I just want to be me. And I’m a sort of spontaneous sort of out there guy and, you know, I’ve got wonderful people around me and I’m a very, very lucky chap.

 

Sam: Your investment company for the kiwi saver is ethical investment. To what extent is that viable or to what extent is that perhaps, you know, what do we need to do, I suppose my question is, to make that the norm?

 

Gareth: Well I think consumers are actually demanding it, just like they are demanding better quality food and a lot of things. So that’s definitely the case in finance and that’s great to see, isn’t it? Rather than saying, “well I know if I invest in a company that sells guns I’ll probably make more money than anything.” And then they say no thanks. The issue with the ethical investing for an investment company like the one I own, I’ve sold it now, that’s actually where I made most of my money, it’s about the degrees of freedom. You can actually, no gain companies no smokes, no oil companies, you know what I mean, fossil fuels [inaudible 00:39:21], but what about banks? Because banks bank them all, you know? So you can only go so far with that because you can’t see through that’s the issue. I’m not saying it’s just tokenism but it’s understanding the limits of that. I think the best thing you can do is live an ethical life in terms of your fellow human beings.

 

Sam: Do you have a go-to definition of sustainability?

 

Gareth: Yeah. Our environmental policy is to, for each generation to leave the environment at least as good in condition as they found it from this point on, hopefully better. So that’s all economic growth and all economic growth is is income growth has got to be subject to that constraint so that’s why in the environmental policy we had this whole polluted place thing, so I can give you an example of that. Farming. Just talk about farming, dairy farming, talk about the sub-catchment we’ve been leaking nitrates so the authorities that be, whoever they are have to decide well here is a tolerable level of nitrogen leaching so you set that and over time you might set that down, down, down but you set it and any farm that leaks more than that gets taxed.

 

These are collective taxes, economics 101. And then the revenue of that goes to any farm that leaches less than that, gets that revenue. So we base it so that it’s completely neutral within the geographic area and within the industry. So what you’re doing is inciting good behaviour and distancing bad behaviour and so far as the environmental target is concerned. So we are very much with the Green’s on the environmental bottom line. Same with the rivers. The Nats have just come up with this unbelievable definition of swimable rivers, they don’t have to have any water in them, I mean come on.

 

Sam: You talked before about the discount rate but is the problem with the discount rate being, I was thinking about the future or people further away than us if you apply it… what is the economics, can do to overcome that? Is there an alternative model for how we should be thinking for the future?

 

Gareth: That’s just full information. Once you understand the consequences of the situation, not just for tomorrow but further down, and what the unintended consequences might be further down, you’re discount rate will fall. You’ll say okay, “well if I let this go”, say climate change, “if I let this go then the consequences are could be by year X South New Zealand is under water. Oh shit, maybe we should do something.” So you just dropped your discount rate. So I think it’s about knowledge, I think it’s about people being educated on stuff. And people are hugely hungry for information rather than Mike Hosking sound bytes.

 

Sam: But after almost every news article, particularly on national radio, and there’s an economist comes on and says oh yes, but that’s going to reduce job rates by seven percent or is able to put a number on something that is quite specific we might argue about whether or not those are just made up, but if we’re talking about some impacts into the future we’re not able to have someone come on and say in a sound bite well that’s going to increase jobs by …

 

Gareth: Yeah so what you need with every policy is here’s the benefits and here are the costs so that’s the draw and that’s what I’ve done with all these policies, is said here is the good news, we’re a very radical flagship policy which is shifting the textbooks, here’s the good news, eight percent of your income comes into your pocket with the tax cuts and I say here’s the bad news, your house is going to get taxed on the half percent of every vehicle they own, okay.

 

Every policy has got a positive, there’s no free answers here and the stats quo with establishment parties is tendered to be, “here’s a free lunch, here’s another free lunch”, you listen to Winston, how is he going to solve the housing thing? I’m just going to have the government build more houses. Well hang on Winston, where the hell is the money coming from? Specifically, which tax bar are you going to take the money from? Please tell us the downside of your policy because every policy has got a downside. That’s all economist do so I think, people aren’t stupid, we all know it’s a world of trade offs so once the general public understands the nature of the trade off they all make an informed decision.

 

Shane: What’s the biggest success you’ve had in the last couple of years?

 

Gareth: I think just doing the books. Yeah, they’ve been. For me, the biggest joy has been working with those cool people, who are so good in their areas and just learning. Understanding, I mean I was the biggest climate change skeptic on earth basically until my wife read Flannery’s book and said, “Gareth, you have got to understand this because you don’t, it’s clear.” Three years later we had a book. That was harder than my PhD, that darn thing. So it’s just the joy of learning is by far the best part of life.

 

Sam: What’s the big unknowns?

 

Gareth: For me going forward?

 

Sam: Yeah.

 

Gareth: Or for all of us?

 

Sam: Well, for all of us. What’s on the next on the list of books?

 

Gareth: Next on the, well I’m almost through with my book phase, actually contrary to what you said I’ve actually done twenty books. Six of them were on travel and the last one was riding motorcycles across North Korea, you know, it’s never been done before or since. So it was a big seller, that book, in Korea anyway, South Korea. I think the big unknowns really for me is how is New Zealand going to handle the opportunity and the threats that are sitting out there. I mean I am not a great fan of what I sort of call the foreign peril when New Zealand is actually selling it’s land and allowing foreigners to have permanent residency without New Zealander tax status. I just think that’s nuts. The demand from abroad for stake in New Zealand is infinite and the value they are putting on it is going through the roof this is what Sir Paul Callahan referred to as a place where talent wants to come and live. That is probably the biggest gold mine for New Zealanders, I mean, that’s available and we need to cap that gold mine in one way or another.

 

Sam: We are writing our own book about these interviews. We are calling it Tomorrow’s Heroes. What we’re trying to do is capture the things people are doing that are making a difference because then if we can work out what that is we can bottle it and get other people to do that. So a couple of questions from that. How would you describe your super power? What is it that you’re bringing to the good fight?

 

Gareth: Well I do think we all learn from other people. As our son Sam said there’s no such thing as an original idea, it’s all in the execution and we do learn from what other people do. And I’ll give you a couple of examples of that.

 

You know we’ve been riding these motorcycles around the world since 2001 and the number of New Zealanders that will come up to me and say, “I’ve read this book, I’ve read that book on travel and now we’ve gone and done the same.” Or whatever has been just awesome you know and so another thing that we’ve, Joanne and I have been very busy doing, is all this charitable stuff. I mean we had to get rid of that Trade Me money, right, so we’ve been doing all this charitable stuff overseas.

 

Mainly in the country we ride bikes through with funding hospitals and all sorts of projects, Kiwi Heroes is working over there and there’s some amazing people, New Zealanders around the world, in the most desolate places doing incredible stuff. And that has rubbed off too. We’ve been on speaking tours around New Zealand talking about that and other New Zealanders will say because of that we just sold up. We just sold the house, everything and we’ve been off the last three year doing …” and you just go, blooming heck, it doesn’t take much to turn us does it? You know. So you get a lot of satisfaction out of that sort of thing and I’m the same. I get influenced very heavily by my heroes.

 

Shane: Do you make any mistakes?

 

Gareth: Heaps. You know, like I say some of my investments weren’t successes, 30% is probably too high probably 20. So you know I’ve done a lot of those. I don’t think I handled the beach discussion as well as I could have. That’s another one. The beach discussion really made me angry because the public ended up paying three million for a beach that we could have gotten for 300,000 and I just couldn’t get that across. I tried to do it in a way but it was a wee bit too complex and it got lost so I see it as a bust. So you know, not everything works. I thought cats was a big mistake for awhile but I don’t now, it’s been an outrageous success. So yeah. You take risks.

 

Sam: Do you need to find some outrageous things like that over the next seven months?

 

Gareth: Yeah, I mean I’m basically an anarchist from way back so you know I get no more satisfaction than throwing the marbles across a dance floor and seeing what happens.

 

Sam: Do you consider yourself to be an activist?

 

Gareth: Yeah, in my own funny way. My trouble is that I’m a bit of a lone wolf. I like teams as long as I can be boss, which is almost an oxymoron. But I do, as Jeff put it one day, we are very team oriented, it’s fantastic. We’ll all have a really good discussion and you know we go back and forth and Gareth makes his decision. But that’s the only way we get go forward. And that’s why I reserve the Green’s actually. I mean I love the democracy of the greens but the trouble is that it’s your worst enemy at times, you know, what did Churchill say, he said something like that about democracy didn’t he? You know or actually Churchill has another great quote about democracy which really resonates with me right at the moment, “I used to believe in democracy really strongly until I had a 5 minute conversation with the average voter.” I’ve had a bit of that but that is actually a bit disparaging. I have found that the people who have shown up for me are really wonderful. But, yeah, democracy isn’t everything but it’s what we’ve got.

 

Sam: Given that you may or may not get in to Parliament, and even if you do you’re not going to be there forever, what do you need to change? What is it that you would do that you were there that we need to be doing differently over the next 10, 20, 30 years?

 

Gareth: Well the biggest thing for us, for me personally, in our policy offering as the democracy we see it, that by far for me personally. I mean the climate thing is important but it’s a no brainer you know you’ve got to do it. Same with the river, with the environment all that so a lot of that stuff is you know, you’re just falling off a log really from a technical point of view.

 

But the democracy we see is a bit more subtle and what I’m concerned with democracy in New Zealand is that actually Parliament doesn’t have sovereignty. Sovereignty lies with the cabinet and despite the fact, you know, the law, that’s what it says Parliament does. All the National MP’s who aren’t in the cabinet are essentially just voting further and all the opposition MP’s you know are almost a waste of space. It’s not their fault it’s just the way the system works. So I would like the sovereignty of Parliament restored and the proposal to do that is first you get up a constitution so I agree totally Palmer on that and the point of a constitution is that it means that you and I understand very succinctly what it is that New Zealand values and what we stand for and we will not allow those rights to be infringed on.

 

So Muldoon would have never, ever have got that superannuation fund changed in 1975 if we’d had a constitution because a constitutional board would have said immediately this is a breach of human rights of future generations. So you have the constitution so that we all know what we stand for and we’re all in the same canoe and then you have either an upper house or a constitutional review board, whatever you call it, but it’s got to have some sort of teeth. It hasn’t got sovereignty, Parliament has got sovereignty and they can say this coming up legislation that you are proposing breaches human rights.

 

We’re all aware of it, we know our constitution and we say yeah, you’re not doing that to us. So we would have nipped that New Zealand super bribe in the bud and it never, ever would have happened. Rather than 10 years later Cullen trying to caw it back with the Cullen Fund and with Kiwi Saver because it was such a balls up. And we’re still fighting, here we are 30 years later still trying to deal with it. And to me that’s the biggest thing is to get democracy back on the rails in this country.

 

Sam: What gets you out of bed each morning?

 

Gareth: I just enjoy people. I just, you know, why wouldn’t you, you know? I know I’ve only got a limited number of days left I want to max out here so that when the grim reaper comes I can’t say “Hang on I haven’t done this, I haven’t done that.” I can say, “oh thank God! Take me away, I’m knackered.”

 

Sam: What’s the next motorbike trip?

 

Gareth: Lagos to Japan. So it goes up West Africa and then across the top of Russia, because we have done [soc row] but we haven’t done the top and gets to Japan just in time for the World Cup.

 

Sam: Well. If you could wave the magic wand and have a miracle occur what would you have happen?

 

Gareth: I’d get fairness back in the tax system. That’s our number one policy. I think that would solve so much in New Zealand. Take the tax burden right off salary wage earners and get it across us all so that people like me pay our fair share of tax, basically and I think that just solves so many issues, it solves the housing issue, it gives businesses capital for investment because that’s where the savings have to go. It reduces our reliance on foreign savings and stops the Prime Minister from going around with the bloody begging bowl overseas and bending over backwards to help, to give foreign investors tax breaks. It makes us resilient, self sufficient, makes us fear and makes us more prosperous. I mean come on, what is there not to like here?

 

Sam: And lastly then, do you have any advice for our listeners?

 

Gareth: Well I would just say that don’t, especially don’t think you’re powerless. You’re hugely powerful. You cannot throw rocks at what’s happening and say this is terrible, this is terrible. And moan and groan about the government. If you don’t exercise your rights in the voting booth, and to do that in a responsible way you have to be informed. Not just a single issue person and not a bigot. Now the biggest issue we’ve got with the voting at the moment apart from what we just talked about, the whole democracy alienation, is the young ones. Trying to get these young ones out of bed in the morning.

 

So we took a poll on that you know. We went last season, we just did a whole lot of polling, what would actually get you off your bums in the morning to actually exercise your vote? And I couldn’t believe the answer but the number one issue was Cannabis reform. Talk about a first world problem, you know, I’m not saying it’s completely irrelevant, I’m just saying it’s pathetic in terms if that’s the top if your tree, you know, boy just stay in the educational system mate, you’ve got a way to go.

 

Shane: Okay. You’re listening to The Sustainable Lens on the Otago Access Radio on 105.4FM. This show was recorded on the 10th of March 2017. Our guest was Dr. Gareth Morgan. Your hosts were Sam Mann and Shane Gallagher. You can get podcasts of previous shows on sustainablelens.org or you can subscribe on iTunes or on [inaudible 00:55:36]. We hope you enjoyed the show.

 

Categories
economics transport

Reimagining our communities

Jean-Daniel Saphores

We have to re-imagine our communities…what we have built is unsustainable

Working at the crossroads of environmental systems, civil engineering, transport economics, resource economics and sustainability, Jean-Daniel Saphores is holds multiple roles at University of California Irvine. He is: Professor, Civil & Environmental Engineering in the The Henry Samueli School of Engineering; Professor of Economics in the School of Social Sciences; and Professor of Planning, Policy and Design in The School of Social Ecology.

Talking points

I was always concerned with the environment, and the impact of the environment on our health…I thought we could do better at how we relate to the environment.

Building structures to take advantage of what nature has to offer to fulfil our needs

Uncertainty could come in many forms, it could be uncertainty in natural processes, uncertainty in prices…in the real world we face a lot of

Uncertainty, but in economics most models are deterministic – that assume we know everything, of course this has limitations, because, as you know, we don’t know everything.

Assuming we know everything may not be the best way to go

Using a deterministic framework can be the wrong thing to do

So many things we don’t know

Doing nothing is not the solution if we’re facing dire problems

(can values be represented in economic models?) They can be captured to some extent.

For your work to be useful, you want to try to apply models.

My main interest is the the link between transportation systems and environmental systems: so environment, transportation and health.

Many facets of the transportation system are important to welfare

More than just efficiency of transport, the idea is to try to change urban form

We have to reimagine our communities…what we have built is unsustainable

I like electric cars, but we still need to rethink our urban form

Shared services could really improve our situation

We get the society we deserve but it is important we understand the implications of our choices

(Are people generally good?) Values and norms drive peoples behaviour…norms are more important than incentives

Children good way to bring message home…school benefits programmes

Reluctance in the US to rely on economic instruments

Recycling isn’t a herculean task, it just requires you to be consistent…and once you have a habit you are set

Recycling…but these are just marginally changes, if we really want to make a bigger impact, we need to revisit our way of living

It’s pretty clear not everyone can enjoy the lifestyle we have in US…but even here it’s entirely unsatisfactory to have 15% poverty rate including one out of five children, if we look at that we should be very unsatisfied with our current economic system if we have any kind of
ethical values.

We need to have convergence – economic development in poor parts of the world, the type of economic development that avoids environmental degradation that was generated the way the US, Europe and Japan developed, then in our part of the world we need to really take into account the impacts of our decisions to consume. I believe that most people would take steps to change their lifestyle, and we also need to take a look at how we organise our lives on a daily basis in our cities and so on, change our codes so that over the next two decades we can have convergence. We can not deny reasonable affluence to other parts of the world…in any case if we carry on the current path we may be in for trouble.

We can do better to separate growth and resource consumption. I’m an optimist, I believe it is possible to decrease poverty and enhance
people’s lives without completely ruining the planet.

I do believe in economic instruments, so trade is important, better trade, trade that takes into account the environmental impact

I believe that over time convergence will happen…otherwise we’re in trouble

(Success) Adopting my son

(Activist) Not yet. I’m a member of the Union of Concerned Scientists, but I’ve only been moderately concerned so far. I’m going to become more concerned and more active. Poverty and environmental quality – together.

(Motivation) Future of planet and our legacy to our children.

(Challenges) Upgrade academic skills and do good.

(Miracle) We face the challenges

(Advice) Do good and enjoy yourselves

This Sustainable Lens is from a series of conversations at University California Irvine in June 2015. Sam’s visit was supported by the Newkirk Center for Science and Society, and coincided with Limits 2015.

Categories
economics innovation oil politics social-ecological transformation

Transforming industrial society

Staffan Laestadius

If you take climate change seriously, you also have to discuss how to transform society, not just industry but also
transforming life in society so that it will keep providing welfare.

Staffan Laestadius is Professor of Industrial Dynamics. He says his work starts where Climate Change research finishes. He tells us how industrial and societal transformation are inextricably linked. He also tells us that such transformation is possible – a path to emission reduction without miracles.

Talking points

Silent Spring, for me, and many of my generation…that was the first step into sustainability.

Limits to Growth…widely discussed, heavily criticised not least by economists, but also by people who thought this book was something that was telling the the rest of the world now the northern part of the world have got their lifestyle, there is no time, no space for the others to catch up. I think that was the wrong conclusion – I think the Limits to Growth book got too bad a reputation, but many of the forecasts have turned out to be relatively true now.

Industrial transformation…how analyse and understand processes of industrial change.

It isn’t enough to put new fuels in old cars.

The energy transformation required is huge…the elephant in the room, so huge, dramatic and challenging we don’t want to talk about it

We don’t want to talk about what do we have to do to take climate change seriously..but I try to do that.

I try to show it is possible to change

Industrial processes and social change

In Northern Europe we have developed a welfare state, a process modality, people believe that they have got all their welfare, their technology, their cars, and you will not convince people to leave all that to leave all that to go into a stone age economy just to preserve the climate.

You have to show that instead of man as master of nature…to a more circular system that provides a similar or comparable standard of living..that it is the challenge.

Show it is possible without decline in welfare….welfare based on a new sustainability based industrial system

The standard reaction…new technological solutions but from old thinking, linear thinking.

We could have fixed it with these old solutions 50 years ago, but now those solutions are not there any more, we have to be more humble and look to more sustainable solutions.

Now it needs a new way of thinking

There are limits to what we can do

Accepting the planetary boundaries work, my contribution is “What are the consequences for industrial and social transformation?”.

You can’t get people to accept transformation promising that everything will be worse – whether you continue on the same path or accept a sustainable path – so you must find a path of achieving transformation that can provide welfare for society – that is sustainable.

It is easy to fall back to “we’re too small, nothing I do matters”…but a message is the snowball effect – somebody has to go ahead.

We have to show that is possible to transform, increase competitiveness and welfare

To show it is possible we have to break down the enormous task…4 dimensions. 1 half of reductions…2. you should reduce activity levels first, then efficiency…3. it is possible to start, you don’t have to do everything now…4. 4% per year as long as we have growth, intensity is of no interest to nature…so absolute reductions.

We should focus first on doing less of carbon intensive processes

It is possible, but it is tough, because time is running out.

Reduce activity, increase efficiency, then substitution. This is the logical order, but of course they can be worked on together.

This is not a technology revolution…technology is there already…

For the coming years – at least until 2030 we have the technology, it is a political problem to calibrate the system so it becomes politically and socially attractive to join the solution.

Fossil fuels have been so successful, so cheap because externalities ignored

The basic training of economists, externalities so small we don’t have to worry about them. But now we see the basic problem is externalities.

We need to leave 2/3rd of fossil fuel in the ground

Sometimes when I go to sleep I think this is too tough but I think it is worth fighting for

We need to find a pricing model that makes it rational to transform

We need to transform the economy but also to keep the welfare model

(Will the transformation come anyhow?) Stakeholders in old regime…people know more, we have to get politicians to coordinate.
Political leadership is not just doing what they believe the electorate wants, they have to lead in the right direction…climate change a real challenge to traditional left wing/right wing…..we have to find political alliances

(a gentle revolution?) I think this may be necessary in a few years as the climate situation gets worse.

(New book Triple Challenges for Europe) Triple challenges…climate change, economic development, governance.

End austerity politics with investment in green solutions

(Success) not sucess or failure…returning to the synthesis of sustainability in my personal view and work… integrating industrial and social change…a coherent view

Instead of narrowing focus on details of technical transformation, widening scope go more into debate and how to get impact and work with transformation

(Activist) The third task for academics – societal influence – mine is impact on transforming our industrial society. Not an activist. Was when young, but basically I’m an academic.

I wouldn’t say that I’m an activist, but I would say I’m not scared to take a position that is solidly based.

If you take climate change seriously, then you have to work with a transformation…this is the magnitude of the challenge
(Motivation) – I still think I have a lot to do

I have a broader interest…too many things…I work with social, industrial and technology…it keeps me engaged in the debate

(Challenges) Swedish government could agree on transformation of our carbon dependence, way to achieve 4% per annum, and show the world that it is possible.

It will get worse before it gets better.

Maybe we have to face some more disasters and then we can mobilise a transformation

I think it is possible for all of us on an individual level to make the first half…it is possible…the rest will be dificult

I have reduced my car travel to less than half without any problem at all.

I have to do more, and we all have to do more in future, but it is possible to reduce by half with no suffering.

Categories
ecological economics economics systems

Seeing big, connected pictures

Marjan ven den Belt

 

 

 I value my kidneys, but I have no intention of selling them. But for some reason when we look at wetlands that function as the kidneys of our ecosystem, they are for sale. There’s something wrong there.

Associate Professor Marjan van den Belt is the Director of Ecological Economics Research New Zealand at Massey University. She is an Ecological Economist.  We talk about what led her to a career in economics and how that became ecological economics and what that means.

Talking points

I was an environmental activist from an early age – it has always been a part of me, perhaps my methods have become more refined over the years.

I chose economics because I thought that understanding the world’s money systems

The human system should be within the carrying capacity of the ecological system

Ecological economics is not so much how we use the existing economic tools on environmental issues (that would be environmental economics), ecological economics aims to design and develop new types of tools

Ecological economics is not particularly impressed with GDP – Gross Domestic Product – because it measures economic activity only. It does not distinguish whether that activity is desirable or undesirable. For example if we have sickness, war, disasters, crime that’s all good for GDP. Whereas the things that we do want – healthy families, low crime, environmental volunteering – that is not counted as valid activity for GDP.

You get a distorted picture when you take GDP as a proxy for well-being or wealth.

Uneconomic growth is when we don’t count costs and benefits in decision making – such as benefits we derive from the ecosystem that are not in our decision making.

New Zealand should take a good look at whether we are experiencing uneconomic growth.

We train economists to think that if only we could include all externalities in our decision making framework – the market – then we’re all sweet. The problem is that goods and services from ecosystem services don’t behave as marketable goods.

We’ll never have all the externalities, all the science, by looking in smaller and smaller pieces, hence I’m all for transdisciplinary approaches using synthesis – put the pieces together in an elegant way.

We really need more synthesis – putting the pieces together, not just taking apart.

Trickle-down hasn’t worked,

We need to decouple economic growth – measured as development, all the things that are desirable – from material throughput.

All over the world we see GDP growing, while the Genuine Progress Indicator levels off.

Facilitating complex dialogue

Systems dynamics is not about prediction, it’s about understanding.

How do we make better decisions in a timely fashion? How do we develop the capacity to make the best possible decision in the most transparent way? How do we synthesise the information we have effectively?

Systems thinking is an uncommon common sense.

We’ve kind of forgotten the art of synthesising things back together. It’s my big quest, bringing the disciplines together.

We assume that value can only be monetary, but it’s not. We use values in many different ways – to measure things, to express to whether we care for it, ethical aspects. I would say I value my children, but they’re not for sale to the highest bidder. I value my kidneys, but I have no intention of selling them. But for some reason when we look at wetlands that function as the kidneys of our ecosystem, they are for sale. There’s something wrong there.

Sometimes putting a monetary value on something can be a good conversation starter, but it doesn’t mean we should immediately create a market for it.

Pricing is different from valuing, we need to get that lingo straight.

The fragmented approach isn’t really helping. So provide the space, put people together, connect the dots.

(Superpower) Time travel for backcasting…and the beauty is that we have these tools. We do have to crack silly measures like GDP, and intellectual property rights over ecosystems

(Success) Working with Maori – that holistic, moralistic way of looking at the world. I find that creative and giving and promotes dialogue.

(Motivation) While we have to acknowledge that the trends aren’t good – I’m not in denial about this – but I choose to wake up every morning and work towards solutions, because I enjoy that the most.

(Activist) Active. Does this make me an activist. Sometimes I do show up and bang my fists on the table, but my natural tendency is as a mediator, a facilitator – providing participatory leadership inviting people into that space.

(Challenges) Establish a synthesis centre.

(Miracle) That we really start to understand how dependent we are on ecosystems. That there is great opportunity and excitement in redesigning our human society to respect and stay within those bounds. That for me is very exciting.

(Advice) Keep at it. Find the right people, don’t be in denial. Be courageous.

Categories
economics

Scarce resources: economics and sustainability

Dan Marsh

The study of how people chose to use their scarce resources in attempting to satisfy their unlimited wants. This explains both economics and sustainability.

University of Waikato’s environmental economist Dr Dan Marsh on the potential benefits for a sustainable future from the application of economists’ focus on allocation of scarce resources in the face of unlimited human wants.

Talking points

Economics is not the bad guy in sustainability. Economics is really about people, why they do what they do, and how we can help people, societies to be better off.

A lot of people think that economics is all about money, that we’re more-or-less the same as accountants, but that’s really not the case – what economists study is how to improve human welfare.

Economics is a really great training in a way of thinking – a way of approaching the problems humans face, which is a great foundation for almost any career – how to think, how to analyse, how to take decisions.

The study of how people chose to use their scarce resources in attempting to satisfy their unlimited wants. This explains both economics and sustainability.

The economic study of scarce resources…we only have one world, we only have a finite world, a finite amount of land, biodiversity, all kinds of things, and we’re worried we’re using too much of it. Yet people always want more. No matter how much we have, we seem to want more.

Economics is saying we’ve got this scarce resource, we’ve got humans who want more and more – how can we allocate what we have in order for the greater good, the best outcomes in terms of human welfare? That is what economics is all about.

A lot of people think that economists just want growth and the expense of other things they don’t really care about – I don’t really think that is true. But economics is a very broad profession. I could say I don’t think it – and that would be true – but someone else could find an economist who does think that.

Economics is not like accounting, not a set of things that all economists should use, say and do. There is no defined body of knowledge in economics – in political terms, people who study economics go from the far left to the far right and everything in between.

Growth is not fundamental to being an economist.

Economics should be able to help people (government, policy makers) work out how to give the people what they want. Most people want to improve their incomes…if we want higher incomes then we need growth – this is simply responding to what people want – the way democracy is supposed to work. But, some people have focussed on a narrow kind of growth, and taken insufficient account of the effects of inequality, and the environment. I would agree that this has happened.

Externalities are central to economics. For me it is about setting the framework so the kind of growth we have is the kind of growth people want. And the kind of growth people want, is sustainable growth.

(Is sustainable growth a sensible term?) I believe it is. I’m somewhat of an optimist in this regard. Optimist in terms of what might be possible with technology, also an optimist in terms of how people and human societies can develop.

An important way of thinking about this is the capital approach. Capital can be divided into three main kinds: Natural capital (environment), social and human capital (people, knowledge, health, well-being) and economic (things that we make). When people say ‘growth is not sustainable’, they are assuming that in order to grow we have to have more natural capital.

The kind of growth I would like, would ensure that we don’t use more natural capital, perhaps cutting back on it, as we look after improved technology, education to grow human capital.

We can see this in natural resource per computing power. By 2020 if everyone has a ‘super computer’ in their pocket, imagine the growth in human welfare from that, a massive change and potential for improvement in human welfare that is using a remarkably small amount of resources.

I like to focus on management, and what governments should be (rather than focus just on individuals and business) for we have to have the right frameworks to give individuals and businesses the right incentives that will make it easier and reward doing the right thing.

We’re a long way from being able to bring into play all the externalities. But there are quite a few areas that we’re beginning to get the basic rules right – incentives for sustainable behaviour.

We we buy something, on average, assuming the market is working, then we are paying the market cost – because otherwise business will go out of business. But we will only be paying full cost when we pay for externalities and only when everyone along the supply chain has been forced to pay for it.

Taking account of all externalities is difficult. I’m a practical person, just taking nito account the main ones is difficult enough – it is probably an unrealistic goal.

But markets undoubtedly fail, and when government intervene in markets they sometimes make things worse. We might meddle so much in our effort to make markets take into account all externalities we might get it wrong and make it worse.

I’m not sure who said that ‘climate change is the mother of all externalities’, but it’s right.

Climate change is the biggest and most worrying externality in the world.

Economists tend to favour emissions trading or carbon tax as they would encourage people who can reduce emissions at the lowest cost to do so – and that’s a very desirable thing.

Sometimes people take the approach that “polluting is a bad thing, find the polluter, tell them what to do”. Economists take the view that we need to get the rules right, get the incentives right to find ways to encourage reduction of pollution at the cheapest cost and we’ll get more reduction – it will cost less, and we’ll have more money for other things.

Often the most expensive reduction is 10-20 times more expensive than cheaper options encouraged by trading. The Rotorua lakes, the cost per unit of nitrates leached into to the lakes, this averages hundreds of dollars per kilogram, but farmers can reduce the same for a few dollars. Why would we start with $100/kg rather than a few dollars?

For the good of the environment, we will get more improvement.

The same applies to the cap and trade around Lake Taupo, a scientifically established bottom line, then discharge allowance within that – yes they pay for the right to pollute. Does this “paying for the right to pollute” matter? Assuming that we have correctly calculated the cap – that this is the sustainable level, does it matter that someone has bought that right?

I understand that people don’t like the idea of someone buying the right to pollute, but the fact is that this mechanism allows us to get pollution reduction at the lowest cost. That person who buys the right to pollute, who sells it to them? The person who can reduce their pollution at the lowest cost.

Non market valuations – natural, spiritual, aesthetics – these things not usually measured in the markets, but environmental economists have developed methods of valuing these things. In some cases a non-market valuation can assist in difficult decisions.

Even people who say the environment shouldn’t be valued end up doing it implicitly (case study of Manukau sewerage treatment).

Quite often for some social questions, it’s not appropriate for economists to be telling people what to do.

The way I see it, it is for society to decide on how it wants to run society – what are its core values, to decide on what is ethical or not ethical – and for economists to use their skills to work within these constraints to try to help society meet what it wants to do.

People have tried to value a species (for example Costanza’s total value of ecosystems, 97, 14), but it is open to dispute. Environmental Economists would focus on changes and changes you might be considering.

Trying to value change in species and biodiversity using non-market techniques is interesting but tricky and highly contested.

Bateman‘s work in the UK to produce a national ecosystem assessment decided not to value ecosystems, so instead used a constraint approach.

We should be cautious about claims about dollar values on species and biodiversity change.

Economics can help us think about benefits and costs that happen at different points in time. The Stern Report on the economics of climate change for example.

The key driver is how much we value costs into the future.

Discounting is a reasonable approach for the next 10-20 years, but I don’t think it is reasonable for inter-generational decisions. Unless we use a discount rate of zero, it will mean we put no weight on future generations – most of us would agree, that’s not ethical.

We do struggle with longer time periods, but we’re all making decisions about how we weigh costs and benefits…all the time, to pretend we can’t do it is now very helpful, the economist’s approach is to see how people are doing it (investment decisions in schools etc).

If the discount rate you use is too high it will mean you start putting a low rate on costs (and indeed benefits) into the future and we should be cautious of that, particularly for intergenerational issues where I think that result might conflict with what we muight conclude from ethics.

(What’s the alternative?) Economists might try to contribute but we shouldn’t pretend that we’ve got the only answer, we should acknowledge that that’s about ethics and what people feel is right.

(Activist?) Yes, in the sense that I’ve always been. I always says what I think or say I disagree, I’m not too worried about putting my head above the parapet. I am actively involved in trying to use environmental economics to improve New Zealand’s environment. I’ve always argued in favour of the environment, typically trying to help decision makers better understand the value of the environment to the benefit of the environment.

(Challenges?) Too much to do.

(Miracle?) The National Government brings in changes to make NZ’s Emissions Trading Scheme really work, so people who are emitting carbon really would face a realistic cost of carbon. I believe if we could do that, over time we really would get a reduction in NZ’s carbns emissions, and we could do it in the lowest cost way. The main problem is the international linkage – the trouble is the European ETS caved in under pressure and caused the price to crash and our transferrability means our price has crashed. So we need to reduce our transferrability in order to get our incentives correct. It’s really sad the way things are at the moment, it’s not working because the price is too low.

(Advice?) Study economics.

Categories
agriculture economics

Circular economy

Dan Kristensen

The current economic system is linear and ends in a landfill. In a circular economy you design our way out of the need to dump.

Daniel Kristian Kristensen is a researcher in the Department of Agroecology – Agricultural Systems and Sustainability at Aarhus University. We talk sustainability transitions in agriculture, circular economy, and the need for radical rethinking.

Talking points

It is quite apparent that the system is not suited to continue along the same path as previously…so that’s what I see as a transition, a fundamental shift in the way that agriculture is organised.

Agriculture has to deliver…that will be a period of – maybe not conflict – but where the demands on agriculture will be quite intense.

The tension is where where interesting things are happening, agriculture is has both models (production and ecological models)

We have to drop the idea of there being one solution and embrace the complexity of having to negotiate increasingly globalised solutions for the problems that are occurring locally.

There a lot of issues around sustainability, but it’s not one issue so it’s not one solution.

Recycling is not enough, it often means you degrade the product. We need to take recycling to a radical extent – upgrade and improve.

In a circular economy things have to circulate, not just take a few more loops and still end in the landfill after all. You want to continuously upgrade the product and the services associated with the product – upcycling.

Consumption is important to keep the economy going, but it does have an element of being more reflexive, consumption needs to be rethought so it’s not just wanting new stuff all the time and discarding what you had previously. Rethinking…getting the services you want, say to use the phone, then just get the service…that will change the incentive for the manufacture…

(On growth)…the circular economy is a radical reworking of how the economy works on many levels. Growth as we normally think about it might not sit very well with the circular economy, it can be done applying principles to the continuous improvement and new services, but consumption in terms of increasing throughput and throwing more stuff away, that is definitely not compatible with circular economy.

It’s a radical transition, but it still approachable for someone that wants to treat it less radically – it’s different actors around a common agenda.

I like to think of it as negotiating where we want to go in the future.

It is as much as change of mindset as technical solutions.

We need exemplars of what is achievable.

(Motivation?) Curiosity, how we can go on having an economy and prosperous society?

(Activist?) No, would like to be one but I can’t claim to be being very activistic.

(Challenges?) Circular economy in a relationship to agriculture.

How to get people together, traction on a way forward, getting a framework for long term solutions drawn up – that’s one of the big challenges, there’s of muddling through that is short sighted. The long term vision needs to be there, we need some dialogue on that. We need a conversation about that, creative thinking and involvement in that.

(Advice?) Pursue your interests in terms of education and do that as a guide.

Categories
economics engineering systems

Strategic sustainable transport

Henrik Ny

If you come back a year later and they’ve got recycling in the office rather than looking at the main process, that’s a sign that they are not really buying it.

Dr Henrik Ny is a researcher and Sessional Instructor at Blekinge Institute of Technology. His research interests include ecological economics and sustainable product development. He has worked to integrate lifecycle assessment into the environmental management system and the waste treatment and recycling efforts of major industrial companies. Henrik’s current role is to run large research projects together with industry and public institutions. The largest so far is a regional electric vehicle project called Greencharge.

This conversation is one of a series of four recorded at Blekinge Institute of Technology Department of Strategic Sustainable Development in September 2014.

Talking points

I studied engineering as a route to sustainability.

If you did it from scratch it would be much easier…but it rarely happens that you get to do something from scratch.

My PhD was a toolbox for companies to practically integrate strategic sustainability into their products and systems.

Rather than just looking at the systems as they are, we started looking at applying the principles for sustainability.

Substances from the earth’s crust should not be allowed to increase in the system – because then we will have problems now or in the future. So this makes the process of increasing concentrations a problem – before you know what consequences they give.

Chemicals – combinations of emissions from the earth’s crust – these should also not increase.

The third is about other ways to break down natural systems.

The fourth is about social sustainability, because even if we address the ecological issues without the social people will not deal with this in a good way. We need to be happy at the same time.

We have focussed on the process conditions – the increasing concentrations, we’re working with others (Rockstrom) who have set up the boundary conditions for how far those processes can go.

Companies are beginning to understand that so long as they are acting in an unsustainable way, they are taking a risk. It sometimes takes while for them to understand that.

If you are working with someone who is trying to improve, it is sometimes counter productive to be too dogmatic. I never tone done the science or the consequences of something, but I am trying not to tell them how they should run their business.

If you come back a year later and they’ve got recycling in the office rather than looking at the main process, that’s a sign that they are not really buying it.

The nature of something that is so big – holistic – is that sometimes it is so big and blurry that you don’t know where to focus…that’s the value of the framework.

We have added a scoping phase to Life Cycle Assessment where you use the principles of sustainability, so that you can see, just by knowing that you’re looking for substances from the earths crust what you’ve up against… the idea is that you can keep track and not get lost into the detail.

If you want (your analysis) to become dynamic, then you use scenarios and tweak it, system dynamics from a strategic perspective.

The challenge is to do something complex enough to address reality, but not so complex that you don’t understand what is going on.

Putting social systems into that makes it more complex.

(Green Charge) The technology we need is more or less here – so it is more of a social- economic problem: how can you mobilise the necessary actors to act in a coordinated way to make this possible and affordable.

We could say this is how you should be sustainable, but if everyone is bankrupt before they get there then little is won. So we try divide in two steps. First a wish list of the things we want to do. Then we prioritise based on short-term economics.

So we try to find things that will give you money now, and prepare for coming steps.

(are we close to the tipping point for sustainable transport?) Not yet, but within five years.

The status quo is a big barrier.

As long as there are a few good examples of success, we will move forward quite quickly.

Those who don’t move will lose in the transition.

The strategic framework raises a few principles as a common guide for any actor. It is built at such a level that anyone acting in society could, for example identify according to principle one, how they contribute to increasing concentration of substances from the earth’s crust. That can lead to common goals, with different types of actors working together.

The strategic sustainability framework provides a common language so that people from different positions can work together.

When you put a price on externalities and internalise them into the economy, then you are making the economy better. But even with this environmental economics, we might consume them (the environment) anyway but at a higher cost. Ecological Economics attempts to limit this with quota and so on.

We need to think about growth in more nuanced way. Many times growth today is just expanding a wasteful business model where you waste a lot of resources, then you expand that and waste a even more resources. If you transition to a business model where you waste less resources, then you can have economic growth while not wasting as much. It is difficult to achieve this in practice – to have both growth without systematically eroding the environment.

There are different ways to fulfill needs that wouldn’t show up in our current economic systems.

Just enough is not enough. Restorative sustainability…systems that start to improve themselves again. I think this is necessary, because we have destroyed a lot of things.

(Motivation) Realisations when I was very young – looking a car exhausts and asking where they go. The realisation that this is not going to work. Then being able to be part of the solution and just looking at the problem. And I’m quite curious and I like solving problems, simplifying, explaining…and here is the biggest, most interesting problem we have.

(How many people do we need?) Amoeba theory…

(Activist?) Depends on what you mean by activist. I don’t generally go around telling people what they should do. And I’m not fundamentalist in that I do everything right always myself. I try to make the big things right and recognise that sometimes you need to make compromises.

(Challenges?) Run Green Charge to fruition. Develop the road map, develop a big systems model to look for transition points.

(Miracle?) We have the technology…so one, a sudden global awareness that we need to change to become sustainable, and two, this is how we should do it.

(Advice?) Don’t despair. Most of us are aware that there is something wrong with the world today, but most of us are also quite frustrated that we don’t know what to do to fix it. But there are many things you can do, use the internet, find things to do, trying to reduce your own energy bill for example will start helping the world.

Categories
business economics policy

Creating change

David Bent

A responsibility mindset – a focus on compliance – is not a strong narrative for change.

David Bent is Director of Sustainable Business at Forum for the Future. He is also a policy fellow at the Centre for Science and Policy at the University of Cambridge.

Talking points

15-20 years into my career it is the right moment to to ask the big questions, and the right question after working with business for 10+ years on becoming more sustainable, it seems the right time to ask “what’s the role of business?”.

Business as political actors

The more we found better ways of representing cost on how much effort it would take for a company to move from its current position to being sustainable, the less likely they were to use that information to do anything about it – for one thing, you were telling them off, and the other, you were making the opposite of a business case…we were framing it all wrong. We were starting with a responsibility mindset, the business has a negative impact on the world, what can we do to make that impact less. The switch now, is the world has an impact on the business, what can the business do to be successful in a world dominated by sustainability. That opens up a whole new terrain of things you can do, including looking at the opportunities, and framing things as strategic risks, that if you do nothing about then your entire industry is at risk.

A responsibility mindset – a focus on compliance – is not a strong narrative for change.

How can we create change by helping leading businesses go further, faster?

Our system innovation approach is deliberately aligning all of our work to create change at a system level

How can we help individual companies play their part in the transition to a sustainable global economy?

A move away from framing things in terms of responsibility- which rather traps you in ethics and duty and you have to hope that people share your value set – to a frame based on sustainability, how will you be successful in the long term?

How can we scale up what seems to be working? What can we do to scale up innovation so there is system level change? How do you scale up impact?

Our (Forum for the Future) founders had had a long time campaigning, and post-Rio 92 they could see that campaigning by throwing mud wasn’t enough, people where saying “yeah, I get it, it’s important, now what should we do?”, so Forum was founded on the basis of partnership and long term working

One of the primary things we provide is being a critical friend

Part of what the change agents in the companies are looking for, is someone who can bring the difficult truths to a conversation. That does lead to delicate balances: “what is the most this organisation at this time can handle, with a view to them being able to handle more in a years time?”.

With the best will in the world, even with the pioneering organisations we’re working with, they are to some extent dependent on the status quo, and we’re trying to change the status quo and create disruption in the interests of people who don’t yet exist in the form of future generations, and it’s very difficult for future generations to pay current wages.

Sustainability is not a collection of individual things, but it’s a relationship between all those different things.

We meed to maintain a transdisciplinary systems view…to see the connections, and to see the dynamics, and to play out and see what the unintended consequences might be requires seeing the connected whole.

What historical examples are there in our shift of energy sources that happened at a global scale and happened quickly? The one that gives me hope, bizarrely, are the shift from coal to oil…and the abolition of slavery, a move from a seemingly free resource with negative impacts occurring on people the political elites of the time didn’t care about – in that case people who were slaves, in our case people in the future. It took a generation, but it is possible to make those massive changes…the political elite can see a viable alternative. A third parallel is the transition to the welfare state.

(Michael Jacobs four conditions for creating the Welfare State) Massive crisis – opportunity for change…business elites could see a viable path…that someone has laid the intellectual groundwork…and a popular movement.

We had the crisis – the global financial crisis – and that disproved the intellectual foundations for the previous two decades – that if you leave companies alone they won’t be so stupid as to hard themselves…it turns out the bankers are that stupid. We had a popular movement, a spasm of anger – who got us into the mess and who is paying for the mess.

…but in London there weren’t enough people who feared that they would down-grade their current and their children’s prosperity…the interesting thing about austerity, is to what extent are people giving up hope that the future is better than today. At the moment, the way people are reacting to that in the UK and across Europe, is they are turning to nationalist parties.

The facts don’t back up (nationalist) story, but nevertheless the story speaks to people being very much afraid, feeling that globalisation is taking things away from them, and losing hope for the future and turning nationalistically- turning inwardly to deal with it rather than turning outwardly.

Part of the story has to be making ourselves more resilient by distributing the risk and ability to respond across many different nodes, and acknowledging interdependence – what happens way over there affects us here. It is in our enlightened self interest to make sure that things don’t get really bad in Africa. I want the people in the tropics to have the capability to choose how to live their own lives rather than being subjected to have to respond to e vents far beyond their control.

We know a lot about the boundary conditions we have to live within…then there’s the social and political foundations – give people the capability to make choices in their own lives…that’s moderately well known: a degree of equity; interdependence; you need access to energy, health care water, sanitation … those end goals and the boundaries are like the table on which you can put your coffee cup of sustainable economy – that’s well known. What we don’t have a good grasp on, is how we make the transition from here to there. There’s a couple of things that make that really difficult. One is that it has to be economically viable at each step of the way – the current ways of making profit have to finance the things that drive us in a different direction, we have to allocate capital away from stuff that is familiar and currently turning out profit…and put that investment into things that are a bridge into the new future. The other problem is that every step along the way has to be politically viable…without knowing how that is going to happen we’re adding decimal points on the end of a universal constant, it doesn’t make any difference.

Businesses need to make a reason for change….seeing that the long term success of their businesses, their shareholders is in creating a more sustainable world.

The buy-in of a certain group of the business elite is there, we now need more unusual ambassadors.

Humans have evolved brilliantly to respond to things that are urgent that we can see and touch and feel – if you’re a monkey in a tree that’s absolutely what you have to be good at – and what we have in the crisis – the slow, grinding, unfolding crisis that we have – are things that our actions today affect the world in 25 plus years, climate change experience of the next 15-20 years was set in train by accumulative behaviour up until about 1990.

Our evolutionary heritage, and our political systems are really badly set up to deal with climate change – in many ways that’s why there is a crisis, it’s in the gaps of how we deal with things. If we could deal with it, we would have dealt with it, but we can’t deal with it and that’s why it’s ongoing.

Rational argument hasn’t carried the day, so in some ways we need something that will loosen people’s ties to the status quo. We missed the opportunity of the financial crisis…we didn’t have a strong enough intellectual alternative, equivalent to Keynes, then may be we could have replaced laissez-faire markets with something else.

A resilience narrative gives agency, it gives them stuff to do in their locale, it gives a way of thinking more into the future. But the thing I don’t like about it – its shadow side – it accepts that some sort of crisis is inevitable, that we can’t really avoid some sort of downside in order to create action, and there’s still an eternal optimist side of me that says, with enough workshops and podcasts we’ll be able to act before we’re in that situation, but that was probably five – ten years ago.

So there’s something appealing as well as appalling in the resilience narrative that could bind people together to act.

(Motivation?). Social justice and creating change for social justice.

I am annoyed when there’s persistent injustice, in particular where’s nothing the people at the end of that can do anything about it. We’re at a complicated moment in history – fairness always means different things: fairness of outcome, fairness of process, fairness of opportunity. There’s a mixture for me of fairness of outcome and fairness of opportunity, and we have to acknowledge that at the moment we’re not set up for that – and for me this makes what are seen as environmental issues are really social issues. If we take climate change – it’s been caused by the emissions of rich countries, it’s going to affect poor countries, and affect choices and take away the ability to have to have the life that people want to lead in the tropics in the first instance, and that’s not even remotely their fault, and that’s the social justice question. The environment is the means, but the real motivation for me is the social justice question. And what gets me out of bed in the morning is creating change to avoid those injustices.

(Activist?) No. For me an activist is someone who’s primary way of trying to create change is protesting outside the castle walls. For me, we need the activists at the gate, banging and causing elites to understand that there’s need for change, my role is the advisor inside the court that helps the barons do something about it. You need both parts of that movement, you need the activists and you need the ones helping those with resources and power do something about it. And that help might include getting out of the way. Inside the gates and therefore not activist.

(Challenge) How can we take advantage of the windows of opportunity that come along? To avoid the worst and get the best.

(Miracle) Smallest thing that might make the biggest difference. Extend the time horizon of decision makers – to 10-15 years planning horizon, you would have enlightened self-interest – thinking about not just your entity, but all the things your entity relies on and all the things it impacts on. Once you have that time horizon then you start thinking about who else shares those goals to create a good context for my entity.

(Advice) There is always something you can do wherever you are. It is easy to think these challenges are so enormous that there’s nothing you can in any situation it’s about what “they over there should be doing. Well they should but there’s also things that everyone can be doing

If everyone does lots of little things, they do add up.

Categories
computing design economics

Change through informal exchange

John Harvey

Informal exchange is binding, it creates ties, it creates social obligation.

John Harvey is a researcher at the Horizon Digital Economy Research Institute at the University of Nottingham. An economic anthropologist, John is researching systems to encourage non-monetary forms of exchange such as freecycle, couch surfing and his own Neehoy. He talks with us here about prosociality and empathy as core design strategies.

Talking points

As much time, effort and inter-personal meaning goes into the informal economy

There are two fundamentally different ways people come at understanding the economy. There’s the formalist approach – the idea that we’re all rational people, and that we rationalise, economise in the presence of scarce resources, and the opposite side to that – the substantivist approach would argue that neither of those presuppositions are true the idea of rationality is not universal and the idea of scarcity is not universal – they are constructs. The formalists might say the economy is the aggregate of all individual actions, whereas the substantives may say the economy is simply the way that people provision and furnish for themselves – they not might be trying to maximise utility.

There’s always been this sense of alienation when it comes to exchange. You might consider some people you talk to the same as yourself – you might give or share with them readily, or some people you might consider as other – you might want some balanced exchange.

Alienation refers to the objects in our lives – the idea that some objects are transferable, and some objects are not transferable – we keep them within our kin, our friends, our family. Some items assume a collective ownership – the food in the fridge. That comes from a shared mutual understanding of who we are. Introducing otherness introduces the notion of debt.

New technology is changing the way we look at things – we can belong to multiple communities online that we wouldn’t necessarily interact with otherwise…this is changes the dynamics of how we procure things for our own lives.

(Couch-surfing, wikipedia, creative commons) These new forms of collective ownership are fascinating.

We should be designing economic policy that helps people to feel well-being rather than increased GDP.

I think GDP is a terrible measure of prosperity

The free market…has helped to liberate people, but potentially it imprisons them in an iron cage of consumption.

Efficiency is a good thing…the less damage we can do to the planet, the less resources we can extract the better. Efficiency as it relates to production starts to become controversial – as you put efficient tools into the hands of a few, you reduce the workforce.

Centralising production…full of conundrums…

We’re (Neehoy) expanding the ideas of free-cycle to large scale asset management.

Most of the focus in asset management has been on high value assets, but this overlooks the millions of pounds tied up in furniture. In health, much of this is dormant, sat idle, if we can reduce this by a fraction then not only is the organisation saving money, it’s also a great thing for the environment.

Prosociality means to me a voluntary intentional behaviour that results in benefits for another.

In rational economics this is explained by the utilitarian self – if you act in a way that is kind to other people, you have a warm glow – you feel good about yourself – you’ll feel good and that’s why you do it it’s selfish. Similarly they’ll say when you see somebody in distress you’ll feel negative, you’ll feel guilt. Acting kindly is helping to relieve that sense of guilt. Alternatively to that utilitarian concept of altruism, that egoistic interpretation, are ideas about empathic concern – the ability to imagine the other. What other people endure and perceive in their own lives.

We see these rational behavioural economic assumptions in design. Recently we’ve seen a lot of work that attempts to nudge behaviour, it takes an individual to be at best to be rational and at worst to be irrational but within confines – bounded rationality. …HCI is well positioned to present information, cues to try to manipulate behaviour, but it is fraught.

Activist: HCI an interventionary field, we don’t just describe the world, we try to change it – it is inescapably an activist discipline. There is a moral obligation of HCI researchers to consider impacts.

I’m naturally anarchistic – I like decentralisation, I like giving tools to people so that they can do something meaningful with their life. Unless those tools are created in participation with local cultures you run the risk of cultural imperialism.

I like the idea that technology can help people to become kinder, freer.

I celebrating differences rather than looking for universal principles.

Streetbank: a small charity, encouraging people to act more kinder to other people that doesn’t rely on reciprocity – I think that is a beautiful thought.

Pay-it-forward still has notion of money that involves debt, the moral stance of obligation, I like play, play-it-forward. Could you create an economic based on these Utopian principles? Not likely to happen but a nice thought.

We need both sides of the economy, there needs to a redress of the balance between those two sides.

Advice: Be willing to fail. Don’t take failure as end of the road – there’s so much to learn from failure it is almost virtuous.

Categories
economics energy

Intelligent efficiency

John "Skip" Laitner

 

As a society we are currently at 14% energy efficiency – most of what we use we waste.  This is the major barrier to development.

John A. “Skip” Laitner is a resource economist. He currently leads a team of consultants ‘Economic and Human Dimensions Research Associates’ based in Tucson, Arizona. He was a senior economist for technology policy at the U.S. Environmental Protection Agency for nearly 10 years, where he won EPA’s Gold Medal award for his contributions to economic policy analysis for that agency. More recently, he led the Economic and Social Analysis Program for the American Council for an Energy-Efficient Economy (ACEEE), a well-known think tank based in Washington, D.C. Recent publications include The Long-Term Energy Efficiency Potential: What the Evidence Suggests. and with colleague Karen Ehrhardt-Martinez, People-Centered Initiatives for Increasing Energy Savings.

 

Talking points:

To continue to develop globally we need to double the amount of necessary energy.

If we could cut the amount of energy wasted in half, then renewables could easily meet the balance

We’re not talking about a return to the stone age – in fact the opposite.  We’re talking intelligent efficiency. 

(why has the market not already fixed this?) we need to shift to a focus on the cost of energy services.  This is an opportunity for new business models – the sale of services, including selling efficiency gains.

Why are people fretting about the budget of a city council at $200 million, when the same city is spending $500 million on energy and wasting most of it?

The measure of fuel poverty is spending 10% of your household income on energy.   If a city is spending more than 10% of its GDP on energy – the city is in fuel poverty.

The energy internet gives us the shift in communication and a new form of energy that was the basis of the first two industrial revolutions.  Now instantaneous 2-way communication and distributed energy resources mean we can move from a commodity based economy to a service based economy.

Improvements in technology will only take us so far – the real systems changes are people-centred.

We’ve a long way to go to help people understand how vital energy is, and how very central it is to our very economic and social well-being.  We tend to think of energy as an afterthought when it really needs to be brought forward into the mainstay of how we live as a society, how we get to work as an economy.

We can save 10-15% on energy use in their home by paying attention – that’s a smart thing to do,  but to really do it at the scale that we need and at the depth we need, we’ve got to do it as a community.  but we need way more than that – we need to do it as a community…it’s more than everyone changing their lightbulbs – though we need that too – we need system changes.

We need everybody understanding that the well-being of the community really depends on succeeding on this task of energy efficiency, and thinking through new business models that need to be brought forward to make it happen.

 

Categories
economics Inequality

Inequality costs

Robert Wade

It is profoundly stupid to ignore society-wide costs of inequality

Professor Robert Wade is from The London School of Economics. He has recently written Inequality and the West, published as Chapter 3 in Inequality: A New Zealand Crisis, edited by Max Rashbrooke (Bridget Williams Books 2013).

Seeing himself as an analyst rather than an activist, Prof Wade has helped shape debate on the inequality. GDP, he says is a flawed measure of performance and while not opposed to growth – we have certainly seen benefits from material progress – he says we “we need to ‘green’ GDP – we need to decouple growth from emissions”.

Policy made for the top 1% by the top 1%

Categories
economics systems

Ending extraction economics

Nicole Foss

There’s not going to be any economic growth – live with it

Describing herself as both a systems analyst and an investigative journalist, Nicole Foss is co-editor of The Automatic Earth. Nicole describes our financial predicament, vulnerabilities, and the end of economic growth. Our expansionary system is at – or beyond – the point of collapse. We explore how our wealth extraction from the over-leveraged economy and environment cannot last. This system has reached out spatially to extract wealth, and now that is gone, we’re borrowing from the future by raising debt to bring forward demand. Growth she likens to the logic of the cancer cell and any politician who promises it is either deluded or lying.

For the future, she says “there’s not going to be any economic growth – live with it”. Amid increasing volatility the general trend will be down. Defeatist we ask? Realist she says.

Talking points:

(Am I an activist?). I’m an information processor. So, I bring information to people, I like to inform decision makers. I like to give people the information and the tools to make decisions that matter. So I’m not sure that I would necessarily say activist, but I suppose I am, in a way. But it’s just about trying to process the information and bring to people in a form that they can use it to hopefully achieve a better future than they would otherwise have had. So I couldn’t sleep at night if I couldn’t do this – if I didn’t think it was possible to achieve anything I would have just stayed back on my farm, and not bothered to do anything, not bothered to reach out to people at all. But because I think there is a great deal to be gained from building community and doing things fundamentally differently if we do it in advance, then even if the odds of success are not always particularly high, depending on where in the world you are, I still think it’s absolutely worth the effort and worth the attempt because we know from the lessons of history that if we fail we’ve in for a bleak period that won’t be very much fun for quite a long time.

Having humans live within their limits is a good thing. The particular human beings probably aren’t going to like it very much because in the meantime they’ve gotten used to an extraordinary lifestyle.

Trainspotting: You can hear Sam’s pencil scrawling rapidly in recognition as Nicole tells how she was told to focus, “focus is not the point”, she says “the point is breadth”.

The Sustainable Lens conversation with transdisciplinary scientist Dr Sylvia Nagl would be a good companion to this talk.

Categories
climate change ecology economics health politics

Wise Response (Part 2)

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Previously on Sustainable Lens Emeritus Professor Sir Alan Mark (pod) described work towards the Wise Response campaign.   This call to face up to New Zealand’s critical risks was launched in Dunedin recently with a series of speeches. Sustainable Lens highlights these messages (Part 1 last week).

  • Russell Tregonning: (OraTaiao: The New Zealand Climate and Health Council). Climate change is the #1 threat to health.   NZ a global free loader.
  • Neville Peat : Each generation defines “natural” without realising baseline has shifted – unwittingly we are accepting less and less.  These baseline shift results in community amnesia.  We need a baseline assessment of true relationship of economy & ecology.   Danger of DOC’s dual role of conservation & tourism.  Community fatigue while government dodges responsibility
  • Professor Tim Hazeldine:  Economics is our friend. Problem is not enough market (why are we subsidising polluters?)
  • Louis Chambers:  Generation Zero is not doing this because we’ve nothing better to do, we’re doing it because we must.   It needs an all systems, all society transformation.   We must find allies; change culture; strategic microcosms; clarify vision; pick strategic battles; repeat until we win.
Categories
climate change conservation biology ecology economics maori politics science

Wise Response (Part 1)

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Previously on Sustainable Lens Emeritus Professor Sir Alan Mark (pod) described work towards the Wise Response campaign.  This call to face up to New Zealand’s critical risks, was launched in Dunedin recently with a series of speeches.  This week and next on Sustainable Lens we highlight those messages:

  • Hoani Langsbury What sustains life essence?
  • Professor Peter Barrett We’re creating an event of geological magnitude (greenhouse but with remnant ice sheets – so energy transfer)
  • Associate Professor Susan Krumdieck Beyond myths of market: we have no choice but to reduce demand, only whether this is graceful or not. Every professional needs to make changes to provide products and services in new reality.
  • Dr Mike Joy Impacts of massive increase of industrialised dairy farming.  Intensified cows have footprint of 84 million humans need to cost impacts.  25¢ Phosphate fertilizer cost $100 to remove.  Ecological debt $20 for 1kg milk fat.

 

Categories
agriculture economics

Pursuit of happiness or pursuit of wealth?

Dr. John Ikerd is emeritus professor of agricultural economics at the University of Missouri-Columbia. His most recent book is “The Essentials of Economic Sustainability“.

Sustainable capitalism is possible, just not the capitalistic economy we currently have.

Ikerd argues that in classical economics – Adam Smith, Thomas Malthus and David Ricardo – there was a belief in the invisible hand of the free market but that this operated entirely within the context of a just society. People would pursue their economic interests within the context of societies and cultures that would place social and ethical constraints on their pursuit of individual self interests. In the later development of neo-classical economics the drive to make a pure science, the moral and social aspects were excluded. The resulting focus on rational preferences is based on the assumption that maximising individual self interest is also good for society as a whole.

Ikerd contrasts ethical and social values with economic values. First, economic value describes individual benefit. Second, economic value is instrumental – it carries the expectation of getting something of equal or greater value in return. Third, economic value has to be impersonal – so it can be traded. The outcome of this that it makes no economic sense to invest in anything for benefit of future generations or the good of humanity of as a whole.

Ikerd says stemming from this mistaken reliance solely on economic value we have wrongly equated happiness with wealth. This means we have gotten on to a futile treadmill of more and more cheap stuff. We have lost sight of the pursuit of happiness in the pursuit of wealth.

Society is held hostage by this relentless pursuit of ever more income, ever more wealth, ever more cheap stuff because we’ve led to believe it will make us happy.

The outcome of this is a very fragile economy exhausting finite resources teetering at the edge of a collapse. We have a very short time to anticipate the necessity for change and make changes voluntarily before they are forced upon us.

That we need to return to basic principles of human relationships is really a matter of common sense – something we all know if we just stop and think.

Shane’s number of the week: 200 million Euros. That is how much climate change cost Unilever, which depends on agricultural commodities, in 2011.

Sam’s joined-up-thinking: The Dunedin City Council has released its draft Social Well-Being Strategy. It is an excellent document and a good example of consultation. Sam would like to see moer attention paid to sense of place, mention of intergenerational equity, a less insular focus, and consideration of a total human ecosystem approach (rather than environment being somewhere “out there” to go an visit). The strategy is open for comment until the 21st September.