(Mostly) Unbiased

Presidential Candidate Comparison-

Currently the two bipartisan presidential candidates, Barack Obama (Democrat), and Mitt Romney (Republican), have created a heated environment in which both individuals have jumped around in regard to their positions towards multiple platforms. Romney is known to have done this throughout his campaign, which has caused the loss of credibility towards his conviction. On the other end, President Obama having spent the last four years in office has also jumped around in regard to his original beliefs campaigned back in 2008. The President’s reasons for shifting platforms differ from Romney’s, but all the same both individuals have failed to provide conviction in their personal beliefs.

This now creates a very speculative election, which has many people calling either candidate “the lesser of two evils”. This is not how a democratic election should play out. As a nation we are becoming no better than the tyrannical developing nations, which we criticize so easily for their poor democratic representations -- which we most likely instigated through military force -- but that is not the issue we are discussing. With this poor representation of democracy, we now come to the “hard” decision of which candidate to choose for the next presidency. Let’s begin with President Obama’s positions regarding the affects he will impose on the sustainability of businesses, inferring toward the environment, the economy, and the social equity of our nation.

President Barack Obama (Democrat)

• Energy and Environmentally
• Take control of our energy future by expanding domestic oil and gas production to create 600,000 new jobs and using more renewable energy like wind and solar power.
• Reduce building energy use. Create jobs, save money, and cut pollution by improving energy efficiency in our non-residential building space.
• Make more than 75% of our potential offshore oil and gas resources available for exploration and development and permit clean energy projects on public lands that will generate enough renewable energy to power 3 million homes.
• Economically
• Ensure the wealthiest Americans do their fair share by paying at least the same tax rate as middle class families so we can reduce the deficit in a balanced way while preserving investments in education, clean energy, manufacturing, and small businesses.
• Invest in a domestic clean energy economy powered by sources like wind, solar, and clean coal. Renew successful bipartisan tax incentives that create American jobs and reduce our reliance on foreign oil.
• Invest in the next generation of scientists and engineers. Improve science, technology, engineering and math education and expand programs that expose kids to opportunities in those fields.
• Equitably
• Make the American Opportunity Tax Credit permanent to give more hardworking students a fair shot at an affordable higher education and the skills they need to find a good job.
• Make the American Opportunity Tax Credit permanent to give more students a fair shot at an affordable higher education.
• Reform K-12 education funding by encouraging states to adopt higher standards, and improving teaching and learning assessments.

Presidential Candidate Mitt Romney (Republican)

• Energy (NO Environment directed positions)
• Empower states to control onshore energy development
  • States will be empowered to control all forms of energy production on all lands within their borders, excluding only those that are specifically designated off-limits.  Federal agencies will certify, but the states will lead.
• Open offshore areas for energy development
  • Mitt will establish the most robust five-year offshore lease plan in history, that opens new areas for resource development – including off the coasts of Virginia and the Carolinas – and sets minimum production targets to increase accountability.
• Pursue a North American Energy Partnership
  • Mitt will approve the Keystone XL pipeline, establish a new regional agreement to facilitate cross-border energy investment, promote and expand regulatory cooperation with Canada and Mexico and institute fast-track regulatory approval processes for cross-border pipelines and other infrastructure.
• Restore transparency and fairness to permitting and regulation
  • Mitt’s plan will streamline the gauntlet of reviews, processes, administrative procedures, and lawsuits that mire so many new projects in red tape.
  • This emphasizes the deregulation of environmental impact reports (EIRs) for major projects (including the keystone pipeline).
• Economically
• Repeal Obamacare
• Repeal Dodd-Frank and replace with streamlined, modern regulatory framework
• Amend Sarbanes-Oxley to relieve mid-size companies from onerous requirements
• Initiate review and elimination of all Obama-era regulations that unduly burden the economy
• Ensure that environmental laws properly account for cost in regulatory process
• Provide multi-year lead times before companies must come into compliance with onerous new environmental regulations
• Equitably
• Human Capital
• Eliminate redundancy in federal retraining programs by consolidating programs and funding streams, centering as much activity as possible in a single agency
• Give states authority to manage retraining programs by block granting federal funds
• Facilitate the creation of Personal Reemployment Accounts
• Encourage greater private sector involvement in retraining programs
• Labor
• Appoint to the NLRB experienced individuals with respect for the rule of law
• Amend NLRA to explicitly protect the right of business owners to allocate their capital as they see fit
• Reverse executive orders issued by President Obama that tilt the playing field toward organized labor
• Tax
• Make permanent, across-the-board 20 percent cut in marginal rates
• Maintain current tax rates on interest, dividends, and capital gains
• Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
• Eliminate the Death Tax
• Repeal the Alternative Minimum Tax (AMT)

And this is where we stand. Through a (mostly) unbiased analysis of the two candidate’s positions regarding the environment, the economy, and equity in there affects of the sustainability of businesses, I have come to the conclusion that Mitt Romney believes in a “business as usual” single-bottom line paradigm. In which businesses are free to operate deregulated compared to the standards that really should be set to truly account for our environment. President Obama and his positions push for a more “business as UNusual” triple-bottom line paradigm, in which businesses are required to answer to more strict environmental regulations, clean, renewable energy research is stimulated -- because without a federal stimulus it currently cannot compete against a STIMULATED oil industry, and less unionized workforces, as we are in the 21st century and unions only worked back when the industrial revolution was evolving.

You may see my bias now, but from the bullets presented above it is a clear choice of which candidate presented positions that are relevant, innovative, realistic, and not detrimental to the environment, all while providing developing domestic high-skill jobs through education, and supporting a developing economy -- that DOES NOT need to run off of GDP and infinite growth.

It was not my intention to persuade any individual on their political position. I simply intended to pose a (mostly) unbiased review of the key positions each candidate held towards the environment, the economy, and equity.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

Ends, Means, and Policy

 In economic policy there are two constants, growth and development, and these constants have dictated economic decisions since the beginning of the human existence in some form or another. We as a society have developed the world, growing exponentially in the process, and all the while taking a consistently anthropocentric short-term view of the two constants, growth and development. So how can human society redevelop and restructure their economic decision making process to create a more sustainable economic policy that is structured around a biocentric paradigm. But before we can continue we must first define some key terms that are imperative to discussing the solutions towards creating economic ends, means, and policies that support long-term sustainable growth and development.

Entropic Dissipation: the gradual erosion and dispersion into the environment of the matter of which all human artifacts are composed in a one-way flow of low-entropy usefulness to high-entropy waste.

Determinism: The philosophical doctrine that every event or decision is the inevitable consequence of antecedents, such as physical, psychological, hereditary, or environmental conditions, that are independent of human will or purpose.

Steady-State Subsystem: The economy viewed as a subsystem in dynamic equilibrium with the parent ecosystem or biosphere that sustains it. Quantitative growth is replaced by qualitative development or improvement as the basic goal.

Economic Imperialism: The idea that the entire ecosystem can be priced and all values internalized into prices, with the result that price calculations are reliable guides for all decisions.

  Now that we have defined some key terms relating to creating more sustainable economic policies in regard to the environment, we can now begin to discuss the solutions to our current societal predicament. So when the steady-state subsystem discusses drawing the "boundary in the right place”, it is referring to setting the point of equilibrium at a certain level in relation to societies desires. These desires are set by logical demand and the society agrees to these parameters. How you would accomplish such a “radical” societal change is the real debate.

 To begin, a logical solution must be accepted, this means that the boundary is set through scientific and analytical conclusions regarding the consequences of our actions. Including the logical solutions -- which provide for zero biased information -- the society must also incorporate some philosophical thought towards the decision to set the boundary. The philosophical decisions must be met with considerable input, because the questions must ask for the hard answers regarding our future survival and the survival of the planet. After all this there should be a well-rounded and analytical boundary that has been developed to create a more sustainable policy.

 The data and information necessary for this conclusion would come from multiple sources. These sources include surveys which convey the wants of all individuals through questions that do not contain pitfalls. Another area where data would come from is from scientific studies relating to the consequences of our actions as a society, and creating conclusions that express the necessity of the creation of a steady-state subsystem boundary which will create a more sustainable and prosperous existence.

 With all the arguments regarding the solutions towards our current inefficient economic system we still come to the same conclusion regarding the two constants in economics, growth and development, but the argument to the solution is what is better, growth or development?

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

Willingness to Value

 If you were asked to establish your willingness to pay (WTP) or willingness to accept (WTA) for a specific good or service it would most likely vary depending on what is being valued. This idea of WTP and WTA is based on the economic concept of establishing monetary values for all goods and services, even if the good or service brings non-instrumental value to you. This concept was developed due to the homo sapiens suicidal tendencies to exploit all resources biotic and abiotic until they are virtually exhausted (and yes it is possible to exhaust biotic resources). But to continue we must first define some of the key terms that will assist us in establishing the relevance of WTP and WTA, and what exactly it means for the future of our planet.

Contingent Valuation: Hypothetical estimates of prices of non-market goods and services based on survey questions asking how much one would be willing to pay for an extra unit of the good or how much one would accept for the loss of a unit of the good.

Willingness to Pay: The price or dollar amount that someone is willing to give up or pay to acquire a good or service. Willingness to pay is the source of the demand price of a good. However, unlike demand price, in which buyers are on the spot of actually giving up the payment, willingness to pay does not require an actual payment.

Willingness to Accept: The price or dollar amount that someone is willing to receive or accept to give up a good or service. Willingness to accept is the source of the supply price of a good. However, unlike supply price, in which sellers are on the spot of actually giving up a good to receive payment, willingness to accept does not require an actual exchange.

 Now that we have defined the key terms related to establishing values for goods and services we may begin to discuss further the concepts of willingness to pay (WTP) and willingness to accept (WTA) and their differences. Willingness to pay is different from willingness to accept, because with WTP you are considering your personal willingness to pay to receive a good or service. This could range from buying household appliances to entering a national park to experience the scenery -- it all depends on your WTP and the good or service you are attempting at acquiring. With WTA it is your personal willingness to accept a certain value to give up a good or service, and this could also range from giving up drinking coffee in response to the economic savings it generates to giving up driving a car in exchange for knowing the amount of carbon dioxide you are personally diverting from the atmosphere.

 With contingent valuation (CV) studies survey design is critical because it formulates the questions that the recipient is answering in regard to their personal valuation practices. This means that if a questionnaire for a CV is formulated wrong the resulting answers from a recipient will be skewed and the precise valuation for a good or service -- such as a forest being considered for resource exploitation -- will be lost to unpredictable data failure.

 In regard to ecological resources contingent valuation measures tend to have an upward bias, because of social factors associated with WTP and WTA. When an individual is surveyed to determine their WTP or WTA regarding an ecological resource, and its instrumental and non-instrumental values, an individual will be compelled due to social factors to value their WTP or WTA for the ecological resource as worth more. This results in an upward bias regarding the valuation of ecological resources causing most economists to speculate on the true value that is placed on ecological resources when bias is replaced with Keynesian economic supply and demand theory.

 In all the valuation of goods and services, specifically those of environmental resources, through contingent valuation studies with questions relating to willingness to pay and willingness to accept have established some value on ecological resources to protect them from the current growth and profit hungry economic system that has exploited our resources for too long. Now it is time for the next step in our systematic evolution, the establishment of a monetary-free economy perhaps, the study of environmental economics being accepted as mainstream, or something even more “radical” in the philosophical context. We can only hope our ignorance is lifted before we meet our untimely demise.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

A Paradigm for a Paradigm

 In this complicated world we currently live in, filled with global markets, political corruption, corporate greed, and rampant severe poverty, it is hard to distinguish what systems will work and what systems will not work in the future. A leading factor to some of the economic and societal woes the world has been experiencing of late is the concept of paradigms. A paradigm is a worldview underlying the theories and methodology of a particular scientific subject. So how can societies find a paradigm that benefits the majority and harms no one (ideally)? This is the question philosophers have posed for a millennium to no avail. Until today previous leaders have not considered the shifts in paradigms as probable logical solutions to the flawed systems scattered throughout different societies. To discuss this concept further we must first define some key terms that will help us establish some different paradigms that have already been implemented throughout different societies around the world.

Regression Analysis: the use of regression to make quantitative predictions of one variable from the values of another.

Boundary Vegetation: consists of the area of vegetation that creates a boundary between ecosystems.

Intangible Costs: an unquantifiable cost relating to an identifiable source. Intangible costs represent a variety of expenses such as losses in productivity, customer goodwill or drops in employee morale.

Intangible Benefits: are advantages or favors that can be offered by one person to another. An example would be a research organization asking someone to volunteer time and expertise for a project in exchange for prestige by affiliation. 

Induced-Adoption Paradigm: the idea of the induced-adoption of a certain paradigm to mitigate change within a system.

Familial Influence: the influence of family on the decision making process towards investors.

 Now that we have defined the key terms relating to shifting paradigms in societies we can begin to discuss the different areas in which societies can establish shifts in paradigms. From the dissertation by Bradley Tyndall the differences between a diffusion of innovation paradigm and an induced-adoption paradigm in the context of the use of Grevillea in Kenya is a great example of shifting paradigms in an emerging market for societies. The difference is, diffusion of innovation paradigms include the action of innovative systems being dissolved among a society through a certain paradigm over time, and induced-adoption paradigms are almost forced through the actions of either economic collapse of environmental collapse, which provides limited innovation. So the use of the Grevillea tree in Kenya is based on a diffused innovation paradigm, because over time the adoption of the Grevillea tree became diffused throughout Kenya as farmers found them to be indispensable.

 With the diffused innovation paradigm came the realization of the intangible costs and benefits of the Grevillea tree. These intangible costs and benefits played a major role in the process of diffusing the innovation of planting the trees on farms to then practice agroforestry. The intangible benefits of planting the Grevillea tree were extremely valuable, like marking property boundaries, harvesting the branches, and the expedient growing rate all contributed to the diffused innovation of planting the Grevillea tree with the shift in paradigms.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

How do you value the future?

 This is a current subject of much debate, not between politicians, not between engineers, not between individual citizens, but between environmental economists. Valuing the future has created texts devoted directly to deciding what is right or wrong, but who knows best? Before we can begin discussing the facts behind how, why, and when we should be valuing the future different from the present, we must first define some key terms that are imperative towards understanding exactly what “valuing the future” means.

Pareto Optimality: An efficient allocation is one that best satisfies individual wants weighted by the individual’s ability to pay -- that is, by their income and wealth.

Intertemporal Allocation: The apportionment of resources across different stages in the lifetimes of basically the same set of people (same generation).

Intertemporal Distribution: The apportionment of resources across different generations (different people).

Lorenz Curve: A curve plotting the cumulative percentage of the population against the cumulative percentage of total income held by that percentage of the population, which illustrates the degree of equality or inequality in the distribution of income.

Gini Coefficient: A measure of the inequality of the distribution of wealth or income across a population. A Gini coefficient of one implies perfect inequality (one person owns everything), and a coefficient of zero indicates a perfectly equal distribution.

Intertemporal Discounting: The process of systematically weighting future costs and benefits as less valuable than present ones.

 Now that we have defined some key terms that are imperative towards understanding how, why, and when we should be valuing the future as more or less than present day, we can now begin to figure out just what exactly environmental economists are debating about.

 The topic of renewable and non-renewable resources brings up debate when discussing intertemporal distribution, because each is treated differently when being considered for reasonable distribution across generations. Renewable resources are considered finite, so when considered for distribution across generations the renewable resources are given a higher future value based on intertemporal discounting, because the supply is finite even as demand increases exponentially. On the other end non-renewable resources are considered (income specifically) more important, and when being considered for distribution across generations non-renewables are valued less in future values as the intertemporal discounting interest rate increases to make it seem as though non-renewable resources are more cost effective to exploit presently for economic gain, then to preserve them for any future exploitation.

 This difference in renewable and non-renewable resources in relation to intertemporal distribution provides a stark contrast that is expressed best in intertemporal discounting, and the value of natural capital. Personally when considering this economic valuation of present and future values I find that I value the present and future as not more or less, but as the same. What I mean is that living in the present is VERY important, making decisions in the present that affect the future deserve the utmost logic, but those same decisions that affect the present and future should be taken into account for any future valuation, which is why I value the present and future as the same. This concept is reflected in economics much differently than I reflect it. In economics most economists use intertemporal discounting to create values for future amounts, the problem is that it is all based on our current money-market economy that creates a necessity for economic gain in the shortest span of time, which is present value. So when this happens economists use high interest rates (upwards of 3, 4, or 5 per cent) to include in intertemporal discounting creating a future value that is only a percentage of the present value amounts. A great example of this market failure is the idea of valuing a human life. Currently a human life is estimated to be worth around $10 million, but if we apply a three (3) percent discount rate to this it means that a human life five hundred years from now is only worth $3.81 in today’s valuation.

 So which human life would you like to occupy? The life you currently live, worth $10 million, or that of future humans five hundred years from now worth a TOTAL of $3.81. No wonder we currently exploit resources like there is no tomorrow, because according to intertemporal distribution and discounting from the world’s leading economists, the value of tomorrow will be so little it will nor be worth to live that long. Luckily for humanity, present and future, environmental economists are attempting to change the intertemporal discounting rate from the usual 3, 4, or 5 per cent interest, to a more reasonable rate of 0.5, 1, or 1.5 per cent interest that would value the future and its resources almost as valuable as present values.

 Let’s just hope the day comes soon enough to slow down our suicidal growth rates before all is lost.

P.S.
 Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

Is Small Beautiful?

The original publication date of the collection of essays Small is Beautiful by E. F. Schumacher was in 1973, and yet MOST of his text continues to ring true today in 2012. A little history regarding the author would be beneficial before we discuss the relevance of this work in accordance with today’s society. Schumacher was a respected economist who worked with John Maynard Keynes and John Kenneth Galbraith, and for twenty years as the Chief Economic Advisor to the National Coal Board in the United Kingdom. He was opposed to the tenets of neo-classical economics, declaring that single-minded concentration on output and technology was dehumanizing. He held that one's workplace should be dignified and meaningful first, efficient second, and that nature (like its natural resources) is priceless.

Now that we have an understanding of the author and the publication date, we can now begin to discuss the relevance of the text with its relation to modern day society. What was very interesting in the reading was the references Schumacher made towards the value of natural capital and the imperative realization of this concept among economists. This concept of 'natural capital' has most likely been around in different forms and terms since the greeks and romans developed the first economies of scale. What is interesting is in 1973 we had a very influential economist stating the effects of not valuing natural capital and the environmental destruction that follows, and now in 2012 we still have many more influential economists stating the same information and authoring similar texts in regard to 'natural capital’. These authors include Paul Hawken, Amory B. Lovins, and many more, and unfortunately we are seemingly in the same position as we were in 1973.

But this is somewhat wrong for a couple of reasons. First, Schumacher states in his text that, “[S]tatistics never prove anything.” This statement made by Schumacher is relatively mis-educated, because currently in our global society statistics provide key data that helps organizations prove that, for example the value of 'natural capital’ through the collection of data regarding the depletion rate of resources in comparison to there demand from society. So this statement made by Schumacher expresses the generation from which he was educated in and developed his theories in (a time when computers had VERY limited computing power).

Since the publication of Schumacher’s collection of essays a lot has changed in society for the better. One example of an area that is experiencing a change in thinking is technology and its relation to the efficiency of innovation in energy. In 1973 Schumacher predicted that by 2028 we would be experiencing an energy crisis the world has never witnessed before. The optimistic outlook in this bleak prediction is, that technology and its creators are beginning to realize their importance in innovating the energy sector to create less supply while providing for the increase in demand. Technology has now helped society exponentially update the energy sector with new and more efficient energy solutions each year while creating less demand for the non-renewable resources (oil, coal, natural gas) that we have been dependent on since the beginning of the industrial revolution.

With this understanding of the relation of Schumacher’s Small is Beautiful to today’s society we can now understand and realize that even though the concept of ‘natural capital’ has been around for tens of thousands of years the realization of the concept takes a lot more effort than predicted. So why not educate yourself on an emerging paradigm that holds its creation in the oldest civilizations known to current societies.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel

Adopting and Innovating Agroforestry

In agriculture what is more important, diversity or abundance?

Unfortunately this is a loaded question and the answer is mixed, but most often then not the answer is more diversity leads to better agricultural operations. So how does agroforestry play into this diversity concept? To begin we have to define some key terms that help us understand how agroforestry and diversity then create successful agriculture operations.

Innovation/Technology transfer: Is the process of integrating new and innovative technology into operations in a way that creates a more efficient and productive environment.

Diffusion of Innovation Paradigm: The act of innovative designs being incorporated into society as a whole.

Agroforestry: Is a collective name for land use systems and technologies in which woody perennial are deliberately combined on the same land management unit with hervaeous crops and/or animals, either in some form of spatial arrangement or temporal sequence.

Indigenous Knowledge Systems: is human experiences, organised and ordered into accumulated knowledge with the objective to utilise it to achieve quality of life and to create a livable environment for both human and other forms of life.

Endogenous Technology: Is an economic theory which argues that economic growth is generated from within a system as a direct result of internal processes and will lead to economic growth by means of the development of new forms of technology.

Now that we have defined the key terms listed above we may begin to discuss how agroforestry plays such a large role in the diversity level of agriculture. The dissertation from Professor Bradley Tyndall titled The Anatomy of Innovation Adoption: The Case of Successful Agroforestry in East Africa (1996) is a very interesting text regarding the successful integration of agroforestry into farming in East Africa to increase maximum sustainable yield and create diversity. The most interesting aspect of this dissertation is the effectiveness of the Grevillea tree in producing fuelwood for the farmers in a sustainable manner. The Grevillea tree is a Silver Oak tree that grows in Australia and has recently been introduced to Africa. The amazing aspect of the Grevillea tree is its rapid growth and cultivation rate, this makes it extremely cost effective to divert a portion of land to the cultivation of these Silver Oaks for use as fuelwood.

In East Africa the poverty rate is rampant with a majority of the population unable to sustainably heat and cook in their own homes. With farmers producing an abundance of certain crops the soil has begun to deteriorate in quality of nutrient. So farmers have begun to grow and cultivate the Grevillea tree as a percentage of their irrigated land, in so producing different nutrients for the soil and later harvesting the wood as fuelwood for heating and cooking. All this culminates in the practice of agroforestry and the creation of diversity from abundance, which creates a win-win for the farmers of East Africa that do not rely on the energy and fuel from the corrupt governments, and it creates a healthier soil that is more diversified in cultivation.

With the Grevillea tree being used solely for private utility this makes it a non-market good, as it is not commercially sold in the area. But being a non-market good still creates a high demand product. Currently 94 percent of farmers in East Africa grow and harvest the Silver Oaks for private use, seeing that they are cost effective, have rapid maturity phases, and consume at a very efficient rate, the percent of farmers may have grown to close to 100 percent in East Africa alone and even more around the world. The Grevillea tree should remain a non-market good, because it is extremely efficient towards farming techniques creating diversity in crops as well as creating sustainable operations for numerous families in rural East Africa.

This is just one example of a resource that may create diversity out of abundance, and in doing so increasing the efficiency and cost effectiveness of an agricultural operation.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel