Monday, January 4, 2010

Denmark's experience

I don't know whether this is left wing or right wing. It just makes such good sense to me. http://www.nytimes.com/2009/12/23/opinion/23friedman.html?_r=1
I discovered Thomas Freidman as a writer very recently. On the question of climate, resources, etc., I find him very impressive.

Here in Canada, becasue we have the tar sands and hydro electricity, there is really little incentive for any one to explore innovative technology other than going after these two. There is little incentive for us to conserve energy.

6 comments:

  1. Not sure if you read comments on your older articles so thought I would make my comment about an older article here on the newest one. You state in one article that Diane Francis is Conrad Black's wife - I don't think either Diane or Conrad would enjoy that marriage. Conrad's wife is Barbara Amiel. Diane Frances is a left wing economist not a right-wing writer as is
    Amiel.

    Lori Klassen

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  2. I find Thomas Friedman very over-rated, and highly recommend not wasting your time reading his books. I have read both of his books (skimmed the second as i was annoyed by his first, but wanted his take on the environment) and he is very good at creating anecdotal evidence, but he does not properly do his research in my opinion, and hence never provides the complete picture. For example, he implies in the article you attached, that Denmark must be a success given they made this transition, and yet their GDP grew 40% since 1990. Well the US has grown over 100% in that time, and even France has grown 100%, so he does not make a compelling case that it has not hurt their economy. Additionally, as i mentioned in an earlier blog, many of these European alternative energy companies are very close to bankruptcy, as their governments subsidized an industry that will be taken over by lower cost Asian product. I see this daily, as the Northern European companies have negative margins in an environment where the Chinese companies are seeing 30% profit margins in solar. So we shall see how Denmark is fairing in a few years with a domestic alternative energy space specifically.

    I think you and i still agree that a tax on carbon, replacing an income tax, is probably good. Unfortunately, it seems in Denmark, it was merely incremental and therefore further took power from the citizen, and gave it to a central government in my view. I will have to do more work, but that is how it appears.

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  3. Lori, Karl had already pointed out my mistake in a blog he has since erased. I could wonder about the enjoyment factor - has Barbara given Conrad as much joy as you think, or, on the other hand what could Diane do - but I don't think we should go there.

    Karl, I see you're ahead of me with respect to Thomas Freedman. I have not read his book, only some of his columns in the NY Times. I will read some more, and may end up agreeing with you.

    What I got out of the piece I referenced, was that applying a carbon tax has not been political suicide in Denmark. The article gives no indication of how high that tax was. It may have been incremental, as you suggest.

    But your comparison of Denmark and the USA in terms of GDP growth, raises several interesting questions. No doubt we have become accustomed to accepting a high growth in GDP as good, a modest growth in GDP as poorer, and a lack of growth in GDP as unacceptable. And this does make sense in a developing economy. But to my way of thinking, that makes no sense in an economy that is already develooped. In an economy already developed, a rise in GDP per person simply means that more resources are being used - instead of one trip to wpg in a year, there are two :) A different measure of wellbeing, other than one measuring how much we consume or spend, is needed. It has certainly been suggested by others (I don't have the link) that the happiness index in a number of European countries is significantly higher than it is in the USA, in spite of the fact that all their GDPs per person are lower.

    Furthermore, it will not surprise you to hear me say that GDP simply cannot perpetually go up. There has got to be a limit. Following that line of reasoning, Denmark is closer to finding the answer than the USA.

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  4. Denmark has extremely high taxes on their vehicles as well. A car has 180% tax on it. So therefore hurting only the middle class and poor by making cars unaffordable. Only the rich can afford a car. Of course people there find solutions like communal car ownership etc.
    Owning a car in Europe is not as important as owning one in North America where the less density in population means less public transportation.
    Lori

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  5. But Lori, isn't that all a good and necessary thing. I think that if the human species is to survive, we will need to find ways of living that will not entail ever greater consumption of this planet's scarce resources. I don't see how we can have ever increasing numbers of autos. The problem is most evident in the cities of this world. I was absolutely appalled at the traffic problems in Addis Ababa when we visited there 2.5 years ago. When we left there in 1980, it took 0.5 hr to drive across the city - never more. Now it could take 2 hours - not always, but often.

    How can a city government think that more autos is an inevitable component of progress? I thing the only logical reason a city fathers could think that is that the only existing worldwide template for prosperity includes more autos. Other than that, it just makes no sense. In the West we have matched increased numbers of autos with throughways and freeways and what not. In the global South this has not happened, but they keep adding autos, leading to more grid lock.

    As we make adjustments, the poor will always be hurt more than the rich - this is inevitable - but the response should not be that we subsidies autos to make them more affordable for the poor [which is an indirect effect of the auto bailouts in both the US and Canada]. As to how one should than help the poor, it is easier to identify what should not be done, than what should be done.

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  6. I believe you are still operating under the assumption of a theoretical problem.

    WIll evidence change your view? Certainly not the notion of commodity prices, as even futures contracts out many years to not portend a big scare in the earth's resources as stated in prior notes. As well the survival rate of humans increasing has not changed your view. I see your concern very similar as if someone 5000 years ago thought that 30,000 people was too many for the world to support. What metrics are you looking at that suggest we are reaching the earth's capacity, that are different than metrics in the past?

    Addis Ababa does not appear to be in the top 100 most densely populated cities in the World, with Munich, Taipei or San Jose all being more populous per population. I have been to all 3 multiple times, and none of them have traffic problems. Therefore, is it city planning or too many cars and people that are the problem? Given the wealth level, i would be shocked if somehow Addis Ababa had more cars per population than Munich, Taipei or San Jose.

    As i stated before, all the cries of "the sky is falling" by environmentalists in the past such as global cooling in the 60s/70s, the oil price spike in the 1970s being the result of too much consumption, and recently global warming, appear to be shown to be at worst wrong, and at best grossly exaggerating the timeline of troubles.

    A real problem is that governments are spending far too much, and we will at some point in the next 10-20 years have a global economic collapse killing millions. I remain very unconvinced that the "earth is dying", based on our current consumption rates.

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