Autechre: Nine

China Getting Serious About Carbon While US Dithers

In a Financial Times piece yesterday, Gordon Conway summarizes the findings of the task force working on the energy-related aspects of China's next 5 year plan:

The report is to be presented to CCICED in Beijing on Thursday and to Premier Wen Jiabao on Friday. The proposals are partly based on a set of energy demand scenarios produced by the Chinese Energy Research Institute. One adopts a continuation of current trends that will result in the production of nearly 13bn tonnes of CO2 per year by 2050. A second, produced as a “low-carbon scenario”, reduces emissions to nearly 9bn tonnes. A third, more radical “enhanced low-carbon” scenario would produce peak emissions around 2025, reducing to 5bn tonnes by 2050.

It looks like China is moving toward a very serious approach of "decoupling" economic growth from carbon emissions, led by the public rather than the private sector. It has broader carbon goals, like reducing carbon emissions per unit GDP 20-23% over 2010-2015, but also the specific goals of how to go there through energy efficiency and low-carbon energy sources:

The Chinese plan is to reduce energy consumption per unit of GDP by 75-85 per cent by 2050. It will be achieved through industrial restructuring and efficiency gains in every economic sector, including new low-carbon cities that avoid suburban sprawl and prioritise public transport.

and

The energy mix will progressively change. In the medium term there will be an increase in renewable energy and nuclear power, with 50 per cent of generating capacity coming from low-carbon sources by 2030. By 2050 all new power sources will be low carbon.

Of course it's still not clear which approach Premier Jiabao will take, and there's a big difference between 13 billion tons, almost twice their current emissions, and 5 billion tons, significantly below current US and Chinese emissions. Still, some snippets in the article from Conway, who worked on the report, suggest that they are leaning towards more ambitious approaches because they understand the economic value of decarbonization.

He says that China worries about being locked into outmoded industrial structures in a low-carbon world (perhaps also about being hit by carbon tariffs from developed countries). Furthermore, they recognize that clean energy technologies will drive growth in the first half of the 21st century, as Tom Friedman writes over and over and over albeit correctly. China's government is obsessed with growth because that's what maintains stability under their authoritarian regime, and they may favor a crash investment in decarbonization as a means of creating growth.

What significance does this have for the US? It bodes very well for international climate negotiations, yet it puts pressure on us to stop holding back. We can't point the finger at the growing developing nations any more, as the Obama administration continues to do. Even though China is not responsible for the historical emissions causing current warming, they're taking aggressive steps to slow their emissions growth because they are worried about climate change and understand the economic potential of clean energy. The burden is on the US to speed up our emissions reductions and get more ambitious as the EU has. If Copenhagen fails, it will now be because of the US, not China.

Secondly, it shows that a government-planned and government-led program on carbon emissions may be the best approach to tackle such an urgent problem as climate change. We'll have to wait and see if their plan works. But, as our mobilization for World War II demonstrated, a Keynesian and/or socialist approach of public investment and public ownership of parts of the energy sector can create the leverage to exert fast transformations in an economy.

That's not to say that market approaches to pollution don't work. Cap-and-trade worked in the 90's in reducing acid rain-causing SO2 emissions. The ETS, or European Trading System, has helped the EU be on track to hit its Kyoto targets (see Joe Romm's Climate Progress post here). However, market approaches can easily be filled with loopholes that limit their effect, as the Waxman-Markey bill that passed out of the House this summer shows. A direct investment approach such as China's seems better suited to rapid transformation.

The planet needs a more aggressive approach from the United States government, and so does our moribund economy.

The Berlin Wall and the Palestine Wall

Yesterday was the 20th anniversary of the fall of the Berlin Wall. The Berlin Wall divided a nation. It was a tangible manifestation of the global split between capitalism and communism that nearly led to a nuclear war. We should celebrate its fall along with the Germans, and be thankful that our foolishness as well as that of the Soviet Union didn't kill us all.

Francis Fukuyama said the fall of Communism marked the "end of history." He was wrong. Violent symbols of conflict like the Berlin Wall still exist, in tangible as well as symbolic form.

Israel has built a similar wall through the West Bank. Along with settlements, it is part of Israel's colonial project to annex parts of the West Bank. As Robert Naiman notes in a great post on the Just Foreign Policy blog, 85% of the wall lies within the West Bank and outside the internationally accepted borders of Israel. It cuts off 9.5% of the West Bank and 35,000 Palestinians from the rest of their territory. The wall has been condemned by the World Court and even Israel's High Court.

Friends of Freedom and Justice Binin, a Palestinian activist group in the town of Bilin along the wall, excellently documents the confiscation and repression that the wall engenders on their website. Yesterday a number of Biliners marked the anniversary of the fall of the Berlin Wall by protesting at the Israeli wall and actually ripping down a part of it as Berliners did to theirs. Check out the video below. As you can see near the end, the Israelis respond rather violently.

Definitely read the whole of Naiman's post. He notes that the US and EU have done nothing to stop the wall as we provide massive foreign aid to Israel. Commendable calls on Israel to stop building new settlements on Palestinian territory have not been backed up with action. Naiman notes:

We've reached this point in large measure because of the unwillingness of the Obama Administration to put real pressure on the Israeli government to implement past agreements - in particular, to implement a freeze on the expansion of Israeli settlements in the West Bank. When the first President Bush demanded a settlement freeze, he backed up his demand with real pressure - holding up loan guarantees to Israel. The Obama Administration never indicated that there was any "or else" associated with its demand for a settlement freeze, leading the Netanyahu government to conclude that it could just wait the Obama Administration out - a conclusion that appears to have been borne out by events.

In other news on Obama's failure to back up rhetoric with real change in our foreign policy: the New York Times reports that the Mahmoud Abbas is threatening to resign as head of the Palestinian Authority. He believes, I think correctly, that the peace process is completely untenable in the wake of the Obama administration "backpedaling" on its call on Israel to halt new settlement construction in Palestinian territory. Doesn't sound like change to me, Mr. Obama.

Note: Just Foreign Policy does some great work on pushing our government for a more peaceful foreign policy that is fairer to the people of the Global South. Check out their website and sign up for their action list. For subscribers they send out a daily compilation of pertinent news stories on American foreign policy; it's a great way to stay in the loop.

Obama and the Mayoral Race in NYC

If you haven't heard, the mayoral race in NYC ended up being extremely close with independent incumbent Michael Bloomberg, the billionaire, defeating Democrat William C. Thompson Jr. by just 51-46. The mainstream media reported widely on how this was a surprise, because Bloomberg had a good approval rating and spent $90 million on the campaign. Most reported on how that absurdly high level of campaign spending and his repeal of the term limits law to stay in power pushed a lot of voters over to Thompson. Very few, however, reported on how the national Democratic party failed to get behind Thompson. That refusal to get their hands dirty in the NYC race demonstrates a lot about the centrist and even right economic beliefs of Obama and the national Democratic leadership.

Glenn Greenwald wrote a great post on his blog (btw, great blog if you're into civil liberties, antiwar, and media issues) the other day on the tiff between Rep. Anthony Weiner and the administration on this matter. Weiner publicly criticized the President for spending resources to support Gov. Corzine in NJ but not doing the same for Thompson. The Politico reporter allowed a White House aide to respond anonymously, childishly taunting Weiner for deciding not to run for mayor himself.

Glenn focused on so many mainstream media outlets allow Obama aides to comment anonymously. Frequently they use that anonymity to bash those on the left in his own party who criticize him for being such a centrist. He also notes the irony of American media criticizing left-wing leaders in Latin America who change term limits laws to extend their terms and failing to do so in the case of right-winger Uribe in Colombia and Bloomberg.

I think it also says a lot about the Obama administration's stance on political economy. The refusal to campaign for Thompson suggests some level of comfort with Bloomberg on the part of Obama. Bloomberg is a social liberal and is great on environmental issues. However, on economic issues, which a mayor has much more control over than social issues, he is quite conservative. As this Nation article states, Bloomberg opposes a living wage ordinance, favors regressive taxes like the sales tax instead over the progressive income tax, and consistenly favors big developers and big finance. He presides over a higher than average unemployment level while manufacturing has sunk to just 2% of the city's economy. The Nation article predicted a Thompson loss because of his failure to present an alternative economic vision for the city, which I think is right.

The Working Families party, which does have that vision, endorsed Thompson, which suggests that he would be far better on these issues, even if he didn't make them the centerpiece of his campaign. What if Obama had come to NYC and campaigned briefly for Thompson every time he was in the area to do so for Corzine? New Yorkers love Obama; he might have allowed Thompson to close the gap.

The fact that he didn't suggests that Bloomberg's economic policies are just fine with him. It reinforces that Obama is a centrist, not a progressive. He espouses a mostly Keynesian view of debt-funded public investment during recessions with some programs to protect the poor and middle classes and the environment (typically weak ones), but has no intention of reducing the massive socio-economic gap in our country between the super-rich and everyone else.

Bloomberg is a symbol of American finance, as that's where he made his fortune. The Democrats' comfort with him is a symptom of their closeness to Wall Street. Let's not forget that the mildly liberal Corzine, whom Obama backed strongly, is a Goldman Sachs alum. Those of us who want a fair economy need to stop supporting the Democrats without strings attached, because it's not getting us very far.

LTJ Bukem

I've never blogged about music before, but I love music, ergo I will henceforth. Recently I've been really getting into drum'n'bass music. If you haven't heard of it, it's a form of electronic music with super fast and heavy beats and pretty spare bass and keyboards. I love dem BPMs! Ha my girlfriend hates when I play it because it makes her anxious, but I love the energy in this music.

LTJ Bukem is a great producer from the UK who's huge in d'n'b. To the speedy beats and heavy bass he adds some great 70's jazz fusionish electric keyboards. Lots of BPMs, but really spacey at the same time. Check the song out below, it's one of his early tunes from the early 90's.

Krugman: We need more stimulus!

In the 3rd quarter of this year, our economy grew at an annualized rate of 3.5%. Good news?: yes. Is everything all better?: definitely not. A lot of economists are predicting a so-called "jobless recovery." On top of that, it's entirely possible that reduced demand from unemployment and a continuing credit crunch might drag our economy back down. Our government has a lot more work to do to fix the economy.

Nobel laureate Paul Krugman has been calling for more and more effective (ie. less tax cuts, more direct spending) stimulus in his NY Times column for a long time. His column today continues that motif and lays out an excellent case for more economic stimulus.

He writes that the growth numbers show that the stimulus is working. That spending will continue to go out over the next year and a half. However, the rate at which it is going out, and thus its effect on growth, is currently peaking, meaning that the stimulus won't continue to increase growth. If that rate of growth is going to continue, private spending will need to increase as the stimulus tapers off by the end of 2010. Krugman doesn't see that happening.

On top of that, even if growth continues, it will take an unacceptably long time to put a dent in unemployment. Krugman points out that our 3.5% annualized GDP growth rate in the 3rd quarter is roughly the same as annual growth during the Clinton administration, very interesting. If job creation proceeds as it did at that growth rate in the 90's, it would take a decade to get to "something like full employment."

So it's clear that we need more stimulus, despite the huge deficit resulting from Bush-era tax cuts for the wealthy, the creation of Medicare Part D, and immoral and unnecessary wars. The deficit hawks on the right and left worry that our debt-fueled stimulus will present a big debt burden in the form of higher taxes to the next generation of Americans. As Krugman writes, that generation, my generation, is feeling unemployment the most (yes I am one of them). Krugman's colleague Bob Herbert at the Times had a great column on that subject on Saturday. High unemployment will be a huge drag on our generation for an extended period of time, not just directly through unemployment but also through unemployment hampering growth.

That argument alone trumps the deficit hawks' weak arguments. However, he adds something I hadn't thought of:

Even the claim that we’ll have to pay for stimulus spending now with higher taxes later is mostly wrong. Spending more on recovery will lead to a stronger economy, both now and in the future — and a stronger economy means more government revenue. Stimulus spending probably doesn’t pay for itself, but its true cost, even in a narrow fiscal sense, is only a fraction of the headline number.

It almost echoes the supply-side argument of the Reganites except in reverse. And except that it actually makes sense.

So will the Obama administration and the Democrats in Congress push for more deficit spending to fuel stronger re-growth in our economy? Right now they're patting themselves on the back for how the stimulus worked, and they should. However, they need to move forward on job creation, and currently it doesn't look they will.

In the meantime, they seem perfectly willing to borrow money to continue a war in Afghanistan. Sounds like they got their priorities straight, huh?

Paying for health care reform: Why it matters big time

As Bill Moyers said, health care reform is a means to social justice. Getting almost universal coverage and bringing down costs for working families is crucial not just because health care is a human right, but also because the middle class livelihood is becoming untenable for more and more families in America. The gap between the wealthy and everyone else has grown by leaps and bounds since the Reagan years. Reducing what working families pay for health care makes the middle class accessible to more people and makes it more secure for those already there.

Back in August, I laid out the three fundamental goals of health care reform that we need to keep our eye on. But there's also principles for going about health care reform that are important as well. Unlike the goals, these are more subjective and vary a lot from person to person. An example of a health reform principle: a lot of pundits from the center-left and the right have been crowing about increasing competition, a panacea for these free marketeers. Competition doesn't necessarily reduce costs or expand coverage (it actually expands them, but that's not my point here), so it doesn't have anything to do with the goals of reform, but it's how these people want to go about reform. The principles of reform are different from the goals in that they mostly deal with how to reach those goals.

One important principle for those of us who see health care as a means to social justice is paying for expanding health care coverage in a progressive way. This means that the funding for health care reform ensures that reform overall transfers wealth downward. Expanding coverage and lowering cost will benefit working families, but if we pay for that by taxing working families then it might not benefit them overall economically.

The mandate-and-subsidies approach that the Congressional Democrats have taken to health care reform won't reduce health costs very much as I've written earlier. Nothing will change for workers who get coverage from their employers, and the un-insured will have to pay more than they did before because of the individual mandate. As such, if Congress chooses to pay for the subsidies by taxing the middle class, it may actually increase overall costs for working class families. Given that the idea behind goal #2 of reform is to make health care less of a cost burden on working families, the principle of paying for reform progressively becomes elevated to a goal and a must under the mandate-and-subsidies approach.

House Democrats proposed to pay for their bill, HR 3200, by creating a surtax on the wealthy. This is the preferred approach. The wealthy have benefited so much from the Bush tax cut and our general economic policy of the last 30 years, so it's only just that they pay to cover the un-insured. The House has also discussed taxing sugary drinks as well. Although this is a regressive tax, I would find it acceptable if paired with a surtax on the wealthy because it would improve our nation's health and lower health care costs overall.

President Obama proposed to pay for reform by limiting tax deductions for the wealthy. This would also be a satisfactory approach because it would rely on funding coming from the rich, although it seems unlikely to be included in the final health care bill.

In the Senate only the Finance Committee has the jurisdiction over taxes. The bill currently in that committee, proposed by its chairman Max Baucus, would fund the subsidies by taxing so-called "Cadillac" health care benefits over a certain amount at 35%. The NY Times ran a great article today that this tax would hit middle class union workers who negotiated for better health benefits instead of higher wages, small businesses that typically have more expensive plans, and people who live in areas with high health care costs like California and Massachusetts, despite being designed to tax the benefits of the wealthy. The threshold is indexed to inflation, so over time most employer-based coverage would be hit by the tax. The Baucus bill would also place $88 billion in taxes on insurance companies, drug companies, labs, and device makers. As Maggie Mahar writes on her excellent blog, most people think these taxes will simply be passed on to consumers in higher premiums. On top of those taxes on working families, the bill would limit tax deductions for medical expenses. The committee amended that approach because it would hit the elderly very hard, but it still remains in the bill for everyone else, and it will mostly hit the middle class as well.

Unfortunately the Baucus bill seems to be the most likely to win over the conservative and moderate Democrats needed to pass any bill. So there's a decent chance that health care reform will be funded in large part on the backs of the working families that it's supposed to help.

Because Congress's approach does little to reduce overall health care costs, it has to be funded by taxes on the wealthy to truly benefit most Americans. Our progressive members of Congress need to stand firm against the Baucus bill and any other plan that would tax the middle class to pay for itself, especially if like the Baucus bill it does not contain a public option to hold down costs. It would be better to put off reform than make the middle class pay even more.

Note: How to pay for reform would be important in a single-payer bill as well, but it would be a principle instead of a goal. That's because single-payer would save so much in health care costs that even if we taxed everybody at a flat rate to pay for it, all working class families would be better off than they are now. Obviously those of us who want a more just society would want the tax to fund single-payer to be progressive, but it wouldn't be as necessary as with the mandate-and-subsidies approach.

HR 676 would pay for itself partially through flat payroll taxes on employees, but also a payroll tax on employers, a 1/3 of 1% stock transaction tax, a surtax on the wealthy, and closing corporate tax loopholes. It satisfies my principle and all 3 health reform goals, which is why Congressional leaders should push it instead any mandate-and-subsidies bill.