“Think Global, Act Local,” – Anonymous.

“Re-localization is a critical step in moving toward sustainability. The “global economy” is one of the culprits of our present mess,” – John Ehrenfeld.

“Sustainability is the possibility that human and other life will flourish on the planet forever,” – John Ehrenfeld.

Ehrenfeld, author of “Sustainability by Design,” here,   lectures at Marlboro College in its MBA in Managing for Sustainability.

In “Italy’s accordion Industry: Tiny and Thriving“, NPR’s Morning Edition, on 1/9/12, discussed globalization in the context of the accordion industry in Italy. The piece began: “More than 70% of Italy’s gross domestic product comes from small businesses – and they’re not growing. Economists are worried that this will make it impossible for Italy to climb out of it’s massive $2.6 Trillion debt.”It concluded “But until more small companies [coalesce into giants like Prada] things in … Italy will stay out of tune with the global eonomy.”

But the piece also reported that the Italian accordion makers focus on quality. They don’t make many instruments – make about 20% of what they made in their heyday, one company makes 180 to 200 per month, but they make the Ferraris of the accordion world.  More accordions are made today are by China, Inc., but those are cheap, low quality things.  The Italian instruments sell for up to $50,000 each, to professional musicians such as Bjork  and “The Decemberists.”

The story also asks about the long term consequences of 70% of a nation’s GDP coming from small businesses?

But it doesn’t ask:

• What is the standard of living and quality of life for craftspeople in Italy? Are people happy? Fulfilled?
• What is the wage and income differential between the workers and the owners? Between the manufacturers and the suppliers?
• How interconnected are the local economies? Are they using locally sourced materials? Is the economy local?  How much of the economy is local?
• Aside from Italy’s debt, is their economy sustainable? Another way of asking this is “Could Italy service the debt with a 30 or 50 year payment schedule, with interest set at 2.5% or 3.5%? According to the CIA Factbook, (here) Italy has a population of about 61 million people. While NPR puts the Italian debt at $2.6 Trillion, according to CNN Money, (here) Italy’s debt is about $262 Billion. That’s a per capita debt load of about $4300, according to CNN Money, and $41,995. $4,300 doesn’t seem too bad. Even $42,000 isn’t too bad, over a person’s lifetime. In the United States, $43,000 buys one or two years of college at the undergraduate level.

As noted, the piece ended with “But until more small companies [coalesce into giants like Prada] things in … Italy will stay out of tune with the global eonomy.”  This leads me to my final unanswered questions:

Is it a bad thing for Italy to be out of tune with the global economy? and

Is Italy really out of tune with the global economy?

The first two things that come to my mind when I think of “The Global Economy” are China, Inc. / WalMart, and oil. (I see China, Inc. and WalMart as one thing, but that’s another story). I see environmental degredation, poverty of mind, body, and spirit, and working conditions that equate to slavery.Personally, I’d rather be making accordions for a living wage in Italy, where I have a chance to open my own shop, than in China where conditions are equivalent to slavery.

Bjork, a singer from Reykjavík, Iceland, and the Decemberists, from Portland, Oregon, are buying Italian accordions. They would rather spend $50,000 on accordions from Italy than $399 on accordions from China.  This suggests that the Italian accordion makers are, in fact, in the global economy, albeit on a different scale of that of the Chinese and one that economists don’t understand.

This brings me to the olive trees pictured above. Olive trees take a long time to mature – 35 to 150 years. But they live, thrive, and produce olives – for a very long time - hundreds of years, thousands of years with luck and proper cultivation. (Achaia Olive Groves).

And just as I would rather be making accordions that sell for $50,000 than those that sell for $399, I would rather sell 200 units for $50,000 each than 25,063 units for $399.

Tweet  “The United States,” according to Robert Barro, who teaches economics at Harvard and is a “fellow” at the Hoover Institution, “is in the third year of a grand experiment by the Obama administration.” This is inaccurate. Obama is the President, but the US Constitution provides a framework in which power is divided into three branches of the Federal government, and the power of the each of the branches is checked and balanced by the others, and “all power not expressly granted to the federal government is held by the states and the citizens. It would be more accurate to say that the United States is in the third year of a grand experiment by the Obama administration, the Congress, the Judiciary, the Republican Party, various special interests, and the citizens.

Barro published this flawed analysis in “How to Really Save the Economy, “an op-ed in the New York Times, published Sept. 10, 2011.

“How is the experiment going?” Barro asks rhetorically. “Not well,” he answers.

How could it? On January 16, 2009, a week before the Inauguration, Rush Limbaugh, one of the leaders of the right wing of the United States said, “I hope Obama fails.” (The text is on Limbaugh’s site. An audio is on You Tube.) As I wrote, on Popular Logistics, here, a hope that the President fails is hope that the United States fails.

As was reported, here, in the Washington Post on August 6, 2011, and here on Popular Logistics, on August 8, 2011, John Boehner, Eric Cantor, Paul Ryan, and the “Young Guns,” their Republican comrades in the House of Representatives, PLANNED as far back as January, 2009 to use the debt ceiling to create a political crisis. The Republicans have been trying to actualize Mr. Limbaugh’s hopes.

Barro is a professor of neoclassical economics, and a fellow of the Hoover Institution. What he doesn’t understand, and what President Herbert Hoover didn’t understand, is that under economic conditions such as we see today, while businesses and government are able to create jobs, business owners are risk averse, and won’t risk capital.  The government MUST create jobs, because businesses won’t.  Everyone who has a job and a 10 year old car, and is hesitant with regards to buying a new car, understands this.  John Maynard Keynes understood this. Franklin Delano Roosevelt understood this.  Herbert Hoover didn’t – which is why he lost to Mr. Roosevelt in 1932, and why, 36 years later, President Nixon said “We are all Keynesians now.”  (Note that Mr. Nixon has been called many things. However, “Liberal” is not one of them.)

So how do we really save the economy? See Part Deux.

One of the best kept secrets in New York City is the existence of a 40 kilowatt (KW) photovoltaic solar array on the Whitehall Street terminal of the Staten Island Ferry, pictured above, and first covered in Popular Logistics  in 2007, here.

There are 90,000 public schools in the United States. Suppose we were to install a 40 KW solar energy system on each of them. PV solar modules require very little maintenance over their 35 to 45 year life expectancy. At a cost of $5,000 per kilowatt of nameplate capacity, each of these 90,000 systems would cost $200,000. This 3.6 gigawatts of distributed daylight-only capacity would cost about $14.4 billion. The total costs would probably be less because PV Solar is subject to economic forces like Moore’s Law.

It seems to make sense to use taxpayer monies to finance these systems; taxpayer monies pay the electric bills for public schools and other public infrastructure.

Every public school in the country would have a power plant that generates power, during the day, with no fuel cost and no waste. And with no associated mining, processing, transportation, fuel costs and no waste management costs. At $5.00 per watt, or $5 billion per gigawatt, the capital costs are lower than the costs of new nuclear and significantly lower than the costs of coal with carbon sequestration, with none of the risks or hazards associated with the systems: no arsenic, mercury, lead, thorium, uranium, zinc, or carbon.

But what are the other implications? What would it give us? Again. see Part Deux

Green Living Festival

Tweet I am presenting “Beyond Fuel: From Consuming Natural Resources to Harnessing Natural Processes,” a discussion of the hidden costs, or “economic externalities,” of nuclear power, coal, and oil, and the non-obvious benefits of wind, solar, marine hydro and efficiency at the Space Coast Green Living Festival, Cocoa Beach, Florida, Sept 17, 2011.

The festival  is sponsored by the Cocoa Beach Surfrider Foundation and the Sierra Club Turtle Coast Group. It will be at the Cocoa Beach Courtyard by Marriott.

Cocoa Beach is about 60 miles east of Orlando and 120 miles north of West Palm Beach. It is easily accessible by air, land, sea and space.

This will be similar to the presentation I recently gave to the NYC Business Sustainability Minded Action Round Table (Click here or here).

It is during hurricane season. Hopefully life will not be imitating art as portrayed in Vapor Trails, by Roger Saillant and Bob Siegel, and the conference will not be cut short by a hurricane of Katrina-like proportions.

   Tweet I thought the market would crash in the wake of the Earthquake / Tsunami / Nuclear Meltdowns at Fukushima. It didn’t. However, something much less serious may be bringing the market – and the economy – to it’s knees. Politics. The Voice of America reported here that Standard & Poors downgraded US debt from AAA to AA+. Click here for the S&P’s Special Report and here for the full report.

S&P’s analysts wrote:

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

It is clear that the emphasis on cutting government spending, eliminating government jobs, eliminating benefits to unemployed citizens, rather than raising revenues and developing infrastructure is not in the long term or short term interests of the United States. As the 512 point drop in the Dow Jones Average, and the downgrade of US debt indicate, Republicans and the Tea Party should be careful for what they wish for – they just might get it.

In the discussions over the debt ceiling, John Boehner said something to the effect that if a family or a business is borrowing too much it simply must tighten it’s belt.

This may be true. It also may be true that a family has tightened it’s belts so much that there is no room left to cut. What do you cut when you have to choose between food and medications? Sure you can quit smoking and stop eating meat – you’ll save money and be healthier – but what if you’ve already quit smoking, quit eating meat and now you’re down to one meal a day, and it’s either dog food and stone soup? What do you do when it’s food or rent? Or food or medication?

And if a family needs more income one solution to go out and work. The Republicans want to shrink government – are shrinking government – which means firing government workers – teachers, FAA workers, construction workers. This is the equivalent of quitting your job and telling your husband / wife and kids to stay home and quit school because you didn’t get a raise and can’t afford pencils and notebooks.

In strict economic terms it’s bad on the micro-economic level for the people who get fired, and bad on the macro-economic level for everyone.

John Boehner, Eric Cantor, and other members of the Tea and Republican parties may label themselves “Job Creators,” but this is like Nicole Polizzi, who plays “Snookie” on the MTV program “Jersey Shore,” calling herself a “serious actor.” She may be effective as “Snookie,” but I don’t think she’d be effective as Juliet. Boehner, Cantor, and Ms. Polizzi can call themselves whatever they want. Reality may differ.  Steve Benen, writing in Washington Monthly, here, noted:

Fed Chairman Ben Bernanke projects 200,000 job losses; Moody’s Analytics chief economist Mark Zandi puts the number at 700,000 job losses; the Economic Policy Institute projects job losses of just over 800,000; and data from the Center for American Progress found the proposal would force roughly 975,000 Americans from their jobs. Goldman Sachs didn’t offer specific numbers on job losses, but it believes the GOP plan would cost us up to 2% of GDP, pushing the U.S. economy closer to a recession.

All of these projects have one thing in common: experts agree that the Republican plan would make the economy and unemployment much worse. GOP leaders don’t care, but consensus is hard to avoid.

Boehner seems to have forgotten, however, that the government is not a business. If it is, then it’s a monopoly.  There is, after all only one Federal government. It can simply raise prices – or taxes – “The price we pay for civilization,” according to Justice Oliver Wendell Holmes. President Bush cut $100 Billion per year in taxes from the wealthiest Americans, like Paris Hilton, Mike Tyson, Warren Buffett, other business leaders, athletes, and celebrities.  I have great respect for Ms. Hilton, Mr. Tyson, and Mr. Buffett.  But I don’t understand why I should subsidize their lifestyles or why they should not pay their fair share of taxes.  Uncut those taxes and we would see $1 trillion in 10 years.

Mr. Buffett has noted, several times, including the Daily Finance, that he pays taxes at a lower rate than his secretary. “I think there should be tax increases for people in the high income levels,”Buffett, the “Oracle of Omaha,” said.

The economy is in bad shape. Unemployment is over 9%. As Paul Krugman notes, in “The Wrong Worries,” the New York Times, people in Washington are “Obsessing over deficits while the economy is crumbling.” Krugman continues:

In June, 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number went down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2.

These may sound like dry statistics, but they reflect a truly terrible reality. No only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of very-long-term – maybe permanent – unemployment. Among other things, the rise in long-term unemployment will reduce future government revenues, so we’re not even acting sensibly in purely fiscal terms. But, more important, it’s a human catastrophe.

And why should we be surprised at this catastrophe? Where was growth supposed to come from? Consumers, still burdened by the debt that they ran up during the housing bubble, aren’t ready to spend. Businesses see no reason to expand given the lack of consumer demand. And thanks to that deficit obsession, government, which could and should be supporting the economy in its time of need, has been pulling back.

I agree with Krugman, as would John Maynard Keynes and Franklin Delano Roosevelt. We need to invest in infrastructure and education, to plan for the long term.

For example, investing in a clean, renewable, sustainable energy infrastructure. Bruce Katz, at the Brookings Institution, says the transformation to a clean, renewable energy infrastructure would create 2.7 million jobs (here). That would lower unemployment from 9.1% to 7.3%. It would also stimulate housing and other sectors – further reducing the unemployment rate.  And the power would be clean – no arsenic, lead, mercury, uranium, zinc, or carbon dioxide. It would be good for the environment as well as the economy.  In 1961 we put in motion a plan to send Americans to the moon, and brought them back safely in 10 years. We met our goal. We can change the energy paradigm for $1.2 Trillion and do it within 25 years.

On a side note, the simplest, if least elegant and least poetic definition of “managing for sustainability” is “long term thinking.” Other definitions include

John Ehrenfeld’s “flourishing forever.”

The Brundlandt Commission’s “meeting the needs of the present without jeopardizing the abilities of future generations to meet their needs.”

My “Harnessing natural processes rather than consuming natural resources.”

But how badly did the stock market crash?  The Dow Jones Industrial Average dropped 512 points on 8/4/11. It is 1434 points off the recent high of 12,810, reached on April 29, 2011. It is also 2616 points below the peak of the high of 14060 reached on Oct. 5, 2007. But, the index is 4818 points above the low of 6627 reached on May 9, 2009.  The stimulus President Obama put is place may not have been adequate, but the economy is marginally stronger.

In the 521 day slide from 10/5/07 to 3/9/9 the Dow dropped by 53%. In the 98 day slide from April 29 to August 5 the Dow dropped by 11%.

This graph is constructed from the prices of American Express, Goldman Sachs, and Wells Fargo, as indicated on the Internet. American Express is 10 points and 26.7% above the lowest it’s been in the past 52 weeks. 6 points below the high. Goldman is 2.55% above this point, and Wells Fargo is 9.51% above it. Similarly Berkshire Hathaway, managed by Warren Buffett, is about 19.8% below the high, and less than 2% above its 52 week low point.

The same holds for various technology stocks. Apple is 140 points above the low, 30 points below the high, and, perhaps, at the lowest it will be for the next 12 months, or 12 years. Google, a technology saavy data company, is about 65% between the low and high. IBM is close to the highest it’s been, Intel is in the middle, Microsoft is close to the low, Research in Motion, the Canadian based company that makes and programs Blackberries, is basically at the lowest it’s been in the last 12 months. It will either recover or fade into oblivion.

Adding in the Earnings per Share data and Price Earnings Ratios and looking at other companies believed to be well managed reinforces these conclusions.

(Disclosure: If I had cash I would invest in some of these companies.)

The question of whether the market will go up is really whether the economy will recover. Goldman will thrive regardless of the state of the economy. It proved that by selling credit default swaps and instruments betting on foreclosures. American Express will profit if people use their credit cards. Wells Fargo will thrive if people have jobs, get paid, save money, and pay off their debts. Apple will sell computers, phones, tablets, music players, music, video, software, and services – as long as people can afford to buy them. AboveNet sells telecommunications services with a cool fiber network that spans the globe. It’s success is dependent on a strong global economy. Brocade makes really cool network gizmos. CommVault writes software to backup and restore data.  Google, as noted, sells advertising. It is more like ABC, CBS, and NBC, rolled into one, in the days before cable. IBM, Intel, Microsoft are household names. Paetec, like Abovenet, is a small telecommunications company. They have good products and good service.

And as noted above, Research in Motion will either recover or fade. In that it is, while Canadian, Research in Motion is a metaphor for the US economy. Given the first ever downgrade by a ratings agency of US bonds, it looks like fade is a real possibility. We can tell ourselves that we’re riding a magic carpet, but as Arthur C. Clarke said, in Profiles of the Future, “Any sufficiently advanced technology is indistinguishable from magic.”

As any freshman economics student should know, the Gross Domestic Product, GDP, is a measure of spending, derived from the Gross National Product, GNP, defined by Simon Kuznets during the Depression (click here for econlib).  GDP is, at best, an indirect measure of wealth.  The Genuine Progress Indicator, GPI, defined by Think Progress in 1995, measures genuine progress.

Consider the case of Joeseph Q. Bloggs, MBA, J.D., Esq., an investment banker. Bloggs has a J.D. from Harvard or Yale, an undergrad degree from Princeton, Dartmouth, Cornell, or another ivy league school, and a high school diploma from the Citadel or an acclaimed private school. As with his colleagues on Wall Street, he is self-proclaimed “Master of the Universe.” He leaves work one night after negotiating a highly leveraged hostile takeover, buys a Lamborghini, and rents the time of an expensive “friend.”  He buys her an expensive outfit, and takes her to dinner at an the Four Seasons, or a similar expensive restaurant.  He has a few drinks before dinner, a bottle of wine with dinner, and a glass or two of port after dinner.  On the way to the Hamptons, he crashes his Lamborghini into a Ferrari driven by another lawyer / banker / actor / “Master of the Universe.”

Both cars are totaled. Bloggs’ passenger, the other driver, his or her passenger, are killed.  Bloggs survives.

He is met in the hospital by a highly trained team of medical professionals, paparazzi, a cop, lawyers for his soon-to-be-ex-wife, and his lawyer.

Bloggs has increased GDP. Big time. His car had 40 miles on the odometer. He spent $210,000 to go 40 miles – that’s $5,250 per mile – not counting the cost of gasoline.  The GPI, however, is diminished.  The highest potential of the resources transformed into the cars, clothes, and jewelry were not realized.  The highest potential of the recently deceased people were not realized. Bloggs highest potential is not realized in paying large legal fees in a divorce and in fighting charges of drunk driving and vehicular homicide.

While this example, you might say, is absurd, there are analogous real world events. Consider the antics of Brittney Spears and Lindsay Lohan. When they get into trouble they increase GDP.  This does not do anything for GPI.

The Deepwater Horizon disaster of April to August, 2010, the Upper Big Branch disaster of April, 2010, the Kingston Tennessee coal ash flood of December, 2008, the Fukushima nuclear disaster of March, 2011, the developing crisis at the Fort Calhoun and Cooper nuclear plants in Nebraska (here) do not realize the highest potential of the resources used in extracting various resources or cleaning up the messes, when possible. Consider the Purgen plant, a proposed coal with sequestration facility in Linden, NJ. (discussed here on Popular Logistics on Earth Day, 2011). They lower GPI. Consider Pete Townshend’s smashing a guitar at every concert.  These are Pareto inefficient. These are economic “bads” not economic goods. But they increase the GDP.

For a more detailed description of GPI, click here for GPI Atlantic, here for Pembina, here for Investopia, here for Bhoomi, or here for my earlier post.

Arguably, Mr. Kuznets has done more for society than Ms. Lohan and Ms. Spears. However, Ms. Lohan and Ms. Spears have done more to increase GDP. In general, when given the choice between two options, the more expensive one adds more to GDP. A less expensive one might add the same or more to GPI.  What’s bad on a micro scale for an individual might be good on a macro scale for GDP.  While the GDP measures spending, i.e. consumption and waste, GPI measures investment and, as noted above, the development of genuine progress.

in black and white, because some ideas are.

Tweet    During the Great Depression the Classical Economists said “Unemployment is voluntary. Business owners will not voluntarily keep the means of production idle.”  While he had been a student of classical economics, John Maynard Keynes observed that the data didn’t fit the theory. And, he reasoned, if the observable data don’t fit the theory, the theory must be flawed.   “Business owners are risk averse,” he saw. “A employee needs to be productive, needs to make widgets. But if no one is buying widgets, then contrary to classical theory, factory owners will fire workers and keep capital idle rather than hire workers to create excess inventory. That’s just common sense.”

We see this today.

When unemployment was low, for example in the United States during the tech boom of the 1990′s, people acted on the premise that “There is so much work that we could hire and good people and train them.”  Today hiring managers seem to be acting on the premise that “There are so many people looking for work that they can wait for the perfect candidate.” Perfection being unattainable, jobs go unfilled. This is ok, in this context, because

• “Budgets are tight.”
• “The future is uncertain.”
• “Money not spent on a new hire can be saved or used to pay down debt.”

Keynes also observed that the government is an employer that does not need to worry about going out of business. Building infrastructure is government employment that is investment for the future. These observations are as valid today as they were 80 years ago.

Back to the problem of today’s unemployment, we also see hiring managers faced with dozens, perhaps hundreds, of qualified applicants, including many who are out of work, and many who are “over-qualified.”  Suppose a hiring manager has 100 resumes. Each has two pages and a one-page cover letter.  At one minute per page, it would take 300 minutes – 5 hours – to read the resumes and cover letters.  Assuming half are qualified applicants, and the hiring managers throws darts, he or she has a 50/50 chance of finding someone good. While no one with integrity would do that; HR must read resumes and talk to people on the phone trying to send the hiring managers a reasonable number of the best resumes. The level of specialization in today’s world makes the job harder. If someone talks slowly in a phone interview are they thoughtful, looking up the answer on the Internet, or stupid? Again, with 20 or 50 new resumes each day, why not wait?  HR and hiring managers may say “these applicants seem to be really good, but are they? let’s see who else is out there.”

The decision to hire the employer closes the door to all other candidates. If the new employee doesn’t work out, which may not be evident for 3 to 6 months, the employer has to fire the employee – which costs time and money, and and then go thru another round of search, weed out, and ultimately hire.  From the employer’s perspective the biggest risks are that the prospective employee is either incapable of doing the job, as advertised on the resume, or unwilling to do the job, and as promised in the sales call that is the interview.

But let’s take a step back. Let’s look at the economy from 30,000 feet, or 10,000 meters, and look thru the lens of “sustainability.”  Consider what our competitors in other countries are doing. Every developed country except the United States has a single payer health care system which covers every citizen and even tourists. A high speed rail system links people in Europe from Madrid to Rome, Paris, Berlin, Vienna, Amsterdam, and London. Germany is replacing their nuclear plants – which 10 years ago provided 29% of their electricity and today provide 20% – with clean, renewable, sustainable energy from wind, solar, and combined cycle hydro and biofuel systems.  What about a domestic high speed rail infrastructure efficiently linking cities from Boston to Miami, New York to San Francisco, LA to Seattle (and Vancouver) and Chicago to Denver to Dallas, Houston, Austin, Reno, LA, and Mexico?

Can we do this? How long would it take? How much would it cost? What is the multiplier? How many jobs would be created? We have 14 or 15 million unemployed people, millions others who have been out of work so long that they are not counted, and countless more who are underemployed! How many jobs would we create building a sustainable energy infrastructure and a high speed rail infrastructure?  With wind turbines offshore of the East Coast in up and down the Great Plains and solar modules on the roof of our homes, schools, office buildings, stores and factories? And with insulation and cogeneration basically doubling building energy efficiency?  Can we retrain unemployed coal miners in manufacture of solar modules, mounting systems and wind turbines?  The answer is of course. The questions that matter are “How much would it cost?” and “Can we afford not to?”

In the last 210 years we – humanity – have increased atmospheric carbon dioxide from 290 parts per million and about 2.8 trillion tons to 390 ppm and 3.6 trillion tons.  Looking at the data Arrhenius concluded that increasing carbon dioxide in the atmosphere would make summers warmer in Scandinavia. He was right.  However, we now know that burning fossil fuels contributes to storms, floods, the death of coral reefs and the challenged food supply of climate change. We also know that domestic oil production peaked in 1971 and international production is peaking now.  Do we want to blow up every last mountain in Appalachia for coal?  Do we want to destroy water supplies for methane?  Don’t we realize that sooner or later we, or our children, will have to shift the energy paradigm to one that is sustainable?  And beyond that, fuel free energy systems cost less. While this actually hurts GDP – GDP measures spends not value – repair of the damages caused by the earthquake – tsunami – nuclear disaster at Fukushima (IAEC Log) and the Deepwater Horizon will contribute to GDP – but these decrease Genuine Progress Index (wiki). These are ‘Uneconomic Growth.” Fuel free energy systems contribute to the Genuine Progress Index and other indices that measure wealth and happiness.

Earth from Space, courtesy of the American taxpayer. Reto Stöckli, Nazmi El Saleous, and Marit Jentoft-Nilsen, NASA GSFC

Tweet

Earth Day, 2010, I looked to the future on Popular Logistics. In 2009, I wrote about water pollution and agricultural waste in the Chesapeake. Today I am looking at the present and recent past. While a comprehensive look at where we are can be found on the web pages of the World Watch Institute, the New York Times, and the World Factbook of the Central Intelligence Agency, I want to make a few points.

Our energy policy is “when you flip a switch, the juice gotta flow.” It ain’t magic. It’s engineering and classical physics, with an understanding of radioactive fission and decay and a profound lack of long term thinking. It ain’t magic, but it might as well be. But we really need to base our energy policy on an understanding of ecological economics and sustainability.

We’ve had a few problems with nuclear power and fossil fuel in the last few years. Yet, there’s some light on the horizon.

Regarding those problems with fossil fuel …

December 22, 2008, a flood of 1.2 billion gallons of toxic coal ash at the Kingston Steam Plant on the Clinch and Emory Rivers, upstream of Kingston, Tennessee, here or here. April, 2010, a disaster at the Upper Big Branch Mine in Montcoal, West Virginia (here). One of the results of the accident was that Massey Energy, the company that operated the mine, was sued by institutional investors who alleged corporate malfeasance. And then there was the catastrophic spill of 50,000 to 70,000 barrels of oil per day into the Gulf of Mexico for three months. These, I said, were the “Fossil Fuel Trifecta of Disaster.” My series began with “Fossil Fuels and a Walk on the Moon.”  BP’s stock – and “market capitalization” was cut in half. While it has since recovered somewhat, it is still well below the level immediately prior to the spill. BP has also lost good executives to the nascent biofuels industry.

Also back in 2009, I started covering the “Purgen Plant,” a “Rube Goldberg” design for a coal plant with carbon sequestration, here.  The technology is incredibly expensive – $16 to $18 per watt – and spectacularly stupid. The plan is to use 25% to 40% of the output of the plant to capture 90% of the carbon, then compress it and pipe it 70 miles along the sea floor, then bury it 1 mile beneath the bottom of the ocean. It will cost the taxpayers billions, as long as nothing goes wrong.

More recently I’ve been writing about the unfolding earthquake – tsunami – nuclear disaster in Japan beginning with  Earthquake, Tsunami, and Energy Policy and concluding with Nuclear Power, What Future? But there are two important points – under “normal” conditions nuclear power produces less radioactive waste than coal, and the wastes from nuclear power plants are regulated. Under real world conditions, nuclear plants leak tritium and other radioisotopes into the biosphere. Look to this blog for more posts on this in the future.

Yet, there is some good news.

• Cape Wind, LLC finally got the permits they need to build America’s first offshore wind farm (see Cape Wind, Leadership and Vision).
• The solar energy industry is strong in New Jersey and California, and expanding.
• The FDA expects America’s rural electric coops to continue to move into renewable energy.
• Bright, dedicated, passionate and beautiful people are thinking about sustainability in places like Bainbridge, Columbia Earth Institute, the Fowler Center at Case Western, Marlboro College, the Presidio, UVM.
• Large institutions such as Deutsche Bank – one of the 10 largest banks – and Zurich Reinsurance are concerned about climate change. Click here and here. concerned about climate change.

In addition to my work on this blog, my song “Sunbathing in Siberia” may not be “American Idol” fare (and that’s part of the problem) but my friends dig it, and my “Earth Energy Haikus” were posted on Amida’s web site. The problems we write about on Popular Logistics are complex “systems” problems. They have developed over the last 50 or 100 or 200 years. They can’t be fixed with a magic wand. We need to look long and hard at various paradigms, such as energy and consumption, and how they need to shift. In his lectures, his book, “Sustainability by Design” and on his blog, John Ehrenfeld defines “Sustainability” as “Flourishing forever.” Doing it is the conundrum.

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The image of the “Blue Marble” was created by Reto Stöckli, Nazmi El Saleous, and Marit Jentoft-Nilsen, at the Goddard Space Flight Center, NASA GSFC. It is described here.  “This true-color image shows North and South America as they would appear from space 35,000 km (22,000 miles) above the Earth. The image is a combination of data from two satellites. The Moderate Resolution Imaging Spectroradiometer (MODIS) instrument aboard NASA’s Terra satellite collected the land surface data over 16 days, while NOAA’s Geostationary Operational Environmental Satellite (GOES) produced a snapshot of the Earth’s clouds.”

First in a series on the systems dynamics of nuclear power in the light of the ongoing catastrophe at Fukushima.

Radioactive waste and melt downs are intrinsic properties of nuclear power. Before / After Gallery.

Current Assessment: 3/27/11 3:00 PM. 10,668 dead, 16,574 missing. Radiation levels spike, drop. (Gather). Silver lining in the cloud – radioactive substances will wind up in the Great Pacific Garbage Patch and trigger mutations in bacteria and plankton, creating “Plasticovores” – critters that chow down on plastic.

Eighth Assessment: 3/24/11 11:30 PM. 10,035 dead. 17,443 missing. Market Watch. Earlier in the day AP, Courtesy of the Star, Bloomberg. reported slightly lower numbers.  We have seen a natural disaster of earthquake, tsunami, and aftershocks. While the the damage is tremendous, it could have been much worse. There are 10,035 tragedies, and 17,443 people are missing. It seems likely that many of them will never be found.  Yet The nuclear plants have not yet undergone a full meltdown. This speaks volumes about American and Japanese engineering. The nuclear plants were built pretty well. Yet it also suggests that it is not prudent to build nuclear power plants in earthquake zones. Radioactive waste and meltdown are not intrinsic properties of solar, wind, geothermal, and conservation.

Seventh Assessment: 3/18/11 11:00 AM.  The spin machines are beginning to sells this as a tragedy local to Japan. It won’t – can’t happen here. as something that requires tougher standards for future nuclear plant designs, as something that teaches us design lessons. ” ProPublica 1 and 2.

Sixth Assessment: 3/18/11 9:00 AM Death Toll: 6,911 (CNN). Shortages of food, water, medicines, heat, power. Yet some good news: Japanese soldiers and firefighters acting heroically and selflessly to try to prevent meltdown. There is no looting. The Japanese people are finding hope, trust, calm. The earthquake measured 9.0 on the Richter scale. The aftershocks: at least 27 of 6.0 or greater, at least 154 of 5.0 or greater.

Fifth Assessment: US: “Stay 50 miles (80.45 km) from the plant.” Sweden: “Stay 80 km (49.7 mi.) from the plant.” WSJ online. That is 20,096 square km or 7,850 square miles. Half of that is in the Pacific.  Radiation damage: Significant.

Fourth Assessment: 3/16/11: 9:00 PM. We should decommission all nuclear reactors with all deliberate speed and replace them with a clean, renewable, sustainable energy topology!

Tertiary Assessment: 3/14/11: 9:00 PM. Explosions at three reactors. Cooling system failure, fuel rods heating out of control. Operators were pumping seawater into the plants in a desperate attempt to keep the fuel rods cool until the pumps failed. Meltdown occurring. Meltdown is a problem because of the laws of physics.

Second Assessment: The containment vessels and reactor cores said to remain intact after the explosions at Fukushima. Pumping in sea water is unprecedented. Radioactive material was released. How much radioactive material has been released? What is the material and what are the half-lives? Will the containment vessel remain sufficiently cool to avoid a meltdown? “ 

Initial Assessment: (3/11/11) Meltdown Likely.

“Washington, 1972: If the cooling systems fail at a ‘Mark 1′ nuclear reactor, the primary containment vessel surrounding the reactor will probably burst as the fuel rods inside overheat. Dangerous radiation would spew into the environment.” Design Flaws of Mark 1 Nuclear Reactors – NYTimes.

Solar panels and wind turbines can be damaged in earthquakes and swept away in tsunamis. There is zero chance of long term collateral damage due to the very nature of solar modules and the laws of physics. ZERO! And if a solar array was swept away in a flood it could probably be used as a raft.

3/14/11. 9:00 PM EST. Explosions at three reactors

3/14/11. 9:00 AM EST. Death Count: 10,000 people. In addition 6 nuclear power stations are offline – some will be permanently.  It is believed that there were partial meltdowns at 2, perhaps 3 of the 6 facilities in the Fukushima complex.

How many people lost on the four trains, including one bullet? How many cars per train? If 9 cars, with 30 passengers each, and 1 pilot, that’s 271 people per train, and 1084 people. The earthquake struck at 2:46 PM local time. If the trains were derailed by the earthquake there may have been many survivors. If the trains were swept out to sea by the Tsunami …

3/12/11. 10:30 PM EST. Partial Meltdown at Fukushima 1 and 3 here, here, and here. 120,000 people ordered to evacuate the area within 20 km of the plant! That’s a 20 km radius. Evacuation of 120,000 people withing 20 km / 12 mile of the plant. That’s 1,256 sq km.  Or 452 square miles. New York City is an area of 321 square miles. Good thing there are no nuclear power plants near NYC. Wait – what about Indian Point?

Fukushima 3 uses a plutonium fuel. More dangerous.

Michio Kaku, at BigThink.com. “The fail-safe systems failed… battery power was left, about 8 hours worth, to keep water circulating over the core of the reactor. But after that was exhausted, temperatures began to rise, as well as pressures. (If the core of the reactor is ever exposed without water, temperatures can rise to 5,000 degrees F, at which uranium dioxide fuel beings to melt, initiating the China Syndrome. It takes 30 minutes to several hours for an exposed core to melt down. Then a steam explosion might have enough force to rupture the vessel and containment.) Attempts were made to ship 14 back-up generators. … with the pressure inside the reactor rising 50% above normal, attempts were made to vent some of this dangerous, excess pressure. Radiation levels soared to 1,000 times normal levels inside the containment building.“

3/12/11. 4:45 PM EST. Nuclear Information and Resource Service, NIRS.org Fact Sheet on Fukushima.

3/12/11. 9:00 AM EST.

USA Today: ” Japan government spokesman Yukio Edano said ‘the explosion destroyed the exterior walls of the building where the reactor is placed, but not the actual metal housing enveloping the reactor… The radiation around the Fukushima Dai-ichi plant had not risen after the blast, but had in fact decreased. …  The pressure in the reactor was also decreasing after the blast.’ ”

My questions: If the radiation decreased after the blast, is it because the radioactive material was dispersed in the blast? What else would account for a decrease in radiation? Radioactivity doesn’t get “absorbed” in a blast.

USA Today: “The explosion was preceded by puff of white smoke that gathered intensity until it became a huge cloud enveloping the entire facility, located in Fukushima, 20 miles from Iwaki. After the explosion, the walls of the building crumbled, leaving only a skeletal metal frame.” 51,000 people evacuated from what is now a 12 mile radius around the plant.”

after tsunami

3/12/11. 5:00 AM EST.: Dave Batty, Guardian, UK, “One of the buildings of Fukushima nuclear power complex reported to have been destroyed in an explosion.” 

Matt Wald, NY Times Evacuation of 45,000 people in 6-mile radius around Daiichi and 1-mile radius around Diani nuclear power stations. No radiation reported around Diani. Release of  radiation from Daiichi.

Martin Fackler, NY Times. “Death toll …  in the hundreds…  could rise to more than 1,300, most of them drowned. … Thousands of homes … destroyed … roads … impassable, trains and buses … not running, and power and cellphones … down. … three trains missing …” Economic Times, India, “Death toll now at 1,600…. Four trains missing.”

This is the death toll from the tsunami. How many people were on the trains? How are trains “missing?” These are like NJ Transit, NYC Subway, MetroNorth, Amtrack. Did they get swept away in the 22 foot waves of the Tsunami?

Some good news: “While the loss of life and property may yet be considerable, many lives were certainly saved by Japan’s extensive disaster preparedness and strict construction codes.” Fackler, NY Times.

3/11/11. 10:00 PM EST. News of quake: (US Geological Survey)

Photos – NY Times.

3/11/11. 8:00 PM EST. When an earthquake or tusnami knock out some solar arrays or wind turbines food might spoil because a refrigerator loses power.  But if an earthquake or tsunami knocks out the cooling system of a nuclear power plant – which is what happened at the Japanese plants – thousands of people need to be evacuated due to the risk of a meltdown (click here or here).  Note that San Clemente, San Onofre, Diablo Canyon are on the Pacific, Salem, Hope Creek, Oyster Creek, are on the Atlantic.  Indian Point is on the Hudson, not too far from New York City and New York Harbor.

The AP reported:  “Japan quake causes emergencies at 5 nuke reactors

“Japan declared states of emergency for five nuclear reactors at two power plants after the units lost cooling ability in the aftermath of Friday’s powerful earthquake. Thousands of residents were evacuated as workers struggled to get the reactors under control to prevent meltdowns.

“Operators at the Fukushima Daiichi plant’s Unit 1 scrambled ferociously to tamp down heat and pressure inside the reactor after the 8.9 magnitude quake and the tsunami that followed cut off electricity to the site and disabled emergency generators, knocking out the main cooling system.

“Evacuation zone … 10 kilometers after authorities reported eight times the normal radiation levels outside the facility and 1,000 times normal inside Unit 1′s control room.

“Tokyo Electric Power Co., which operates the six-reactor Daiichi site in northeastern Japan, announced that it had lost cooling ability at a second reactor there and three units at its nearby Fukushima Daini site. …  Nearly 14,000 people living near the two power plants were ordered to evacuate.

“Japan’s nuclear safety agency said the situation was most dire at Fukushima Daiichi’s Unit 1, where pressure had risen to twice what is consider the normal level. The International Atomic Energy Agency said in a statement that diesel generators that normally would have kept cooling systems running at Fukushima Daiichi had been disabled by tsunami flooding. … Officials at the Daiichi facility began venting radioactive vapors from the unit to relieve pressure inside the reactor case. The loss of electricity had delayed that effort for several hours.”

My assessment: Meltdown Likely.

First in a series on the economics, ecological economics, finance, logistics, and systems dynamics of nuclear power in the light of the ongoing catastrophe at Fukushima.

Index to the series

1. Earthquake, Tsunami and Energy Policy, March 11-13, 2011. Here.
2. After Fukushima, Wall Street Bearish on Nuclear Power. March 14, 2011. Here.
3. Fukushima: Worse than Chernobyl? Here.
4. Fukushima: GE Mark 1: Unsustainable by Design. Here
5. Is Fukushima Dai-icha worse than Chernobyl? Here.
6. Nuclear Power: What Future? Here.

As we consider the Centennial of President Reagan’s birth, it is important to note that while he cut taxes on some taxpayers, he raised taxes on other taxpayers. As the graph, presented by Barry Ritholtz at Business Insider, shows, the deficit shot up under President Reagan, as it did under Presidents Woodrow Wilson, Herbert Hoover, Franklin Roosevelt, George H. W. Bush, and George W. Bush.

See also CNN Money Report.

The deficit shot up under Presidents Wilson and Roosevelt and Truman because of World Wars I and II. The deficit also increased under Roosevelt because GDP dropped during the Depression. The deficit dropped under Truman, Eisenhower, Kennedy, Nixon and Ford because they listened to John Maynard Keynes and used government spending as a tool to lower unemployment and stimulate the economy by building infrastructure. As President Nixon said, “We are all Keynesians now.” (Click here or here).

Under Reagan, the maximum income tax rate dropped from 70% to 28%.The top rate is the rate paid by the people who have the highest incomes – major league baseball, football, and basketball players, musicians, actors, investment bankers, and hedge fund managers. If they pay less taxes, the difference is made up by people with lower incomes.  I respect Warren Buffett, Aaron Rodgers, Bruce Springsteen, Michael Douglass, and others.  But I don’t understand why I should be compelled to subsidize their lifestyle or the lifestyles of people like Brittney Spears, Lindsay Lohan or Paris Hilton.

Be that as it may, President Reagan didn’t cut spending. He had to raise taxes to cover spending. Despite his tax hikes, however,  the deficit climbed. It continued to climb under G. H. W. Bush. It dropped under Clinton, who famously, balanced the budget and presented G. W. Bush with a surplus.  The rest, as is said, is history.

1.5 MW Solar Array, Rutgers University, Livingston Campus

New Jersey taxpayers could net $36.9 million per year, $369 million over 10 years, with the installation of 152.5 megawatts (MW) of photovoltaic (PV) solar electricity systems on public schools, community colleges, and each of the public universities in the state.

The systems would pay for themselves within the first 8 years. At 2010 values of electricity and Solar Renewable Energy Certificates (SRECs), these systems would generate electricity worth approximately $300 Million and SRECs worth $1.2 Billion over the first 10 years, approximately $369 Million in excess of the cost of the systems, and provide virtually free electricity over the remainder of their 35 to 40 year lifespan.

Widespread deployment of solar energy increases the resilience of the electric grid, strengthens national security and can enhance local emergency response capabilities.

These are the conclusions of a feasibility study by Lawrence J. Furman, principal of Furman Consulting Group, LLC during the course of his studies for an MBA in Managing for Sustainability at Marlboro College Graduate School.

The money saved is a function of the number and capacity of the PV solar systems, installation costs, financing costs, electricity costs, and SREC values.

The study modeled the installation of 152.5 megawatts, MW, of photovoltaic, PV, solar, as:

• A 50 KW PV solar array on each of the 2,500 public schools,
• A 500 KW PV solar array on each of the 19 community colleges,
• A 1.5 MW, PV Solar array on each of the 12 public colleges and universities.

The study assumed:

• Installation costs of $6.00 per watt, $300,000 for a 50 kilowatt, or KW, system.
• Bond financing at 5% for 10 years,
• Electricity prices fixed at 2010 levels for 10 years,
• Solar Renewable Energy Certificates, SRECs, fixed at 2010 levels for 10 years.

While there are “carbon footprints” and “resource footprints” in the manufacture and installation of solar energy systems, and while the systems would have to be refurbished or recycled at the end of their useful life, solar energy produces power without the release of carbon dioxide or other greenhouse gases and without the release of radioactive wastes or toxic wastes, such as those associated with coal, oil, natural gas, or nuclear power. In addition, there is no loss of ecosystem services associated with the deployment of a solar energy system on the roof of a building or over a parking lot. There is a loss of ecosystem services when a solar array is deployed as a ground mounted system in a field.

New Jersey, a state of approximately 8 million people, is perhaps a bell-weather state in the United States. The NJ Energy Master Plan calls 22.5% renewable energy by 2021. Approximately 50% of New Jersey’s 7 gigawatts (GW) of electric generating capacity comes from an aging fleet of nuclear power plants. Exelon, the owner / operator of the Oyster Creek nuclear facility, recently announced that it will close the nuclear plant in 2019, rather than install cooling towers.

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Copies of the report are available from Furman Consulting Group, LLC..