Back to the Sustainable Energy Transition: The Physics of Sustainability and Some Tweets About it.

In the last blog I strongly advocated simplifying the conversation about climate change, focusing on how we can get from the present “business as usual” scenario to an “environmentally friendly” scenario that will not result in an environment inhospitable to adaptation. The recent IPCC report summarized the difference between the two scenarios with this graph, which I also showed last week:

IPCC Global average surface temperature changeI will elaborate on the two scenarios and their implications in future blogs.

Meanwhile, I would like to highlight some recent activities that have been occupying my time and which I hope might help clarify the process of changing from scenario one to the other. Let’s start with two events:

  1. I was invited by the editors of a new journal of the Material Research Society (MRS), which focuses on energy and sustainability, to write a review article entitled “Energy and Sustainability, from the point of view of Environmental Physics.” The title was suggested by one of the journal’s editors, and I make a point not to argue with editors. However, I am free to interpret the title as I see fit and set the boundaries of the article. I will start by using my previous definition (January 28, 2013 blog): I define sustainability as the condition that we have to develop here to flourish until we can develop the technology for extraterrestrial travel that will allow us to move to another planet once we ruin our own.” In principle, a scenario such as the RCP2.6 scenario, is supposed to get us there. I’ll be writing the article over the next two months, hopefully focusing on the challenges that face material research scientists as they struggle to develop materials that will help to take us from the present “business as usual” scenario to the RCP2.6 scenario.
  1. The second event developed out of a request that I got over Twitter to write something about a new article by David MacKay, where he discussed the storage requirements of such a transition. I liked the paper and summarized my response in a short blog that I posted here on August 8th.

There was a small buzz over that response, which I am including below.

John Morgan @JohnDPMorgan  Aug 11
@MichaTomkiewicz @nuclear94 Cost and capacity are not the issue. EROI of renewables are degraded below viable level by storage.

 Jeff Terry ‏@nuclear94 Aug 11
@JohnDPMorgan @sydnets @MichaTomkiewicz capacity is an issue. No one knows how to store and extract energy of that magnitude.

 Jeff Terry ‏@nuclear94 Aug 11
@JohnDPMorgan @sydnets @MichaTomkiewicz 36 TWhr of storage is 9x annual output of Hoover Dam. Good luck with that.

@nuclear94 @sydnets @MichaTomkiewicz What @JohnDPMorgan said was that capacity is not *the* issue, not that it isn’t an issue.

Ben McCombe ‏@BenMcCombe Aug 11
@nuclear94 @sydnets @MichaTomkiewicz @JohnDPMorgan If EROI issue can’t be resolved, then storage is a no go whatever the capacity.

Jeff Terry ‏@nuclear94 Aug 11
@BenMcCombe @sydnets @MichaTomkiewicz @JohnDPMorgan assuming one’s survival does not depend upon it.

John Morgan ‏@JohnDPMorgan 19h
@BenMcCombe @nuclear94 @sydnets @MichaTomkiewicz Ben’s reading is correct. The EROI problem is intractable, even if we had free TWh capacity

Jeff Terry ‏@nuclear94 19h
@JohnDPMorgan @BenMcCombe @sydnets @MichaTomkiewicz depends upon how bad the problem gets.

Dadiva Netter ‏@sydnets 19h
@nuclear94 @JohnDPMorgan @BenMcCombe @MichaTomkiewicz could further innovation make a difference?

John Morgan ‏@JohnDPMorgan 19h
@nuclear94 @BenMcCombe @sydnets @MichaTomkiewicz Solar, wind + storage is either in energy deficit, or too low positive to work. Pretty bad.

John Morgan ‏@JohnDPMorgan 19h
@sydnets @nuclear94 @BenMcCombe @MichaTomkiewicz I don’t think so. The leading edge of storage EROI is earthmoving.

Jeff Terry ‏@nuclear94 19h
@sydnets @JohnDPMorgan @BenMcCombe @MichaTomkiewicz miracles can always make a difference.

Jeff Terry ‏@nuclear94 17h
@MichaTomkiewicz @sydnets @JohnDPMorgan @BenMcCombe the energy density is still not there.

John Morgan ‏@JohnDPMorgan 15h
@MichaTomkiewicz @nuclear94 @sydnets @BenMcCombe There is no storage tech that can store wind or solar energy at adequate system EROI.

John Morgan ‏@JohnDPMorgan 15h
@MichaTomkiewicz @nuclear94 @sydnets @BenMcCombe Nothing on the horizon, either.

John Morgan ‏@JohnDPMorgan 15h
Throwing our limited resources at incapable tech is the functional
equivalent to giving up. @MichaTomkiewicz @nuclear94 @sydnets @BenMcCombe

John Morgan ‏@JohnDPMorgan 15h
“Not giving up” just means shifting our efforts to directions that can yield
results. @MichaTomkiewicz @nuclear94 @sydnets @BenMcCombe

Twitter responses are by their nature short, but a collection of them can be relevant and informative. EROI (Energy Return on Energy Invested) is an important concept that was brought up several times in the conversation, but it’s something that I have not yet mentioned in the two years that I have been writing this blog. John Morgan recently wrote an article on the issue and I have invited him to post a guest blog that goes into some more detail. It touches on a very fundamental issue: one cannot develop a new energy source that requires more energy for production than that which it generates. It’s long been the “gold standard” for approximating the remaining level of fossil fuels available. If, for instance, there is an oil deposit that requires more energy (and money) to extract than that gained by its extraction, no one would bother with the effort (therefore, that deposit is not counted among available resources). With sustainable energy sources the estimates are a bit more complicated but the concept remains the same.

Stay tuned.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Make it Simple, Please!

Many years ago, I was invited to a small gathering of scientists that did work on solar cells. The invitation came from the Department of Energy (DOE), which coordinates funding to these projects. The conference was focused on creating a common language between scientists and the bureaucrats in charge of funding such projects. We started the meeting with short presentations of our work. The dominant message from the DOE people was: simplify it! They argued that they have to report to congress and, as a rule, a “typical” congressman doesn’t know terms such as “logarithmic scale,” “rate constant,” or “conversion efficiency,” all of which are customary phrases among scientists that do work in the field. We started to argue that these concepts are essential, but we quickly gave up. This event took place before climate change became the existential topic it is today, that requires the global collective action that we are striving to achieve.

Now we are in a different situation. Climate change is a global threat that needs mitigation on a global scale. For this to happen, we need leadership that can follow the issues. In many countries this leadership needs to be elected; in all cases, it is vital to keep such people in office. To satisfy these requirements, all of us need to understand the issues; that means they must be presented in a manner that does not require any academic prerequisites. We need messages that can be put on posters similar to the ones that we saw in abundance during September’s People’s Climate March (September 23 and 30, 2014 blogs). The global institute that was put in charge of delivering said message is the IPCC. I have discussed the IPCC often in this forum. It issues reports periodically, upon which most of the public conversation is then anchored; the last report (AR5), which came out a year ago, consists of three sections:

The first chapter in all three group reports is titled “Summaries for Policy Makers.” This is the same kind of audience that the DOE personnel from my earlier meeting were trying to address.

All of the graphs on this blog are taken from these chapters. I will start with the one that will make my point in the clearest possible way:

IPCC Cutting-EmissionsYes, I know: very “simple” :( . A great poster for a march :( and great rallying cry for action :( .

It does, however, contain a lot of credible information. It contains possible emission pathways under different scenarios. The IPCC uses the mechanism of different scenarios to predict the future. They do not favor one scenario over another; they just describe the consequences that will happen if the world follows a particular scenario. Before the last report, the IPCC was using 40 different scenarios; for the last report, they changed the process in which they construct scenarios. The scenarios are stories. One can find a good, relatively simple description of the scenario process in the blog Skeptical Science, under the title “The Beginner’s Guide to Representative Concentration Pathways.”

I personally both can and do spend a full lecture discussing this graph with my classes. As a policy maker, on the other hand, I would be looking at the graph and trying to decide not only what to do based on the information it provided me, but also how to then justify those actions to my constituents so they will elect me for another term. Try it!

I have included two more graphs that are often used to introduce audiences to the consequences of climate change. Both are taken from the same chapters; respectively, they predict the temperature rise and the sea level rise:

IPCC Global average surface temperature change

IPCC Global mean sea level riseThey are a bit simpler than the first graph, but contain the same elements. These graphs are among the simplest in the reports.

The scenario-based analysis of the future has its place, but that place should be in the technical literature – not as a “Summary for Policy Makers,” and not as a rallying cry for action.

For such a purpose, two scenarios are perfect as a message for the policy makers and a rallying cry for the general public: one “business as usual,” which predicts the consequences for the physical environment if we continue doing what we are doing now, and the other, “environmentally friendly” that will stabilize the condition of the physical environment. These would necessarily include details about what it takes to go from one scenario to the other.

The “business as usual” scenario changes with time. That’s fine; in every report, one should be able to see if we are making progress toward a sustainable scenario or if instead we are retreating from that goal.

A graph like that exists in recent reports; in fact, I have shared it a few times before on this blog (September 24, 2012):

IPCC Ecosystem Risks Fork

My book, Climate Change: the Fork at the End of Now was directly inspired by this graph. You can see the fork in the two scenarios and you can easily identify the conditions that lead to either side of the fork. The writing on the graph describes some of the consequences of being on the left side of the fork. The color is nice for emphasis but is not absolutely necessary. The graph starts early enough to superimpose measurements and predictions. It is simple enough to put on posters and to use it as a battle-cry.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Assessment – Fall

In my July 8, 2014 blog, I promised to check in with four self-assessment reports throughout the year, at the following times:

  • The commemorations of the American and French Revolutions (first two weeks of July)
  • The Jewish religion’s holy day, Yom Kippur – a day in which Jews are advised to take accounts of their doings and undoings (beginning of October)
  • New Year’s Day (January 1st)
  • Earth Day (April 22nd)

The July date also coincides with the Muslim religion’s Ramadan, and Earth Day doubles as my wife’s birthday, so they are extra meaningful. I am writing this report two days before Yom Kippur, and it will be posted three days after. Arguably, Yom Kippur is the ideal day in the Jewish calendar for a self-assessment.

I first intended to structure these reports similarly to the daily reports that I get from a good friend that works in the financial industry. He has the Bloomberg machine on his desk that provides him with an updated analysis of the financial market, which he shares with clients and friends. His reports simply include short lists of daily events that he thinks impact the industry and a paragraph that summarizes his opinions of the effects that these events might have. I quickly realized that at least for the first report, my approach has to be totally different. Unlike the daily events that my friend deals with, I am dealing with global events that affect basically everything that we do. Data on what is happening are everywhere, and most of them are reliable. Have a look, for example, at the portal that the World Bank is using to discuss climate change; it is a massive undertaking. However, I hope to be able to distill these data to their simplified essentials, while preserving his format as closely as feasible. I want to include not only data of what I am doing and the impact it has, but also what all of us collectively are actually doing or not doing to minimize the long term damage to the physical structure of our planet that results from our consumption activities on a global scale.

Today’s report will not include any of this. It will focus on the principles that I want to follow, as well as (hopefully) generate feedback from all of you that will allow me to rethink and adjust as I move forward with this blog.

Assessment has become a big thing in academia. Every school now engages in the activity with the full knowledge that if they don’t do it, their “customers” will do it for them. Our “customers” (in academia) are our students, our communities, our alumni, our donors, our evaluators and whoever else is providing the resources for what we are doing – and thus has the power to stop the flow of the resources and force all of us to look for different jobs. If we neglect assessing ourselves, other people will do it for us, a prospect which fills every school with dread.  I am the assessment coordinator of my department so I am fully engaged in all aspects of the process. Any assessment starts with goals and objectives, along with tools to measure whether these goals and objectives are being met.

In my very first blog, on Earth Day, April 22, 2012 I tried to explain (and meanwhile figure out for myself) why I am writing and what my goals are. Here is what I wrote:

It’s with excitement and some trepidation that I write my very first blog post today.  As a trained scientist, it really isn’t in my nature to write short blips about weighty subjects like climate change. But I’ve taken up this challenge - today, on the 42nd anniversary of Earth Day – because I simply couldn’t stand by and watch while climate change “deniers” continue to try to take center stage and to keep all of us from doing what’s necessary to head off the impending climate change disaster. As a professor, a scientist, a Holocaust survivor and someone who has just written a book on climate change, I think I am uniquely positioned to tell the climate change story.  I know that once people really grasp the science behind climate change and how each person really can help us reverse course, they take action and feel hopeful.  I’ve seen it happen.  Despite everything, I feel hopeful too.

I got 77 comments on that blog! Most of the interest didn’t arise from my writing about the climate change issue, but rather came about because my special background allowed me to connect the climate change threat with that posed by the rise of the Nazis in the 1930s. The latter led to the Holocaust, and the murder of millions – including most of my family. I invoked the Holocaust because I saw it as an opportunity to translate some elements of the way its history has been taught, and bring science education to some segments of society that would not otherwise have been reached. I also realized that my unique background as both a Holocaust survivor and a climate scientist gave me the “legitimacy” to try. I believe that mitigation of and adaptation to the threat of climate change are political processes that need as broad a participation as we can get; such broad participation requires expanding the education beyond the student population that I usually teach. This remains my central goal, against which every assessment of what I am doing will be judged.

It is clear that unlike in my school, my audience here is the “general public,” so my success or failure should be determined by the extent that my writing is read and shared by others. Humility is an important asset; if I were to assess myself in comparison to Katy Perry (57,000,000 twitter followers) or Barack Obama (45,000,000), I would conclude that I’m a total failure and I am wasting my time. If, on the other hand, I simply compare my progress against the number of students with which I am in direct contact at my University – and for whose teaching I am being nicely compensated – I am doing fine.

Writing the blog on a weekly basis takes me about a day per week – time that I could have used for other activities. It also costs me money, because I engage public relation people to help me both edit my blog and satisfy my goal of reaching as broad as possible a general audience. My editors and publishers work for non-profits and share my goals, but they need resources. Since I am paying them personally, my family is among the most important customers who need to be convinced that what I am doing is worth the sacrifice.

So here’s a basic breakdown:

As far as social media goes, I have recently made more of a push. Most of my efforts have focused on Twitter. Since my blog on July 8th, I have gained 125 followers (bringing my total to 283). I also gained 45 retweets, 35 messages or mentions, and 28 favorites. This is all readily accessible information. On Facebook, in the same time period, my page got an additional 1500 impressions from 784 unique users.

As I mentioned earlier, this first report is mostly explanations, and includes very few facts. Starting with the next report, I hope to start following a more structured routine that not only tracks my own progress in reaching a larger audience, but also society’s progress in meeting the challenge of climate change. Hopefully you guys will provide the necessary feedback to help me constantly improve what I am doing.

Be Sociable, Share!
Posted in Climate Change, Education | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

The World and Me

As I mentioned in my last blog, it’s been a busy month. Among other events, the semester started, and there was an enormous climate change march in Manhattan (paired with others globally) in anticipation of the United Nations special session on climate change. The actual United Nations session garnered commitments from each of the more than 100 world leaders in attendance to take action on climate change.

The new report on climate change focused on the idea that by converting some “externalities” into “internalities,” one can show that a carbon tax in some form or another could effectively mitigate climate change. The report also concluded that such efforts could both save money overall and accelerate economic growth, provided that the money from the tax were used to balance and reduce other taxes (see Eduardo Porter’s, “The Benefits of Easing Climate Change,” NYT September 23, 2014).

All of this has happened in the middle of what has seemed like the world catching fire. President Obama reflected on these situations in his address to the United Nations, a speech that was well summarized by the New York Times’ Mark Landler:

Even so, Mr. Obama said, the threat from the Islamic State was only the most urgent of an onslaught of global challenges that have given the United States no choice but to take the lead: from resisting Russia’s aggression against Ukraine to coordinating a response to the Ebola outbreak in West Africa; from brokering a new unity government in Afghanistan to organizing a new campaign to confront climate change.

The United Nations special session ended with a slew of commitments, which the UN Secretary General, Ban Ki-moon, later summarized. These included halving the loss of natural forests globally by 2030, palm oil producers aiming for zero net deforestation by 2020, a commitment by institutional investors to decarbonize 100 billion worth of investment by 2015 (see also Justin Gillis’s piece in the same September 23rd NYT publication), and the Insurance Industry’s commitment to double its “green” investments by the end of 2015.

All of these are in addition to commitments from large emitters like China and the US to work towards specific (lower) targets for emission of greenhouse gases.

As always on these issues, we will have to wait and see to what extent actions match intent. Toward the end of next year, there is a meeting scheduled in Paris, which is supposed to come out with a draft treaty to replace the Kyoto Protocol.

A day after the UN meeting I was invited to teach a class at a different school. The course was focused on global challenges and my talk was titled “Personalizing Global Challenges,” with a focus on climate change. Two of the faculty members and one of the students had participated in the march in New York City. During the class, my memory drifted back to the march; I have started to realize that perhaps the only way to democratize the future global changes we need – such as those needed to mitigate climate change – is to find a way for each of us to be able to personalize the issue.

Indeed, the march was incredibly successful in personalizing the issues. The march included meticulous organization, well-rehearsed chanted slogans and quite a few multi-use signs, but at the end, none of those were the real takeaway. Instead, there was a sense of recognition that this was a historic march that might really have an effect. Much of the focus seemed to be on having a good time, taking photographs of everything around you, and coming up with slogans and signs that highlighted significant and personal elements that need to change in order to modify our global behavior and prevent the dismantling of the planet that we all depend on.

I am including some of my own photos here for your enjoyment and you can find more in the links to the albums that I included in last week’s blog.

IMG_2897_NewOn his own, with a big message: “Good Planets Are Hard to Find”

IMG_2901_New“The Solution to Pollution is Revolution – Organize” was a bit on the fringe but it rhymes.

IMG_2914_New“Not Blind Opposition to Progress but Opposition to Blind Progress” Couldn’t have said it better, especially since it marched with the trade unions.

IMG_2917_NewScience was at the center of the effort, and the emphasis on the need to “Teach Science” was everywhere.

IMG_2922_NewDirected at economists – In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit

Stop Pretending Start Defending“Stop Pretending, Start defending,” “Windmills Not Weapons,” “Have the Nerve to Conserve.” (This photo, courtesy of my editor, Sonya Landau of LCG Communications)

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , | 1 Comment

What a Week! – Scotland and the Climate Change March

PCM Poster MamaI have written a great deal on the stuttering energy transition that we are all going through, and the difficult journey we are having in trying to replace our energy sources with more sustainable ones (just put the term “stuttering” in the search box to find all the blogs that use the term). This week I will look at different but related transitions, a subject on which I hope to focus the next few blogs.

I started to write this post on Thursday, the day voters in Scotland went to the polls to vote on separation from the United Kingdom. The Economist was against the move (September 13 – 19 issue), and featured a leading piece, titled, “Scottish Independence: UK RIP?” which started with the following paragraph:

School children once imagined their place in the world, with its complex networks and allegiances, by writing elaborate postal addresses. British youngsters began with their street and town (London or Manchester, Edinburgh or Cardiff), followed by England, Wales, Scotland or Northern Ireland; then came the United Kingdom (and after that Europe, the World, the Universe…). They understood that the UK, and all its collective trials and achievements—the industrial revolution, the Empire, victory over the Nazis, the welfare state—were as much a part of their patrimony as the Scottish Highlands or English cricket. They knew, instinctively, that these concentric rings of identity were complementary, not opposed.

The concentric rings in the Economist’s post include the planet in the form of “World” but in a set of parentheses linked together with the Universe. The nearest star, Alpha Centauri, is 4.4 light years away from us. This distance is equivalent to 25.6 trillion miles. With the fastest rocket available to us, it would take 200,000 years to get there. As you can see, the distances involved prohibit us from doing anything more than observing Alpha Centauri, much less the Universe at large. Putting the Universe in the same parentheses as the planet, however, implies (at least to me) that we cannot do anything about our plant either – except observe it.

Many people beg to differ. On Sunday, the People’s Climate March will take place in New York City (read more here, here, and here), as well as many other cities worldwide. The March is in support of a meeting of world leaders at the UN, scheduled for Tuesday. That meeting’s goal is to reach a global agreement on mitigating climate change, which has been caused mainly by our use of fossil fuels as the global dominant energy source. Organizers from all over the country have worked long hours for many months to try to make it the largest demonstration on record, with a clear message that the time has come to reach a global agreement. At the time that I am writing this blog, expectations are that more than 100,000 people will participate. By the time that the blog will be posted (two days after the March) the global meeting at the UN will be taking place and we will have better numbers about how many people actually participated. The Secretary General of the United Nations, Ban-Ki Moon, has promised to march.  I will be there too, as will many of my friends. I have strongly encouraged all of my students to be there as well. As a matter of fact, I have included it in the syllabus as an extra-credit (not compulsory) activity with two components: one collective, the other individual. In the individual component, they are to try to convince somebody to change their mind about climate change and write about the effort. The collective component includes participating in a collective activity such as the March and describing their perspective of what took place. In both cases, the writing will be presented in the form of comments on a blog posted specifically for that purpose. Students have asked me what to do if they don’t believe in climate change. My response was to encourage them to participate and comment, as long as they are intellectually honest and well-argued, and can reflect their opinions on what is taking place. My September 30th blog will focus on the March; I will post my own experiences and “invite” the students to comment. I will also post a blog on the private discussions toward the end of the semester.

Today (Friday), I got an email from one of the organizers of the People’s Climate March, YJ Cho, that describes the March in numbers. I will share it with you:


I can’t believe the People’s Climate March is less than 48 hours away. And I can tell you, without a doubt, that it’s going to be absolutely beautiful on a scale that we’ve never seen before.

These numbers don’t tell the whole story, but they definitely give you an idea of what’s coming on Sunday:
2,100: The number of People’s Climate events taking place this weekend in over 160 countries around the world — this is part of something truly global.

1,500: Partner organizations officially supporting the March — and it’s still growing!

1,000: Artists who have been hard at work for months making absolutely stunning materials for the March using more than 100 gallons of paint, 350 yards of posterboard, 13 parachutes, and miles of cardboard tubes (because no one is allowed to use wood in the March – NYPD rules).

500: Buses coming from across the country. Lined up end to end that’s more than twice the width of Manhattan at its widest point – and they’re carrying 25,000 people to the March.

475: The number of volunteers we have to help support the March this weekend as greeters and March marshals — but we still need 200 more! Click here to sign up to volunteer, and we’ll get you oriented ASAP.

362: The number of college campuses where students are organizing to turn out for this March in huge numbers. Young people will not accept a future ravaged by climate change.

300: The length in feet of a single banner in the March. It might just be the biggest climate banner ever (at least that I’ve seen – you can find it in the “We Know Who’s Responsible” theme).

125: World leaders planning to attend the climate leadership summit on Tuesday — more than at any previous climate summit or negotiation. Let’s send them to the negotiating table with the sound of a enormous movement ringing in their ears.

82: The expected temperature on Sunday. That’s beautiful weather to make history in.

29: The number of Marching bands that will be making sure this March has a beat. And that’s not counting the International Brotherhood of Electrical Workers Local 3 bagpipers.

26: The number of city blocks being blocked off for this March to lineup – check out the lineup here and find your people. Or just show up at 86th St and Central Park West at 11 AM.

5: How many friends you should bring (or at least forward this email to) – because to change everything it takes everyone.

1: Planets we have. Which means we also only have one shot to get this right.

0: The amount of progress we’ll make if we stay home. We don’t know that this will work – but we do know that if we stay home, the only thing that’s going to change is the climate.
This is going to be huge.

-YJ Cho and everyone working on the People’s Climate March

I strongly encourage everybody to participate in the exercises from above. If you are (were) a participant in the March you will provide an independent perspective and if you are not, the students will benefit from your input on their comments.

PCM March CrowdUpdate (Monday): Scotland voted to stay part of the United Kingdom by a margin of 10%, and the People’s Climate March was a great success. Reports have estimated the turnout as anywhere between 311,000 and 400,000; among them – 50,000 students from 500 campuses that covered 10 full city blocks. The UN Secretary, Ban-Ki-Moon, has summarized the issue nicely: “There is no plan B because there is no planet B.” There are articles about it all over the media, and you can find endless photos and videos on the social media networks. For an excellent collection click here for the NYC march, or  click here to see the global album.

Next week I will expand on my own impression and include results of the UN meeting.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , | Comments Off


We are not very good at estimating risk. This is especially true of large, infrequent risk. Recently a judge fined BP for being “grossly negligent” in the blowout on the deep water horizon oil rig disaster that killed 11 workers and spilled millions of gallons of oil into the Gulf of Mexico. The judge also stated that the company acted with “conscious disregard of known risks” and that its “conduct was reckless.” With his verdict, the judge confirmed the possibility of new fines of up to $18 billion in addition to the billions that BP has already spent on the disaster.

Some doubt that BP can survive the additional fines and the major setback to the company’s reputation, but many others disagree and claim that the company is both large and profitable enough to be able to survive them. There is no question in my mind that the decision will change the risk assessment of deep water drilling and the business models of such drilling. I have no idea if BP was insured against such a disaster but I am confident that they will have a very difficult time going forward in finding any insurance company willing to serve them against any such future event.

This was a major disaster, but in the global scheme, it was not completely irreversible. Global consequences of climate change, meanwhile, are on a much larger scale, and we cannot rely much on guidance from past events. I addressed this important issue in my book (Climate Change: The Fork at the End of Now. Momentum Press, 2011), as many others have done in the past. Here are two short excerpts from my book:

The profitability of the insurance industry critically depends on its ability to assess risk, defined as:

loss potential = occurrence x frequency.

Can we insure the survival of the planet as a habitable environment? If the answer is yes, then who and how will pay the premium? If climate change is just a big catastrophic event, then the mechanism of financial preparation should not be much different than the insurance of present catastrophic events. The trouble is that we are not very good at insuring catastrophic events.

Are we better at recognizing small, everyday, events in which risk plays a role?

Every Saturday morning, throughout most of the year, we have a green market not far from where I live. It’s great – you get fresh produce and you meet friends and neighbors. Right now it’s corn season. The photographs below show one of the fresh corn stands. They look great

Corn_Blog1 Corn_blog2

The top photograph shows the stand itself before customers have started to explore the merchandise. It’s a beautiful collection of sweet corn ears with the price of $2 for 3 ears clearly posted.

However, there is a risk involved in the purchase: we don’t see the kernels inside. We have no idea if some of them are missing, rotten or otherwise damaged. In principle the price should reflect this uncertainly. However, some customers want to eliminate that risk, so they peel back the husk to get a good look at the kernels. The second picture shows one such customer. He checks each ear and puts any damaged ones back into the pile. Obviously, other customers that want to buy the corn will not touch those ears now that they can see their flaws. The risk falls entirely on the seller. I do not know the profit margin of the seller or whether he takes this practice into account. My guess is that he does. In that case, the customers that peel the husks away before buying the corn are shifting the risk to the rest of the customers who play by the rules.

Some of the approaches to storm adaptation and sea level rise on a local level rely on sea walls and other blocking structures (April 30, 2013 blog). These measures end up shifting both the rising water level and therefore the risk to neighboring locations, making it even more costly to everyone else. Climate change, and the associated sea level rise are global issues. If we continue with the corn analogy, those who set up such blocking structures are peeling back the corn, but all of us pay for the increased risk.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , | Comments Off

Income Inequality – Climate Change

I just came back from a very intense week in Israel. I went there in the “middle” of a war between Hamas and Israel, which paused for a cease-fire a day after my arrival. This war has been between a well-run state with probably the best army and technology in the Middle East, and a small group in control of a piece of land that supports 1.8 million people. The group declared its motivation as hatred for Israel. The inequality of strength between the two antagonists forced Hamas to take up a strategy that included use of civilians as shields. The result was many civilian casualties, mass destruction and suffering by innocent people caught in the middle.

The question I was asked most often in Israel this week was what Americans think about the conflict. This question came sharply into focus by way of a young American relative of mine who recently married an Israeli and now lives with him in Israel along with her newborn baby. She said that her Facebook page is full of condemnations of Israel by her American friends that are appalled by the force imbalance and the civilian casualties. She has started to post her own responses to try to shift the balance to a bit more objective stand.

My answer in these conversations was that the US public opinion is now occupied with extreme unrest all throughout the world, including the conflicts of Ukraine-Russia; ISIS – Syria and Iraq; Somalia, South Sudan, Libya, Boko Haram, etc. With reluctance to dig a bit deeper into the causes, many Americans blame President Obama for causing the unrest or not doing enough to re-equilibrate the world. The conflict between Hamas and Israel doesn’t occupy much of their attention in comparison. Many are now taking the position that it is just another example of the craziness happening in the world right now. Blaming the American president is an easy vent for all this frustration. This attitude encounters great sympathy in Israel. My thoughts, however, have (characteristically) expanded beyond the present into the future.

International laws of war are designed to regulate wars and conflicts between nations with regular armies – not wars or deadly conflicts between organizations such as Hamas, ISIS, Hezbollah and Boko Haram. Extreme inequality and despair leads to international terrorism, and we are starting to see this trend swamp almost every corner of the world. Tom Friedman, in the TV documentary series, “Years of Living Dangerously” (May 27, June 3, 2014 blogs) associated the unrest in Syria, Egypt and Yemen with climate change-induced droughts that led to severe water stress. Israel is in the same region, with a similar climate, yet – drought or no drought – it doesn’t suffer from water stress. Instead, Israel serves as an example of efficient water management (March 4, 2014 blog). One of my talks in there focused on this issue.

My course on Physics & Society is anchored largely on the US National Intelligence Council’s (NIC) periodic report on global trends. They consider income inequality a very important trend to follow. Other trends include: population growth, economic growth, power distribution, environmental impact, climate change, science & technology, energy, water and food. These trends are all strongly dependent on each other, and the intelligence communities in every country are very interested in them because they have major impacts on security. In the modern world, with global, sophisticated, communication capabilities, desperate people find ways not only to confront people and nations that are much better off but also to communicate with each other to coordinate supporting activities. Physics tells us (again, the famous 2nd Law of Thermodynamics – see last week’s blog) that destruction is much easier than rebuilding. It is now being estimated that what was destroyed in the three weeks of conflict between Israel and Hamas will take 20 years to rebuild (assuming that there will be no more war – a big assumption).

In my November 26, 2012 blog I discussed climate change in terms of the IPAT equation that states:

Impact = Population x Affluence x Technology

It turns out that the strongest impact on climate change, in the form of greenhouse gas emissions, is in the Affluence term (measured as GDP/Capita). As I discussed in last week’s blog, the income inequality between developed and developing countries is decreasing rather than increasing, as their economic growth is on average twice or three times faster than that of developed countries. As I said then, China has become the largest emitter of carbon dioxide, but it still remains a far smaller emitter on a per capita basis than the USA. By all estimates, the mid-21st century world will be much more dominated, both demographically and economically, by citizens of what we now label as developing countries. The world cannot accomplish the necessary energy transition to sustainable energy sources unless the developing countries can be convinced that the shift will not hinder their efforts to close the gap in the standard of living between them and the developed countries. Their citizens would not allow such a presumably unfair tradeoff.

Climate change is a global phenomenon that requires global cooperation. On the other hand, the most important impact of climate change comes through the water cycle (search for all the entries on “Water Cycle” in the blog). This manifests itself in the form of droughts, floods, extreme weather events and the rise in sea level. Since we don’t have a global government, the adaptations to most of these impacts will necessarily be local. Adaptations require resources, however, which means that while they are readily available to those who can afford them, they remain out of reach for those who cannot. The poor cannot adapt and many of them will turn, instead, to violence. Since, in general, this violence is not sanctioned by sovereign states, we define it collectively as terrorism.

In the end, extreme inequality makes all of us miserable and we had better look for ways to realize soon that we are together on this planet and need to start caring for (and about) each other. If things look bad now, there is no question in my mind that in a “business as usual” scenario, the world will be a much scarier place toward the end of the century – my definition of “The End of Now.”

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off

Income Inequality – Science Magazine

Science Magazine is addressing inequality; on May 23rd, they came out with a special issue dedicated to the science of the topic (not exclusively – there is other stuff in the issue as well). Other special issues of Science this year have included Exploring Martian Habitability, Visualization Challenge, Crystallography, Breast Cancer, the Gas Surge, Strategies Against HIV/Aids, Slicing the Wheat Genome, Vanishing Fauna, and Parenting, so we are in good company! I am including a table of relevant articles below:

Table of the relevant articles in the issue:

  • A world of difference by Emily Underwood.
  • The ancient root of the 1% by Heather Pringe.
  • Our egalitarian Eden by Elizabeth Pennis
  • Tax man’s gloomy message: the rich will get richer by Eliot Marshall
  • Physicists say it’s simple by Adrian Cho.
  • Can disparities be deadly? By Emily Underwood.
  • While emerging economies boom, equality goes bust by Mara Hvistendahl
  • Tracking who climbs up-and who falls down-the ladder by Jeffry Mervis
  • Review – Inequality in the long run by Thomas Piketty and Emanuel Saez
  • Review – Skills, education and the rise of earning inequality among the “other 99%” by David H. Autor.
  • Review – Income inequality in the developing world by Martin Ravallion.
  • Review- Intergenerational transmission of inequality: material disadvantage and health at birth by Anna Aizer and Janet Currie
  • Review – On the psychology of poverty by Johannes Haushofer and Ernst Fehr

The list reflects a mixture of short introductory pieces, and various other segments on the topic followed by with short review articles. Piketty (together with Emanuel Saez) makes a contribution on the same topic as his book, but this time it is a much shorter piece and considerably more quantitative. There is no way for me to try to cover all the topics addressed – both the volume of information and the prerequisites required for comprehension make that impossible in this setting. Science Magazine readers are not required to be experts in the fields but the material does require some background in science and math. I chose instead to make some comments on three pieces:

  1. “Physicists say it’s simple” by Adrian Cho – for the obvious reason that I have a similar interdisciplinary background as the author.
  2. “The ancient roots of the 1%” by Heather Pringe – to demonstrate that tax records are not the only evidentiary material for income inequality, as implied by Piketty’s work and that income inequality is not necessarily destined to increase indefinitely.
  3. “Income inequality in the developing world” by Martin Ravallion – this quantifies some of the criticism of Piketty’s work (as I mentioned in last week’s blog) and relates to the fact that inequality of many of the developing countries as compared with the developed countries is decreasing as evidence of the much higher economic growth rates of these countries.

I will not try to summarize the articles here but will instead take key sentences and/or paragraphs that demonstrate the points. I strongly encourage everybody to go to the original Science articles and try to read them as they were intended to be read.

Physicists say it’s simple:

Adrian Cho is a physicist that turned to economics. He starts with a sentence that is classic for this kind of article: “If the poor will always be with us, an analogy to the second law of thermodynamics may explain why,” and follows it up with a short explanation:

The argument builds on the century-old kinetic theory of gases, in which physicists asked: What is the most probable distribution of the energies of the molecules in a gas? Yakovenko and a colleague argued in 2000 in The European Physical Journal B. “The exponential distribution is what you would call natural inequality—what you would get from entropy,” Yakovenko says.

This is not the place to argue with the analogy. I’m sure that I have mentioned the second law of thermodynamics often enough throughout my blog to convince everybody that almost everything in the Universe can be defined as physics. My wife (a psychologist) threatens to divorce me every time that I use that argument, and she is probably right to do so.

The ancient root of the 1%:

The article starts with the following sentence, “Don’t blame farming. Inequality got its start among resource-rich hunter-gatherers.” It then continues to develop the historical evolution of economic inequality mainly based on archeological and anthropological evidence:

Such economic disparities were common in the Roman Empire, where 1.5% of the empire’s households controlled 20% of the income by the late 2nd century C.E., according to one recent study.

Inequality has deep archaeological roots. Yet if existing traditional societies are any guide, our hunter-gatherer ancestors were mostly egalitarian (see sidebar, p. 824). How and when did a few members of society begin to amass wealth? Relying on evidence from the Near East, researchers suggested that the earliest elites emerged after 10,500 years ago, when people successfully domesticated plants and animals and settled in large permanent villages. In this view, agriculture led to the production of surpluses and the emergence of managers, craftspeople, and other specialists, who eventually gained control over extra resources.

Now, analyses of archaeological sites as well as ethnographies of traditional societies are etching a more complex picture, suggesting that some ancient hunter-gatherers may have accumulated wealth and political clout by taking control of concentrated patches of wild foods. In this view, it is the ownership of small, resource-rich areas—and the ease of bestowing them on descendants—that fosters inequality, rather than agriculture itself.

Income inequality in the developing world:

Science 2014 May 344(6186) 851-5, Fig. 1This short review summarizes inequality data for 130 developing countries by using household surveys. The measure of inequality (MLD) was designed to differentiate between inequality within countries and inequality between countries. It is designed to have similar characteristics to the more widely used Gini Coefficient, where MLD = 0 represents perfect equality while MLD = 1 represents “perfect” inequality, where all of the resources are concentrated in a single hand. One of the criticisms of Piketty’s work that I mentioned last week was that the inequality in the developing countries is decreasing, not increasing. The figure shows this is true (at least from 1980) for inequality between countries, but it is not true for inequality within countries, which seems to increase with time.

The same issue has another related article, “While emerging economies boom, equality goes bust,” by Mara Hvistendahl that deals with individual big developing countries like China and India and arrives at the same conclusion.

I will conclude this blog with a very short description of a course that I teach to senior undergraduate and graduate students in physics: “Physics and Society.” Part of the rationale for the course reads as follows:

Merriam Webster Dictionary defines Physics, among other definitions, as: science that deals with the structure of matter and the interactions between the fundamental constituents of the observable universe. The goal of physics is to formulate comprehensive principles that bring together and explain all discernible phenomena.

With a population of 7 billion people (October 2012) and growing, humans are unquestionably part of the physical environment.

Most of our graduate students see a Masters degree as the end of their education, one that holds the promise of increased job opportunities. The course’s objective is to explore career opportunities beyond the usual boundaries of textbooks, expanding to include real-world applications that are not restricted to textbook physics. Income inequality is an important topic in this course.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , | Comments Off

Inequality – Responses to Piketty

In last week’s blog, I focused on Piketty’s book and my reading of it. As I mentioned there, the volume of responses to the book was overwhelming. Some of the responses focused on the book, but many of them tackled the issue itself. Not surprisingly, there was a considerable amount of repetition in the responses. As I promised last time, this blog will summarize some of the main issues that they raised. Because this blog is focused on public responses, I have compiled excerpts of responses, mostly as posted in the “New York Times,” my main source of information on current events.

I will start with the obvious: Nicholas Kristoff’s Op-Ed in the “New York Times,” (July 24, 2014) entitled: “An Idiot’s Guide to Inequality.”

He starts with restating the observation that Frank Rich made (see last week’s blog) about the book’s low score under the “The Hawking Index.” Here are his exact words:

We may now have a new “most unread best seller of all time.” Jordan Ellenberg, a professor of mathematics at the University of Wisconsin, Madison, wrote in The Wall Street Journal that Piketty’s book seems to eclipse its rivals in losing readers: All five of the passages that readers on Kindle have highlighted most are in the first 26 pages of a tome that runs 685 pages.

Unlike, Frank Rich’s, which reviewed Hillary Clinton’s book, Kristoff’s Op-Ed zeroes in on Piketty’s book. As a remedy for the book’s low readership, he introduces us to the “Idiot’s Guide to Inequality.” Here are the elements of his “guide”:

First, economic inequality has worsened significantly in the United States and some other countries. The richest 1 percent in the United States now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own half of all wealth. The situation might be tolerable if a rising tide were lifting all boats.

Second, inequality in America is destabilizing. Some inequality is essential to create incentives, but we seem to have reached the point where inequality actually becomes an impediment to economic growth. Certainly, the nation grew more quickly in periods when we were more equal, including in the golden decades after World War II when growth was strong and inequality actually diminished. Likewise, a major research paper from the International Monetary Fund in April found that more equitable societies tend to enjoy more rapid economic growth.

Third, disparities reflect not just the invisible hand of the market but also manipulation of markets. Joseph Stiglitz, the Nobel Prize-winning economist, wrote a terrific book two years ago, The Price of Inequality, which is a shorter and easier read than Piketty’s book. In it, he notes: “Much of America’s inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others.”

Fourth, inequality doesn’t necessarily even benefit the rich as much as we think. At some point, extra incomes don’t go to sate desires but to attempt to buy status through “positional goods” — like the hottest car on the block.

Fifth, progressives probably talk too much about “inequality” and not enough about “opportunity.” Some voters are turned off by tirades about inequality because they say it connotes envy of the rich; there is more consensus on bringing everyone to the same starting line.

One might think that since Standard & Poor’s is a rating agency, it doesn’t have a political agenda, yet – for the first time – they have identified that inequality is causing slow economic growth. Here is their reasoning, as reported by Neil Irwin in the “New York Times” (August 6, 2014) in his article, “A New Report Argues Inequality is Causing Slower Growth. Here’s Why It Matters”:

I asked Beth Ann Bovino, the chief U.S. economist at S.&P., why she and her colleagues took on this topic. “We spend a lot of time trying to think about what the economic outlook is and what to expect ahead,” she said. “What disturbs me about this recovery — which has been the weakest in 50 years — is how feeble it has been, and we’ve been asking what the reasons behind it are.” She added: “One of the reasons that could explain this pace of very slow growth is higher income inequality. And that also might also explain what happened that led up to the great recession.

”From my research and some of the analysis I saw from others, when you have extreme levels of inequality, it can hurt the economy,” she said.

Because the affluent tend to save more of what they earn rather than spend it, as more and more of the nation’s income goes to people at the top income brackets, there isn’t enough demand for goods and services to maintain strong growth, and attempts to bridge that gap with debt feed a boom-bust cycle of crises, the report argues. High inequality can feed on itself, as the wealthy use their resources to influence the political system toward policies that help maintain that  advantage, like low tax rates on high incomes and low estate taxes, and underinvestment in education and infrastructure.

As I mentioned last week, one of my main reservations about Piketty’s book was his use of the word, “global,” when he mainly looked at France, England and the US, only occasionally mentioning other countries, most of which are already developed. Piketty recognizes this deficiency, but has argued that he lacks sufficient data about developing countries to continue his studies there. Here is what the “New York Times” wrote on this issue (July 20, 2014) in an article titled, “Income Inequality is Not Rising Globally, It’s Falling”:

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

Inequality is rising because the return on capital is considerably larger than that on labor; Piketty’s solution is to “simply” tax capital above a certain threshold. He recognizes that the taxing would have to be global because otherwise people with capital will run to the nearest tax haven or area with the lowest tax rates (The new term for this, when applied to this phenomenon in business, is “inversion.”). The “New York Times” (July 21, 2014) addresses this issue as well:

Sean Hannity, the Fox News prime-time host, threatened last month to leave New York for a tax haven down south. Tiger Woods transplanted himself from California to Florida for the same reason. The actor Gerard Depardieu decamped from France and sought citizenship in Russia after complaining that 85 percent of his income was consumed by taxes.

“I can’t wait to pay no state income tax down in Florida or Texas,” Mr. Hannity, who lives in Nassau County, said. “I haven’t decided yet, but I’m leaning Florida because I like the water and I like to fish.”

But a new analysis being released Monday undermines the frequent assertion that wealthy people reflexively flee New York City — where Mayor Bill de Blasio campaigned to raise taxes on those who make more than $500,000 — for low-tax states.

The study, by the city’s Independent Budget Office, found that the share of higher-income households that moved from the city in 2012, 1.8 percent, equaled the share of lower-income households that left.

Next week, I will leave off of Piketty, but not the issue of inequality. I will cover the May 23rd “Science” magazine dedicated to inequality, which – in a sense – suggested (to me) a stamp of approval for incorporating inequality into the sciences.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Income Inequality – Piketty

Summer is about to end and school will start soon. In a few days I will be going on a short trip to Israel to give two talks – one at the Weizmann Institute about water management and climate change, and the other at my high-school reunion. The one at the Weizmann Institute will focus on attempts to ensure that 75 years from now the world will be safe for our grandchildren and their grandchildren. The talk at my school reunion will focus instead on my own attempts to facilitate communication between my generation and that of our grandchildren, using my family as an example. There will be three days between the talks, and the subject matter will cover a span of about 150 years. It makes me feel like a mini Methuselah (according to the Bible he died age 969), which makes life interesting. I have often focused here on the issue of connecting the distant past with an equally distant future, and I will continue to do so.

In the next few blogs before my trip I would like to focus on an issue that is especially important presently – income inequality. I have addressed the subject before, specifically in the February 4, 2013 blog in connection with sustainable economic growth, and the January 7, 2014 blog as it relates to population growth. However, this year the issue took on a new dimension. On the political side it started with the election Bill de Blasio as New York City’s new mayor, and his campaign cry to try to address the city’s growing inequality. The publication of Thomas Piketty’s book, Capital in the Twenty-First Century, (translated to English by Arthur Goldhammer), only served to amplify the importance of the issue.

I am a physicist (trained as a physical chemist), and I teach two courses in which income inequality plays an important role: climate change and “Physics and Society.” In both courses whenever I mention inequality, my students’ typical response is: “Why should we care? We are here to end up on top.” Both courses are highly interdisciplinary and deal with subjects that I never studied in school; instead, I have tried to self-educate myself throughout the years. Economics is probably the most important of these disciplines. In the more than two years that I have been writing this blog, it has surfaced repeatedly. As a result, I decided to spend part of my recent vacation-work trip to Europe (June 10, 24, 2014 blogs) trying to read Piketty’s book in full. I did it (all 700 pages worth :( )! When I came back I read Joseph Stiglitz’s new book, The Price of Inequality (W.W. Norton & Company, 2013). I also found that “Science” magazine, one of the most prestigious scientific journals, dedicated a significant fraction of its May 23rd issue to articles about inequality. In a sense, this summer was the summer of inequality for me and I want to share some of it with you.

I will start with Piketty’s book, continue through some of the many public reviews and comments that have shown up on an almost daily basis since its publication (April 2014), follow up with highlights from the Science issue and finish with attempts to correlate all of this with sustainability and climate change. Throughout this series of four blogs I will intersperse my own takes on these issues.  To put it into perspective, Frank Rich in an article in New York Magazine (August 12, 2014; page 46 ) titled “Good Hillary, Bad Hillary” described a new statistical tool called, “The Hawking Index,” which examines readership. It was created by Jordan Ellenberg, a Wisconsin Mathematician. The index is named after Stephen Hawking’s book, A Brief History of Time, about the beginning of the Universe in the Big Bang. The index is supposed to compute how thoroughly best sellers are being read (For example, Donna Tart’s Goldfinch scored a whopping 98.5%). At the bottom of the index, breaking Hawking’s previous low of 6.6%, came Thomas Piketty’s Capital in the Twenty-First Century with a score of 2.4%.

Regarding Hawking’s book, I still remember an episode in London when I tried to buy the book as a present for my stepfather. I went to a reputable book store and asked for the book; they sent me to the History section. I immediately realized, (this was many years before the creation of the “Hawking Index”), that popularity and readership are not necessarily the same.

Piketty bases his analysis on detailed examination of data and the argument that capitalism is based on two fundamental laws. This sounds similar to Physics, where significant parts of the macroscopic physical environment are based on the 1st and 2nd laws of thermodynamics (you can use the Search button on the side to see previous mentions of thermodynamics in this blog). The laws are very simple and are given in a form of two formulas:

  1. α = r×β
  2. β = s/g

α is the share of income that comes from capital; β is the ratio of capital to the national income; r is the rate of return from capital; s is the savings rate and g is the growth rate.

To use two numerical examples from the book: in equation 1 if β = 600% and r = 5% it follows that α = 30%. Likewise, in equation 2, if we say that the savings rate (s) is 12% and the growth rate (g) is 2%, it implies that β = 600%. Significantly, the second law implies that a country that saves a lot but grows slowly accumulates large capital (relative to its income). Piketty places the two laws at the heart of the central contradiction of capital. Put simply, if the return on capital is greater than the general growth of the economy, then this will inevitably lead, over time, to those with capital increasing their wealth in relative terms, until they eventually own all capital and thus put an end to capitalism itself. With the return increasing over time, when given access to various assets, capital will get a larger share of income. In fact, when wealth is inherited and can be diversified, the returns are higher than in case of an individual who has limited wealth and prefers safer avenues which earn lower returns.

A typical data set on which his analysis is based, is given below:

The figure is in the book but in a bit less attractive form at least in my version of the book (the electronic version). I took this version from Google images instead.

The figure is in the book but in a bit less attractive form at least in my version of the book (the electronic version). I took this version from Google images instead.

The figure depicts the share of total national income held by the top percentile of the population in four Anglo-Saxon countries over the 20th Century. Similar trends can be seen in the French data. It is obvious from the graph that over most of this time, the share of income does not obey the “basic laws of capitalism,” because the share of income held by the top percentile is actually decreasing, not increasing as the laws would predict. Piketty claims that the laws are not obeyed over this period because the period was dominated by the two World Wars in which massive capital was destroyed. This is certainly true in France and Germany, which are not shown here, but the claim is a bit questionable, to a variable degree, for the four countries shown in the graph. Regardless, for what it is worth, based on the two laws, the claim itself that capital grows considerably faster than income makes sense (at least to me).

Another important issue is that the claim of global behavior, which he uses as a predictor for the future, is based mainly on three countries: France, England and the USA. The analysis and the predictions are based on analysis of historic data and Piketty was not able to find similarly extensive data sets for other countries. This is problematic for numerous reasons.

Be that it as it may, I return to my students’ recurring question – so what? If some guys are getting richer and the standard of living (in real $) for most of the rest of the 99% remains approximately the same (and we belong to the 99%), why should we care? Why not just strive to join the 1% and let the magic of the free market work its way?

I will try to address some of these questions and how they relate to the book in the next three blogs. Meanwhile, I’d like to finish here with an observation unique to the US. A recent US Supreme Court decision, which passed by a margin of 5:4, started with the following paragraph:

In the Court’s plurality opinion, Chief Justice John Roberts wrote, “The right to participate in democracy through political contributions is protected by the First Amendment, but that right is not absolute. Our cases have held that Congress may regulate campaign contributions to protect against corruption or the appearance of corruption. See, e.g., Buckley v. Valeo, 424 U.S. 1, 26-27 (1976) (per curiam).”

The resolution states that spending money on an election is protected by the First Amendment, as is free speech. The only exception is that Congress may regulate campaign contributions to protect against corruption or the appearance of corruption. This means that the ever-increasing share of capital owned by the top 1% of the population – a resource that provides this group with the unopposed ability to sway elections – cannot be limited by Congress. Using such monetary expenditure to gain more and more influence on the political process, resulting (for example) in the lowering of taxes, modification of antitrust legislation or reduction of welfare payments, is not considered “quid pro quo,” meaning that it is not considered corruption or appearance of corruption, and thus cannot be limited.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

Be Sociable, Share!
Posted in Climate Change | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment