Ted Nordhaus: Rethinking environmentalism

On Tuesday, I attended a talk at Powell’s by Ted Nordhaus, an author and long-time environmentalist. I recently read an article about him and co-author Michael Shellenberger in Wired that piqued my interest in their book “Break Through: From the Death of Environmentalism to the Politics of Possibility“.

Ted’s main idea is that the current efforts of the environmentalist movement are unrealistic in their expectations and ineffective in their long-term goals. By fighting lots of little battles (cutting car emissions, capping carbon output, reducing consumerism), the movement has lost sight of the bigger picture. Without large scale, systemic change, we might be able to slow the destroying of our planet, but not prevent its untimely demise.

He pointed out that the solution of cutting back to save the environment is an appeal by the middle/upper classes of developed nations to others in a similar socioeconomic class. It’s easier to convince middle class families in Oregon to pay a slight premium for wind power than to convince a rural village in China to not build a coal power plant. Both would have similar impacts on carbon emissions, but only one would result in being left behind without electricity. It’s not that the Chinese villagers don’t care about the environment; their priorities are more centered around immediate survival and economic development.

The solution: a massive development effort to bring down the cost of alternative energy sources to a level that will compete with traditional sources. Until the price of solar/wind/nuclear/hydroelectic/geothermal power is competitive with coal, developing nations such as India and China simply aren’t going to “go green”.

There’s a lot more Ted said in his talk that I’d like to share, so I’ll continue to post while I read the book. Also, I recorded the talk, but don’t know of a good way to share it. Any ideas?

A lesson about supply/demand and technology

I read an interesting article in The Economist that I found particularly interesting. I’m not sure if I’m turning into an economics nerd, but I think it made a great connection between manufacturing and inventory technology with the “Great Moderation” (more on this in a sec).

Since I’m not an economist of any sort, the concept of the Great Moderation was new to me, although it seems to be part of the economic vernacular. It refers to the period of greater stability in the world economy that has developed since the early 80s. Basically, world markets have been less volatile and seemingly better able to recover from crises than in the past. The article is primarily about what caused this change and whether it is sustainable (as opposed to just a long streak of good luck).

What I found interesting was a point about inventory cycles (which I think is how long it takes to turn over a company’s inventory). The article suggests that due to a generally improved ability to manage inventory, companies are able to scale production to demand more effectively, minimizing large excess or severe understock. This in turn, decreases the volatility of the market. Here’s the punchline:

That something so workaday as supply-chain management could have so marked an effect might seem a dull conclusion. But dullness is a virtue, because technological improvement is irreversible. This means the greater stability it provides is likely to be permanent.

Pretty incredible that something as boring as supply chain management can impact the global economy in such a large way. I guess that is how Wal-Mart almost took over the world.