Environmental Law Prof Blog

The Changing Shape of the World Economy

Take a look at this chart available at Visualizing Economics  You can also click the image to see it in a pop-up window.  It shows China, India, Russia and Brazil with rapidly growing GDPs between now and 2050.

Are Speculators Driving Up Oil Prices?

The Economist published an article Data Diving discussing new data that allows closer analysis of whether speculators are responsible for driving up oil prices.  The short answer according to the speculators is probably not.  And, even if they were, in the Economist's opinion, the critical importance of liquidity overwhelms any effect on higher prices.

The regulatory question is whether the Commodity Futures Trading Commission should limit the positions that speculators such as banks, hedge funds, and others take on oil because of the harmful influence that speculators have on the market.

... whether speculation has really been responsible for spiking prices is a controversial issue. In 2008 the Commodity Futures Trading Commission (CFTC) issued a report dismissing the role of speculators in last year’s startling run-up in prices. But banks, hedge funds and others who bet on oil (without a use for the stuff itself) still face limits on the positions they can take, if Gary Gensler, the new CFTC head, can show that their influence in markets does harm.

New disaggregated data show more clearly the role of speculators in the market:

On September 4th the CFTC added more evidence to the debate by releasing what it said were more transparent data on market positions. Before this month, the CFTC simply classified traders as “commercial” or “non-commercial” in its weekly report on the overall long and short positions in the market. Now it has started to disaggregate them further, into producers and buyers, swap dealers and “managed money”. The third category includes hedge funds.

The new data indicate that speculators (swap dealers and managed money) were long on oil in the week to September 1st, with managed money holding a net long position by more than a 2-to-1 ratio. Those actually involved in the oil business (producers and users) held positions that were net short by similar ratios.  And the swap dealers and managed-money players are bigger in the market, both in terms of the contracts they hold and their own sheer numbers.

So, the speculators constitute the largest amount of the market and they take dramatically opposite positions in the market as compared with producers and users.  Still, the speculators' analysts discount the ability of speculators to affect the market.  I'm not market savvy enough to understand the speculators' analysis proffered by the Economist so would someone out there explain how this tells us that speculators are not influencing the market?

But analysts at Barclays Capital note that long swaps accounted for just 6.4% of total futures and options contracts, not enough to drive prices up on their own. Physical traders held more of the outstanding long positions (10.3%) and held even more short positions. This one set of numbers, in other words, does little to prove that speculators are overriding market fundamentals to drive prices. New quarterly data also released by the CFTC show that money flows to exchange-traded funds (ETFs) in commodities failed to correlate strongly with last year’s price surge.

Maybe some more numbers will help us sort this out (in favor of the speculators):

There are more disclosures to come. The CFTC says it will soon release the newly disaggregated data going back three years. If those numbers, like the quarterly ETF data, are equally unconvincing on the role of speculation, the case for limiting positions will be weakened.

And the Economists' speculator-friendly bottom line:

And a strong counter-argument remains: that speculators provide crucial liquidity. Even if they also have some effect on prices, taking them out of the game could well do more harm than good. It is tempting to look for scapegoats when high prices hurt consumers. But the real culprits for oil-price volatility may be much more familiar: supply, demand and global instability.

Sustainable Fisheries Law

I teach Sustainable Natural Resources Law in the spring.  Here's a new publication brought to my attention by Gerd Winter that looks like a great fit for introducing students to the fisheries area.  A slightly edited summary of the book courtesy of Gerd appears below:

Towards Sustainable Fisheries Law

As most of the fish resources in the world's oceans are constantly depleting, the development of effective and efficient instruments of fisheries management becomes crucial. Against this background, the IUCN
Environmental Law Programme proudly presents its latest publication in the IUCN Environmental Policy and Law Paper Series, edited by Gerd Winter, a member of the IUCN Commission on Environmental Law, which focuses on a legal approach towards sustainable and equitable management of fish resources.

This publication is a result of an interdisciplinary endeavour with worldwide participation studying multiple demands on coastal zones and viable solutions for resource use with emphasis on fisheries. The book consists of six case studies including Indonesia, Kenya, Namibia, Brazil, Mexico and the EU, which are preceded by an analysis of the international law requirements concerning fisheries management. The final part of the book summarizes the case studies and proposes a methodology for diagnosing problems in existing management systems and developing proposals for reform.

Towards Sustainable Fisheries Law thus helps the reader to learn more about the international legal regime for fisheries management that is currently in place, improves the understanding of the institutional and legal problems related to fisheries management that countries face at the national level, and provides guidance for sustainable use of fish resources through a "legal clinic" for fisheries management.

The book was published as IUCN Environmental Policy and Law Paper No. 74. Free copies can be ordered at the IUCN office or downloaded (2,05 MB) from the IUCN website at: Toward Sustainable Fisheries Law

World Council of Churches Statement on Eco-Justice and Ecological Debt

Many of us attempt to bring ethical perspectives to bear on issues raised by our classes in addition to ecological and economic perspectives.  Although it may be a bit late for those of you who have already started class, here is the most recent statement by the World Council of Churches on eco-justice and ecological debt.  In a related, but fascinating, note, the WCC as part of its current  programme work on poverty, wealth and ecology is attempting to articulate a consumption and greed line -- in addition to the more typical poverty line.  This would provide practical spiritual guidance on when, in Christian terms, too much is too much.  Check it out!!!

WCC Statement on eco-justice and ecological debt

02.09.09

The World Council of Churches (WCC) Central Committee adopted a "Statement on eco-justice and ecological debt" on Wednesday, 2 Sept. The statement proposes that Christians have a deep moral obligation to promote ecological justice by addressing our debts to peoples most affected by ecological destruction and to the earth itself. The statement addresses ecological debt and includes hard economic calculations as well as biblical, spiritual, cultural and social dimensions of indebtedness.

 The statement identifies the current unprecedented ecological crises as being created by humans, caused especially by the agro-industrial-economic complex and the culture of the North, characterized by the consumerist lifestyle and the view of development as commensurate with exploitation of the earth's so-called "natural resources". Churches are being called upon to oppose with their prophetic voices such labeling of the holy creation as mere "natural resources".

 The statement points out that it is a debt owed primarily by industrialized countries in the North to countries of the South on account of historical and current resource-plundering, environmental degradation and the dumping of greenhouse gases and toxic wastes.

In its call for action the statement urges WCC member churches to intervene with their governments to drastically reduce greenhouse gas emissions and to adopt a fair and binding deal at the UN climate conference in Copenhagen in December 2009, in order to bring the CO2 levels down to less than 350 parts per million (ppm).

 Additionally the statement calls upon the international community to ensure the transfer of financial resources to countries of the south to refrain from oil drilling in fragile environments. Further on, the statement demands the cancellation of the illegitimate financial debts of the southern countries, especially for the poorest nations as part of social and ecological compensation.

In a 31 August hearing on "ecological debt" during the WCC Central Committee meeting in Geneva, Dr Maria Sumire Conde from the Quechua community of Peru shared some ways that the global South has been victimized by greed und unfair use of its resources. In the case of Peru, Sumire said mining has had particularly devastating effects, such as relocation, illness, polluted water,and decreasing biodiversity.

 The concept of ecological debt has been shaped to measure the real cost that policies of expansion and globalization have had on developing nations, a debt that some say industrialized nations should repay. Dr Joan Martinez Alier, a professor at the Universidad Autònoma de Barcelona in Spain, said climate change, unequal trade, "bio-piracy", exports of toxic waste and other factors have added to the imbalance, which he called "a kind of war against people around the world, a kind of aggression."

 Martinez went on saying: "I know these are strong words, but this is true." He beseeched those present, at the very least not to increase the existing ecological debt any further.

 The WCC president from Latin America, Rev. Dr Ofelia Ortega of Cuba, said ecological debt was a spiritual issue, not just a moral one. "The Bible is an ecological treatise" from beginning to end, Ortega said. She described care for creation as an "axis" that runs through the word of God. "Our pastoral work in our churches must be radically ecological," she said.

 Full text of the statement

 More on the 31 August hearing on ecological debt

 WCC countdown to climate justice

WCC programme work on poverty, wealth and ecology

More information on the 26 August - 2 September 2009 Central Committee meeting

 

How this virus developed and why it may be a killer

The Mexican swine flu virus is a swine influenza A/H1N1 virus hybridized (mixed) with human and bird viruses.  We have some immunity to human flu and to some strains of swine influenza A/H1N1;  We don't have immunity to bird flu, which is why that virus is so virulent - with a kill ratio of almost 50% -- and why so much pandemic planning and preparedness focused on bird flu.

New Scientist reports:

This type of virus emerged in the US in 1998 and has since become endemic on hog farms across North America. Equipped with a suite of pig, bird and human genes, it was also evolving rapidly.  Flu infects many animals, including waterfowl, pigs and humans. Birds and people rarely catch flu viruses adapted to another host, but they can pass flu to pigs, which also have their own strains.If a pig catches two kinds of flu at once it can act as a mixing vessel, and hybrids can emerge with genes from both viruses. This is what happened in the US in 1998. Until then, American pigs had regular winter flu, much like people, caused by a mutated virus from the great human pandemic of 1918, which killed pigs as well as at least 50 million people worldwide. This virus was a member of the H1N1 family - with H and N being the virus's surface proteins haemagglutinin and neuraminidase.  Over decades, H1N1 evolved in pigs into a mild, purely swine flu, and became genetically fairly stable. In 1976, there was an outbreak of swine H1N1 in people at a military camp [Fort Dix] in New Jersey, with one death. The virus did not spread efficiently, though, and soon fizzled out.

But in 1998, says Richard Webby of St Jude's Children's Research Hospital in Memphis, Tennessee, swine H1N1 hybridised with human and bird viruses, resulting in "triple reassortants" that surfaced in Minnesota, Iowa and Texas. The viruses initially had human surface proteins and swine internal proteins, with the exception of three genes that make RNA polymerase, the crucial enzyme the virus uses to replicate in its host. Two were from bird flu and one from human flu. Researchers believe that the bird polymerase allows the virus to replicate faster than those with the human or swine versions, making it more virulent.

By 1999, these viruses comprised the dominant flu strain in North American pigs and, unlike the swine virus they replaced, they were actively evolving. There are many versions with different pig or human surface proteins, including one, like the Mexican flu spreading now, with H1 and N1 from the original swine virus. All these viruses still contained the same "cassette" of internal genes, including the avian and human polymerase genes, reports Amy Vincent of the US Department of Agriculture (USDA) in Ames, Iowa (Advances in Virus Research, vol 72, p 127). "They are why the swine versions of this virus easily outcompete those that don't have them," says Webby.

But the viruses have been actively switching surface proteins to evade the pigs' immunity. There are now so many kinds of pig flu that it is no longer seasonal. One in five US pig producers actually makes their own vaccines, says Vincent, as the vaccine industry cannot keep up with the changes. This rapid evolution posed the "potential for pandemic influenza emergence in North America", Vincent said last year. Webby, too, warned in 2004 that pigs in the US are "an increasingly important reservoir of viruses with human pandemic potential". One in five US pig workers has been found to have antibodies to swine flu, showing they have been infected, but most people have no immunity to these viruses.

The virus's rapid evolution created the potential for a pandemic to emerge in North America.  Our immune response to flu, which makes the difference between mild and potentially lethal disease, is mainly to the H surface protein. The Mexican virus carries the swine version, so the antibodies we carry to human H1N1 viruses will not recognise it. That's why the CDC warned last year that swine H1N1 would "represent a pandemic threat" if it started circulating in humans. The avian polymerase genes are especially worrying, as similar genes are what make H5N1 bird flu lethal in mammals and what made the 1918 human pandemic virus so lethal in people. "We can't yet tell what impact they will have on pathogenicity in humans," says Webby. It appears the threat has now resulted in the Mexican flu. "The triple reassortant in pigs seems to be the precursor," Robert Webster, also at St Jude's, told New Scientist.

While researchers focused on livestock problems could see the threat developing, it is not one that medical researchers focused on human flu viruses seemed to have been aware of. "It was confusing when we looked up the gene sequences in the database," says Wendy Barclay of Imperial College London, who has been studying swine flu from the recent US cases. "The polymerase gene sequences are bird and human, yet they were reported in viruses from pigs."

So where did the Mexican virus originate? The Veratect Corporation based in Kirkland, Washington, monitors world press and government reports to provide early disease warnings for clients, including the CDC. Their first inkling of the disease was a 2 April report of a surge in respiratory disease in a town called La Gloria, east of Mexico City, which resulted in the deaths of three young children. Only on 16 April - after Easter week, when millions of Mexicans travel to visit relatives - reports surfaced elsewhere in the country.

Local reports in La Gloria blamed pig farms in nearby Perote owned by Granjas Carroll, a subsidiary of US hog giant Smithfield Foods. The farms produce nearly a million pigs a year. Smithfield Foods, in a statement, insists there are "no clinical signs or symptoms" of swine flu in its pigs or workers in Mexico. That is unsurprising, as the company says it "routinely administers influenza virus vaccination to swine herds and conducts monthly tests for the presence of swine influenza." The company would not tell New Scientist any more about recent tests. USDA researchers say that while vaccination keeps pigs from getting sick, it does not block infection or shedding of the virus.

All the evidence suggests that swine flu was a disaster waiting to happen. But it got little research attention, perhaps because it caused mild infections in people which didn't spread. Now one swine flu virus has stopped being so well-behaved.

This leads us to the policy question: why should humans keep pigs?  Like other meat, pigs consume an extraordinary amount of resources to provide nutrition.  Maybe the ancient Israelites had an insight that we have lacked -- there may be more wisdom in the Torah and its laws than we knew.  Perhaps it is time, or past time, for our eating habits to evolve lest an even more virulent strain of swine flu develop.  Assuming that this pandemic passes without too many deaths, we may need to rethink whether it is good to keep large quantities of pigs.  For now, the virulent bird flu does not seem easily communicable.  Let's keep it that way. 

Arctic Sea Ice Melting Fast

According to a new report by Wang and Overland in Geophysical Research Letters, the arctic sea ice is melting fast enough that it will be largely gone within 30 years.  The ice is melting so fast because arctic temperatures in the last four years have risen to a level (a 9 degree Fahrenheit increase) which was not expected to occur for another 60 years.  The sea ice reflects sunlight so the planet will heat even faster as the ice melts.  So....perhaps all of those changes that we were expecting in 2010 may be here by 2040, or earlier.

Common Dreams reports:

[Wang and Overland] expect the area covered by summer sea ice to decline from about 2.8 million      square miles normally to 620,000 square miles within 30 years.Last year's summer minimum was 1.8 million square miles in September, second lowest only to 2007 which had a minimum of 1.65 million square miles...Arctic sea ice reached its winter maximum for this year at 5.8 million square miles on Feb. 28. That was 278,000 square miles below the 1979-2000 average making it the fifth lowest on record. The six lowest maximums since 1979 have all occurred in the last six years.  Common Dreams Arctic Sea Ice

Water News from Water Advocates

New Congressional Legislation: Strong support for drinking water and
sanitation continues on Capitol Hill, where legislation introduced in
the Senate would put the U.S. in the lead among governments in
responding to the Millennium Development Goals for water and sanitation.
Companion legislation is expected soon in the House. Titled "The Senator
Paul Simon Water for the World Act of 2009" (S624), the bipartisan bill
introduced by Senators Durbin, Corker and Murray on March 17 seeks to
reach 100 million people with safe water and sanitation by 2015 and to
strengthen the capacity of USAID and the State Department to carry out
the landmark Senator Paul Simon Water for the Poor Act of 2005.

USAID: Dozens of USAID missions, notably in Sub-Saharan Africa and
Southeast Asia, are gearing up to utilize increased appropriations to
implement the Senator Paul Simon Water for the Poor Act, after years of
lacking the tools to help extend safe, sustainable water, sanitation and
hygiene. USAID this past month announced a number of initiatives
including: new strategic partnerships to extend water and sanitation
access to the urban poor in Africa and the Middle East (with
International Water Association), new multilateral revolving funds (in
the Philippines), new collaborations (with Rotary International) and a
new USAID Water Site http://tinyurl.com/newUSAIDwater.

Appropriations: Through the recently passed Omnibus legislation,
Congress appropriated $300 million for Fiscal Year 2009, for "water and
sanitation supply projects pursuant to the Senator Paul Simon Water for
the Poor Act of 2005." As with last year's appropriations, forty percent
of the funds are targeted for Sub-Saharan Africa. Priority will remain
on drinking water and sanitation in the countries of greatest need.
Report language suggests increased hiring of Mission staff with
expertise in water and sanitation. It also recommends that $20 million
of the appropriation be available to USAID's Global Development Alliance
to increase its partnerships for water and sanitation, particularly with
NGOs.

In Fiscal Year 2010, a broad spectrum of U.S. nonprofit organizations,
corporations and religious organizations are urging $500 million to
implement the Senator Paul Simon Water for the Poor Act, as part of an
overall increase of foreign development assistance, a level also called
for by InterAction and the "Transition to Green" Report. 

For more water news, visit Drink Water for Life. 

The New Subsistence Society

Sometimes its a good idea to stand back and contemplate the universe.  Today's early news that the Dow Jones Industrial Index took another header because of AIG's $60+ billion loss prompts me to do that. 

What is the vector of our society?  What will it look like after all the dust has settled?  It is not just the financial crisis that prompts me to contemplate this.  Although the phrase is over-used, we are in the midst of a perfect storm -- a global economy that creates and distributes goods and services through the internet, computerized machines and cheap labor virtual collapse of the financial system, the advent of peak oil, and the climate crisis.  How will all of these things cumulatively affect our future?

We've lived with the first problem for decades now -- what do people do as they  become less and less important to production of goods and services.  The science fiction of our times: what happens when people and their primary asset, labor, becomes virtually superfluous.  Certainly countries with high labor costs relative to Asia and South America already are beginning to experience the problem.  Computerized machines can plant, water, and harvest the fields; robots can make the cars and prefabricated housing; department stores, bank branches, car dealers, even retail grocery stores can be replaced by internet marketing; 100 law professors lecturing to law students and 1000 college professors lecturing to college students is more than enough -- creating the prospect of a British or continental education system, with those professors raised to unseemly heights and the remainder left to do the grunge work of tutors; even more radically, 100 K-12 teachers can teach a nation of students with computer graded exams, if we believe that convergent answers are the goal of education; priests and ministers can be replaced by TV showmen and megachurch performers. 

So what do the other 6.95 billion of us do?  Now, we consume.  Voraciously.  If we don't, then the basics can be provided by a very few and the rest of us become unwanted baggage.  A non-consumer is a drag on the system.  We depend on the velocity of money, excess consumption, and inefficiency to provide each of us with a job and to maintain the current economy.

And what happens when money moves at a crawl, when people stop consuming, when production becomes life-threatening to the planet, and when a key resource for production, oil, reaches the point of no return???  The answer is a new subsistence economy.  A new world where a few are need to produce, a few more can consume, and the remainder have no economic role and are left to subsist as best they can.

Admittedly, it will be subsistence at a higher level -- through the internet, computerization, and technology, each of us will have the capacity to do things for ourselves that are beyond the imagination of today's impoverished subsistence farmers.  But, relative to those who own all of the means of production, a few entertainers (be they basketball players, lecturers, moviestars, or mega-church leaders), and a few laborers (building the machines, computers, the information infrastructure and doing basic and applied research), we will all be poor.  Perhaps only relatively and perhaps only in material terms.  But poor, living at a subsistence level, consuming food from our own gardens, building our own houses, wearing clothes for function not fashion, educating our own children through the internet, capturing essential power through distributed energy, and buying very little of goods that are bound to be too expensive for most -- probably just computers.  It won't necessarily be bad.  Perhaps we can refocus on relationships, family, community, art, music, literature, and life, rather than define ourselves in terms of our job and our things.  Perhaps we can refocus on spirituality instead of materialism. Who knows?  Maybe the new society won't be such a bad thing after all -- at least if we insist that the few who have the privilege of production have a responsibility to share the wealth with the many.

President Obama's "State of the Union" Speech

The White House has published the "Remarks of President Barack Obama -- Address to Joint Session of Congress" as prepared for delivery on Tuesday, February 24th, 2009. White House link   The President called for Congress to send him a cap and trade bill to address climate change and stressed investments in clean energy as the path to America's future.  What a difference from last year!

As the President says about the long term investments that are absolutely critical to our economic future:

It begins with energy.

We know the country that harnesses the power of clean, renewable energy will lead the 21st century.  And yet, it is China that has launched the largest effort in history to make their economy energy efficient.  We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it.  New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.

Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either. It is time for America to lead again.

Thanks to our recovery plan, we will double this nation’s supply of renewable energy in the next three years.  We have also made the largest investment in basic research funding in American history – an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.

We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country.  And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.  So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.  And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.

As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink.  We should not, and will not, protect them from their own bad practices.  But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win.  Millions of jobs depend on it.  Scores of communities depend on it.  And I believe the nation that invented the automobile cannot walk away from it.

None of this will come without cost, nor will it be easy.  But this is America.  We don’t do what’s easy.  We do what is necessary to move this country forward.

Remarks of President Barack Obama – As Prepared for Delivery
Address to Joint Session of Congress
Tuesday, February 24th, 2009

(en español)

Madame Speaker, Mr. Vice President, Members of Congress, and the First Lady of the United States:

I’ve come here tonight not only to address the distinguished men and women in this great chamber, but to speak frankly and directly to the men and women who sent us here.

I know that for many Americans watching right now, the state of our economy is a concern that rises above all others.  And rightly so.  If you haven’t been personally affected by this recession, you probably know someone who has – a friend; a neighbor; a member of your family. You don’t need to hear another list of statistics to know that our economy is in crisis, because you live it every day.  It’s the worry you wake up with and the source of sleepless nights.  It’s the job you thought you’d retire from but now have lost; the business you built your dreams upon that’s now hanging by a thread; the college acceptance letter your child had to put back in the envelope.  The impact of this recession is real, and it is everywhere.   

But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this:

We will rebuild, we will recover, and the United States of America will emerge stronger than before.

The weight of this crisis will not determine the destiny of this nation.  The answers to our problems don’t lie beyond our reach.  They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.  Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure.  What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.

Now, if we’re honest with ourselves, we’ll admit that for too long, we have not always met these responsibilities – as a government or as a people.  I say this not to lay blame or look backwards, but because it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament.

The fact is, our economy did not fall into decline overnight.  Nor did all of our problems begin when the housing market collapsed or the stock market sank.  We have known for decades that our survival depends on finding new sources of energy.  Yet we import more oil today than ever before.  The cost of health care eats up more and more of our savings each year, yet we keep delaying reform.  Our children will compete for jobs in a global economy that too many of our schools do not prepare them for.  And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.

In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election.  A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future.  Regulations were gutted for the sake of a quick profit at the expense of a healthy market.  People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.  And all the while, critical debates and difficult decisions were put off for some other time on some other day.

Well that day of reckoning has arrived, and the time to take charge of our future is here.

Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity.  Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down.  That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight.

It’s an agenda that begins with jobs.

As soon as I took office, I asked this Congress to send me a recovery plan by President’s Day that would put people back to work and put money in their pockets.  Not because I believe in bigger government – I don’t.  Not because I’m not mindful of the massive debt we’ve inherited – I am.  I called for action because the failure to do so would have cost more jobs and caused more hardships.  In fact, a failure to act would have worsened our long-term deficit by assuring weak economic growth for years.  That’s why I pushed for quick action. And tonight, I am grateful that this Congress delivered, and pleased to say that the American Recovery and Reinvestment Act is now law.   

Over the next two years, this plan will save or create 3.5 million jobs.  More than 90% of these jobs will be in the private sector – jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.

Because of this plan, there are teachers who can now keep their jobs and educate our kids.  Health care professionals can continue caring for our sick.  There are 57 police officers who are still on the streets of Minneapolis tonight because this plan prevented the layoffs their department was about to make.

Because of this plan, 95% of the working households in America will receive a tax cut – a tax cut that you will see in your paychecks beginning on April 1st.

Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college. And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits and continued health care coverage to help them weather this storm.

I know there are some in this chamber and watching at home who are skeptical of whether this plan will work.  I understand that skepticism.  Here in Washington, we’ve all seen how quickly good intentions can turn into broken promises and wasteful spending.  And with a plan of this scale comes enormous responsibility to get it right.

That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort – because nobody messes with Joe.  I have told each member of my Cabinet as well as mayors and governors across the country that they will be held accountable by me and the American people for every dollar they spend.  I have appointed a proven and aggressive Inspector General to ferret out any and all cases of waste and fraud.  And we have created a new website called recovery.gov so that every American can find out how and where their money is being spent.

So the recovery plan we passed is the first step in getting our economy back on track.  But it is just the first step.  Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.

I want to speak plainly and candidly about this issue tonight, because every American should know that it directly affects you and your family’s well-being.  You should also know that the money you’ve deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system.  That is not the source of concern.

The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.

You see, the flow of credit is the lifeblood of our economy.  The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.

But credit has stopped flowing the way it should.  Too many bad loans from the housing crisis have made their way onto the books of too many banks.  With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other.  When there is no lending, families can’t afford to buy homes or cars.  So businesses are forced to make layoffs.  Our economy suffers even more, and credit dries up even further.

That is why this administration is moving swiftly and aggressively to break this destructive cycle, restore confidence, and re-start lending.

We will do so in several ways.  First, we are creating a new lending fund that represents the largest effort ever to help provide auto loans, college loans, and small business loans to the consumers and entrepreneurs who keep this economy running.   

Second, we have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and re-finance their mortgages.  It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values – Americans who will now be able to take advantage of the lower interest rates that this plan has already helped bring about.  In fact, the average family who re-finances today can save nearly $2000 per year on their mortgage.   

Third, we will act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times.  And when we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.

I understand that on any given day, Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached, and that holds nobody accountable for their reckless decisions.  But such an approach won’t solve the problem.  And our goal is to quicken the day when we re-start lending to the American people and American business and end this crisis once and for all.

I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet.  Those days are over.

Still, this plan will require significant resources from the federal government – and yes, probably more than we’ve already set aside.  But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.  That would be worse for our deficit, worse for business, worse for you, and worse for the next generation.  And I refuse to let that happen.    

I understand that when the last administration asked this Congress to provide assistance for struggling banks, Democrats and Republicans alike were infuriated by the mismanagement and results that followed. So were the American taxpayers.  So was I.

So I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions.  I promise you – I get it.

But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment.  My job – our job – is to solve the problem.  Our job is to govern with a sense of responsibility.  I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage.

That’s what this is about.  It’s not about helping banks – it’s about helping people.  Because when credit is available again, that young family can finally buy a new home.  And then some company will hire workers to build it.  And then those workers will have money to spend, and if they can get a loan too, maybe they’ll finally buy that car, or open their own business.  Investors will return to the market, and American families will see their retirement secured once more. Slowly, but surely, confidence will return, and our economy will recover.    

So I ask this Congress to join me in doing whatever proves necessary.  Because we cannot consign our nation to an open-ended recession.  And to ensure that a crisis of this magnitude never happens again, I ask Congress to move quickly on legislation that will finally reform our outdated regulatory system.  It is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation, and punishes short-cuts and abuse.

The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term.  But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit.  That is our responsibility.

In the next few days, I will submit a budget to Congress.  So often, we have come to view these documents as simply numbers on a page or laundry lists of programs.  I see this document differently.  I see it as a vision for America – as a blueprint for our future.

My budget does not attempt to solve every problem or address every issue.  It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.

Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars.  And that includes me. 

But that does not mean we can afford to ignore our long-term challenges.  I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.

For history tells a different story.  History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas.  In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry.  From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age.  In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history.  And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.

In each case, government didn’t supplant private enterprise; it catalyzed private enterprise.  It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive.

We are a nation that has seen promise amid peril, and claimed opportunity from ordeal.  Now we must be that nation again.  That is why, even as it cuts back on the programs we don’t need, the budget I submit will invest in the three areas that are absolutely critical to our economic future:  energy, health care, and education.

It begins with energy.

We know the country that harnesses the power of clean, renewable energy will lead the 21st century.  And yet, it is China that has launched the largest effort in history to make their economy energy efficient.  We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it.  New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.

Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either. It is time for America to lead again.

Thanks to our recovery plan, we will double this nation’s supply of renewable energy in the next three years.  We have also made the largest investment in basic research funding in American history – an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.

We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country.  And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.  So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.  And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.

As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink.  We should not, and will not, protect them from their own bad practices.  But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win.  Millions of jobs depend on it.  Scores of communities depend on it.  And I believe the nation that invented the automobile cannot walk away from it.

None of this will come without cost, nor will it be easy.  But this is America.  We don’t do what’s easy.  We do what is necessary to move this country forward.

For that same reason, we must also address the crushing cost of health care.   

This is a cost that now causes a bankruptcy in America every thirty seconds.  By the end of the year, it could cause 1.5 million Americans to lose their homes.  In the last eight years, premiums have grown four times faster than wages.  And in each of these years, one million more Americans have lost their health insurance.  It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.  And it’s one of the largest and fastest-growing parts of our budget.

Given these facts, we can no longer afford to put health care reform on hold.

Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade.  When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time.  Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives.  It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time.  And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.

This budget builds on these reforms.  It includes an historic commitment to comprehensive health care reform – a down-payment on the principle that we must have quality, affordable health care for every American.  It’s a commitment that’s paid for in part by efficiencies in our system that are long overdue.  And it’s a step we must take if we hope to bring down our deficit in the years to come.

Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.

I suffer no illusions that this will be an easy process.  It will be hard.  But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.  So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.    

The third challenge we must address is the urgent need to expand the promise of education in America.   

In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity – it is a pre-requisite.   

Right now, three-quarters of the fastest-growing occupations require more than a high school diploma.  And yet, just over half of our citizens have that level of education.  We have one of the highest high school dropout rates of any industrialized nation.  And half of the students who begin college never finish.

This is a prescription for economic decline, because we know the countries that out-teach us today will out-compete us tomorrow.  That is why it will be the goal of this administration to ensure that every child has access to a complete and competitive education – from the day they are born to the day they begin a career.

Already, we have made an historic investment in education through the economic recovery plan.  We have dramatically expanded early childhood education and will continue to improve its quality, because we know that the most formative learning comes in those first years of life.  We have made college affordable for nearly seven million more students.  And we have provided the resources necessary to prevent painful cuts and teacher layoffs that would set back our children’s progress.

But we know that our schools don’t just need more resources.  They need more reform.  That is why this budget creates new incentives for teacher performance; pathways for advancement, and rewards for success.  We’ll invest in innovative programs that are already helping schools meet high standards and close achievement gaps.  And we will expand our commitment to charter schools. 

It is our responsibility as lawmakers and educators to make this system work.  But it is the responsibility of every citizen to participate in it.  And so tonight, I ask every American to commit to at least one year or more of higher education or career training.  This can be community college or a four-year school; vocational training or an apprenticeship.  But whatever the training may be, every American will need to get more than a high school diploma.  And dropping out of high school is no longer an option.  It’s not just quitting on yourself, it’s quitting on your country – and this country needs and values the talents of every American.  That is why we will provide the support necessary for you to complete college and meet a new goal:  by 2020, America will once again have the highest proportion of college graduates in the world. 

I know that the price of tuition is higher than ever, which is why if you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education.  And to encourage a renewed spirit of national service for this and future generations, I ask this Congress to send me the bipartisan legislation that bears the name of Senator Orrin Hatch as well as an American who has never stopped asking what he can do for his country – Senator Edward Kennedy.

These education policies will open the doors of opportunity for our children.  But it is up to us to ensure they walk through them.  In the end, there is no program or policy that can substitute for a mother or father who will attend those parent/teacher conferences, or help with homework after dinner, or turn off the TV, put away the video games, and read to their child.  I speak to you not just as a President, but as a father when I say that responsibility for our children's education must begin at home.

There is, of course, another responsibility we have to our children.  And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay.  With the deficit we inherited, the cost of the crisis we face, and the long-term challenges we must meet, it has never been more important to ensure that as our economy recovers, we do what it takes to bring this deficit down. 

I’m proud that we passed the recovery plan free of earmarks, and I want to pass a budget next year that ensures that each dollar we spend reflects only our most important national priorities.

Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office.  My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs.  As you can imagine, this is a process that will take some time.  But we’re starting with the biggest lines.  We have already identified two trillion dollars in savings over the next decade.

In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use.  We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.

In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans.  But let me perfectly clear, because I know you’ll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people:  if your family earns less than $250,000 a year, you will not see your taxes increased a single dime.  I repeat: not one single dime.  In fact, the recovery plan provides a tax cut – that’s right, a tax cut – for 95% of working families.  And these checks are on the way.   

To preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security.  Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans.

Finally, because we’re also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget.  That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules – and for the first time, that includes the full cost of fighting in Iraq and Afghanistan. For seven years, we have been a nation at war.  No longer will we hide its price.

We are now carefully reviewing our policies in both wars, and I will soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war.

And with our friends and allies, we will forge a new and comprehensive strategy for Afghanistan and Pakistan to defeat al Qaeda and combat extremism.  Because I will not allow terrorists to plot against the American people from safe havens half a world away.

As we meet here tonight, our men and women in uniform stand watch abroad and more are readying to deploy. To each and every one of them, and to the families who bear the quiet burden of their absence, Americans are united in sending one message: we honor your service, we are inspired by your sacrifice, and you have our unyielding support. To relieve the strain on our forces, my budget increases the number of our soldiers and Marines. And to keep our sacred trust with those who serve, we will raise their pay, and give our veterans the expanded health care and benefits that they have earned.

To overcome extremism, we must also be vigilant in upholding the values our troops defend – because there is no force in the world more powerful than the example of America. That is why I have ordered the closing of the detention center at Guantanamo Bay, and will seek swift and certain justice for captured terrorists – because living our values doesn’t make us weaker, it makes us safer and it makes us stronger. And that is why I can stand here tonight and say without exception or equivocation that the United States of America does not torture.

In words and deeds, we are showing the world that a new era of engagement has begun.  For we know that America cannot meet the threats of this century alone, but the world cannot meet them without America. We cannot shun the negotiating table, nor ignore the foes or forces that could do us harm.  We are instead called to move forward with the sense of confidence and candor that serious times demand.

To seek progress toward a secure and lasting peace between Israel and her neighbors, we have appointed an envoy to sustain our effort. To meet the challenges of the 21st century – from terrorism to nuclear proliferation; from pandemic disease to cyber threats to crushing poverty – we will strengthen old alliances, forge new ones, and use all elements of our national power.

And to respond to an economic crisis that is global in scope, we are working with the nations of the G-20 to restore confidence in our financial system, avoid the possibility of escalating protectionism, and spur demand for American goods in markets across the globe.  For the world depends on us to have a strong economy, just as our economy depends on the strength of the world’s.

As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us – watching to see what we do with this moment; waiting for us to lead.    

Those of us gathered here tonight have been called to govern in extraordinary times.  It is a tremendous burden, but also a great privilege – one that has been entrusted to few generations of Americans.  For in our hands lies the ability to shape our world for good or for ill.

I know that it is easy to lose sight of this truth – to become cynical and doubtful; consumed with the petty and the trivial.

But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.

I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him.  He didn’t tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old.  I didn't feel right getting the money myself."

I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community – how it can bring jobs and businesses to a place where piles of bricks and rubble once lay.  "The tragedy was terrible," said one of the men who helped them rebuild.  "But the folks here know that it also provided an incredible opportunity."    

And I think about Ty’Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina – a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom.  She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room.  She even asked her principal for the money to buy a stamp.  The letter asks us for help, and says, "We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world.  We are not quitters."

We are not quitters.

These words and these stories tell us something about the spirit of the people who sent us here.  They tell us that even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity.

Their resolve must be our inspiration.  Their concerns must be our cause.  And we must show them and all our people that we are equal to the task before us.

I know that we haven’t agreed on every issue thus far, and there are surely times in the future when we will part ways.  But I also know that every American who is sitting here tonight loves this country and wants it to succeed.  That must be the starting point for every debate we have in the coming months, and where we return after those debates are done.  That is the foundation on which the American people expect us to build common ground.

And if we do – if we come together and lift this nation from the depths of this crisis; if we put our people back to work and restart the engine of our prosperity; if we confront without fear the challenges of our time and summon that enduring spirit of an America that does not quit, then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, "something worthy to be remembered."  Thank you, God Bless you, and may God Bless the United States of America.

Creating a Sustainable Society - the Role of Social Entrepreneurs and Volunteers

Today, the House Committee on Education and Labor had a Congressional hearing on volunteerism. Both Van Jones and Cheryl Dorsey testified to the value of volunteerism for the future of the green movement and social entrepreneurship.  Cheryl Dorsey’s video testimony can be found here Dorsey video link  and her written testimony is here. Dorsey written link  Van Jones’ video testimony is here Jones video link  and his written testimony is here.Jones' written link   Although we frequently focus on using regulation to control traditional profit-oriented business endeavors, it's good to remind ourselves that social entrepreneurs and volunteers can make a real difference in the quality of life in our communities as well as the quality of the environment.

National Environmental Law Moot Court Competition

Congratulations to all of the participants in the National Environmental Law Moot Court Competition held at Pace University during the last few days.  Roughly 70 law schools participated in the competition, which featured a difficult and oft-times confusing problem about salvage of a Spanish shipwreck.  The law covered by the problem included admiralty law, administrative law, international law such as the UNESCO treaty and the Law of the Sea, the National Marine Sanctuaries Act, the Endangered Species Act, the Clean Water Act, the Rivers and Harbors Act, the Outer Continental Shelf Lands Act, and for good measure, the Submerged Military Craft Act.  Just typing that list makes me tired!

The learning is in participating, but the honors for Best Briefs go to University of Houston, Georgetown, and University of California at Davis, with Houston winning overall Best Brief.  The Best Oralist Honor goes to Louisiana State University.  The final round of the competition featured Lewis & Clark law school, University of Utah, and Louisiana State. Lewis & Clark prevailed, winning the overall competition for the 2d time in a row.  If I recall correctly, that may be the first back to back win.  Congratulations to everyone!

The students of Pace University deserve special mention for sacrificing their ability to compete and for running a flawless competition.  More details can be found at the NELMCC site.

Christopher Field and Anny Cazenave AAAS reports on rapidly worsening climate change

On Saturday, I noted the AAAS meeting report on climate change by Christopher Brown.Climate change worsens more rapidly than IPCC anticipated   Here's a bit more on Christopher Field's report from MSNBC:

Carbon emissions have been growing at 3.5 percent per year since 2000, up sharply from the 0.9 percent per year in the 1990s..."It is now outside the entire envelope of possibilities" considered in the 2007 report of the International Panel on Climate Change...The largest factor is the widespread adoption of coal as an energy source... "and without aggressive attention societies will continue to focus on the energy sources that are cheapest, and that means coal."  Past projections for declines in the emissions of greenhouse gases were too optimistic, he added. No part of the world had a decline in emissions from 2000 to 2008.

Anny Cazenave of France's National Center for Space Studies [reported] that improved satellite measurements show that sea levels are rising faster than had been expected... Rising oceans can pose a threat to low level areas such as South Florida, New York and other coastal areas as the ocean warms and expands and as water is added from melting ice sheets...And the rise is uneven, with the fastest rising areas at about 1 centimeter — 0.39 inch — per year in parts of the North Atlantic, western Pacific and the Southern Ocean surrounding Antarctica...

MSNBC link
 

Red Queens or Court Jesters: How Species Evolve

A review in this month's science by Michael Benton discusses two prominent models of evolution.Science article  The abstract and some snippets of the article are below:

Evolution may be dominated by biotic factors, as in the Red Queen model, or abiotic factors, as in the Court Jester model, or a mixture of both. The two models appear to operate predominantly over different geographic and temporal scales: Competition, predation, and other biotic factors shape ecosystems locally and over short time spans, but extrinsic factors such as climate and oceanographic and tectonic events shape larger-scale patterns regionally and globally, and through thousands and millions of years. Paleobiological studies suggest that species diversity is driven largely by abiotic factors such as climate, landscape, or food supply, and comparative phylogenetic approaches offer new insights into clade dynamics. 

According to Benton, abiotic factors play a more prominent role when the geographic and temporal scale is large:

Much of the divergence between the Red Queen and Court Jester world views may depend on scale (2) (Fig. 1): Biotic interactions drive much of the local-scale success or failure of individuals, populations, and species (Red Queen), but perhaps these processes are overwhelmed by substantial tectonic and climatic processes at time scales above 10⁵ years (Court Jester). It is important not to export organism-level processes to regional or global scales, and it is likely that evolution operates in a pluralistic way (3).

Fig. 1. Operation of Red Queen (biotic causation) and Court Jester (abiotic causation) models at different geographic and temporal scales (A). The Red Queen may prevail at organismic and species level on short time scales, whereas the Court Jester holds his own on larger scales. The stippled green shape shows an area where Red Queen effects might be identified erroneously, but these are likely the result of spatial averaging of regional responses to climate change and other complex physical perturbations that may be in opposite directions, and so cancel each other, suggesting no controlling effect of the physical environment on evolution. Physical-environmental disruptions may elicit biotic responses along the red line separating Red Queen and Court Jester outcomes (B). The usage here is the microevolutionary Red Queen, as opposed to the macroevolutionary Red Queen that posits constant extinction risk, a view that has been largely rejected (31). Illustration based on (2). [View Larger Version of this Image (69K GIF file)]

Large-Scale Controls on Species Diversity

... Biotic factors, such as body size, diet, colonizing ability or ecological specialization, appear to have little effect on the diversity of modern organisms, although abundance and...life-history characteristics (short gestation period, large litter size, and short interbirth intervals) sometimes correlate with high species richness (16).

 

Geographic and tectonic history has generated patterns of species diversity through time. The slow dance of the continents as Pangaea broke up during the past 200 My has affected modern distribution patterns. Unique terrestrial faunas and floras, notably those of Australia and South America, arose because those continents were islands for much of the past 100 My. Further, major geologic events such as the formation of the Isthmus of Panama have permitted the dispersal of terrestrial organisms and have split the distributions of marine organisms. A classic example of vicariance is the fundamental division of placental mammals into three clades, Edentata in South America, Afrotheria in Africa, and Boreoeutheria in the northern hemisphere, presumably triggered by the split of those continents 100 Ma (17). Other splits in species trees may relate to dispersal events, or there may be no geographic component at all. 

Species richness through time may correlate with energy. The species richness–energy relationship (18) posits correlations with evapo-transpiration, temperature, or productivity, and studies of terrestrial and marine ecosystems have shown that these factors may explain as much as 90% of current diversity, although relationships between species diversity and productivity change with spatial scale (19). Over long time spans, there are strong correlations between plankton morphology and diversity and water temperature: Cooling sea temperatures through the past 70 My, and consequent increasing ocean stratification, drove a major radiation of Foraminifera, associated with increasing body size (20). More widely, there is close tracking between temperature and biodiversity on the global scale for both marine and terrestrial organisms (21), where generic and familial richness were relatively low during warm "greenhouse" phases of Earth history, coinciding with relatively high origination and extinction rates. 

A much-studied manifestation of energy and temperature gradients is the latitudinal diversity gradient (LDG), namely the greater diversity of life in the tropics than in temperate or polar regions, both on land and in the sea. There are two explanations (22): (i) the time and area hypothesis, that the tropical belt is older and larger than temperate and polar zones, and so tropical clades have had longer to speciate, or (ii) the diversification rate hypothesis, that there are higher rates of speciation and lower rates of extinction in the tropics than elsewhere. There is geological and paleontological evidence for a mixture of both hypotheses (23, 24). 

Species diversity may increase by the occupation of new ecospace. The number of occupied guilds, that is, broad ecological groupings of organisms with shared habits, has increased in several steps through time...(25). Further, marine animals have shown several step increases in tiering, the ability to occupy and exploit different levels in the habitat: At times, burrowers have burrowed deeper, and reef-builders have built taller and more complex reefs. Analogous, if even more dramatic, expansions of ecospace have occurred on land, with numerous stepwise additions of new habitats, from the water-margin plants and arthropods of the early Paleozoic to the forests and upland habitats of the later Paleozoic when land animals first burrowed, climbed, and flew, through the introduction of herbivory, giant size, endothermy, and intelligence among vertebrates, and the great blossoming of flowering plants (with associated vast expansions in diversity of plant-eating and social insects and modern vertebrates)...(26). 

The other mode of species increase globally or regionally is by niche subdivision, or increasing specialization. This is hard to document because of the number of other factors that vary between ecosystems through time. However, mean species number in communities (alpha diversity) has increased through time in both marine (15, 25) and terrestrial (10) systems, even though niche subdivision may be less important than occupation of new ecospace in increasing biodiversity. Further, morphological complexity may be quantified, and a comparative study of crustaceans shows, for example, that complexity has increased many times in parallel in separate lineages (27).

Chartering Sustainable Transnational Corporations

This link connects to a paper I just posted on SSRN.  I presented the paper at the 6th Colloquium of the IUCN International Academy of Environmental Law in Mexico City in November 2008.  I am submitting a short version of the paper for possible publication in a book incorporating papers presented at the conference on the theme of Alleviating Poverty and Environmental Protection.  And I am preparing a more complete and elaborate version for possible law review publication.  I would deeply appreciate your comments on the subject of how we ensure that transnational corporations act in a sustainable manner and the obstacles or concerns with the approach I suggest.  SSRN link

Abstract:    
Using a recent innovative Oregon sustainable corporation law as a springboard, this article argues for requiring all transnational corporations to be chartered as sustainable corporations. Given the far-reaching effects of their operations and their uniquely powerful role, the global wealth that has been accumulated in these organizations must be fundamentally redirected toward creating a sustainable world. As a privilege of doing transnational business, transnational corporations should be required to incorporate environmental and social responsibility into their corporate charters-the document that sets forth the prime mission of the corporation and its directors, essentially baking sustainability into the corporate DNA of transnational corporations.

To be both effective and to harness the entrepreneurial creativity of these organizations, the sustainable corporation charter must be implemented per provisions that require transnational corporations to develop corporate sustainability strategies in accordance with the guidance provided by the implementing provisions. The implementing provisions should also require that the transnational corporations monitor and report in a standardized manner compliance with the corporate sustainability strategy, with sustainability-related laws, and with nonbinding environmental, labor, human rights, corruption, and other sustainability-related standards.

The sustainable corporation charter requirement should be imposed as a matter of international law, through an international convention and administered by an international commission. The requirements should be directly applicable to transnational corporations as a condition of doing transnational business. The commission should be authorized to take enforcement action directly against the corporation. In addition, both home and host nations to transnational corporations should agree to compel the corporations - either incorporated in that nation or doing business in that nation-to comply with the sustainable corporation charter requirement as a condition of doing any business. Nations that fail to join the international convention, or that fail to enforce the international convention, should be subject to mandatory trade and other economic sanctions by all signatories to the international agreement.

We can no longer allow transnational corporations to aggregate the bulk of societal wealth and then operate in an environmentally and socially irresponsible manner. The proposals in this article are one step toward turning transnational corporations into sustainable corporations.

Keywords: transnational corporations, corporate charters, multi-national corporations, sustainability, environmental, international convention, environmental assessment, voluntary compliance, environmental standards, alien tort, corporate social responsibility, human rights, international law, enforcement

Let Clean Water Flow

Here's my church's video to launch our 2009 Drink Water for Life lenten challenge.  If you benefit from the work I do on this blog, please, please, please......take the challenge or find another way to contribute to organizations that do community-based water projects.  Church World Service or Global Ministries are great faith-based organizations.  Water for Life and Water for People are great secular groups. Every 15 seconds, a child dies from a water borne disease like cholera or dysentery from lack of clean water and sanitation.  Together, we can change this.  Village by village. 

Let Clean Water Flow 

Nourish the Hungry

Greenwire reported on the Madrid meeting next week that will be examining progress on addressing the worldwide food crisis -- where one of every seven people in the world is hungry.  What a wonderful time to begin to make a difference!  Although the crisis in food prices that fueled the Rome discussions last summer has abated, the long-term problem remains.  And, if the Administration is swift and sure-footed enough, President Obama can use the discussions in Madrid to signal that the United States is serious about fulfilling his inaugeral promises:

UNITED NATIONS -- One of President Barack Obama's first forays into into multilateral diplomacy will be following up on a food crisis that engulfed the world's poorest countries last year. Though food prices have fallen sharply in recent months, diplomats will gather Monday in Madrid to see whether they are keeping their promises of food aid and support for agricultural development made at U.N. Food and Agriculture Organization (FAO) talks in Rome last June. "The Madrid meeting will raise the political profile of food security," said David Nabarro, coordinator of a U.N. task force established last year by Secretary-General Ban Ki-moon to address the crisis. "The food systems of the world have been in crisis, continue to be in crisis and will go on being in crisis until we're able to create a situation where they work in the interests of poor people."

U.N. officials estimate that about 1 billion people are undernourished and at least 100 million would face imminent starvation were it not for emergency food assistance. Last year, record oil prices, burgeoning demand for food, and failing crops contributed to a upward spiral in the price of most food basics, especially rice, wheat and corn.

U.S. farm income rose by about 50 percent during the boom, but most of the world suffered. Food prices have since plunged, but Nabarro told reporters here yesterday that food commodities are still much more expensive than they were in decades past. And officials fear that under-investment in agriculture expected during the current market slump is only setting the stage for greater problems down the road. "The food crisis is not the story that's on the tip of everybody's tongue right now. It's the financial crisis," said J.B. Reed of the nonprofit Nuru Project, which staged a New York photography exhibit last month showing images of starving people and Third World food riots. "But the financial crisis has implications for the food crisis."

Average food prices more than doubled worldwide over three years. Farm subsidies in wealthy countries, the popularity of biofuels and market speculators were among the culprits blamed. But a long neglect of the importance of Third World agricultural productivity by organizations like the World Bank, the International Monetary Fund and the U.S. Agency for International Development contributed greatly. For 20 years, aid efforts have focused mostly on industrial infrastructure, figuring the developing world could simply import cheap food grown efficiently in the West. Agriculture enjoyed about 20 percent of international aid dollars back in the late 1980s, but skewed priorities have shrunk its share to just barely 3 percent today. FAO estimates that by mid-2008 food prices were 64 percent higher than 2002 levels. The only other time prices shot up so quickly was in the wake of the oil shock of the 1970s.

In total, governments pledged about $6.6 billion in new spending on food aid and agriculture programs in Rome last year. The lion's share of commitments came from Washington, which pledged to spend $5 billion over the next two years. Since then, the global financial crisis has diverted hundreds of billions of dollars in government resources to shoring up banks and protecting deposits. Meanwhile, collapsed commodity prices and rising food stocks have largely eliminated any sense of urgency. "Actually, most countries that pledged in Rome have followed up, but the follow-up has been a lot slower than we would like," Nabarro said. "One of the things we will be doing in Madrid is tracking that follow-up." Experts who have stayed focused on food security issues worry that the financial crisis will affect future food production more than many appreciate. Falling prices and weaker demand mean farmers in developed countries have little incentive to grow more this year. And the tight credit environment makes it difficult for farmers to finance expanded yields even if they wanted to....

U.N. leaders have said that between $20 billion and $40 billion in new annual spending on agriculture is needed over the next several years to keep up with population growth and expanding demand as nations like India and China grow richer. Nabarro said he hopes at least some new commitments for additional spending will materialize in Madrid, with the new Obama administration playing a lead role. "We take a view that in a world where 14 percent of the population remains hungry ... that is an extremely unsatisfactory situation," Nabarro said. "That is a representation of a crisis."

Lower food costs give public policymakers some breathing room as they focus on halting the decline in the global economy, which began in the developed world but is now hitting developing countries hard, as well. Agricultural economists predict that prices for most food commodities will stay low for much or all of 2009. "World production of wheat, maize and rice is expected to exceed demand and contribute to a partial replenishment of stocks," experts with the U.N. Department of Economic and Social Affairs say in their latest global economic outlook. But economists warn that once the financial system recovers, so will food markets. And price declines over the last few months still don't make up for much of the increases experienced over three years. The World Food Programme's budget for 2009 is estimated at $5.2 billion, a record....

Most of the green team confirmed today: Jackson, Sutley, and Clinton remain

E & E News reported:

The Senate unanimously confirmed seven of President Barack Obama's Cabinet picks today, including Agriculture Secretary Tom Vilsack, Energy Secretary Steven Chu and Interior Secretary Ken Salazar, but postponed debate on his nominees to lead the State Department, U.S. EPA and White House Council on Environmental Quality...In a post-inauguration session, the Senate quickly approved Chu, Salazar, Vilsack, Education Secretary Arne Duncan, Homeland Security Secretary Janet Napolitano, Veterans Affairs Secretary Eric Shinseki and Office of Management and Budget Director Peter Orszag.

Senate Majority Leader Harry Reid (D-Nev.) also scheduled a 3 p.m. roll call vote for tomorrow on Sen. Hillary Rodham Clinton (D-N.Y.), Obama's nominee to be secretary of the State Department.... The Senate did not take up two other Obama nominations: Lisa Jackson to be the next EPA administrator and Nancy Sutley to be the chairwoman of the White House CEQ. Both nominees did not face significant scrutiny during their confirmation hearings last week, leaving several Senate Republican and Democratic leadership aides today searching for answers about who was holding up the two Obama environmental picks....Andrew Wheeler, Republican staff director for the Senate Environment and Public Works Committee, said ranking member James Inhofe (R-Okla.) supports both nominees and isn't sure who raised the objection to Jackson and Sutley's confirmations, though he said the objection to Sutley being confirmed today was because her position is not Cabinet-level.

Visitors from Mozambique and Inaugural Awe

Today I had the pleasure as Director of our law school's Certificate Program in Law and Government to host two visitors from Mozambique through the International Leadership Visitor Program funded by the State Department.  This program focuses on bringing emerging leaders from developing countries concerned with good governance to the United States, to expose them first-hand to various aspects of American governance.  Last year, we hosted 16 visitors from more than a dozen African countries.  Today's session was more informal and a bit more manageable.

Our visitors were the Governor of a northern province and the second in command of a major department within the national government.  They were interested in learning how the United States trains its graduate or advanced students in law and government.  We were able to share some aspects of our program, including attending and speaking with my first year Lawmaking Process class.  They were also fascinated by how the United States is evolving with its election of President Obama. 

The treat, of course, for me was to learn first-hand something about Mozambique, its politics and policy, and role in Africa.  Certainly, its thorough integration of woman into the power structure and into all aspects of administration is a lesson for Americans as well as other Africans.  This is beginning to happen here, witness Hillary Clinton, Nancy Pelosi, Diane Feinstein, the corps of talented Governors through the US and the league of women joining the Obama administration.  But, until a woman stands where President Obama stood today, we still lag behind virtually every developed country in the world -- and many, such as Mozambique, in the developed world.  Women took their place in the struggle for independence in Mozambique -- even on the battlefield.  They have continued to serve in Parliament and throughout government, with stature and an assured equality that American woman still lack.

Their challenge is to solidify their independence and their emerging democracy -- and to solve the problem of poverty.  There, President Obama gave them reason to hope: "To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.  And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our boders; nor can we consume the world's resources without regard to effect.  For the world has changed, and we must change with it."

As you who read this blog regularly no doubt realize, these words, especially about providing clean water and reducing our consumption of resources, were music to my ears.  And perhaps to yours.

We have a President who in the midst of the raging storms of the failure of our economy and two wars, understands that "each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet."  That the work to be done includes the promise that "[w]e will harness the sun and the winds and the soil to fuel our cars and run our factories."  That "we will work tirelessly...to roll back the specter of a warming planet."

As my new friends from Mozambique realize, President Obama has not become just an American president, but he is today the most important leader of the whole world.  Not just by virtue of our relative prosperity and military power, but by virtue of our willingness to turn the page of history and to pledge to live up to our responsibilities to people seeking peace and justice and equality and means to enjoy their full measure of happiness throughout the world.

Today, my friends, let us celebrate with all of our new friends...and pledge ourselves to making this vision become a reality, in law, in policy, and in how we conduct our obscure, everyday lives.

Biofuel Soars on Air New Zealand

Due to the poor EO/EI ratio of biofuel and its competition with food crops, most of us are skeptical about widespread use of biofuel to meet transportation needs.  However, air transportation is one of the few sectors where finding alternative energy sources is difficult.  So, the recent and forthcoming tests of various biofuels in the air transportation sector are noteworthy, especially when strict conditions are placed on biofuel production.  In one recent test, Air New Zealand set three requirements for sustainable biofuel:

(1) the fuel source must be environmentally sustainable and not compete with existing food resources;

(2) the fuel must be a drop-in replacement for traditional jet fuel and technically be at least as good as the product used today; and

(3)the fuel must be cost competitive with existing fuel supplies and be readily available.

Environmental News Service reported in more detail:

A passenger jet with one of its four engines running on a biofuel blend today completed the world's first commercial aviation test flight to test a biofuel made from jatropha.  The test flight was a joint initiative with partners Boeing, Rolls-Royce and Honeywell's UOP. The two hour Air New Zealand test flight was powered by a second-generation biofuel made from the seeds of the jatropha plant that could reduce emissions and cut costs. The flight was the first to use jatropha jatropha seed oil as part of a biofuel mix [50% jatropha, 50% jet fuel]....

   

Air New Zealand test plane (Photo courtesy Air New Zealand)

       

 

                 

Jatropha seed pods (Photo courtesy Air New Zealand)

Jatropha is a plant that produces seeds that contain inedible lipid oil that is used to produce the fuel. Each seed produces 30-40 percent of its mass in oil and jatropha can be grown in a range of difficult conditions, including arid and otherwise non-arable areas, leaving prime areas available for food crops....

The jatropha used on Tuesday's flight was grown in Malawi, Mozambique and Tanzania, the airline said. The criteria for sourcing the jatropha oil required that the land was neither forest land nor virgin grassland within the previous two decades.

 

Jatropha grows on poor soil and in arid climates not suitable for most food crops. The jatropha farms that grew the seeds for this test flight are rain-fed and not mechanically irrigated.

The test flight partners engaged Terasol Energy, a leader in sustainable jatropha development projects, to independently source and certify that the jatropha-based fuel for the flight met all sustainability criteria. Once received from Terasol Energy, the jatropha oil was refined through a collaborative effort between Air New Zealand, Boeing and refining technology developer UOP. The process utilized UOP technology to produce jet fuel that can serve as a direct replacement for traditional petroleum jet fuel.

Air New Zealand aims to meet 10 percent of its fuel needs through sustainable biofuel by 2013. In February, Virgin Atlantic was the first airline to test a commercial aircraft on a biofuel blend, using a 20 percent mixture of coconut oil and babassu oils in one of its four engines. In January, two more airlines will test their biofuel blends. Continental Airlines on January 7 will conduct a test flight powered by a blend involving algae and jatropha. The flight will be the first biofuel flight by a commercial carrier using algae as a fuel source, the first using a two-engine aircraft, and the first biofuel demonstration flight of a U.S. commercial airliner.  On January 30, Japan Airlines is planning a test flight from Tokyo using a fuel based on the camelina oilseed as a way to cut greenhouse gas emissions.

OCEAN SCIENCE: Winter Carbonate Collapse

H. Jesse Smith

Anthropogenic fossil-fuel burning is increasing the concentration of CO₂ in the atmosphere, which in turn is causing more CO₂ to dissolve in the ocean, thereby lowering the water's pH. Such ocean acidification in turn decreases the concentration of carbonate ion (CO₃)^2-, which makes it more difficult for calcifying organisms such as foraminifera, pteropods, and corals to build their skeletons. So far, most of the attention paid to this process has focused on the time-averaged chemistry of the ocean, but organisms actually experience seasonal carbonate and pH variations. McNeil and Matear examine these variations and show that anthropogenic CO₂ uptake is likely to induce winter aragonite undersaturation in some regions of the ocean when atmospheric CO₂ levels reach 450 parts per million. These findings underscore the importance of understanding the seasonal dynamics of marine carbonate chemistry, as natural variability could hasten the deleterious impacts of future ocean acidification. -- HJS Proc. Natl. Acad. Sci. U.S.A. 105, 18860 (2008).