From Compromising to Breakdown: gray before completely black

By Shahab Sabahi

Energy and Environment - Policy analysis research group

It is hard to come up with words that are strong enough to describe our policymakers. Perhaps one likes to portray them as incompetent negotiators, awful thinkers, misguided policy analysts, ignorance or disregard for the public interest, and exhibit of ego. 
But they do not hold for the earlier generation of politicians. How? Imagine if our policymakers had the experience that politicians had during cold war. Given China as the ideological opponent of those politicians, they implicitly engaged China and take advantage of its position in negotiating the conflict of interests with the Soviet Union. The politicians fascinatingly made that strategic collaborating deal with China in order to secure the national interests. They saw things in a way that “No matter cat is black or white when it can catch mouse”. They did not compromise anything but their ideology.
A successful negotiation needs strategic thoughts those which require perceptions.
That sort of Cold War – policies can be only laid out by the faculty of wisdom. It requires leaders whose strong visions guide their ways to success even though uncertainties are high. Today policymakers are naïve and stand for about what their opponents push, albeit they call it “compromising”.
They hide the fact that their only objective is vectoring next election regardless of the cost which their supporters should bear. 

The tale of development, human and society

By Shahab Sabahi

Energy and Environment - Policy analysis research group

About 1500 BC, civilizations set about their social development process. They learnt how effectively carried out their affairs and produced surplus. This practice brought the civilizations prosperity. The development created a variety of social classes and caused population growth. More production was needed to satisfy the increase of demands. To keep their gods happy, the civilizations practiced more rituals and offered lavish sacrifices to gods. As the social class grew more diversified, elites should finance their worriers to maintain security and order within communities. 
The development produced more complexity and had worrying consequences. Animal sacrifices, population growth and expanding cities left fewer territories available for hunting and breeding herds and less timbers for fire. At that point in time, worriers had established themselves as a source of power. To seek and secure new resources, they marched into neighboring communities and beyond, harassed other societies, and occupied their food stocks and resources. The violence destroyed more resources
This aggression and ruthlessness disgusted NOBLE human beings who perceived the spirit of humanity. The nobles set up the new school of humanitarian thoughts to transform lifestyles. One of their principles was “natural resources are scarce and sacred, do not exploit them for external sacrifices in rituals” 
This approach introduced a new lifestyle that allowed humankind to exploit resources with respect and survive for long.
Today, we risk environmental catastrophe because we no longer see the earth as holey but regard it simply as a resource. 

Addressing crises

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Today, there's no shortage of crises in the world, from economic crisis, security and nuclear proliferation, famine, food price high to climate change. All these troubles reveal the many shortcomings in the institutional structures of our modern world in national and international levels. All the old political systems that had been developed before the world war one, could not fit our modern globalization. Middle class has grown over the last decades and thus human’s requirements have also been shifted. Population and demands keep growing and our policymakers stuck into their old fashion ideology and keep regulating to downgrade the planet and humanity.
In some ways, the continuing failure to address the current issues in an appropriate fashion strains people’s fate. Moreover it puts question on the competence and wills of policymakers. Despaired people will lead to more crises. It seems scary and certainly wouldn't be pleasure in future and bring threat to humanity.
Institutional reform and stringent policies are essential.  Developing new thoughts and doctrines should set our top priorities. Policymakers should be more realistic and stop changing the planet in the same way that they have done.

The green paradox illusion

By Shahab Sabahi

Energy and Environment - Policy analysis research group

The green paradox initially suggested by Strand 2007; Sinn  2008; Hoel 2008. The green paradox advocators are anxious that oil consumption may increase as a result of the climate change fear and the use of low carbon energy sources. They argue, in the response to the low carbon energy use, oil markets may anticipate a future reduction in demand and increase current supply. Therefore green technologies implicitly increase the climate change damages.
We should take it with a grain of salt.
The missing point is that an increase in current fossil fuel supply leads to fuel extraction costs increase, thus it will offset the green paradox. It means that demand for fossil fuel declines as its price rises. It is an imperfect energy substitutes.
I strongly argue that competitive low carbon energy supply is the key element to the climate change mitigation. Giving energy security issue as another crucial challenge and the limitations of fossil fuel energy supply, the use of low carbon energy is inevitable.
To combat climate change, energy security issue, we should combine carbon pricing policy along with a R&D and innovation policy. My analysis shows the carbon pricing policy is insufficient to accelerate transition to low carbon energy use. 
Unavoidably with competitive low carbon energy supply, the demand and use of fossil fuel will drop, and is unlikely the green paradox occurs. 
Instead, let’s shift our focus on an effective R&D policy implementation to support the development of low-carbon energy technologies with private-sector engagement.

Hamlet vs. Policymakers

By Shahab Sabahi

Energy and Environment - Policy analysis research group

You know what I think. How policymakers address current international affairs. One day liberals came up with bank bail-out idea to save the economic crisis. They imagined the bank bailout would do miracle and a massive job creation, economic recovery would be promising. Now the new fashion is the government spending cut, no tax increase and austerity measure. Do policymakers know which one is right? Or they just do DECISION MAKING process based on Illusion.
New policymakers are stuck in their ideologies and utterly blind to realities. They are powerless to deal with the EU financial crisis, the US budget deficit and unemployment issues, Climate change, food price high, the news corp scandal and a few boarder disputes.
It seems that the policymakers are torn between wrong and wrong rather than right and wrong to decide.
It reminds me of Hamlet by W. Shakespeare (act 1, scene 4). Hamlet's inability to take decisive action ultimately results in tragedy.

So oft it chances in particular men

That for some vicious mole of nature in them -

As in their birth (wherein they are not guilty,

Since nature cannot choose his origin),

By the o'ergrowth of some complexion,

Oft breaking down the pales and forts of reason,

Or by some habit that too much o'er leavens

The form of plausive manners - that these men,

Carrying, I say, the stamp of one defect,

Being nature’s livery or fortune's star,

Their virtues else (be they as pure as grace,

As infinite as man may undergo)

Shall in the general censure take corruption

From that particular fault. The dram of evil

Hamlet's definition of the subjective "right" differs drastically from Claudius' definition. Hamlet may care for human worth, and hatred evil. It might be a tragedy of moral idealism as much as a tragedy of reflection (Bradley)
It will do policymakers and all of us good:

Oil Price after the world took the IEA's painkiller - high price ahead

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Look graph below. It displays that the International Energy Agency, IEA's
painkiller did not work. On June 22nd after IEA announced its members'
commitment to a contingency release from the strategic petroleum reserves
caused the price of Louisiana Light Sweet (LLS), which is the type of oil
held in the Strategic petroleum reserves, to fall $7 in a week. The
price-fall was short lived and returned to its pre release level again last
week.

I discussed in my previous post, this move would have a temporary effect on
the oil market. Furthermore the US was the only country of twelve involved
in the IEA action to exclusively release crude for general sale to the
public. Now traders have the option of storing oil and selling it to
refiners later when prices rise. Even though storing oil on offshore
tankers, as a general practice by traders is expensive, some of the trading
companies have their own mass storage facilities to manage the costs in long
run.
Now price bounced back high and most likely higher in future (storage
effect) raise the question of why the IEA allowed traders to bid in the
auction process. The US energy department says its policy is not to
discriminate between different purchasers. Other governments involved in the
IEA release either selling their oil directly to industry, or only selling
refined retail products such as diesel or jet fuel, rather than crude (the
economist).
Does it not show the IEA's is inharmonic? It would have been better the IEA
performed a policy analysis before making such an immature decision.

What the oil dream can do - Cuba walks a change path

By Shahab Sabahi

Energy and Environment - Policy analysis research group

The United States geological survey, considers that the seas around Cuba hold 4.6 billion barrels of crude oil. This is very deep water reserve. In 2004, Repsol struck oil there, but found out the extraction would not be profitable. Any new discovery would take years to exploit. (the Economists)
Now the world demand for energy exponentially rises. Consequently energy security is going to be a pressing issue for states. Even the spots with small amount of fossil stock appeal state authorities
Cuba, with centralized planner and a communist system, is not exceptional. The need for foreign investment makes Cuba seeks investment from China, Brazil and India which have already offered a multi-billion-dollar credit line. Cuba’s government is trying to find a way-out from its existing political structure, to give ways for more efficient private engagement in the country’s economic affair. In recent movements, the government cut food imports by leasing land to private farmers. The government granted 221,000 licenses for small businesses (The Times) since October last year, to make the island more attractive for foreigners to visit and Cuban-Americans to retire.
But Cuba’s main hope of economic independence is OIL. A $750m drilling rig is underway to live up this hope. It built in China with no American parts to avoid falling foul of the United States’ economic embargo against the island. Cuba will celebrate the rig presence in its waters by the end of the year. Spain’s Repsol will drill an exploratory well the early 2012.
If the oil hope comes true and then Cuba’s reforms take momentum, Cuba may be a rather different place.

A hidden threat – Population Growth, A need for new political ideology?

By Shahab Sabahi

Energy and Environment - Policy analysis research group

I recall, when I was at my ten, my father’s simple argument why communism would suit China. Without any offence, he believed that a central planner would evenly distribute food to Chinese for the sake of the rest of the world to get enough food. 
Thirty years on, China exercises its version of capitalism and stands as the world’s second largest economy with its increasing number of middle class, who will steadily demand more food and energy.
China is not any longer the only populated spot. On World Population Day, July 11, the United Nations announced an upcoming event global population hitting the seven billion mark by late October 2011. Another projection suggests the second milestone will be in 2025 when the global population will reach eight billion.
A new study “Africa's Demographic Multiplication” conducted by the Washington-based Globalist Research Center, points out that Africa's population has more than tripled during the second half of the 20th century, growing from 230 million to 811 million. Africa has become more populous than Europe.
Only Nigeria, Africa's most populous country at 158 million, is expected to grow to 730 million by century's end, making it larger than Europe's projected population of 675 million. Nigeria is currently the only African country with a population exceeding 100 million. But 10 other countries in the African continent are expected to join that club before the close of the century: the Democratic Republic of Congo (DRC), Egypt, Ethiopia, Kenya, Malawi, Niger, Sudan, Tanzania, Uganda and Zambia.
Cost-benefit analysis (again economic dimension) by experts reads that in many countries, every dollar spent on family planning saves at least four dollars that would otherwise be spent treating complications arising from unplanned pregnancies. Despite the low cost and many benefits of planning, as analysis shows, world leaders, particularly emerging countries as pledged before, have not placed a priority on its funding. WHY?
Perhaps world leaders see it as an opportunity and a new market for selling products and hunting cheap workforce. It may hold in medium term however it is obvious that the world’s scarce resources will be a pressing issue in foreseeable future.

Policy is wrong - A crossroad for US economy

By Shahab Sabahi

Energy and Environment - Policy analysis research group

The ongoing budget ceiling debate between the US congress and the Obama administration evokes Henry Morgenthau, Roosevelt’s treasury secretary, and his argument. Alike the congress today, Morgenthau opposed the Keynesian government spending idea and advocated the budget balancing and tax cut.
With Morgenthau’s idea the great depression continued until 1941, when the U.S. entered World War II. Under the war circumstances, the US government shouldered massive war spending and it was doubled the Gross National Product.  Unemployment was slashed from 14% in 1940 to less than 2% in 1943 as the workforce grew by ten million. The following year after the war, 1946, positive growth effect continued and federal spending remained high at $62 billion. The war supplies made the top priority, regardless of cost and efficiencies.
Eventually the idea of government spending (Keynesian spending) and business regulation won the ground and the term of government stimulation package entered in the political language 
Apart of any technical analysis, with paying a careful look in Friday’s job report, it is obvious that Obama’s effort fails to evolve the economy by stimulation. 
What went wrong with Obama’s policy? It seems that he tried to stimulate the economy with an increase in government spending, but indeed, he did not.
Dislike Roosevelt’s policy; today there are not any public works projects, defense projects and actually half a million fewer government employees are now out of work since 2008.
Obama’s stimulus much consisted of tax cuts, aid to distressed families and aid to hard-pressed state and local governments and not spending. They were not the kind of job-creation program. As it was circulated between a few economists that that tax cuts would be ineffective and that the proposed spending was inadequate. So it is now proved.
The mortgage relief of $46 billion agreed to spend to help families stay in their homes, however about $2 billion has been spent instead.
It seems we should say:
Dear J.P. Sartre, no longer exists human's ability to think of what is not. Today human cannot think of what exists. We run out of options and turn to dogma .
Public administrators lose their sights and fail to come up with any new ideas. Even they are unfamiliar with what historical trends show. Moreover they are deaf to scholars’ voices and arguments, if they do not favored their policies.

Why is R. Malthus right? - Population and Economic Growth along with Globalization lead to chaos if…

By Shahab Sabahi

Energy and Environment - Policy analysis research group

The 18th century Britain was experiencing a transition in its society. The feudal system had been slowly giving ways to a new social order. This shift and its consequences forced a large percentage of the British population, such as tenant farmers, to leave their lands. Straight away wool had become a valuable product. Landowners sniffed the profits to be made, declared many of the common lands to be private property, dispossessed the tenants, and began shepherding sheep which was less labor-intensive in comparison with that time farming. So the vast majority of the dispossessed farmers were out of work. and by the 1790s, poverty was out of control.
It was coincident with the French Revolution which had inspired a new group of Utopian writers and philosophers in Britain. They argued that the overwhelming poverty in Britain was due to the riches and their control over social and political institutions. They believed that economic power guided political power, and if the economic power were removed, then the masses would be able to restructure society in a new form, based on logic and reason, which would lead to a better life for all. No one would go hungry, as resources would be allocated according to need, not according to wealth. This course of reason would lead to the elimination of government, law, and private property and a true democratic society would prevail. Humanity would be set on a course of uninterrupted improvement, and eventual perfection. (Jascha Swisher).
In a response to the Utopians Thomas Robert Malthus in his essay “On the Principle of Population”, based on the facts of the poverty, argued the Utopian ideas could never work: there could never be enough food to support such an idealistic society. Human misery and suffering were practically inevitable. To support his hypothesis, he simply pointed out that man would continue to eat, and to reproduce.
In our modern time, Malthus’s theory has not taken seriously as there was little sign of impinging Malthusian population pressures. But  it was wrongly interpreted by sociologists, (albeit based on the facts of that day) as they saw population had increased far beyond what Malthus predicted possible, and starvation, in the JUST First World countries at least, is not a significant problem. They wrongly believed that ONLY advancements in agricultural technology had made possible plenty food production, which been able to keep up with the expanding population without overt Malthusian checks.
But it is time to rethink what Malthus’ message tries to deliver. It was not only the technology advancement which improved our life over the late 20s century. We have exploited a large portion of the environment capacity. The environment capacity has already hit its exhausting level. Inevitably the technology advancement has assisted us to efficiently exploit LARGER amount of resources, and obviously fed a large number of population.
Now our civilized modern social system is expanded and nicely fit its external system, means our environment. It reminds me “theory of dissipative structure”.
It implies that disruptive fluctuations would likely increase in intensity until the GLOBAL SYSTEM either reversed to a much simpler model, closer to thermodynamic equilibrium or evolves through a chaotic path into a more stable configuration. Both will be accompanied with the huge amount energy release.
Please check on population growth in South Asia.

Main Characteristics of China's Foreign Policy - Investments and Conflicts

By Shahab Sabahi

Energy and Environment - Policy analysis research group

China claims that its diplomacy aims at safeguarding national interests and promoting world peace
To achieve the former target, China’s diplomacy has well paved the road for Chinese enterprises to take stakes abroad. The world’s second largest economy has vastly invested in the natural resources development projects. It could secure a few oil and gas exploration and development concessions in the Middle East where traditionally was the stronghold of the WEST. China’s Diplomacy helps Chinese enterprises dominate the domestic markets of some host countries and colonize them with the new strands of Chinese skilled and unskilled workforces. China finances public projects across Africa and the Middle East and provides technical supports, albeit not giving philanthropy. Very on time, when the EU were struggling their debt, to diversify cash reserves and influence the EU, China seized the opportunity and jumped into the EU markets. This move made both sides satisfy. In one hand it helps the EU hold breath for a while and bring home some cash. In the other hand China sets up a new save and opens a wider market.
Laughs, smiles, shaking hands, photos, flags waving and press conferences and of course hope of prosperity are the outcomes of China’s Diplomacy.
What about World peace? Is really China’s foreign policy toward the peace?
China has played different games in the Asia-Pacific neighborhood and looks its diplomacy is at odd with world peace.
China antagonizes its neighboring countries. During two incidents on May 26th and June 9th, between Vietnam and China, Vietnamese oil exploration vessels conducting seismic surveys were harassed by Chinese ships. This has brought to a head the long-standing territorial dispute over the areas around the Paracel and Spratly Islands in the South China Sea.
Philippine, Taiwan, Brunei and Malaysia also claim these islands and the discussion on the disputed islands is anxiously ongoing.
In another accident tension grew high when Japanese coast guard detained a Chinese trawler near the disputed Senkaku Islands.
In northern Myanmar, Chinese dam projects caused a fight broke out between the Myanmar Army and the Kachin Independence Organization (KIO) at the Dapein dams, which are being constructed by China’s state-owned Datang Company.
They are a couple of evidences that show China’s policy for Asia is not very much peaceful. Apart from securing natural resources, geopolitical competition is also on China’s agenda. With China rising as a naval power, the current dominant power in the Pacific Ocean, the United States, is looking for ways to maintain its influence. China adopts this provocative approach in Asia to push back and prevent containment of US’s naval expansion. 

Time is up - OECD needs an Economic Structure Reform

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Do economic, social and political systems have potential to function as sustainable systems? Imagine an economic system involves non-renewable stocks or resources. The system is going to run out of the stocks soon. Moreover assume the social system who runs the economic system does not intend to compromise its consumption level. It is also true for the case, when the size of the social system (population) grows quicker than the economic size.
To keep up with two constraints on the ground, the stocks depletion and unchanged consumption level, the economic system may initially improve its efficiency to get more outputs while the amounts of inputs are reduced. In longer term it goes for innovation and adaptation and it diversifies its outputs and inputs in ways to manage the negative impact of the constraints.
When efficiency reaches its maximum, the fluctuation between efficiency and adaptability converges to its minimum level. At this point, the systems are volatile; however they may be at steady states. It is a time to make crucial decision either path below
1.      The systems are fundamentally rearranged
2.      Refine the patterns through which the systems work and reduce the complexity of them
The economy of developed countries has already arrived at this point. They wish and insist to keep their growth pace high, while budget cuts and cap on their borrowing make priorities on their agendas. It is just an illusion. Policy experts are still confident that they work out policy options (miracle!!) to make both reachable. They simply forget that their economic systems grow big, complex and solid and efficiency improvement, innovation and adaptation will not work. It seems that the policy makers become conservative and close their eyes to reality. They are as rigid as their economic systems.
Time is up and a fundamental reform in economic structure and institution is essential.

Faith in Democracy – with little expectation

By Shahab Sabahi

Energy and Environment - Policy analysis research group





Somporn Samaithong is disabled. He knows and believes democracy. He exercises his right. He makes his effort to put his name on a ballot by his foot.
This is a photo by [Reuters] at a polling station in the outskirts of Bangkok.

Life at the end of streets - Bangkok’s streets

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Bangkok is horizontally and vertically expanding.  Tall buildings spring out so fast to welcome and accommodate the city new residents. Forward looking service sector organizes new setups to cater the upcoming demand.  Expansion, Growth, and Consumption again and again.
To do a survey about changes around the city for a Japanese magazine in Bangkok, my wife and I set out a walk around the central Bangkok. It was just a visual observation of fifteen streets and reporting business changes which might take place across the streets in last year. Imagine streets fill with people, vending carts, and of course cars, where you should struggle your way through crowds while should keep eyes on CHANGES. Although it was a long walk and left us exhausted in the end, it was so much fun. It gave us firsthand knowledge about the central.
Something caught my eyes. Almost all dead-end streets share something in common. They all are massively busy in their way in. Food vendors serve instant, but organic food to their customers. Tourists haggle with junk sellers and noise tests your endurance limit. Just few dozen meters into the dead-end streets, you are taken by surprise. Landscapes are thoroughly changed. Large vintage beautiful villas with all tall green trees come forth and the sound of nature replaces the early miserable noise. Instead of food stench, flowers and scents get off paradise breath, as if you walk in a sacred place. It makes you think about; smiles on faces, smooth silk, delicious foods.
I am wondering, until the next survey in 2012, home many of these vintage houses may be converted to luxurious condos or business offices.

Pragmatism in Chinese foreign policy - A sound position in the Greece and West debt crisis

By Shahab Sabahi

Energy and Environment - Policy analysis research group
R. Wolverson, in her post “Could china be the next Greece? “ appeared on Time, lucidly argues that China should watch its fiscal and monetary policy before experiencing a debt crisis. She investigates China’s growth plan and points at the significance of a boost in its domestic consumption. She sees the danger of inflation which hovers the China economy and remarks it as a growth constrain for foreseeable future. For her, China’s focus on favoring the corporate sector particularly on its exporters is a good example that the government controls on deposit yields and lending rates.
It’s true that China has historically had low deposit yields, which were not in favour of households as they are the savers. Inevitably low lending rates helped the growth of corporate sector and factories and leaves Chinese consumers to spend less.  For sure this old policy cannot be affordable as China is due to expand its domestic consumption with adaptation of a new policy. It most likely leads the country to plunge in debt. So in short, China will walk the same path as the WEST did over its heydays. It is predictable as this is the nature of growth and governs all evolutionary systems when move along their growth path. No way out.
Wolverson also soundly points out the China huge foreign cash reserve will temporarily help out the country before fully dropping down the debt crisis.
In general, her analysis is satisfactory and China will certainly experience slowdown one day.
But the question is WHEN would it happen to China? and WHAT  sort of policy may China adopt to delay the happening of this debt crisis or at least take place with less negative impacts? 
The missing part in her analysis is the impact of China’s foreign policy. The recent vist of Chinese officials from the EU explains everything by itself. Diversification, investment in foreign currency but US$, investment and trade with countries who blessed with natural resources and more flexibility in foreign relation are centre of CHINA’s foreign policy. Something the WEST used to be master in and now lost it in favour of dogmatism. Realism fades away from the centre of the WEST’s foreign policy.