Arquivo da tag: Mercado

Petróleo, gás e mineração ameaçam quase um terço dos Patrimônios Naturais Mundiais (WWF)

01 Outubro 2015

Londres – 1º de outubro de 2015 – Quase um terço de todos os locais pertencentes à lista de Patrimônio Mundial Natural está ameaçado pela exploração de petróleo, gás e mineração. A informação foi divulgada no novo relatório “Protegendo um Excepcional Valor Natural”, produzido pelo WWF, Aviva Investors and Investec Asset Management, e que ressalta ainda o risco para os investidores que trabalham ou possuem a intenção de trabalhar com empresas que atuam com extração nesses lugares ou próximos a eles.

Patrimônios Mundiais Naturais (ou World Heritage Site, em inglês) são lugares de enorme valor natural, como o Grand Canyon, a Grande Barreira de Corais e a Reserva Selous Game, na Tanzânia. Cobrindo menos de 1% do planeta, eles contêm um enorme valor natural, como paisagens singulares e alguns dos animais mais raros da Terra, como gorilas da montanha, elefantes africanos, leopardos da neve, baleias e tartarugas marinhas.

De acordo com o relatório, os pontos de Patrimônio Mundial Natural estão em risco mais elevado do que jamais se pensou até então.

As ameaças estão relacionadas às operações em atividade ou à entrada de empresas para concessão de exploração de minérios, petróleo ou gás, e podem causar danos irreparáveis aos locais à biodiversidade, além de prejudicar as comunidades que tiram dali sua subsistência. No mundo todo, a maior ameaça está na África, onde o risco atinge 61% desses locais.

No relatório, os investidores estão sendo alertados dos riscos que correm ao apoiarem essas empresas – tanto riscos financeiros quanto de reputação. Em resumo, neste caso, há muito risco envolvido para um retorno que não é o suficiente.

O documento convida potenciais financiadores e apoiadores a:

•    Buscar informações se as empresas em que estão investindo, ou considerando investir, possuem concessões ou operações dentro de lugares considerados Patrimônios Mundiais Naturais;

•    Abordar diretamente companhias que trabalham nesses locais ou próximos a eles e as encorajar a mudar seus planos;

•    Considerar retirar o investimento nessas companhias se não forem tomadas medidas para sair desses lugares, e ainda divulgar o fim do apoio e as razões para isso.

O desenvolvimento alternativo e sustentável dos Patrimônios Naturais Mundiais é uma proposta muito melhor para resguardar tanto o futuro dos recursos naturais quanto o das comunidades locais, nacionais e globais. A preservação desses locais e de seus ecossistemas pode fornecer, a longo prazo, benefícios significativos, visto que:

•    93% dos Patrimônios Mundiais Naturais promovem o turismo e a recreação;
•    91% deles geram empregos;
•    84% deles contribuem para a educação.

O WWF convoca investidores a usar as evidências desse relatório para abordar as companhias de extração e encorajá-las a adotar compromissos significativos de “não atuação” e “não impacto” nos Patrimônios Mundiais Naturais, além de divulgar de forma proativa as operações em atividade (existentes, ou em vias de existir), dentro ou nas proximidades de Patrimônios Mundiais Naturais.

De acordo com o diretor-executivo do WWF do Reino Unido, David Nussbaum: “nós estamos indo aos confins da Terra em busca de mais recursos – incluindo minérios, petróleo e gás, que estão cada vez mais caros e difíceis de serem extraídos. Com isso, alguns dos lugares mais preciosos do mundo estão ameaçados por atividades industriais destrutivas que põem em perigo os valores pelos quais eles foram agraciados com o maior nível de reconhecimento do planeta”, comenta.

“Proteger esses locais únicos não é somente importante do ponto de vista ambiental, é crucial para o sustento e o futuro da população que depende deles. Os investidores têm uma oportunidade única assim como uma responsabilidade de administrar seu capital e desenhar nosso futuro”, completa Nussbaum.

Anúncios

Naomi Klein’s Radical Guide to the Anthropocene (The New Republic)

FILM

OCTOBER 1, 2015

In the author’s new documentary, the climate crisis is tied to our rotten economic system.

By 

Last year, Naomi Klein’s book This Changes Everything laid bare the capitalist economic system’s dependence on environmental devastation. We can’t fight climate change until we properly understand capitalism’s culpability, she argued. And with her characteristic brand of activist-oriented problem solving, Klein suggested we could seize this moment of climate crisis to revamp our addled global economy. A documentary of the same name, directed by Klein’s husband Avi Lewis, was conceived as a parallel project to Klein’s book and had its world premiere at the Toronto International Film Festival last month. It trumpets the same battle cry: that fighting global warming effectively means overturning capitalism. As politicians keep bickering over absurdly modest measures like cap-and-trade programs and scientists continue to announce startling figures of shrinking glaciers, Lewis and Klein’s message feels as urgent as ever.

Klein is really good at making radical arguments like this one terrifically accessible. This Changes Everything is the third book in Klein’s anti-globalization trilogy, following 1999’s No Logo, which criticized brand-oriented consumer culture, and 2007’s The Shock Doctrine, which chronicled how corporations take advantage of disasters to implement free-market policies designed to enrich a small elite. The film This Changes Everything marks the second time that Klein and Lewis have collaborated on a documentary. Eleven years ago, the pair made The Take, a movie that followed a group of autoworkers in Argentina who took over their factory and turned it into a cooperative. Lewis and Klein’s new film is similar in its aim to promote grassroots anti-capitalist action.

“A book can’t help you from feeling isolated and alone. A film, I think, can,” said Klein when I caught up with her and Lewis in Toronto to talk about the documentary. This Friday, it will be released in select theaters in New York, and will roll out in Los Angeles and Canada soon afterward. In the film, Klein’s thesis—that the climate crisis is inextricably tied to our rotten economic system—is woven together with portraits of activists fighting against mining and energy projects everywhere from Canada to Greece to South India. Like the book, the film succeeds in making a rigorous argument intelligible to a wide audience. By mixing essayistic filmmaking with vérité documentary techniques that showcase the stories of regular people turned activists, This Changes Everything also communicates an emotional urgency perhaps best suited to the cinematic medium. The documentary connects the past and the present, historicizing the activist battle against new coal plants and oil wells.

Klein traces the ideological infrastructure our current petrochemical economy is founded on back to the Enlightenment period. “It’s a moment in history where you have the Scientific Revolution and you also have the colonial project overlapping temporarily. The idea of infinite growth begins and there’s the birth of the machine,” she said. “These are all happening in the very same century.” She thinks drawing attention to when and where these concepts came from is intrinsic to developing alternatives to them. “Calling it human nature erases that it comes from a place. There are other ideas and other ways of relating to the world.”

From the indigenous tribes affected by Tar Sands development in Alberta to the South Indian villagers protesting a proposed coal plant, the documentary shows communities that practice non-capitalist ways of relating to nature. They’re all suspicious of the narrow post-Enlightenment idea of progress that fossil-fuel development promises. They don’t see the industrial extraction of resources as a necessary pit-stop on the way to an advanced society, but are rather see polluting resources like water which sustain human life as backward.

Klein uses these communities as examples of alternative ways of relating to the environment. She refutes the idea that we are doomed because it’s human nature to live in an environmentally destructive manner. A tendency to generalize “human impact” is embedded in terms like the anthropocene, Klein noted, which is the scientific designation for our era—it refers to the epoch in which human activity from industrial farming to resource extraction has irreversibly changed the planet. Basically, you can read our impact in the rocks of Earth itself. “It being ‘the age of man’ diagnoses the problem as being something essential in humans and glosses over the fact it’s not all humans,” Klein said, noting an essay on the subject by Andreas Malm from Jacobin magazine. “[Malm] makes the argument that it’s only a very small subset of humans that came up with the idea of burning fossil fuels on an industrial scale, and it’s still a minority of humans who do so.” For example, the average American consumes 500 times more energy than the average person living in a country like Ethiopia or Afghanistan. And even within the U.S., there are inequalities.

Environmental issues are inextricable from issues of economic and racial justice. “Being in New York the week after Sandy, there were powerful and disturbing flashbacks to being in New Orleans a week after Katrina happened,” said Lewis. For them, they said, the 10-year anniversary of Hurricane Katrina this year connected the racial justice movement and the climate movement for many. “I think that because Black Lives Matter has united that conversation in the U.S., and then having the Katrina anniversary, for a lot of people it was a bit of an ‘oh yeah’ moment,” Klein said. “If you have a system in which black lives are treated as if they don’t matter, when you layer climate change on top of that then you see the issue on the mass scale.”

Environmental issues are inextricable from issues of economic and racial justice.

While Lewis and Klein’s documentary doesn’t focus on Hurricane Katrina or the intersection of American racial justice and climate change in particular, it does outline how the current economic system values some lives more than others. Klein’s narration returns over and over again to the idea of “sacrifice zones”: A resource economy depends on certain areas being disproportionately ravaged by extraction and processing—these places and the people in them are seen as worth sacrificing for some nebulous concept of the greater good. Populations in sacrifice zones have often been disproportionately poor and people of color, but in the film, we see that as the zones keep expanding middle-class white people from Montana to Greece are realizing they’re new targets of exploitation.

The emotional core of the film comes from individuals battling against being seen as disposable. Though as filmmakers Lewis and Klein unpack troubling realities, their film is cautiously optimistic, and focuses on the power and potential of these grassroots movements. We need a new system, in their view.

While the film concentrates its attention on citizen-driven actions, Klein also spearheaded the policy-focused Leap Manifesto, which was just released in mid-September in advance of the Canadian election, which takes place on October 19. “It’s basically a roadmap for Canada to get off fossil fuels,” explained Klein. Its signatories include public figures like environmentalist David Suzuki and folk-rock icon Neil Young.

Though Lewis and Klein are hopeful, they’re also realistic. Talking to them about the most recent price shocks—which happened since they wrapped shooting, and which have caused the price of oil from the Alberta Tar Sands to fall to historic lows—Lewis notes that “it is not affecting oil company profits as much as you might think it is.” He continued. “There are projects that have been suspended, but there’s thousands of barrels of new capacity that’s going ahead in Alberta each day. It’s not expanding as fast as they want it to, but it’s still expanding.”

Still, Klein explained the price shock is an opportunity. “Here is a pause in the frenetic energy. That kind of money makes it really hard to think. It’s hard to think with oil at $100 a barrel,” she said. “But now we have a moment where we can look in the mirror, and ask is this the best way to run the economy?” Her answer? No.

Aproveitamento de recursos hídricos poderá gerar renda para indígenas (Agência Senado)

Da Redação | 28/09/2015, 09h39 – ATUALIZADO EM 28/09/2015, 17h07

Proposta que altera a Constituição Federal para assegurar aos indígenas participação nos resultados do aproveitamento de recursos hídricos em suas terras (PEC 76/2011) está na pauta da reunião de quarta-feira (30) da Comissão de Constituição, Justiça e Cidadania (CCJ).

Hoje já são reconhecidos aos índios os direitos de posse permanente das terras que ocupam e de usufruto exclusivo das riquezas do solo, dos rios e dos lagos nelas existentes. Quanto à participação na exploração dos recursos, a Constituição garante apenas o direito a resultados obtidos com as riquezas minerais.

O autor da PEC, senador Blairo Maggi (PR-MT), explica que, no caso da implantação de hidrelétricas em terras indígenas, por exemplo, “não há garantia explícita da participação dos índios nos resultados de tal exploração”.

Ele acrescenta que essa lacuna tem gerado divergências na interpretação da norma constitucional e insegurança jurídica para as comunidades. Para o parlamentar, se a Constituição concede aos índios usufruto exclusivo das riquezas dos rios e dos lagos existentes em suas terras, é justo que haja compensação caso sejam privados do livre acesso a essas águas.

O relator, senador Valdir Raupp (PMDB-RO), apoia a proposta e questiona: “se as comunidades têm direito à participação no resultado da lavra mineral, por que também não teriam esse direito em relação ao aproveitamento dos recursos hídricos? Ambas as atividades podem impactar fortemente as comunidades”, observa.

A PEC 76/2011 prevê, para o aproveitamento dos recursos hídricos, a mesma exigência constitucional já estabelecida para exploração de riquezas minerais em terras indígenas, ou seja, autorização do Congresso Nacional, ouvidas as comunidades afetadas.

Após análise na CCJ, a PEC segue para dois turnos de votação em Plenário.

Outros projetos

A pauta da reunião inclui outros 33 projetos, entre eles, proposta de emenda à Constituição (PEC 62/2015), da senadora Gleisi Hoffmann (PT-PR), que acaba com a vinculação automática entre vencimentos mensais recebidos por agentes públicos, como parlamentares e ministros dos tribunais superiores. O fim do chamado “efeito cascata” no reajuste dessas remunerações recebeu relatório favorável do senador Randolfe Rodrigues (PSOL-AP).

Agência Senado

Exxon’s Own Research Confirmed Fossil Fuels’ Role in Global Warming Decades Ago (Inside Climate News)

Top executives were warned of possible catastrophe from greenhouse effect, then led efforts to block solutions.

By Neela Banerjee, Lisa Song and David Hasemyer

Sep 16, 2015

Exxon Experiment

Exxon’s Richard Werthamer (right) and Edward Garvey (left) are aboard the company’s Esso Atlantic tanker working on a project to measure the carbon dioxide levels in the ocean and atmosphere. The project ran from 1979 to 1982. (Credit: Richard Werthamer)

“In the first place, there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels,” Black told Exxon’s Management Committee, according to a written version he recorded later.

It was July 1977 when Exxon’s leaders received this blunt assessment, well before most of the world had heard of the looming climate crisis.

A year later, Black, a top technical expert in Exxon’s Research & Engineering division, took an updated version of his presentation to a broader audience. He warned Exxon scientists and managers that independent researchers estimated a doubling of the carbon dioxide (CO2) concentration in the atmosphere would increase average global temperatures by 2 to 3 degrees Celsius (4 to 5 degrees Fahrenheit), and as much as 10 degrees Celsius (18 degrees Fahrenheit) at the poles.  Rainfall might get heavier in some regions, and other places might turn to desert.

“Some countries would benefit but others would have their agricultural output reduced or destroyed,” Black said, in the written summary of his 1978 talk.

His presentations reflected uncertainty running through scientific circles about the details of climate change, such as the role the oceans played in absorbing emissions. Still, Black estimated quick action was needed. “Present thinking,” he wrote in the 1978 summary, “holds that man has a time window of five to ten years before the need for hard decisions regarding changes in energy strategies might become critical.”

Exxon responded swiftly. Within months the company launched its own extraordinary research into carbon dioxide from fossil fuels and its impact on the earth. Exxon’s ambitious program included both empirical CO2 sampling and rigorous climate modeling. It assembled a brain trust that would spend more than a decade deepening the company’s understanding of an environmental problem that posed an existential threat to the oil business.

Then, toward the end of the 1980s, Exxon curtailed its carbon dioxide research. In the decades that followed, Exxon worked instead at the forefront of climate denial. It put its muscle behind efforts to manufacture doubt about the reality of global warming its own scientists had once confirmed. It lobbied to block federal and international action to control greenhouse gas emissions. It helped to erect a vast edifice of misinformation that stands to this day.

This untold chapter in Exxon’s history, when one of the world’s largest energy companies worked to understand the damage caused by fossil fuels, stems from an eight-month investigation by InsideClimate News. ICN’s reporters interviewed former Exxon employees, scientists, and federal officials, and consulted hundreds of pages of internal Exxon documents, many of them written between 1977 and 1986, during the heyday of Exxon’s innovative climate research program. ICN combed through thousands of documents from archives including those held at the University of Texas-Austin, the Massachusetts Institute of Technology and the American Association for the Advancement of Science.

The documents record budget requests, research priorities, and debates over findings, and reveal the arc of Exxon’s internal attitudes and work on climate and how much attention the results received.

Of particular significance was a project launched in August 1979, when the company outfitted a supertanker with custom-made instruments. The project’s mission was to sample carbon dioxide in the air and ocean along a route from the Gulf of Mexico to the Persian Gulf.

In 1980, Exxon assembled a team of climate modelers who investigated fundamental questions about the climate’s sensitivity to the buildup  of carbon dioxide in the air. Working with university scientists and the U.S. Department of Energy, Exxon strove to be on the cutting edge of inquiry into what was then called the greenhouse effect.

Exxon’s early determination to understand rising carbon dioxide levels grew out of a corporate culture of farsightedness, former employees said. They described a company that continuously examined risks to its bottom line, including environmental factors. In the 1970s, Exxon modeled its research division after Bell Labs, staffing it with highly accomplished scientists and engineers.

In written responses to questions about the history of its research, ExxonMobil spokesman Richard D. Keil said that “from the time that climate change first emerged as a topic for scientific study and analysis in the late 1970s, ExxonMobil has committed itself to scientific, fact-based analysis of this important issue.”

“At all times,” he said, “the opinions and conclusions of our scientists and researchers on this topic have been solidly within the mainstream of the consensus scientific opinion of the day and our work has been guided by an overarching principle to follow where the science leads. The risk of climate change is real and warrants action.”

At the outset of its climate investigations almost four decades ago, many Exxon executives, middle managers and scientists armed themselves with a sense of urgency and mission.

One manager at Exxon Research, Harold N. Weinberg, shared his “grandiose thoughts” about Exxon’s potential role in climate research in a March 1978 internal company memorandum that read: “This may be the kind of opportunity that we are looking for to have Exxon technology, management and leadership resources put into the context of a project aimed at benefitting mankind.”

His sentiment was echoed by Henry Shaw, the scientist leading the company’s nascent carbon dioxide research effort.

“Exxon must develop a credible scientific team that can critically evaluate the information generated on the subject and be able to carry bad news, if any, to the corporation,” Shaw wrote to his boss Edward E. David, the executive director of Exxon Research and Engineering in 1978. “This team must be recognized for its excellence in the scientific community, the government, and internally by Exxon management.”

Irreversible and Catastrophic

Exxon budgeted more than $1 million over three years for the tanker project to measure how quickly the oceans were taking in CO2. It was a small fraction of Exxon Research’s annual $300 million budget, but the question the scientists tackled was one of the biggest uncertainties in climate science: how quickly could the deep oceans absorb atmospheric CO2? If Exxon could pinpoint the answer, it would know how long it had before CO2 accumulation in the atmosphere could force a transition away from fossil fuels.

Exxon also hired scientists and mathematicians to develop better climate models and publish research results in peer-reviewed journals. By 1982, the company’s own scientists, collaborating with outside researchers, created rigorous climate models – computer programs that simulate the workings of the climate to assess the impact of emissions on global temperatures. They confirmed an emerging scientific consensus that warming could be even worse than Black had warned five years earlier.

Esso Atlantic

Between 1979 and 1982, Exxon researchers sampled carbon dioxide levels aboard the company’s Esso Atlantic tanker (shown here).

Exxon’s research laid the groundwork for a 1982 corporate primer on carbon dioxide and climate change prepared by its environmental affairs office. Marked “not to be distributed externally,” it contained information that “has been given wide circulation to Exxon management.” In it, the company recognized, despite the many lingering unknowns, that heading off global warming “would require major reductions in fossil fuel combustion.”

Unless that happened, “there are some potentially catastrophic events that must be considered,” the primer said, citing independent experts. “Once the effects are measurable, they might not be reversible.”

The Certainty of Uncertainty

Like others in the scientific community, Exxon researchers acknowledged the uncertainties surrounding many aspects of climate science, especially in the area of forecasting models. But they saw those uncertainties as questions they wanted to address, not an excuse to dismiss what was increasingly understood.

“Models are controversial,” Roger Cohen, head of theoretical sciences at Exxon Corporate Research Laboratories, and his colleague, Richard Werthamer, senior technology advisor at Exxon Corporation, wrote in a May 1980 status report on Exxon’s climate modeling program. “Therefore, there are research opportunities for us.”

When Exxon’s researchers confirmed information the company might find troubling, they did not sweep it under the rug.

“Over the past several years a clear scientific consensus has emerged,” Cohen wrote in September 1982, reporting on Exxon’s own analysis of climate models. It was that a doubling of the carbon dioxide blanket in the atmosphere would produce average global warming of 3 degrees Celsius, plus or minus 1.5 degrees C (equal to 5 degrees Fahrenheit plus or minus 1.7 degrees F).

“There is unanimous agreement in the scientific community that a temperature increase of this magnitude would bring about significant changes in the earth’s climate,” he wrote, “including rainfall distribution and alterations in the biosphere.”

He warned that publication of the company’s conclusions might attract media attention because of the “connection between Exxon’s major business and the role of fossil fuel combustion in contributing to the increase of atmospheric CO2.”

Nevertheless, he recommended publication.

Our “ethical responsibility is to permit the publication of our research in the scientific literature,” Cohen wrote. “Indeed, to do otherwise would be a breach of Exxon’s public position and ethical credo on honesty and integrity.”

Exxon followed his advice. Between 1983 and 1984, its researchers published their results in at least three peer-reviewed papers in Journal of the Atmospheric Sciences and an American Geophysical Union monograph.

David, the head of Exxon Research, told a global warming conference financed by Exxon in October 1982 that “few people doubt that the world has entered an energy transition away from dependence upon fossil fuels and toward some mix of renewable resources that will not pose problems of COaccumulation.” The only question, he said, was how fast this would happen.

But the challenge did not daunt him. “I’m generally upbeat about the chances of coming through this most adventurous of all human experiments with the ecosystem,” David said.

Exxon considered itself unique among corporations for its carbon dioxide and climate research.  The company boasted in a January 1981 report, “Scoping Study on CO2,” that no other company appeared to be conducting similar in-house research into carbon dioxide, and it swiftly gained a reputation among outsiders for genuine expertise.

“We are very pleased with Exxon’s research intentions related to the CO2 question. This represents very responsible action, which we hope will serve as a model for research contributions from the corporate sector,” said David Slade, manager of the federal government’s carbon dioxide research program at the Energy Department, in a May 1979 letter to Shaw. “This is truly a national and international service.”

Business Imperatives

In the early 1980s Exxon researchers often repeated that unbiased science would give it legitimacy in helping shape climate-related laws that would affect its profitability.

Still, corporate executives remained cautious about what they told Exxon’s shareholders about global warming and the role petroleum played in causing it, a review of federal filings shows. The company did not elaborate on the carbon problem in annual reports filed with securities regulators during the height of its CO2 research.

Nor did it mention in those filings that concern over CO2 was beginning to influence business decisions it was facing.

Throughout the 1980s, the company was worried about developing an enormous gas field off the coast of Indonesia because of the vast amount of CO2 the unusual reservoir would release.

Exxon was also concerned about reports that synthetic oil made from coal, tar sands and oil shales could significantly boost CO2 emissions. The company was banking on synfuels to meet growing demand for energy in the future, in a world it believed was running out of conventional oil.

In the mid-1980s, after an unexpected oil glut caused prices to collapse, Exxon cut its staff deeply to save money, including many working on climate. But the climate change problem remained, and it was becoming a more prominent part of the political landscape.

“Global Warming Has Begun, Expert Tells Senate,” declared the headline of a June 1988 New York Times article describing the Congressional testimony of NASA’s James Hansen, a leading climate expert. Hansen’s statements compelled Sen. Tim Wirth (D-Colo.) to declare during the hearing that “Congress must begin to consider how we are going to slow or halt that warming trend.”

With alarm bells suddenly ringing, Exxon started financing efforts to amplify doubt about the state of climate science.

Exxon helped to found and lead the Global Climate Coalition, an alliance of some of the world’s largest companies seeking to halt government efforts to curb fossil fuel emissions. Exxon used the American Petroleum Institute, right-wing think tanks, campaign contributions and its own lobbying to push a narrative that climate science was too uncertain to necessitate cuts in fossil fuel emissions.

As the international community moved in 1997 to take a first step in curbing emissions with the Kyoto Protocol, Exxon’s chairman and CEO Lee Raymond argued to stop it.

“Let’s agree there’s a lot we really don’t know about how climate will change in the 21st century and beyond,” Raymond said in his speech before the World Petroleum Congress in Beijing in October 1997.

“We need to understand the issue better, and fortunately, we have time,” he said. “It is highly unlikely that the temperature in the middle of the next century will be significantly affected whether policies are enacted now or 20 years from now.”

Over the years, several Exxon scientists who had confirmed the climate consensus during its early research, including Cohen and David, took Raymond’s side, publishing views that ran contrary to the scientific mainstream.

Paying the Price

Exxon’s about-face on climate change earned the scorn of the scientific establishment it had once courted.

In 2006, the Royal Society, the United Kingdom’s science academy, sent a harsh letter to Exxon accusing it of being “inaccurate and misleading” on the question of climate uncertainty. Bob Ward, the Academy’s senior manager for policy communication, demanded that Exxon stop giving money to dozens of organizations he said were actively distorting the science.

In 2008, under mounting pressure from activist shareholders, the company announced it would end support for some prominent groups such as those Ward had identified.

Still, the millions of dollars Exxon had spent since the 1990s on climate change deniers had long surpassed what it had once invested in its path-breaking climate science aboard the Esso Atlantic.

“They spent so much money and they were the only company that did this kind of research as far as I know,” Edward Garvey, who was a key researcher on Exxon’s oil tanker project, said in a recent interview with InsideClimate News and Frontline. “That was an opportunity not just to get a place at the table, but to lead, in many respects, some of the discussion. And the fact that they chose not to do that into the future is a sad point.”

Michael Mann, director of the Earth System Science Center at Pennsylvania State University, who has been a frequent target of climate deniers, said that inaction, just like actions, have consequences. When he recently spoke to InsideClimate News, he was unaware of this chapter in Exxon’s history.

“All it would’ve taken is for one prominent fossil fuel CEO to know this was about more than just shareholder profits, and a question about our legacy,” he said. “But now because of the cost of inaction—what I call the ‘procrastination penalty’—we face a far more uphill battle.”

Part II, coming on September 17, will further examine Exxon’s early climate research.

ICN staff members Zahra Hirji, Paul Horn, Naveena Sadasivam, Sabrina Shankman and Alexander Wood also contributed to this report.

Animal spirits (The Economist)

Releasing animals into the wild is in vogue—with unwelcome consequences

Sep 12th 2015  | SHANGHAI

The Huangpu: hardly loach heaven

EVERY Saturday morning hundreds of devotees gather by Shanghai’s Huangpu river to liberate fish. Over three hours some 2,000 loach are tipped into the murky waters to the sound of chants.

This is fang sheng, or “animal release”, an East Asian Buddhist ritual in which captive creatures are freed. The point is to demonstrate compassion and earn merit. The practice is ancient, though along with everything else, it was condemned as so much superstition under Mao Zedong. Today fang sheng is making a comeback, especially among the young and well-off. Officials estimate around 200m fish, snakes, turtles, birds and even ants are released each year—though no one really has a clue.

Fang sheng associations can rake in around 1m yuan ($157,000) in annual donations. For some monks it has become a racket. The greatest price, however, is paid by the animals themselves and the ecosystems from which they come and into which they go.

A vast and mainly illegal wildlife trade caters to the demand for animals. Figures are hard to come by, but one paper estimated that in Hong Kong two markets sold over 630,000 birds a year, most destined for fang sheng. Many animals—perhaps half of all the birds—die during capture or transit from stress, disease or mishandling.

Nor does using reared or exotic species help. They create havoc in local ecosystems. Zhou Zhuocheng, chairman of China’s main body on aquatic ecology, cites the case of the mosquito fish from North America, a popular fish for fang sheng. It feeds on the eggs of the native Japanese rice fish, causing the latter to disappear completely in some areas. To add to the grimness, many animals, once released, are hoovered up and sold again to fresh devotees. Animals that do not survive the trauma are often sold as food.

Wang Tianbao, a 26-year-old programmer and evangelical Buddhist, admits that paying for animals that have only recently been released is “a waste of money”. Yet still he is prepared to spend oodles on fang sheng, through whose associations he can disseminate Buddhist information and reach new followers. He says he first practised fang sheng as a student, releasing two turtles that cost him 98 yuan, his food budget for three weeks. Today he spends 5,000-7,000 yuan, or about 5% of his annual salary. There may just be better ways to earn merit.

King Coal, Long Besieged, Is Deposed by the Market (New York Times)

A miner at a coal processing facility near Gilbert, W.Va. This year the number of coal miners in the United States dropped more than 10 percent, to just over 80,000 workers.Credit Robert Galbraith/Reuters 

In April 2005, President George W. Bush hailed “clean coal” as a key to “greater energy independence,” pledging $2 billion in research funds that promised a new golden age for America’s most abundant energy resource.

But a decade later, the United States coal industry is reeling as never before in its history, the victim of new environmental regulations, intensifying attacks by activists, collapsing coal prices, and — above all — the rise of cheap alternative fuels, especially natural gas.

This week President Obama slammed the industry with tougher-than-expected rules from the Environmental Protection Agency limiting power plant carbon emissions, which will accelerate an already huge shift from coal to natural gas and other alternatives.

“Clean coal” remains an expensive and thus far impractical pipe dream. Coal is the world’s biggest source of carbon emissions by far and the leading culprit in global warming. Coal advocates like Mitch McConnell, the Kentucky senator and Republican majority leader, have accused the president of an out-and-out “war on coal.”

But it’s collapsing prices and heavy debt loads that are driving the industry into bankruptcy. Alpha Natural Resources, the nation’s fourth-largest coal producer after it doubled down on coal four years ago in acquiring Massey Coal for $7.1 billion, filed for bankruptcy protection on Monday. It follows Walter Energy, which filed last month; Patriot Coal, which sought court protection in May; and numerous smaller mining companies.

The demise of the two biggest surviving publicly traded coal companies — Peabody Energy and Arch Coal, the nation’s two largest producers — may just be a matter of time, based on their recent stock performance. Peabody shares, which traded at more than $16 less than a year ago, hit 99 cents this week, and Arch shares have fallen to $1 from more than $33, making them among the biggest losers this year in the Standard & Poor’s 500-stock index.

“This has been a storm gathering for a very long time,” said Jeff Goodell, author of the 2006 book “Big Coal: The Dirty Secret Behind America’s Energy Future.” “When I wrote my book, coal looked indomitable. But below the surface you could see all these issues coming at them. You can only hold off the larger forces of progress and science for so long. The bottom line is that it’s a 19th-century fuel very badly suited for the 21st century. There’s no way you can wash or scrub coal to make that essential fact go away.”

Market forces have accomplished in just a few years what environmentalists and social advocates have struggled for decades to achieve. Coal prices have plunged about 70 percent in the last four years. This year the number of underground and surface coal miners in the United States dropped more than 10 percent, to just over 80,000 workers. There are now more than twice as many workers in the fast-growing solar power industry than there are coal miners.

Mountaintop removal, the poster child for environmental destruction, has all but ground to a halt as coal companies continue to close mines, lay off workers and slash capital spending on expensive new mining operations. Meantime, natural gas production has soared and electric utilities have built up gas-fired generation to replace aging coal-fired power plants.

“It’s kind of the ultimate irony that market forces, and not the administration or environmentalists, have displaced coal,” said Jorge Beristain, head of Americas metals and mining equity research for Deutsche Bank. “It’s human ingenuity that found a cheaper, cleaner way to skin the cat, which is by producing natural gas from fracking. They’re both fossil fuels, of course, but burning natural gas puts out a lot less carbon than coal.”

Burning coal produces nearly twice as much carbon dioxide as does natural gas, according to the United States Energy Information Administration.

Anthony Young, a mining analyst at the Macquarie Group, agreed. “There have been a lot of protests and animosity towards the coal industry, but lo and behold, it was the natural gas industry that has stopped many of the worst mining practices,” he said. “There are concerns about fracking, but it’s way better than cutting down mountains.”

Environmentalists are starting to notice that financial arguments may prove more effective than moral or social ones at persuading major investors to shun coal. Stanford University, which announced last May that it would divest itself of direct investments in coal producers, looks at least as much like a shrewd investor as an environmental steward, given the subsequent plunge in coal prices and coal company stock prices, and other big investors have taken notice.

In June, Norway’s government pension fund — considered the world’s largest sovereign wealth fund with $890 billion in assets, much of it generated from oil revenue — said it would divest itself of coal holdings. A spokeswoman for the fund said this was a financial decision, not a political one, with the goal of “building financial wealth for future generations.”

“I think you’re seeing a generational shift where the activists are getting more market-savvy,” said Mr. Beristain of Deutsche Bank. “They’re targeting Wall Street and the analysts. It’s becoming part of the environmental agenda to kneecap the coal sector at the source of its cash.”

Carbon Tracker, a London-based think tank, is among those trying to use financial data to affect climate change. “We try to stay out of the political discussion,” said Luke Sussams, a senior researcher and co-author of “The US Coal Crash,” a report arguing that coal faces a long-term, and not just cyclical, decline. “We look at it purely from a risk versus return perspective,” he said. “Our stance is: It’s a bad investment.”

Environmentalists still have their work cut out for them. The coal industry may be in dire straits, but it’s not going to vanish overnight. In 2013 the United States produced 985 million tons of coal, although it was the first time in 20 years that production fell below one billion tons. The United States consumed 924 million tons, 93 percent of it accounted for by the electric power industry, according to government statistics. In 2011, the United States consumed 1.1 billion tons.

“It’s premature to say the industry is dead,” said Mr. Young, the Macquarie analyst. He estimated the industry needs to shrink by about 25 percent to meet current demand, and more if electric utilities accelerate the shift to natural gas. But as coal companies “go through bankruptcy, their assets aren’t going to shut down. Mismanagement will be addressed, and their balance sheets will be restructured, but viable assets will re-emerge and be profitable.”

But it seems safe to say that the coal industry will never wield the enormous economic and political clout that it had even 10 years ago. “In the aftermath of the Bush-Cheney administration, there was this resurgence of the idea that coal was the American rock,” Mr. Goodell said. “America’s industrial strength was built on burning coal. No politician wanted to mess with coal.”

But with the shrinking of the industry, coal interests “are losing their clout, and they’re not going to get it back,” Mr. Goodell said. “It’s becoming clear where the future is going. The politically smart thing is to jump on the renewables bandwagon.”

Correction: August 10, 2015
The Common Sense column on Friday, about the declining fortunes of the coal industry, misstated the number of years ago that the coal company Alpha Natural Resources acquired a rival, Massey Energy. It was four years ago, not two.

The Way Humans Get Electricity Is About to Change Forever (Bloomberg)

These six shifts will transform markets over the next 25 years

The renewable-energy boom is here. Trillions of dollars will be invested over the next 25 years, driving some of the most profound changes yet in how humans get their electricity. That’s according to a new forecast by Bloomberg New Energy Finance that plots out global power markets to 2040.

Here are six massive shifts coming soon to power markets near you:

1. Solar Prices Keep Crashing

The price of solar power will continue to fall, until it becomes the cheapest form of power in a rapidly expanding number of national markets. By 2026, utility-scale solar will be competitive for the majority of the world, according to BNEF. The lifetime cost of a photovoltaic solar-power plant will drop by almost half over the next 25 years, even as the prices of fossil fuels creep higher.

Solar power will eventually get so cheap that it will outcompete new fossil-fuel plants and even start to supplant some existing coal and gas plants, potentially stranding billions in fossil-fuel infrastructure. The industrial age was built on coal. The next 25 years will be the end of its dominance.

2. Solar Billions Become Solar Trillions

With solar power so cheap, investments will surge. Expect $3.7 trillion in solar investments between now and 2040, according to BNEF. Solar alone will account for more than a third of new power capacity worldwide. Here’s how that looks on a chart, with solar appropriately dressed in yellow and fossil fuels in pernicious gray:

Electricity capacity additions, in gigawatts
Source: BNEF


3. The Revolution Will Be Decentralized 

The biggest solar revolution will take place on rooftops. High electricity prices and cheap residential battery storage will make small-scale rooftop solar ever more attractive, driving a 17-fold increase in installations. By 2040, rooftop solar will be cheaper than electricity from the grid in every major economy, and almost 13 percent of electricity worldwide will be generated from small-scale solar systems.

$2.2 Trillion Goes to Rooftops by 2040

Rooftop (small-scale) solar in yellow. Renewables account for about two-thirds of investment over the next 25 years.

4. Global Demand Slows

Yes, the world is inundated with mobile phones, flat screen TVs, and air conditioners. But growth in demand for electricity is slowing. The reason: efficiency. To cram huge amounts of processing power into pocket-sized gadgets, engineers have had to focus on how to keep those gadgets from overheating. That’s meant huge advances in energy efficiency. Switching to an LED light bulb, for example, can reduce electricity consumption by more than 80 percent.

So even as people rise from poverty to middle class faster than ever, BNEF predicts that global electricity consumption will remain relatively flat. In the next 25 years, global demand will grow about 1.8 percent a year, compared with 3 percent a year from 1990 to 2012. In wealthy OECD countries, power demand will actually decline.

This watercolor chart compares economic growth to energy efficiency. Each color represents a country or region. As economies get richer, growth requires less power.

The Beauty of Efficiency

Source: BNEF

5. Natural Gas Burns Briefly

Natural gas won’t become the oft-idealized “bridge fuel” that transitions the world from coal to renewable energy, according to BNEF. The U.S. fracking boom will help bring global prices down some, but few countries outside the U.S. will replace coal plants with natural gas. Instead, developing countries will often opt for some combination of coal, gas, and renewables.

Even in the fracking-rich U.S., wind power will be cheaper than building new gas plants by 2023, and utility-scale solar will be cheaper than gas by 2036.

Fossil fuels aren’t going to suddenly disappear. They’ll retain a 44 percent share of total electricity generation in 2040 (down from two thirds today), much of which will come from legacy plants that are cheaper to run than shut down. Developing countries will be responsible for 99 percent of new coal plants and 86 percent of new gas-fired plants between now and 2040, according to BNEF. Coal is clearly on its way out, but in developing countries that need to add capacity quickly, coal-power additions will be roughly equivalent to utility-scale solar.

Source: BNEF

6. The Climate Is Still Screwed

The shift to renewables is happening shockingly fast, but not fast enough to prevent perilous levels of global warming.

About $8 trillion, or two thirds of the world’s spending on new power capacity over the next 25 years, will go toward renewables. Still, without additional policy action by governments, global carbon dioxide emissions from the power sector will continue to rise until 2029 and will remain 13 percent higher than today’s pollution levels in 2040.

That’s not enough to prevent the surface of the Earth from heating more than 2 degrees Celsius, according to BNEF. That’s considered the point-of-no-return for some worst consequences of climate change.

CO2 emissions from the power sector don’t peak until 2029
Source: BNEF

China’s Communist-Capitalist Ecological Apocalypse (Truthout)

Sunday, 21 June 2015 00:00 By Richard Smith, Truthout | News Analysis 

A pedestrian wearing a protective mask in Beijing, Jan. 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

A pedestrian wearing a protective mask in Beijing, January 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

This article seeks to explain why China’s environmental crisis is so horrific, so much worse than “normal” capitalism most everywhere else, and why the government is incapable of suppressing pollution even from its own industries. I begin with an overview of the current state of China’s environment: its polluted air, waters, farmland and the proximate causes, including overproduction, overdevelopment, profligate resource consumption, uncontrolled dumping and venting of pollutants. I then discuss the political-economic drivers and enablers of this destruction, the dynamics and contradictions of China’s hybrid economy, noting how market reforms have compounded the irrationalities of the old bureaucratic collectivist system with the irrationalities of capitalism resulting in a diabolically ruinous “miracle” economy. I conclude with a précis of the emergency steps the country will have to take to take to brake the drive to socio-ecological collapse, with dire implications for us all.

The first time Li Gengxuan saw the dump trucks from the nearby factory pull into his village, he could not believe his eyes. Stopping between the cornfields and the primary school playground, the workers dumped buckets of bubbling white liquid onto the ground. Then they turned around and drove right back through the gates of their factory compound without a word.

In March 2008, Li and other farmers in Gaolong, a village in the central plains of Henan Province near the Yellow River, told a Washington Post reporter that workers from the nearby Luoyang Zhonggui High-Technology Company had been dumping this industrial waste in fields around their village every day for nine months. The liquid, silicon tetrachloride, was the byproduct of polysilicon production and it is a highly toxic substance. When exposed to humid air, silicon tetrachloride turns into acids and poisonous hydrogen chloride gas, which can make people dizzy and cause breathing difficulties.

Ren Bingyan, a professor of material sciences at Hebei Industrial University, contacted by the Post, told the paper that “the land where you dump or bury it will be infertile. No grass or trees will grow in its place … It is … poisonous, it is polluting. Human beings can never touch it.”

When the dumping began, crops wilted from the white dust, which sometimes rose in clouds several feet off the ground and spread over the fields as the liquid dried. Village farmers began to faint and became ill. And at night, villagers said “the factory’s chimneys released a loud whoosh of acrid air that stung their eyes and made it hard to breath.”

“It’s poison air. Sometimes it gets so bad you can’t sit outside. You have to close all the doors and windows,” said Qiao Shi Peng, 28, a truck driver who worried about the health of his 1-year-old.

China’s rise has come at a horrific social and environmental cost.

Reckless dumping of industrial waste is everywhere in China. But what caught the attention of The Washington Post was that the Luoyang Zhonggui High-Technology Company was a “green energy” company producing polysilicon destined for solar energy panels sold around the world. Indeed, it was a major supplier to Suntech Power Holdings, then the world’s leading producer of solar panels, and Suntech’s founder, Shi Zhengrong, topped the Hunrun list of the richest people in China in 2008. (1)

Silicon tetrachloride is an unavoidable byproduct of polysilicon production. But reckless pollution of farm villages is not unavoidable. Today, China is the only country in the world where such criminal behavior and cynical disregard for the health and lives of farmers and workers has become standard practice on a national scale by governments at every level, even as the government’s own environmental agencies decry such behavior and struggle, mostly in vain, to stop it. As one Chinese researcher told the Post, “If this happened in the United States, you’d be arrested.” But in China environmental regulations are regularly flouted by state-owned and private industries with the connivance of government officials at all levels while protesting farmers, workers and environmental activists are arrested, jailed, beaten or worse, and their lawyers with them.

Polysilicon production produces about four tons of silicon tetrachloride liquid waste for every ton of polysilicon produced. In Germany, where Siemens produces solar panels, pollution recovery technology is installed to process the silicon tetrachloride waste and render it harmless. But such environmental protection technology is expensive. In 2008, the cost to produce polysilicon safely was about $84,500 a ton in Germany and would not have cost much less in China. Chinese companies have been producing it for $21,000 to $56,000 a ton, saving millions of dollars a month, by just dumping the toxic waste in rural areas on helpless village communities.

Gaolong village is a mirror to China. It illustrates how the marriage of capitalism and Stalinist bureaucratic collectivism has created a diabolically destructive hybrid economic system, a rogue economy that is ravaging China’s environment, ruining the health of Chinese people, rendering more and more of the country unlivable, driving the country to ecological collapse and threatening to bring the whole planet down with it. (2)

I. China Self-Destructs

For more than three decades, China’s “miracle” economy has been the envy of the world or at least the envy of capitalist economists for whom wealth creation is the highest purpose of human life. Since 1979, China’s GDP has grown by an average of just under 10 percent per year. Never, the World Bank tells us, has a nation industrialized and modernized so quickly or lifted so many millions out of poverty in such a short time. From a backward, stagnant, largely agrarian socialism-in-poverty, Deng Xiaoping brought in foreign investors, introduced market incentives, set up export bases, turned China into the light-industrial workshop of the world and renovated China’s huge state-owned enterprises (SOEs).

“Fast fashion” is speeding the disposal of the planet.

Three and a half decades of surging economic growth lifted China from the world’s 10th largest economy in 1979 to No. 1 by 2014. What’s more, after decades of export-based growth, China’s 12th Five-Year Plan 2011-2015 sought to refocus the economy on internal market demand to realize Xi Jinping’s “Chinese Dream” of national rejuvenation and turning China into a mass consumer society on the model of the United States. As China sailed right through the global near-collapse of 2008 to 2009, hardly missing a beat, while Western capitalist economies have struggled to keep from falling back into recession, even the Thatcherite Economist magazine had to concede that China’s state capitalism may be in certain respects superior to capitalist democracies and is perhaps even the wave of the future.

But China’s rise has come at a horrific social and environmental cost. It’s difficult to grasp the demonic violence and wanton recklessness of China’s profit-driven assault on nature and on the Chinese themselves. Ten years ago, in an interview with Der Spiegel magazine in March 2005, Pan Yue, China’s eloquent, young vice-minister of China’s State Environmental Protection Agency (SEPA) told the magazine, “the Chinese miracle will end soon because the environment can no longer keep pace.” Pan Yue added:

We are using too many raw materials to sustain [our] growth … Our raw materials are scarce, we don’t have enough land, and our population is constantly growing. Currently there [are] 1.3 billion people living in China, that’s twice as many as 50 years ago. In 2020 there will be 1.5 billion … but desert areas are expanding at the same time; habitable and usable land has been halved over the past 50 years … Acid rain is falling on one third of Chinese territory, half of the water in our seven largest rivers is completely useless, while one fourth of our citizens do not have access to clean drinking water. One third of the urban population is breathing polluted air, and less than 20 percent of the trash in cities is treated and processed in an environmentally sustainable manner … Because air and water are polluted, we are losing between 8 and 15 percent of our gross domestic product. And that doesn’t include the costs for health … In Beijing alone, 70 to 80 percent of all deadly cancer cases are related to the environment.

And criticizing Western economists who reassure us that more growth is the key to repairing the environmental damage done from growth, Pan said:

And there is yet another mistake … It’s the assumption that economic growth will give us the financial resources to cope with the crises surrounding the environment, raw materials, and population growth. [But] there won’t be enough money, and we are simply running out of time. Developed countries with a per capita gross national product of $8,000 to $10,000 can afford that, but we cannot. Before we reach $4,000 per person, different crises in all shapes and forms will hit us. Economically we won’t be strong enough to overcome them. (3)

Pan Yue’s searing honesty got him sidelined but if anything, he understated the speed, ferocity and scale of China’s ecological destruction, a destruction that extends far beyond China itself.

A. Consuming the Planet to Support Unsustainable Growth

As China’s growth took off in the 1980s and 1990s, the industrial boom rapidly depleted the country’s resources, especially lumber, oil and minerals, forcing Beijing to turn outward to feed its voracious engines of growth. The manic and thirsty industrialization boom in China’s northern industrial cities drained China’s northern fresh aquifers leaving some 600 cities, including Beijing, facing dire water shortages while severely polluting most remaining reserves. Profit-hungry loggers cut down most of what was left of China’s forests, recklessly denuding mountains and precipitating such extensive flooding and loss of life in 2009 that the government banned domestic logging. Chinese loggers then turned to plundering Siberia, Malaysia, Indonesia, and even New Guinea and parts of Africa. China had little oil to begin with so industrialization and automobilization quickly turned China from a modest oil exporter into a net importer in 1993 and the world’s leading oil importer by 2013. China’s iron ore, copper and other critical industrial mineral reserves have also been rapidly drawn down, forcing the country to import growing quantities of minerals.

The government has squandered astounding quantities of resources building entire industries China does not need.

In result, today, with 20 percent of the world’s population, China is now by far the world’s largest consumer of marketed primary industrial raw materials (cement, metal ores, industrial minerals, fossil fuels and biomass). China consumes more than 32 percent of the world’s total of these resources, nearly four times as much as the United States, the second largest consumer. China consumes just over half the world’s coal and a third of the world’s oil. China is the leading producer and consumer of steel with 46 percent of world output and now relies on imports for 77 percent of its iron ore. (4) China has become the world’s largest consumer of lumber and forest products, leveling forests from Siberia to Southeast Asia, New Guinea, Congo and Madagascar. Greenpeace concluded that on current trends “future generations will be living on a planet without ancient forests.” (5)

Of course, China has the world’s largest population and is industrializing from a comparatively low level just three decades ago so it’s hardly surprising that it would consume lots of resources to build infrastructure and modernize. But the fact is, most of these resources have been squandered on a stupendous scale, and for all the waste and pollution, most Chinese have gotten surprisingly little out of it all.

The Disposables Revolution and “The Great Acceleration” of Global Consumption

For a start, look at the export bases that have powered China’s rise. When China launched its “reform and opening” (gaige kaifang) in the early 1980s and invited foreign investors to set up joint-ventures and special economic zones, China’s combination of ultra cheap labor plus few-to-no environmental restrictions attracted many of the world’s dirtiest and least sustainable industries. Steel, coke, aluminum, cement, chemicals and petrochemicals, metal plating, leather tanning, plastics, paints and finishes, synthetic fibers and textile production, fabric dyeing, paper production, along with auto battery and electronics recycling – most of the toxic and smokestack industries facing increasingly tough environmental restrictions at home in the United States and Europe, relocated to China after 1980. (6) Seventy percent of the world’s e-waste is dumped in China.

On top of this, China’s masses of low-paid migrant workers were a magnet for the world’s most labor-intensive manufacturing and assembly industries. By the 1990s, China had more than 104 million manufacturing workers, about twice as many as the United States, Canada, Japan, Germany, France, Italy and the United Kingdom, combined. And they worked eight- to 16-hour days, often seven days a week, for an average of $0.57 per hour in 2002, by one estimate, less than the handloom operators earned in the early Industrial Revolution in England. This “China Price” set the global floor for high-volume, light-industrial manufacturing from the 1980s. (7)

The price collapse spurred the biggest boom in global consumption in history and this in turn accelerated global resource plunder on an unprecedented scale. The sudden availability of such a huge pool of ultra-cheap workers also spurred a minor industrial revolution enabling producers to annihilate most of the remaining categories of durable goods and replace them with cheaper, disposable substitutes. With the disposables revolution, local tailors and alteration shops, shoe repair shops, appliance repair shops, TV repairmen and the like all but vanished in the West as it became cheaper to toss these items and replace them than repair them.

The Chinese Communist Party promoted the car craze to bolster status-seeking middle-class political support.

Take clothes: “Fast fashion,” (also known as “trashion fashion”) from H&M, Target, Zara and others, now rules the women’s apparel market with clothes so cheap it’s often not worth the cost of dry cleaning them. As Elizabeth Kline relates in her recent book Overdressed: The Shockingly High Cost of Cheap Fashion, “seasonal shopping patterns have given way to continuous consumption.” Zara delivers new lines twice a week to its stores. H&M and Forever 21 stock new styles every day. In Kline’s words: “Buying so much clothing and treating it as if it is disposable, is putting a huge added weight on the environment and is simply unsustainable.” To say the least.

The US cotton crop requires the application of 22 billion pounds of toxic pesticides every year. Most fiber is dyed or bleached, and treated in toxic chemical baths to make it brighter, softer, more fade resistant, waterproof or less prone to wrinkles. Upholstery fabrics and children’s pajamas are treated with ghastly chemicals to make them stain resistant or fireproof. These toxic baths consume immense quantities of chemicals and water, and it goes without saying that in China, the chemicals are routinely just dumped in rivers and lakes, untreated, just like that silicon tetrachloride poured out on Li Gengxuan’s cornfield. Then after all the chemical treatments, the fabrics have to be dried under heat lamps. These processes consume enormous quantities of energy.

The textile industry is one of the largest sources of greenhouse gas emissions in the world, and it’s growing exponentially. In 1950, when there were about 2.5 billion people on earth, they consumed around 10 million tons of fabric for all uses. Today, we are 7 billion, but we consume more than 70 million tons of fabric annually, nearly three times as much per person as we consumed in the 1950s. Producing 70 million tons of fabric consumes astounding quantities of resources including more than 145 million tons of coal and between 1.5 and 2 trillion gallons of fresh water, every year. Synthetic fibers like polyester and such (now 60 percent of the market) are the worst: They consume between 10 and 25 times as much energy to produce as natural fibers. In short, “fast fashion” is speeding the disposal of the planet. (8)

And what’s true for China’s garment industry is true for most of the rest of China’s export industries. From cheap, disposable shoes and clothes, toys, tools, housewares, Christmas junk and flimsy plastic appliances to meticulously made and expensive but nevertheless designed-to-be-obsolesced iPhones and 60-inch flat-screen TVs, most of the world’s light-industrial goods are made in China and they are, for the most part, deliberately designed to be unrepairable and mostly unrecyclable. After their short life, they all end up piled on the world’s ever-growing garbage mountains, sent back to China in containers filled with e-trash to be “recycled” by children melting the plastic off motherboards over open fires, or left floating around the world’s oceans in giant plastic gyres over vast stretches of oceans, hundreds of feet deep. (9)

Scenes of Planetary Destruction From the 12th Five-Year Plan

When we turn to China’s domestic economy, the waste is breathtaking. As China’s economy opened to the West and China’s exports began returning billions of dollars in foreign exchange, Beijing launched wave after wave of gargantuan development projects: dams, airports, rail systems, roads, subways, sewerage systems, new industries, new housing, new cities, new ports and more. China’s supercharged government planners have been showcasing China’s engineering prowess and economic might by building the world’s biggest dams, the tallest skyscrapers, biggest airports, longest and highest bridges, longest rail and road networks and longest tunnels.

Since the 1980s, China has built enough new housing to re-house the entire population.

Since Deng Xiaoping launched his “Four Modernizations of agriculture, defense, science and technology” and reform and opening up, the country has been in perpetual Great Leap Forward mode: Five-Year plans have set annual industrial growth rates of 8 percent and promoted successive sets of “pillar” industries – autos, electronics, petrochemicals, clean energy and so on. In the current 12th Five-Year Plan (2011-2015), the State Council calls for development of “seven strategic emerging industries” including 1) energy efficient and environmental technologies like “clean coal,” 2) next generation IT and cloud computing and the “Internet of Things,” 3) biotechnology, 4) high-tech manufacturing of vehicles and aircraft, expanding high-speed rail service to 45,000 kilometers, expanding motor expressways to 83,000 kilometers, 5) new-generation nuclear power, more solar and wind energy systems, 6) new materials including development of rare earths, special glass and ceramics, high-performance fiber and composite materials, 7) new-energy vehicles: motor batteries, drive motors, electronic controls, plug-in hybrid and electric vehicles, low-emissions vehicles. (10)

No doubt, the Chinese have benefited from new housing, infrastructure, schools, hospitals and so on. But the government has also squandered astounding quantities of resources building entire industries China does not need, building useless vanity projects, superfluous housing, redundant infrastructure and more. From the start this investment boom has been characterized by uncontrolled overproduction and out-of-control pollution.

Scene 1: The “Car Craze” China and Planet Earth Did Not Need

The 12th Five-Year Plan calls for “enhancing China’s independent capacity to manufacture automobiles, domesticating production of all key parts,” for “large-scale commercialization” of energy efficient and hybrid vehicles, for “building … world-famous brands and core competencies” and so on. Hybrid or not, this is an industry the Chinese do not need. Up to 1979, China produced around 160,000 motor vehicles per year with trucks and buses accounting for 90 percent of the output. People got around on bicycles, buses and trains. In 1990, China had just 5.5 million cars, trucks and buses on the road. By 2013, China became the world’s largest auto assembler cranking out 18.7 million cars and light vehicles, more than twice the number produced in the United States in that year. By 2013, China had 240 million cars on its roads, almost as many as in the United States, and China could have an estimated 390-532 million cars on the road by 2050. The question is, why does China need anything like such a huge auto industry? The lead headline of Bloomberg News for April 9, 2014, citing the latest Intergovernmental Panel on Climate Change report, was “Cars become the biggest driver of greenhouse-gas increases.” What’s wrong with this picture?

China surpassed the US in 2007 to become the world’s leading carbon dioxide emitter.

The automobilization of China has brought three profound changes. First, it has dramatically lengthened the time it takes to get anywhere in China’s gridlocked cities (average speed on Beijing’s ring roads is 9 miles per hour) and created epic, world-historic traffic jams on highways feeding into Beijing and other cities. One jam-up near Beijing in 2010 stretched over 100 kilometers and lasted for two weeks. Secondly, it has added a dense new layer of smog on top of the already thick layers of smog from coal combustion smothering China’s cities. And thirdly, it has paved over much-needed farmland and wetlands and wasted enormous resources China, and the world, does not have to waste. This did not have to happen.

The Communist Party promoted joint-venture auto production as a “pillar” industry in the 1990s for two reasons: First, once the government embarked on its market-reform strategy, abandoning lifetime employment, it needed to push growth to generate private- and state-sector jobs, like capitalist governments everywhere. Speaking in November 2013, Prime Minister Li Keqiang stressed that:

Employment is the biggest thing for well-being. The government must not slacken on this for one moment … For us, stable growth is mainly for the sake of maintaining employment.

Auto manufacture and related industries now account for one out of every eight urban jobs in China excluding road building, another big employer.

Secondly, the Chinese Communist Party (CCP) promoted the car craze to bolster status-seeking middle-class political support. In the 1980s, the CCP supported a modest consumerism. But after the Tiananmen uprising in the spring of 1989, the government opted for expansive consumerism to placate the middle classes. Hence the car craze, followed by the airline craze, the shopping mall craze, the high-speed train craze, the foreign tourism craze, and so on. It is no small irony that just as the CCP was ramping up auto production and banning bicycles from public roads in the 1990s, European countries were moving in the opposite direction – barring cars from many central city streets, promoting bicycles and car sharing, and expanding public transit. China didn’t begin expanding its urban subways in earnest until the late 2000s, after two decades of automobilization had gridlocked its cities and dramatically increased air pollution.

Scene 2: The Roads Not Taken

As China was racing to surpass the US as the world’s largest car market, the Communist Party decided that China should also “catch up and overtake” the US interstate highway system as well. So by 2010 China built 53,000 miles of intercity expressways, exceeding the US interstate highway system’s 47,000 miles. But this program, built at huge cost and by tearing through cities and paving over thousands of square miles of valuable farms, wetlands and so on, is yet another ill-conceived boondoggle because except for a few highways near major cities like Beijing or Shenzhen, China’s expressways are often little used. In places, farmers dry their crops on empty super highways. McClatchy’s Beijing bureau chief Tom Lasseter writes under this picture:

Do you see any cars along this road? One often hears about the traffic jams in the big cities of China. But here’s the flip side of the coin: In rural towns and cities in China, local officials like to build big showcase projects, displaying grandiosity but little utility. I was in the city of Fengzhen in Inner Mongolia yesterday. By Chinese standards, it is a small place, maybe 200,000 people. So imagine my surprise as we leave the downtown to come across this eight-lane highway going past a mammoth new City Hall. Nary a car on it. A passerby could keel over with a stroke on that highway and not risk getting run over for many hours. The city is already in hot water for building a power plant that Beijing says is unneeded. Across China, there are plenty of largely empty hotels, brand new empty highways, modern airports that lose money for lack of traffic, etc. What happens is that unelected local officials, not particularly responsive to local needs, find that pharaonic projects give their municipalities a luster that can attract investment, which is their path to promotion within the one-party system. So for every eight-lane road you see like this, there is a happy bureaucrat pondering a bright career ahead. (11)

How much cement has been poured, how much iron rebar has been forged, and how much coal has been burned to produce the energy to pave over so much of China – for no useful purpose whatsoever?

Scene 3: Half-Empty Trains and Subways

And how much steel, aluminum, copper, cement and electricity have been consumed to build China’s huge national network of high-speed trains? The 12th Five-Year Plan budgeted hundreds of billions of dollars to build more than 16,000 miles of high-speed rails by 2020. By 2013, China had already built more high-speed trains than the rest of the world combined. But this too is more make-work and prestige project than modernizing necessity. High-speed trains are hugely expensive to build and operate and consume more than twice as much electricity to run as regular trains, so tickets can cost 10 times the price of regular train tickets in China. Since few Chinese people can afford such prices, the trains often run at half capacity or less. Chinese transportation experts say the government is throwing money away on bullet trains, money that could be better spent on regular railroads, especially cargo lines, and developing mass transit in and around cities. (12) New York University economist Nouriel Roubini told Reuters in 2011:

“I was recently in Shanghai and I took their high-speed train to Hangzhou,” he said, referring to the new Maglev line that has cut traveling time between the two cities to less than an hour from four hours previously.

“The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou,” he said.

“There is no rationale for a country at that level of economic development to have not just duplication but triplication of those infrastructure projects.” (13)

Duplication, triplication, overconstruction and waste is everywhere in China, even with subways. Twenty-two cities already have subway systems and money was budgeted in 2012 to build subways in another 16 by the end of 2018. Wang Mengshu, a subway engineer from the Chinese Academy of Engineering who helped design China’s first subway in Beijing in 1965, says these are completely unnecessary, too expensive, again more prestige projects than public service: “Second-, third-, fourth-tier cities … those cities don’t need to build subways. Even if they can afford to build them, they can’t afford to run them. But a lot of places think that if they have a subway, then they are a big city.” (14)

Scene 4: China as “Major Aerospace and Air-Travel Power”

The 12th Five-Year Plan grandiosely calls for a push to make China a “major aerospace and air-travel power.” Plans call for nearly a hundred new airports, thousands of new airliners, thousands of helicopters, business jets and small aircraft of all varieties. Boeing estimates Chinese carriers will need more than 5,260 new airliners – worth $670 billion – by 2031. (15) Great for Boeing. But not only did China not “need” this industry, it’s just suicidal for developing countries like China to repeat the same environmental mistakes as the West did.

The UN Intergovernmental Panel on Climate Change calculates that aviation is currently responsible for about 3.5 percent of anthropogenic climate change and says that if present trends continue this share will grow to between 5 percent and 15 percent by 2050 while the absolute contribution of aviation generated emissions will soar. Aviation is already the fastest growing source of global carbon dioxide emissions and if it continues to grow at its current rate it will overwhelm all the cuts engineers have managed to make elsewhere. (16) There are not currently nor are there on the horizon any practical alternatives to kerosene-based fuels for commercial jet aircraft. This is why after surveying the literature on potentials for greenhouse gas mitigation in other forms of transportation, environmental journalist George Monbiot concludes that while some forms of transport can be rendered a bit greener, there’s virtually nothing we can do with aviation with present or foreseeable technologies:

There is, in other words, no technofix. The growth in aviation and the need to address climate change cannot be reconciled. Given that [efficiency gains tend to be canceled out by growth] a 90 percent cut in emissions requires not only that growth stops, but that most of the planes which are flying today are grounded. I recognize that this will not be a popular message. But it is hard to see how a different conclusion could be extracted from the available evidence. (17)

In a world where climate scientists tell us we need to cut global carbon dioxide emissions by 90 percent by 2050, global aviation emissions are on course to double by 2030. It will be suicidal to let this happen. Absent some technical miracle, the only way to suppress aviation emissions is to suppress the numbers of people jetting around the planet, not add hundreds of millions of Chinese to this jet set. Coming to grips with this reality may not be popular in China or the United States, but the alternative is not going to be popular either.

Scene 5: Construction Frenzies, Ghost Cities and the Mother of All Real Estate Bubbles

Yet none of the above compares with the resources squandered on the construction boom of recent decades. China’s construction juggernaut has been gobbling up China’s best peri-urban farmland, expelling tens of millions of farmers and urban residents and consuming staggering quantities of resources to build unneeded housing, shopping malls, industrial parks, office buildings, power plants and infrastructure in a country already bursting with overpopulated, polluted megacities. (18) Millions of urban residents were cleared out of Beijing and Shanghai, which were completely rebuilt with thousands of skyscrapers, apartment blocks, highways and shopping malls. (19) Cities and provinces compete to build cloud-piercing skyscrapers even if they have no prospective tenants for them.

In one village, 80 percent of the population is said to have died from pollution-induced cancers since 1991.

By 2020, 12 of the planet’s 20 tallest towers are expected to be in provincial cities like Shenyang, Wuhan and Suzhou. The office vacancy rate in Shenyang is nearly 30 percent, yet three more towers, all bigger than the Chrysler Building in New York City, are under construction, and another 12 are on the drawing boards. Beijing’s premier architectural atrocity, the Rem Koolhaas-designed CCTV tower – dubbed “Big Underpants” by the locals – sits nearly empty since it was built in 2008. Cities compete to build ersatz Wall Street “financial centers” as in Beijing (abandoned) and Tianjin (abandoned and unfinished). Stunningly lavish offices for cadres are built everywhere. China’s coast has multiple redundant ports, some nearly empty, but more are planned.

Since the 1980s, China has built enough new housing to re-house the entire population but the construction boom has become a self-sustaining, perpetual engine of construction for the sake of construction – supply with no demand. And there are not just miles of empty apartment blocks but entire “ghost cities” complete with office towers, hospitals, schools, futuristic airports, museums, universities, libraries, theaters, sports fields, and miles and miles of apartment towers and subdivisions of McMansions – but almost no people. (20) Twenty-one percent of China’s urban residents, the wealthy and middle classes, own two urban apartments, some own three or four – all bought for speculation, not to live in, not vacation homes. More than 22.4 percent of urban apartments and houses remained vacant in 2014.  (21) By one estimate, more than 64 million surplus apartments had been built in China, enough to house almost half the population of the United States, yet millions more are under construction. (22) Economists have warned that what China is really building is the biggest real estate bubble in history. CBS interviewed Wang Shi, CEO of China Vanke, China’s biggest homebuilder (which makes him the world’s biggest homebuilder), who told CBS’s Lesley Stahl that this can’t last, “this is a bubble, for sure.” When it bursts, “it will be a disaster, a disaster.” (23)

Scene 6: Tofu Construction

Construction is breathtakingly fast in China but it can also be breathtakingly sloppy, dangerous and destined to a short life span. That’s because China’s local building department regulators, like food safety and environment regulators, are subordinate to local officials who partner with and profit off the very construction companies the regulators are nominally supposed to regulate. In result, safety is often subordinated to speed and cost, with predictable results. The Chinese call it doufazha, “tofu” construction. Bridges collapse regularly. Between July 2011 and August 2012, eight major bridges collapsed. An Australian reporter counted four collapsed bridges in just nine days in July 2012. (24) High-speed railway bridges collapse. Buildings collapse. Some just topple over. Millions of peasants have been cleared off the land and dumped into “new towns” around cities where the shoddy new housing is already crumbing as the displaced farmers move in. In 2010, China’s Ministry of Housing admitted the low quality of construction and warned that “China’s newly-built houses can only last for 20 or 30 years.” (25) Have the Chinese invented disposable housing?

Officials call for tougher regulations but most Chinese blame corruption. Zhu Lijia, a professor at the Chinese Academy of Governance in Beijing, says bid rigging is the norm and there are no checks or balances on the procurement process. “We do have relevant laws regarding the bidding process, but there is a lack of enforcement. The bidding process is only a show.” A college student, Zeo Niu, interviewed by National Public Radio after a major bridge collapse in 2012, knew the system well. Her uncle runs a construction company in central China. She said using substandard material while charging for high-quality goods is routine. What really upsets her, she said, “is that so many projects collapse, people just become overwhelmed. ‘I will never remember those victims’ names in this accident, and people won’t remember it,’ Niu said. ‘It will all be buried by another accident.'” (26)

“Twenty More Years of Roaring Growth”?

In The Wall Street Journal of August 20, 2014, Justin Yifu Lin, an economist and close adviser to senior leaders in Beijing, stated that he’s confident China can sustain its recent 8 percent per year growth rate for the foreseeable future. He predicts “20 years of roaring growth” for China. Really? Where does Yifu think the resources are going to come from for this scale of consumption? As it happens, in 2011, the Earth Policy Institute at Columbia University calculated that if China keeps growing by around 8 percent per year, Chinese average per capita consumption will reach the current US level by around 2035. But to provide the natural resources for China’s 1.3 billion to consume on a per capita basis like the United States’ 330 million consume today, the Chinese – roughly 20 percent of the world’s population – will consume as much oil as the entire world consumes today. It would also consume more than 60 percent of other critical resources.

Production Consumption* Commodity Unit Consumption Latest Year Projected Consumption 2035
U.S. China China World
Grain Million Tons 338 424 1,505 2,191
Meat Million Tons 37 73 166 270
Oil Million Barrels per Day 19 9 85 86
Coal Million Tons of Oil Equivalent 525 1,714 2,335 3,731
Steel Million Tons 102 453 456 1,329
Fertilizer Million Tons 20 49 91 214
Paper Million Tons 74 97 331 394

*Projected Chinese consumption in 2035 is calculated assuming per-capita consumption will be equal to the current US level, based on projected GDP growth of 8 percent annually. Latest year figures for grain, oil, coal, fertilizer and paper are from 2008. Latest year figures for meat and steel are from 2010. Source: Earth Policy Institute, 2011

How can this happen? What would the rest of the world live on? Already, as resource analyst Michael Klare reviews in his latest book, The Race for What’s Left (2012), around the world existing reserves of oil, minerals and other resources “are being depleted at a terrifying pace and will be largely exhausted in the not-too-distant future.”

B. Airpocalypse Now

Decades of coal-powered industrialization combined with the government-promoted car craze since the 1990s have brought China the worst air pollution in the world. Scientists have compared north China’s toxic smog to a “nuclear winter” and the smog is also sharply reducing crop yields. Lung cancer is now the leading cause of death in Beijing and nationally pollution-induced lung disease is taking the lives of more than 1.2 million people a year. With 20 percent of the world’s population, China now burns as much coal as the rest of the world put together. Twenty of the world’s 30 smoggiest cities are in China.

As domestic food grows increasingly unsafe, alarmed middle-class Chinese strip supermarkets of imported food.

Ironically, China is also a “green technology” leader, the world’s largest producer of both windmills and solar panels. Yet in China these account for barely 1 percent of electricity generation. Coal presently supplies 69 percent of China’s total energy consumption; oil accounts for 18 percent; hydroelectric, 6 percent; natural gas, 4 percent; nuclear, less than 1 percent; and other renewables including solar and wind, 1 percent. (27)China currently burns 4 billion tons of coal a year; the US burns less than 1 billion; the European Union, about 0.6 billion. China has marginally reduced the carbon intensity of production in recent years by installing newer, more efficient power plants but these gains have been outstripped by relentless building of more power plants. To make matters worse, even when power plants are fitted with scrubbers to reduce pollution, operators often don’t turn on the scrubbers because these cut into their profits.

While government plans call for reducing coal’s share of the energy mix from 69 percent to 55 percent by 2040, it projects that China’s absolute coal consumption will still rise by more than 50 percent in the same period in line with China’s projected economic growth of around 7.7 percent per year. The World Health Organization considers air pollution above 25 micrograms of particulate matter per cubic meter (PM2.5) to be unsafe. China’s current national average is 75 micrograms but particulate levels in many cities average in the hundreds.

In the winter of 2013, China suffered from the worst air pollution in its history as half of the country, nearly the whole of northern and eastern China, was smothered in dense smog for weeks at a time. Smog alerts were called in 104 cities in 20 of China’s 30 provinces as schools and airports closed in Beijing, Shanghai and other cities. In January, PM2.5 levels in Beijing reached 900 micrograms per cubic meter. As Beijing was choking in smog in the winter of 2013, Deutsche Bank analysts gloomily concluded that even if China’s economy slowed to 5 percent growth per year from it’s current 7.6 percent rate, coal consumption would still nearly double and China’s smog could increase by as much as 70 percent by 2030. (28)

China’s leaders thus face an intractable dilemma. They can’t keep growing the economy without consuming ever more coal, oil and gas. Yet the more fossil fuels they burn, the more uninhabitable China’s cities become, the more Chinese people flee the country, and the faster China’s emissions are driving global warming.

Cooking the Planet to Produce Junk No One Needs

China surpassed the United States in 2007 to become the world’s leading carbon dioxide emitter. By 2013, China’s emissions were already nearly double those of the US. The US Energy Information Administration calculates that even if China grows at only 5.7 percent per year, 2 percent less than its current rate and about half the average rate it grew over the past decade, its carbon dioxide emissions would still soar to almost 15 billion tons by 2040, almost triple that of the US. (29) By 2013, China’s per capita emissions surpassed those of Europe. With just 20 percent of the world’s population, China already accounts for almost 30 percent of global carbon dioxide emissions.

Coal-to-Gas Bases Will Doom the Climate

Under pressure to reduce smog and greenhouse gas emissions but still maintain economic growth, the government has begun talking about putting a cap on coal emissions. But this cap would be pegged to expected growth and demand, so coal use is likely to continue rising for years. (30) Yet the most worrisome threat to reducing emissions comes from the government’s newest plan to “clean up its cities” by building dozens of huge “coal-gasification bases” in Shanxi, the Ordos Basin, Inner Mongolia, Xinjiang and other remote areas. These plants will burn coal directly to generate electricity in situ and convert coal to liquid fuels like “syngas” (like natural gas but from coal), which will then be transported to the cities to be burned in power plants, factories and cars.

These huge bases, some encompassing areas larger than the states of Delaware and Connecticut, will be the largest fossil fuel development projects in the world. And far from reducing coal use, scientists say, these complexes consume so much coal-fired energy to produce the syngas and other chemicals that they generate almost twice as much carbon dioxide emissions as if the coal were just directly burned in power plants. (31) Furthermore, water-intensive coal extraction in the new coal bases in northern and western provinces threatens to seriously aggravate China’s already severe water crisis in these regions. (32) And as if all this weren’t enough, the government has also declared its intention to develop “fracking” wherever possible in China. (33)

The UN Intergovernmental Panel on Climate Change calculates that if we’re to keep global warming below 2 degrees Celsius, humanity cannot add more than 880 gigatons of carbon dioxide emissions to the atmosphere before 2050. Collectively, we’ve already used up more than half of that “carbon budget” leaving us a remaining budget of just 349 billion gigatons. If China produces just 10 billion tons of carbon dioxide per year, its current rate, with no growth whatsoever, it will still consume the entire carbon budget for the whole of humanity by itself by 2050.

C. Undrinkable Water, Poisoned Soils, Toxic Food

If the air is bad, the water is far worse. In a few decades of breakneck industrialization, the Chinese have managed to severely and irreversibly pollute most of the nation’s fresh water supplies with dire implications for public health. China’s fresh water sources are contaminated by pesticides, industrial chemicals, heavy metals and myriad other toxics. China’s largest rivers resemble vast open cesspools and for much of their length the banks are strewn with every imaginable kind of trash, and numberless outlet pipes spewing multiple toxics, dead fish, dead pigs and pigswill. Gushing pollutants turn long stretches of rivers bright red or purple or milky white or inky black. Sewage is routinely dumped mostly untreated in the nation’s rivers, the same rivers many cities take their drinking water from, imperiling the health of hundreds of millions. The government has built wastewater treatment facilities all over the country but most remain unused. (34)

These days China’s state sector has all the superficial trappings of a market economy.

China’s rivers suffer huge spills of all kinds of toxic chemicals – benzene, xanthogenate, analine – every year. In north China, the Yellow River “is a catastrophe” and the 300-odd rivers that drain the North China Plain “are open sewers if they are not completely dry” in the words of Ma Jun, China’s leading authority on the country’s water crisis. (35) According to a government report, the Yangtze River, the world’s third longest, is seriously and irreversibly polluted. Long stretches are said to be in “critical condition,” in places, too dangerous even to touch. Aquatic life has all but collapsed. Pollution and shipping wiped out China’s legendary Yangtze Baiji dolphin while even common carp “are gasping for survival.” (36) The 500-mile-long reservoir filling up behind the huge Three Gorges dam on the Yangtze qualifies as the world’s biggest cesspool. In some areas groundwater is being irreversibly polluted as textile dyeing mills and other factories, looking to avoid fines for dumping their effluents into rivers, instead drill and pump them into the earth. Some “use high-pressure pumps to discharge huge volumes of their wastewater directly underground.” According to one scientist, “deliberate, malicious waste discharge by factories has already become endemic.” (37)

The China Geological Survey reported in 2013 that 90 percent of the country’s groundwater is polluted, and 60 percent of it is “severely” polluted. A survey of 11 cities across China in 2012 indicated that 64 percent of water sources were severely polluted and 33 percent moderately polluted. Only 3 percent of sources could be graded as clean. (38) It’s difficult to overstate the dire implications of these practices: In China, groundwater is not only tapped for drinking water throughout rural China as well as in many cities, but over much of the country, especially the parched northern plains, this is the main source of water for farming.

Mass Production of “Cancer Villages”

China’s rivers have received many major toxic industrial chemical spills over the years. In September 2004, Jim Yardley of The New York Times reported on the situation in the Huai River basin, upstream from Shanghai, after a huge chemical spill created an 82-mile-long band of water that killed nearly every living thing and was too polluted even to touch. And the Huai, Yardley pointed out, was supposed to have been a government “success story.” (39) In April 2014, a major leak of benzene poisoned the drinking water for millions in Gansu Province.

Beginning in the 1980s and 1990s, the government promoted the development of market-oriented “township and village industries” to promote growth and employment. These industries, the darlings of the World Bank and Western market-enthusiast academics, became notorious polluters. Foreign-invested special economic zone industries are also major polluters. (40) In the 1990s and 2000s, in response to growing anti-pollution protests in the cities, the government pushed dirty industries out of the cities and into the countryside and rural towns. This brilliant move resulted in horrific contamination of whole rural regions and the mass production of “cancer villages” where extraordinary numbers of inhabitants are dying from intestinal, liver and other cancers caused by ingesting toxic water and food.

Nongovernmental organizations count at least 459 villages spread across every province except far-western Qinghai and Tibet. In one village, 80 percent of the population is said to have died from pollution-induced cancers since 1991. (41) There are villages where almost every child is lead-poisoned. (42) Dumping of toxic chemicals and heavy metals extends even to remote corners of China. In neo-tropical Yunnan Province, investigators have found “rampant chromium dumping” polluting rice paddies and drinking water.

The Damage Done

The problem with water pollution, unlike air pollution, is that it doesn’t disappear once the dumping stops. Heavy metals and other contaminants don’t easily break down or wash away. They can be very long-lived and can’t really be “cleaned up.” (43) Once groundwater is polluted, there’s just no possible remediation. This means that extensive areas of China’s farmland, especially in the north, are effectively doomed. (44) This is taking a huge toll on the health of Chinese people as well as non-human life forms and poses a mortal threat to the entire society. Elizabeth Economy, author of The Rivers Run Black (2007), writes that “Less well documented [than air pollution] but potentially even more devastating is the health impact of China’s polluted water. Today, fully 190 million Chinese are sick from drinking contaminated water. All along China’s major rivers, villages report skyrocketing rates of diarrheal diseases, cancer, tumors, leukemia, and stunted growth.” (45)

The Bad Earth and Toxic Foods

China’s farmlands are extensively polluted with synthetic fertilizers, pesticides, heavy metals, sewage sludge and innumerable industrial toxics. Much of this comes from polluted irrigation water. In places, even industrial wastewater has been used to irrigate farms when local wells have dried up or are themselves too polluted to use. In December 2013, the Ministry of Land and Resources reported that 3 million hectares (7.4 million acres – roughly the area of Belgium) of China’s farmland is too polluted to grow crops on and researchers said that “as much as 70 percent” of China’s farmland could be contaminated to some degree. (46) In April 2014, the government reported that almost 20 percent of the country’s arable land, 10 percent of its woodlands and 10 percent of its grassland soils were seriously polluted with heavy metals, such as cadmium, mercury, arsenic, lead, chromium, zinc and nickel plus inorganic compounds including DDT. The survey, carried out between 2006 and 2010, but suppressed for four years as a state secret out of fear of public outrage, summed up the nation’s farmland situation as “grim”(yanjun). (47)

Shocking as this is for a nation that must try to feed 20 percent of the world’s population on 7 percent of the world’s arable land, environmentalists suspect the published figures understate the true extent of soil contamination. (48) In November 2014, the government conceded that 40 percent of the nation’s farmland is degraded from acidification, pollution and erosion, and the government “is growing increasingly concerned about its food supply after years of rapid industrialization resulted in widespread pollution of waterways and farmland.” (49)

Life in the Communist Party is not so different from life in the mafia.

In May 2013, the Food and Drug Administration of Guangzhou, the capital of Guangdong Province, reported that 40 percent of the rice tested at restaurants that spring was contaminated with cadmium, a highly toxic heavy metal than can cause bone disease, cancer and other illnesses. Since extensive national testing has not yet been done for this or other contaminants, there is concern that such pollution is widespread. Fish (and fishermen) have also been found to have high levels of cadmium, mercury and lead. (50)

To add further insult to consumers, deliberate food adulteration, contamination and fakery is rife in China. In 2008, public anger erupted after the government reported that tens of thousands of children were at risk of kidney stones and other organ damage from milk powder mixed with melamine, a chemical used to deceive protein tests. At least six infants died from illnesses linked to the tainted powder, which sickened more than 300,000 children.

Despite repeated government crackdowns, food contamination is severe and growing in China. As domestic food grows increasingly unsafe, alarmed middle-class Chinese strip supermarkets of imported food and Chinese tourists clear out the shelves of baby formula from New Zealand to Holland to pack and take home in their suitcases. Public alarm is also driving up food imports, which in turn is driving up world food prices. (51) For the first time in its history, China now imports more grain than it produces. This is bad news not only for China’s basic food security but also for natural resources around the world as China’s demand for soybeans, corn, wheat and other grains is leveling forests from Africa to the Amazon.

What’s Going on Here?

Why is it that the same government that has lifted the living standards of more people – millions – faster than any other nation in history, that has built the world’s largest high-speed rail network, the largest airports, longest bridges, skyscrapers by the hundreds and whole cities practically overnight, can’t guarantee safe drinking water or food or medicines or breathable air to its citizens? Why can’t it enforce its own environmental regulations, or its own building codes? Why can’t it stop its own local governments from squandering money building unneeded housing, airports and rail lines? Why is it that the same ruthless police state that so proficiently crushes dissent and censors the internet can’t stop producers, even state-owned companies, from making lead-paint-coated toys, poisoned milk and baby formula, and toxic meat and dumplings, and can’t suppress corruption in its own officials? The answer to all these questions is to be found in the nature, contradictions and tendencies of China’s hybrid bureaucratic collectivist-capitalist economic system.

II. A Political Economy

China’s rulers preside over the largest and most dynamic economy in the world, a powerhouse of international trade whose state-owned conglomerates count among the largest companies in the world. They profit immensely from their state-owned enterprises’ (SOEs) market returns. But they’re not capitalists, at least not with respect to the state-owned economy. Communist Party members don’t own individual SOEs or shares in state companies like private investors. They collectively own the state, which owns most of the economy. They’re bureaucratic collectivists who run a largely state-planned economy that also produces extensively for the market. But producing for the market is not the same thing as capitalism. (52)

Three of the top 10 2014 Fortune Global 500 corporations are Chinese. But they’re not owned by Chinese capitalists. They’re owned by the Chinese government. James McGregor notes, “Of the sixty-nine companies from mainland China in the Fortune Global 500 in 2012, only seven were not SOEs … [and all of these seven] companies have received significant government assistance and most count government entities among their shareholders.” Thirty-five years after the introduction of market reforms, China’s government still owns and controls the commanding heights of the economy: banking, large-scale mining and manufacturing, heavy industry, metallurgy, shipping, energy generation, petroleum and petrochemicals, heavy construction and equipment, atomic energy, aerospace, telecommunications, vehicles (often in partnership with Western companies), aircraft manufacture, airlines, railways, biotechnology, military production and more. Plus all the land and natural resources: There is no private property in China.

“Families benefited from their control of state companies, amassing private wealth as they embraced the market economy.”

In key industries SOEs own and control between 75 and 100 percent of assets including 96.2 percent of telecom, 91.6 percent of power generation, 76.6 percent of petroleum and petrochemicals, 76.2 percent of airlines, 74 percent of autos, and so on. China’s banks are 100 percent state-owned (though there are some private equity firms). (53) In the words of James McGregor, “SOEs monopolize or dominate all significant sectors of the economy and control the entire financial system. Party leaders deploy the SOEs to build and bolster the economy – and undergird the Party’s monopoly political control. The private sector provides a lubricant for growth and the opportunity for people to become rich as long as they support the Party.” (54) SOEs together with local government-owned urban collective and township and village industries currently account for 50 percent of China’s current non-farm GDP. Foreign-invested joint ventures account for about 30 percent of non-farm GDP (though Chinese partners of larger joint ventures, like auto assembly, are mostly SOEs). China’s indigenous private sector accounts for about 20 percent of non-farm GDP. (55)

SOEs resemble capitalist corporations but they’re not driven by the same motor of market competition; they don’t face the same incentives and penalties as capitalist firms, at least not to the same extent, and they’re not run like capitalist companies. (56) These days China’s state sector has all the superficial trappings of a market economy: corporations, CEOs, IPOs, stock markets and so on. The Ministry of Petroleum is now called China National Petroleum Corporation. Baoshan Iron and Steel now calls itself Baosteel Group Corp. and so on. But SOEs aren’t “corporations.”

Dozens of Chinese SOEs have held IPO listings on the New York Stock Exchange and China’s own toy stock markets in Shenzhen and Shanghai. But the government won’t allow its companies to be bought and sold. It will only permit a minority of shares, not more than 25 percent, and only non-voting shares at that, to be traded on the market. As one expert put it “the Chinese government is the only shareholder that counts.” (57) Lots of SOEs produce some or most of their output for the market. State Grid produces power for, besides China (where it has a monopoly), Singapore and Australia, and is developing facilities in the Philippines and Portugal. But State Grid does not answer to shareholders or boards. China’s SOEs are not run by boards of directors and elected CEOs. They don’t have boards of directors. And their CEOs and senior management are all appointed by the Communist Party. All Chinese state “corporations” have Communist Party secretaries who without exception outrank the enterprise CEOs. (58)

To be sure, China has a vast capitalist market economy side-by-side with the state sector. Thousands of real, foreign corporations operate in China today: Apple, Toyota, Audi, GM, Samsung, Procter & Gamble, Walmart, even the Avon lady. And China has plenty of homegrown entrepreneurs and privately owned businesses. China is said to have more than a million US-dollar millionaires and at least 89 billionaires. The private sector includes sizeable companies like Baidu (the internet search giant that dominates the China market since Google left), Tencent (instant messaging), Jack Ma’s Alibaba, real estate developers like Dalian Wanda Group and China Vanka, food processors like Wahaha Corp., insurance companies, and others. But these are not the core of the economy. China’s biggest private company by valuation, Alibaba, doesn’t produce anything at all; like eBay it just connects sellers with buyers. Most of China’s private businesses are small, on average less than half the size of SOEs, and the vast majority are even smaller. They include thousands of small coal mines, thousands of local construction companies, some small steel mills, textile and garment industries, shoemakers, retail shops and supermarkets, restaurants, self-employed truckers, family businesses and the like.

“Get Rich and You’ll Get Audited”

The Communist Party keeps its domestic capitalists on a short leash. Successful entrepreneurs soon find they need a state “partner,” or the government sets up its own competitors to suppress them, or they suffer forced buyouts. Those who cross the Party disappear and their property is seized, and worse. (59) Those whose names appear on Forbes’ list of the world’s wealthiest citizens or the Hong Kong Hunrun Rich List sometimes vanish without a trace. Chinese people call these the “pig-killing lists.” Middle-class Chinese speculate on apartments and suburban villas but the land they sit on is state-owned. Indeed, even title to the apartments and villas they’ve bought is never really secure because these can easily be seized by the state on a whim, with no recourse.

It’s been estimated that in the last three decades more than 60 million Chinese farmers and urban residents have been summarily evicted from their homes and farms to make way for government development projects of all sorts across the country. More than a million and a half farmers and townsfolk were evicted to make way for the Three Gorges Dam. Several million residents of Beijing were evicted to shabby satellite towns while their ancient Beijing homes, some dating back to the Ming dynasty, were leveled to make way for shopping malls, apartment towers and Olympic sports stadiums. (60) In such a system, arbitrary political power and generalized insecurity condition every aspect of life, even within the ruling Party itself – especially within the ruling Party.

A. Beijing’s Game of Thrones

China’s ruling class is the nomenklatura, the upper ranks of the 86-million-member Chinese Communist Party. Since the victory of the revolution in 1949, China has been run by the party-army-bureaucratic aristocracy, the leaders of which reside behind the walls of the Zhongnanhai complex adjacent to the Forbidden City. (61) In the 1950s, they nationalized the economy, divided up government administrative and economic management posts among themselves and centralized all surplus extraction. Today, this state-owned economy is run by their children and will soon be run by their grandchildren.

Since Mao’s death in 1976, the inner circle of the ruling “red families” have been headed up by the so-called “Eight Immortals”: Deng Xiaoping, Chen Yun (the CCP’s leading economic planner), Wang Zhen, Li Xiannian (PRC president), Peng Zhen (NPC Congress chair), Song Renqiong (party personnel chief), Yang Shangkun (PRC president), and Bo Yibo (vice premier and last of the eight to die at 98 in 2007). (62)As the elders retired and died off they entrusted the reins of power to their children, the “princeling” (taizi dang) sons and daughters of the first generation of communist rulers. Since the bad old days when Mao and his Gang of Four dispatched their rivals to rot in dungeons, or shot Lin Biao’s plane out of the sky to prevent his escape to Moscow, the Communist Party has made every effort to present a public façade of leadership unity and discipline and portray its internal workings as “regularized” with “collective leadership,” “10-year rotations” of “presidents” and “prime ministers,” “mandatory retirement of senior officials at 65” and so on. Nothing could be further from the truth.

A study released in February 2015 declared that living in China’s cities is “as deadly as smoking.”

Today, as in Mao’s day, CCP internal political machinations resemble nothing so much as The Godfather or “Game of Thrones.” And how could it be otherwise? In the absence of the rule of law, without elections to choose government representatives, without inner-party democracy, without constitutional procedures to regularize succession to office, without an independent judiciary, justice department, attorney generals and police to systematically prosecute and punish corrupt politicians, in such a system, no one owns their office, position or job on the basis of merit, professional qualification, fixed-year terms or enforceable contracts. Every cadre’s personal and political security depends, above all, on the strength of his/her guanxi: his connections and relationships with networks of allies, their patrons above, their supporters below and especially to families, clans and factions.

From the days of Mao’s purges of “capitalist roaders” Lin Biao, Liu Shaoqi and Deng Xiaoping, to Deng Xiaoping’s own purge of the Maoist Gang of Four, to Jiang Zemin’s purge of “counterrevolutionaries” Zhao Ziyang, Bao Tong et al. in the wake of the 1989 Tiananmen uprising, to current President Xi Jinping’s show trials of  “corrupt” rival Bo Xilai (son of Bo Yibo) and his persecution of powerful opponents in the oil faction and secret police led by Zhou Yongkang, the Chinese Communist Party’s internal political dramas differ little from the treacherous, fratricidal power struggles of the Corleones, Barzinis and Straccis of The Godfather or the bloody feudal wars of the Starks, Tullys and Boltons for supremacy in Westeros. As in “Game of Thrones,” China’s communists are embroiled in nonstop faction building, never-ending intrigue and infighting, and treacherous factional struggles while the paramount leader du jour‘s claim to the red throne in Zhongnanhai is never completely secure. (63)

President Xi Jinping came into office in 2012 on a campaign vowing to “swat tigers and flies alike.” Xi had been brought in to replace the disgraced Shanghai Mayor Chen Liangyu on the strength of his anticorruption campaigns in Zhejian Province where he once told an anti-graft conference: “Rein in your spouses, children, relatives and friends and staff, and vow not to use power for personal gain.” (64) But Xi is just as corrupt as all the rest, and just as thuggish.

Xi once remarked that as a young man he liked to watch The Godfather. Yu Jie, an exiled author of numerous critical books on China, titled his latest book, Godfather of China Xi Jinping (still awaiting publication as of March 2015). Yu told The New York Times that the film was Xi’s political study guide: “The Communist Party is China’s biggest mafia, and the party boss Xi Jinping is the godfather of China.” As if to confirm Yu’s thesis, when he tried to publish the book in Hong Kong, one publisher was arrested in Shenzhen and disappeared. A second prospective publisher received a threatening phone call from Beijing telling him that the book “absolutely cannot be published” and if he publishes it, “your personal safety and the safety of your family cannot be guaranteed” so he immediately dropped the project.

Life in the Communist Party is not so different from life in the mafia: It’s a constant, treacherous and highly dangerous nonstop factional struggle between crime family-based groupings in struggle with one another over top offices and treasure. The key to safety is building unshakable vertical and horizontal networks of support and protection – of guanxi. And the key to solidifying those networks is sharing the loot from corruption. As political scientist Minxin Pei put it: “If your patrons do not protect you, you’re toast … Corruption is the glue that keeps the party stuck together.” (65)

B. Grabbing the Brass Ring: Gangster Capitalism and the Necessity of Corruption

China’s economy mirrors its politics. China’s communist party-state has grown immensely wealthy over the past three decades from rivers of income flowing in from huge state monopolies like Sinopec (China Petroleum), State Grid, Bank of China, China Telecom, from taxing export foreign exchange earnings, and more. But the question is, how is this loot shared out among the ruling class of China, the “gang” of 86 million Communist Party members? In capitalist economies, this is entirely formalized and regularized. One’s wealth is based on property, cash in the bank, stock ownership and such – all secured by the rule of law, enforceable contracts, an impersonal state, independent judiciary and the police. But China has none of this. Cadres don’t privately own SOEs; they don’t own shares in SOEs.

Yet we know from multiple sources including trials of corrupt officials, revelations about secret offshore bank accounts, records of foreign property purchases, and especially from recent headline exposés in The New York Times and Bloomberg News on the wealth of China’s leading “princelings” including former and current heads of state, that China’s Communist Party cadres have gotten gloriously rich by way of market reforms. (66) The New York Times calculated that former Premier Wen Jiabao was worth at least $2.7 billion when he retired in 2012, all secreted under the names of close relatives. (67) As Xi Jinping climbed the party ranks, his extended family got rich in minerals, real estate and mobile-phone equipment. Today, his family is worth at least $376 million, again, with virtually all of it listed in the names of his close relatives rather than his own.

Markets and the Mother of All Moral Hazards

When Deng Xiaoping rejected Maoism and told the Chinese that now it was OK, even  “glorious to get rich,” he faced an immediate problem: To get marketization rolling, he urged the cadres to promote private businesses and joint-ventures with foreign investors, to “jump into the sea of commerce” as he said in his famous “southern tour” of Shenzhen in 1992. Deng’s market reforms thus presented the personally penniless but functionally all-powerful CCP cadres with the mother of all moral hazards. China’s reintroduction of capitalism presented the cadres with a once-in-an-epoch opportunity to grab the brass ring, to get rich, really rich, and fast. The party-state owned all land, resources and industries, and controlled the banks and pension funds, foreign trade and currency exchange, courts, police and everything else. The problem was that the only ways to profit from this were all illegal: bribery, smuggling, influence peddling, embezzling money from state industries, profiting from guandao (reselling state-owned raw materials and commodities on the free market at huge markups), asset stripping, currency manipulation, money laundering and so on.

Risky, but how could they resist? Far from resisting, they led the way in what exiled economist He Qinglian called “the marketization of power.” (68) Besides, since there was no independent judicial system, it was left to the party officials to police themselves. The very people who stood to gain the most from the coming market boom were supposed to refrain from self-dealing. Even so, the breadth and brazenness of corruption grew slowly at first. Looking back to the 1980s, Bao Tong, a senior party official arrested and imprisoned as a “counterrevolutionary” during the 1989 Tiananmen crackdown told Bloomberg News in December 2013: “A bottle of Moutai, two cartons of Chunghwa cigarettes – corruption was no more than that at the beginning…. Now an enterprise worth 10 billion yuan can be purchased with 1 billion. This would have been appalling to people back then.” (69)

“It Doesn’t Matter Who Owns the Money; It Only Matters Who Gets to Use It”

Today, the buffet of benefits available to the upper ranks includes extravagant state-provided housing, posh offices, fleets of limousines, access to state-owned vacation villas, travel and plenty of pocket change to spend on fine French wines, Rolexes, Louis Vuitton handbags and the rest. At the top, princelings are often heads of giant conglomerates, which themselves own dozens or even hundreds of individual SOEs. Presumably this gives them access to multiple income streams and ample opportunities to plunder the government’s ever-growing treasure. Princeling Bo Xilai didn’t send his son Guagua to Harrow, Oxford and Harvard, and buy him Porsches, Ferraris and fancy apartments in Oxford and Cambridge, Massachusetts, on his official salary.

Even China’s leaders complain that China’s “governments at all levels” had turned the state’s banks into “ATMs for officials and official businessmen.” (70) As one SOE boss put it: “It doesn’t matter who owns the money; it only matters who gets to use it.” (71) As individuals, they loot according to their rank, positions and guanxi. And of course, who gets to use exactly what is shrouded in secrecy. Financial Times Beijing bureau chief Richard McGregor quotes a businessman jailed on corruption charges who said: “Every official has three lives. Their public life, their private life, and their secret life.” (72)

In the boom years of the 1990s and 2000s in China’s ruling class, taking their cue from New York banksters who were becoming their partners and backers, corruption flourished on a previously unimagined scale. They siphoned huge sums from state banks, SOEs and ministries. They looted pension funds and state charities. They’ve profited from illegal arms sales and smuggling. They made vast fortunes in real estate evicting millions of farmers and selling their land to developers. They made more fortunes taking cuts from listing Chinese companies on the New York Stock Exchange. In all this, the “princeling” children and grandchildren of the “Eight Immortals” have led the way.

“The anticorruption push is more of a Stalinist purge than a genuine attempt to clean up the government.”

In the 1980s, Deng Xiaoping, Chen Yun and the other aging revolutionary generation leaders entrusted their children to run the new market-oriented state conglomerates like CITIC, China Poly Group (arms, African oil, etc.). Deng’s daughter Deng Rong and her brother Deng Zhifang were among the first to go into real estate in the 1990s. As Bloomberg reported in its investigative report on the 103 children and grandchildren of the Eight Immortals, “Families benefited from their control of state companies, amassing private wealth as they embraced the market economy. Forty-three of the 103 ran their own business or became executives in private firms … The third generation – grandchildren of the Eight Immortals and their spouses, many of whom are in their 30s and 40s – have parlayed family connections and overseas education into jobs in the private sector.” Others took over state-sector conglomerates and SOEs.

Twenty-six of the heirs of just these eight revolutionary leaders ran or held top positions in big SOEs: “Three children alone – General Wang’s son, Wang Jun, Deng’s son-in-law, He Ping; and Chen Yuan, the son of Mao’s economic tsar – headed or still run state-owned companies with combined assets of about $1.6 trillion in 2011. (73) Deng’s son-in-law Wu Jianchang got himself appointed head of numerous metals companies and then became, conveniently, minister of metallurgy. Deng’s grandson Zhuo Su got himself appointed head of a company that bought into an Australian iron ore business. Wang Jun, the revolutionary general’s son, set up a huge conglomerate, Poly Group, with Deng Xiaoping’s son-in-law He Ping, another general. Chen Yun installed his son Chen Yuan as head of the giant state-owned China Development Bank with assets of more than $1 trillion. His sister, Chen Xiaodan, worked at Morgan Stanley in New York, set up her own private equity firm, and worked with her father’s China Development Bank to support Chinese firms investing abroad in Europe and elsewhere.

Wang Zhi, General Wang’s third son, “borrowed” 300,000 yuan from his employer, the Ministry of Electronics, to set up his own company building personal computers, eventually partnering with Bill Gates to develop a Chinese version of Windows software. As Yang Dali of the University of Chicago put it, “The entire country was in business – the Party, the military, the courts, the prosecutor’s office, the police…. Insiders could get rich very quickly.” And “[w]hen the top is corrupt, this is how it will be all the way down,” said Dai Qing, China’s leading environmental activist who herself grew up in the Zhongnanhai compound with the princelings after being adopted by a famous general. (74) Bloomberg reports that, when he was lying in a hospital bed in 1990, hardline Maoist Gen. Wang Zhen (1908-1993) told a visitor that he felt betrayed by his own children. Decades after he had risked his life fighting for an egalitarian utopia, his children were only interested in getting rich: “Turtle eggs,” he said to the visiting well-wisher, using a slang term for bastards. “I don’t recognize them as my sons.” (75)

Getting the Loot Out of China

International banking connections also have been key to the princelings’ strategy of getting their loot out of China. Over the years, it has been estimated that princelings and other high cadres, cronies and capitalists have funneled $1-4 trillion in unreported assets out of the country since 2000. Credit Suisse, PricewaterhouseCoopers and UBS – Western banks with notorious experience in sheltering US and other tax evaders – set up secret companies and accounts for at least 21,000 Chinese in Caribbean tax havens including for Wen Yunsong, Wen Jiabao’s son. High cadres, their relatives and other rich guys fly suitcases of money to North America, Australia, Caribbean havens and other friendly destinations. (76)

In February 2014, it was reported that more than 45,000 (!) Chinese millionaireshad queued up in Vancouver, British Columbia, to get investor residence visas in return for five-year, interest-free loans to the Canadian government. In the US, 80 percent of the government’s EB-5 investor program visas are going to wealthy ex-mainland Chinese; in Australia, it’s nine out of 10. At least 18 of the Eight Immortals’ descendants own or run entities registered in the British Virgin Islands, Cayman Islands, Liberia and other secret offshore tax havens. (77) Bo Yibo’s wife Gu Kailai, convicted in 2012 of murdering her British business partner, controlled a web of businesses from Beijing to the Caribbean worth at least $126 million and stashed many of her assets with her sister in places like the British Virgin Islands, according to Bloomberg. (78) So it goes.

C. Implications, Tendencies, Consequences

This structural arrangement of bureaucratic/gangster capitalist power and property has given China’s economy a radically different pattern and trajectory of economic development from normal capitalism anywhere in the West. We can specify at least the following broad systemic tendencies in this hybrid economic system:

1. Priority to the state-owned economy: Shocked and riveted by the collapse of communism in Eastern Europe and especially the communist debacle in the USSR, Deng Xiaoping and his successors have been determined to avoid such a fate by maintaining state control over the commanding heights of the economy, avoiding substantial privatization and limiting the internal market, as noted above. That’s why the maximand of China’s SOEs is not profit maximization. Their maximand is the security, wealth and power of the Chinese Communist Party and that’s not the same thing. The Bank of China, China Development Bank, the Industrial & Commercial Bank of China and other huge state banks sit at the apex of China’s economy and count among the Global Fortune 500 largest companies. But unlike Citibank or HSBC, their job isn’t to make money. Their job is to lose money – or more precisely, to disburse it.

It’s often said that in the transition to capitalism China’s market reformers “abandoned central planning.” That’s an exaggeration. They reduced the scope of indicative planning but they did not abandon planning the state sector; they monetized it. Instead of issuing physical output targets à la Stalin and Mao, they direct most of the state economy by writing checks: by ordering state banks to disburse funds to support the production goals of the state plans (though they still set physical targets for some items – kilometers of rails, kilometers of roads, tons of wheat and cotton etc., as noted above). In the 1990s, the government leased out, sold off or closed down thousands of small unprofitable SOEs producing consumer goods including wood and leather products, furniture, building materials, garments, food products and the like. Dispensing with these, the government concentrated on restructuring, modernizing, expanding and diversifying the state’s SOEs. (79)

The government also expanded the state sector by establishing entirely new industries: consumer appliances, solar and wind power, biotech, high-speed trains, passenger aircraft, IT and others. But instead of assigning production targets for quantities of Geely cars, Suntech solar panels or China National Railways (CNR) high-speed trains, they allocate funds via state banks to support state-owned industries like CNR and to establish and support state-private joint ventures like Suntech and Geely. Since the 1990s, China’s SOEs, and the entire state industrial sector, have grown enormously. Whereas in the 1970s, China’s SOEs counted for almost nothing in the world economy, today, China’s “national champions” Sinopec, China National Petroleum and State Grid Corporation rank among the 10 largest companies by revenue in the 2014 Fortune 500.

Prioritizing the state sector means that the government often finds it rational to subvert its own market reforms to protect state interests: So when the head of a major state-owned conglomerate was removed for embracing market economics too enthusiastically, a Beijing University expert on China’s state-enterprises commented: “There’s a system in place, not just one person. The party’s appointee draws his position from patronage … and the task is to engage with state leaders and safeguard government assets, not to maximize profits.” (80) This is why the government enforces SOE monopolies regardless of efficiency, why it limits Western investor ownership share in joint ventures, why it bars Western firms from investing in key industries, and why it directs its huge sovereign wealth fund mainly to invest in the resource extraction industries China needs to fuel its national economic development even though global resource prices and resource industry profits have both been falling since 2008. (81) This is all in the collective interest of China’s state-based ruling class.

Yet at the same time, individually, princelings and well-placed cadres are simultaneously conniving, like the gangsters they are, to privatize pieces of the state-owned economy and to sell them at huge discounts to themselves, their relatives and partners, usually via private investment banks that have their real owners concealed behind multiple layers of paper and shell companies. Cadres also funnel money out of SOE profits to buy businesses and properties in the West. SOE overseas companies open still other opportunities to privately pocket profits earned overseas before they’re sent back to China. It can’t be ruled out that such trends could eventually lead to a broad selloff of state assets à la Poland. But for the present, the party seems determined to protect the state-owned economy rather than let it collapse and be sold off and privatized.

2. Hypergrowth drivers: incentives without penalties: China’s SOEs, as we noted, don’t live or die on the basis of their performance in the market. Lots of SOEs are inefficient but because many are also monopolies, they can still be gold mines. (82) As one official observed, “the overall economy has been so good that even pretty stupid SOEs could do well without much effort.” (83) Broke, indebted, inefficient or not, so long as their SOEs are in-plan, and especially if they’ve been designated “key” or “strategic” or “pillar” industries like coal, oil, autos, aerospace, biotech, high-speed rail or some other priority, SOE managers could assume that they would never be forced out of business regardless of their economic performance and generally speaking they have not been.

In result, SOE managers have had the best of both worlds: They have every incentive to borrow and spend, especially on capital construction (including those palatial offices to run the operations), but they face little or no threat of discipline for excess or failure. Given the profit-sharing arrangement between the center and the SOEs, for SOE bosses, it’s capitalism when the SOE is making money but socialism when it needs a government bailout. This is the main driver of “blind growth” across the economy and this can be expected to continue.

3. Hypergrowth drivers: job creation: In capitalist economies, neither individual companies nor governments are obliged to create jobs, though in extreme circumstances like the Great Depression, governments have set up jobs programs to keep the peace. But in China, in the old Maoist bureaucratic collectivist system, the government was the only employer, so it had to employ everyone because there was nowhere else to find work. In Mao’s day, successive generations of workers were simply assigned to work units (danwei) with the result that China’s industries and government offices were often abundantly overstaffed. But with the turn to the market, the government abolished guaranteed employment in the mid-1990s and SOEs laid off some 50 million superfluous workers in the 1990s to make their industries more efficient.

By then however, many excessed workers could find jobs in the new parallel market economy while others were forced into retirement on subsistence pensions. The destruction of millions of state jobs with state benefits provoked widespread protests and unrest in the late 1990s and early 2000s. To contain this unrest, and also to keep up with China’s relentless population growth, the government has been forced to spend heavily on wave after wave of WPA-like, make-work capital construction projects across the country since the 1990s, even if much of what got built was unneeded, as noted above. Given the special threat that extensive unemployment poses to a nominally workers state, this pattern of make-work overproduction and overdevelopment can be expected to continue.

4. Collective property weakens efforts to reduce pollution: Collective ownership means that even with its police-state dictatorship, the center can’t always enforce its will against lower-level officials because those local, country, provincial, ministerial officials, SOE bosses and so on are more partners with Beijing in their joint ownership of the national economy than strictly subordinates. They all have their own guanxi networks to defend their turf and promote their own interests in contravention of central initiatives when it suits their purposes. This is why central efforts to restrain pollution tend to be subverted or defeated by local officials whose overriding concern is to keep the economic engines running regardless of the smog.

China has comprehensive environmental legislation on the books. It has its own Environmental Protection Agency equivalent, the State Environmental Protection Agency (SEPA). It has a State Food and Drug Administration (SFDA) and other regulatory agencies. But the evidence everywhere is that regulation is largely a failure. (84) Here and there SEPA has managed to enforce some cleanups and shutdowns of some conspicuous polluters, usually smaller operations. But more often than not, SEPA regulators are powerless against polluters because environmental protection officers are subordinate to and even paid by local officials who profit from and generate jobs in the same polluting industries SEPA wants to suppress. (85)

In her documentary Under the Dome, Chai Jing asks Ding Yan, the director of the government’s Ministry of Environmental Protection (MEP) Vehicular Pollution Research Institute, about why his agency doesn’t force China’s vehicle manufacturers to stop selling trucks with fake National Standard 4 emission stickers certifying that the vehicles meet the highest emissions standards when in fact they only meet the lowest National Standard 1. “If you (the MEP) assert you have legal authority, no one can deny that, so why not just execute the law?” Ding told her that regardless of the law, his agency had no real power to enforce it: “Nowadays, I don’t dare open my mouth out of fear that [the polluters] will see that I have no teeth” (at 48:19).

Since the highly personalized and politicized state can’t rely on the rule of law, independent courts and police to enforce its environmental regulations, the government has to resort to “campaigns” to enforce environmental compliance. But this approach is hopelessly ineffectual. Beijing issues big directives, sends inspectors around and fines the polluting companies. But as often as not local government partners just pay the fines, or block regulators from shutting down the polluters, or let the regulators shut them down but then let the companies reopen under a new name. If all else fails, there’s always bribery. MEP officials are regularly bribed to let polluters continue operations. (86)

A year after Xi Jinping launched his “war on pollution,” the official press describes Beijing as “all but unlivable.” A study released in February 2015 declared that living in China’s cities is “as deadly as smoking.” (87) The government’s ambitious plans to improve water quality and safety have likewise failed. The 12th Five-Year Plan goal of “completely solving rural drinking water issues” by the end of 2015 “will not be met, and some villages are going backward because of scarcity and pollution.” Urban water safety has not improved and even bottled water is often contaminated. (88)

Moreover, the center itself is conflicted about enforcing its own pollution regulations because the central government, as much as local governments, needs to maximize growth to meet its plan targets and maintain employment to keep the peace. So while it talks about cracking down on pollution, more often than not Beijing also has to prioritize job creation over environmental protection. (89) Therefore, so long as there is no real separation of powers, these trends can be expected to continue and China’s pollution problems will remain essentially unsolvable.

5. Bureaucratic particularism and competition drive redundancy and overinvestment: SOE bosses, and local, provincial and ministerial officials may not face market competition in the same way and to the same extent as capitalist firms, but they face intense bureaucratic competition for access to resources and appropriations from the center. This particularistic intra-ruling class struggle over access to state funds also shapes the broad pattern of China’s economic development, powering tendencies to redundancy, duplication, irrational investment and waste throughout the economy. Thus, in his book on China’s growing airline industry, James Fallows writes:

Foreign reports often present these projects as carefully coordinated expressions of China’s larger ambitions for a modern transportation system and to an extent they are. But there is also bitter bureaucratic and commercial rivalries between the airline and railroad interests within China, each seizing on any opportunity to argue that it reflected the wiser and more farsighted use of the country’s resources. (90)

In China’s hybrid economic system, generally speaking, officials can only profit from their own units – their localities, ministries and SOEs. Cadres can’t buy shares in SOEs anywhere in the economy like in capitalism. No cadre in Sichuan can invest in and profit off of state-owned industries in Shanghai or Shenzhen. So if Sichuan officials wanted to profit from Premier Wen Jaibao’s call at the launching of the 12th Five-Year Plan, to “enhance China’s automobile manufacturing capability,” their only way to do was to build auto plants in their own province. And that’s what happens. That’s why China has more than 130 auto plants, thousands of power plants (one for every three square kilometers in Jiangsu province), roads and bridges to nowhere, more than 30 airlines, near-empty airports everywhere, more than 800 shipyards, redundant ports, redundant “world financial centers,” redundant shopping malls and ghost cites, with all the waste those entail. These tendencies are, again, built into the bureaucratic collectivist nature of this economic system and will continue as long as this system is in effect.

6. Rampant, ineradicable corruption: Anticorruption campaigns have been a feature of CCP inner-party struggles since long before the founding of the People’s Republic. They reached their apogee of hysteria in Mao Zedong’s terror campaign of the “cultural revolution” against “capitalist roaders” in his own party. These days the party brags that it disciplines tens of thousands of corrupt officials every year. Prominent party and state figures tried and punished in recent years include Beijing Mayor Liu Zhihua who received a suspended death sentence in 2009 for bribery. Shanghai party chief Chen Liangyu got 18 years in 2008 for corruption. Zheng Xiaoyu, head of China’s SFDA, was executed in 2007 for taking bribes to approve an antibiotic blamed for at least 10 deaths. Rixin Kang, former head of China’s nuclear power agency, was sent to prison for life in 2011; Cheng Tonghai, former head of Sinopec, got a suspended death sentence in 2009. Li Peiying, the head of Beijing’s Capital Airport, was executed in August 2009. Railway minister Liu Zhijun was given a suspended death sentence in 2013. Bo Xilai, the first member of the Party’s Politburo to be arrested since the end of the Mao era, was given a suspended death sentence in 2013. In January 2015, 70 SOE bosses were nabbed in one sweep, 16 generals in another.

Yet for all the campaigns, arrests and executions, corruption only grows worse every year. And why would it not? Opportunities for getting rich quick have grown as fast as the economy. And despite all the lurid press reports, the chances of getting caught are miniscule and for most corruption cases the consequences are not nearly as dire as the headlines imply, especially for the most elite, the biggest gangsters. (91)Geremie Barmé of the Australian National University says that in his research, for all the drama, most of the offspring of China’s revolutionary founders, the so-called “second red generation,” whose ranks include Xi Jinping and Bo Xilai, had largely escaped serious punishment: “In the murky corridors of Communist power, an impressive number of party gentry progeny, or the offspring of the Mao-era nomenklatura, have been implicated in corrupt practices … But word has it that, like the well-connected elites of other climes, they’ve enjoyed a ‘soft landing’: being discretely relocated, shunted into delicate retirement or quietly ‘redeployed.'” (92)Bo Xilai’s confinement is thought to be not too harsh, and not include orange suits.

Guanxi rules. Xi Jinping’s “war on corruption” is swatting competing tigers like Zhou Yangkang’s clique but has conspicuously failed to swat blatantly corrupt tigers right under his nose, starting with his own sister, brother-in-law, niece and their private sector partners, all of whom have made fortunes trading influence for lucrative state-private deals. Instead, Xi is just pushing them to cash out of their hundreds of millions of dollars in politically vulnerable investments. (93) Novelist Murong Xuecun writes in The New York Times that “the anticorruption push is more of a Stalinist purge than a genuine attempt to clean up the government.” Xi, he says, has mainly targeted specific party factions while those groups that support and pledge loyalty to Xi appear untouched. He notes that in Xi’s former fiefs in Fujian and Zhejian provinces, “as best I can tell not one official above the deputy provincial level has been arrested on suspicion of corruption. Recently the question was raised on the internet: Why have no ‘big tigers’ been found in Fujian and Zhejiang? The message was almost immediately deleted.” (94)

Without the rule of law, an independent judiciary, courts and police to prosecute and punish corrupt cadres, Xi Jinping’s only option is to try to terrorize the cadres by sending down “discipline inspection teams” to punish local transgressors and jail some blatant offenders. The Chinese call it “killing the chickens to scare the monkeys.” But after the terror passes and the teams return to Beijing, it’s back to business as usual. So after wrapping up the second round of two-month inspections in 10 provinces launched in July 2014, Wang Qishan, head of the Central Commission for Discipline Inspection (CCDI) warned officials, “Don’t go back on your old ways when our backs are turned … we will come back and catch you off guard.” (95)

But really, what can the poor CCDI do? The Chinese Communist Party is a cesspool of corruption from top to bottom. The CCDI can’t arrest the entire party. Xi needs these officials to run his economy and administration, but most are well enough connected to avoid his terrorists. Xi can’t trust the police to systematically enforce anticorruption measures because the police themselves are notoriously corrupt. Even his corruption investigators can’t be trusted (1,575 corruption investigators were themselves busted in 2014). By October, Wang was complaining that the cadres were not taking him seriously: “We have stepped up the anti-graft campaign but some party cadres are still undeterred. Some have become even more corrupt.” Wang “vowed to ramp up inspections of the lower tiers of government.” (96) Good luck on that, Mr. Wang.

Pursued with too much vigor, Xi’s anticorruption campaign against senior officials risks not only unsettling elite stability, but also destroying what’s left of the party’s credibility. As a retired princeling military officer said about the most recent campaign against graft and profiteering in the army: “You can’t do it too much, otherwise the party comes out too black, and the leaders won’t like it.” (97) Of course, self-limiting anticorruption campaigns only guarantee that corruption will continue to grow. Moreover, the anti-graft drive is also hurting economic growth as cadres sit on their hands, fearing to do any work that might bring complication, and companies pull back from spending on luxury goods, feasting, champagne and cars – the spending by the 1% that drives so much growth in China, as in the West.

What’s worse is that with the spectacle of China’s political leadership by “communist” princelings-turned-billionaires, corruption rots the whole society from the top down. Whereas in the 1980s, millions of China’s youth were idealistic passionate protesters for democracy, today many of China’s millennial generation have lost all hope for change, been seduced by capitalism and consumerism, become cynical and indifferent toward politics, human rights and the environment, and are insouciant toward CCP lies and repression. Others are just giving up and emigrating.

III. Braking the Drive to Collapse

It goes without saying that the Chinese have every right to modernize, industrialize and improve their material standard of living. But the problem is that capitalism can’t sustainably provide this for the Chinese, the Americans or anyone anymore. As many Chinese say today, “Who cares if we have the world’s highest GDP if we can’t live here?” The Chinese don’t need a higher standard of living based on endless consumerism. They need a better mode of life: clean, unpolluted air, water and soil; safe and nutritious food; comprehensive public health care; safe, quality housing; a public transportation system centered on urban bicycles and public transit instead of cars and ring roads; and more.

We all need to live better by consuming less and consuming rationally, fairly and sustainably. Given the planet’s desperate shape today, the only way humanity is going to survive this century is if developed countries and developing countries contract and converge their resource consumption and pollution around a sustainable global average that will permit the world’s peoples to live in tolerable conditions while reserving resources for future generations and other life forms. (98)

As China Goes, So Goes the World

Climate scientists tell us that, given all the failed promises to date, the backpedaling and soaring carbon dioxide emissions, we now face a “climate emergency.” On present trends we’re on course to a 4 to 6-degree Celsius warming before the end of this century: If we don’t radically suppress fossil fuel burning over the next few decades to keep the warming below the 2-degree Celsius threshold, planetary heating will accelerate beyond any human power to stop it and global ecological collapse will be unavoidable. To have a chance of staying below 2 degrees, the industrialized nations and China must cut carbon emissions by 40 to 70 percent globally by 2050 as compared to 2010, which would require cuts on the order of 6 to 10 percent per year. (99) China would have to cut its industrial emissions by 30 to 90 percent as compared to 2010, the variance depending upon expected growth rates and other assumptions. (100)

The only way China could suppress its greenhouse gas emissions by anything like that amount would be to impose a drastic across-the-board economic contraction, including radical retrenchments and shutdowns of most of the industries that have been built up in the last three decades of market mania. I’m sure this sounds extreme, if not completely crazy. But I don’t see what other conclusion we can draw from the science. On the positive side, as I surveyed above, since so much of China’s resource waste and pollution is just completely unnecessary and harmful, what sounds like extreme austerity could prove just the opposite: liberating, a move to that “better mode of life.” Such an emergency plan would have to include at least the following elements:

  • Shut down all but critically essential coal-fired power plants needed as a temporary measure to keep the lights and heat on and essential public services in operation until renewable replacements can be brought on line. Abandon the coal gasification projects and phase out oil- and gas-powered fuel plants as quickly as possible. Force a rapid transition of energy generation to renewable wind, water and solar energy sources but with the goal of producing much less electricity overall, closer to what China produced in the early 1980s before the market-driven industrialization boom. The US and other developed countries should be obliged to provide extensive technical and material assistance to facilitate this transition.
  • Shut down most of the auto industry. This industry is just a total waste of resources and is the second-biggest contributor to global warming. Most public transportation will have to shift back to bicycles, buses, trains and subways – basically a modernized and expanded version of what the Chinese had in the early 1980s before the auto craze. But the air will be cleaner, transportation will be faster, people will be healthier and immense resources will be conserved.
  • Shut down most of the coastal export industries. Most of China’s coastal export industries are geared to producing unsustainable, disposable products, as noted above. There is just no way to have a sustainable economy in China or anywhere if we don’t abolish the throwaway repetitive-consumption industries in China and around the world.
  • Retrench or close down aviation, shipping, and other redundant and unsustainable transportation industries. Abandon the “aviation superpower” boondoggle. Abandon further expansion of the high-speed train network. China has already built more planes, trains and subways than it needs by any rational accounting of needs. Same with the shipbuilding industry, most of which is geared to container and bulk carrier shipping. This industry needs to be drastically reduced as China’s imports and exports decline with industrial contraction.
  • Shut down most of the construction industry. Even with China’s huge population, the country is massively overbuilt and littered with useless, superfluous buildings, housing, highways, bridges, airports and so on. Some of this can be repurposed. Some should be demolished and the lands returned to farmlands, wetlands, parks or other beneficial use.
  • Abandon the urbanization drive and actively promote re-ruralization.Urban life has its advantages but urban residents consume several times the energy and natural resources and generate several times as much pollution as rural farm families. Besides, most of the tens of millions of Chinese who were relocated to the cities in the last three decades did not go voluntarily; they were forced off their farms by land-grabbing, profiteering local officials. Those ex-farmers who wish to return to the land should be permitted to do so. There is no law of nature that says farm families must be impoverished. In today’s world, family farmers with adequate land and decent technology, who can market their own produce so they don’t get ripped off by middlemen, and who are not under the thumb of banks, landlords or state-landlords, can do very well. (101) China’s farmers are poor because the state has been squeezing them to subsidize industrialization. The best way to raise rural living standards is to give them security in their farms and pay them fair prices for their produce.
  • Abandon the imperial plunder and Han colonization of the West.Xinjiang, Tibet and Mongolia are not ethnically Chinese. If the Chinese government abandons its market-based development strategy it would have no “need” to plunder the natural resources of the West; those peoples can be left in peace to develop at their own pace and in accordance with their ecological limits. And after wrecking so much of their environment, the Chinese owe them some help.
  • Launch an emergency national plan for environmental remediation and restoration of public health. Chinese environmental and health experts have called for a comprehensive integrated plan to address the nation’s environmental and public health issues. (102) Experts say it could take generations to restore China’s farmlands, rivers and lakes to tolerable biological health though, as noted above, in places this may be impossible. A significant share of the costs of this remediation should also be borne by the Western nations whose companies callously contributed to this pollution by offshoring their dirtiest industries to China.
  • Launch a national public works jobs program. If China is going to have to shut down so much of its industrial economy to brake the drive to ecological collapse, then it is going to have to find or create new jobs for all those displaced workers. In Guangdong Province alone, there are something like 40 million manufacturing workers, most of them dedicated to producing the sorts of needless products described above. Forty million unemployed workers would be a big problem. And that’s just Guangdong. But unbreathable air, undrinkable water, unsafe food, polluted farmland, epidemic cancer, rising temperatures and rising seas along coastal China are bigger problems. So there’s just no way around this very inconvenient truth. Making bad stuff has to stop; stopping it will unemploy vast numbers of workers, and other, non-destructive, low-carbon jobs have to be found or created for them. Fortunately, in China, there is no shortage of other socially and environmentally useful work to do: environmental remediation, reforestation, transitioning to organic farming, transitioning to renewable energy, rebuilding and expanding public social services, rebuilding the social safety net, especially for China’s aging population, and much else.

Pan Yue was certainly prescient: The Chinese miracle has come to an end because the environment can no longer keep pace. The question is, can the Chinese find a way to grab hold of the brakes and wrench this locomotive of destruction to a halt before it hurls the country off the cliff?

Revolution or Collapse?

One thing is certain: This locomotive is not going to be stopped so long as the Communist Party has its grip on the controls. The Chinese Communist Party is locked in a death spiral. It can’t rein in corruption because the party is built on corruption, thrives on corruption and can’t police itself. It can’t rein in ravenous resource consumption and suicidal pollution because, given its dependence on the market to generate new jobs, it has to prioritize growth over the environment like capitalist governments everywhere.

It can’t even discipline its own subordinate officials to enforce and obey the government’s environmental, food and drug safety, building codes and similar laws because in this system subordinate officials aren’t necessarily subordinate and can often mobilize their family and guanxi-based backers to defend their interests and thwart Beijing. So long as this basic structural class/property arrangement remains in effect, no top-down “war on pollution” or “war on corruption” is going to change this system or brake China’s trajectory to ecological collapse. Given the foregoing, I just don’t see how China’s spiral to collapse can be reversed short of social revolution.

China’s Communist Party seems all-powerful and unassailable. But it’s not. It’s frightened, desperate and disintegrating. It faces unprecedented threats: near daily industrial strikes; militant and often violent protests over land grabs, chemical plants, incinerators, power plants and the like; “terrorist” attacks from Xinjiang; and even worse, subversive thought that just can’t be stopped by the Great Firewall. Chai Jing’s Under the Dome had 300 million downloads before the government took it down off the web after a week and a half. Who knows what spark will light the next social explosion?

Resistance is growing as pollution and public health worsen, as it becomes harder to sustain that 8 percent growth rate to stave off unrest, as Xi Jinping’s war on corruption only serves to publicize the unregenerate character of the entire Communist Party and underscore its incapacity to solve any of China’s huge problems. Since Xi took over in 2012, he’s been determined to save China’s Communist Party from the fate of its Soviet cousin. Xi ridiculed Mikhail Gorbachev’s “weakness” and cast himself as the tough-guy Godfather, cracking down on the press, the internet and social media, religious groups, democrats, nongovernmental organizations, Western joint-venture partners and “Western ideas.” But this repression just reveals his weakness, not his strength.

The more he harasses, fines and drives Western joint-venture partners out of China, the less access he will have to their technology and the less competitive his SOEs will become. The more tightly he polices culture and censors the internet, the faster China’s intellectuals, scientists, professionals and college graduates will pack up and move to Australia. Nothing demonstrates this weakness and lack of self-confidence more than the Party’s very public disintegration: The government bitterly complains that large numbers of “ready-to-flee, naked officials” (so-called because they’ve sent their families and money to Los Angeles or Vancouver) are scheming to follow them. Surveys show that half of China’s rich (most of whom are Communist Party members) have either left the country or are planning to do so as soon as they can. (103)

China has to be the first nation in history in which significant numbers of its own triumphant ruling class are abandoning their own success story en masse. Today, Xi Jinping faces subversion and resistance everywhere he looks, yet he can’t even count on his comrades. To add to his headaches, Godfather Xi now faces an in-your-face democracy movement in Hong Kong that refuses to die. From workers’ strikes to environmental protests to Occupy Central for Love and Peace, these struggles and movements are fragmented, inchoate and unorganized, so far, but they all share a common demand: bottom-up democracy. Therein lies China’s best hope.

Footnotes

1. Ariana Enjung Cha, “Solar energy firms leave waste behind in China,” The Washington Post, 9 March 2008. All quotations are from this article.

2. There’s no better illustration of this government-industry collusion and pollution’s catastrophic impact on the health of China’s people than journalist Chai Jing’s sensational new documentary on China’s smog Under the Dome – Investigating China’s Smog (Wumai diaocha: qiongding zhixia) which went online in late February and is being rightly hailed as China’s Silent Springhttps://www.youtube.com/watch?v=T6X2uwlQGQM.

3. “The Chinese miracle will end soon,” Der Spiegel 7 March 2005: www.spiegel.de/speigel/0,1515,345694.html.

4. Elizabeth Economy and Michael Levi, By All Means Necessary, Oxford 2014, chapters 3 and 4.

5. Craig Simons, The Devouring Dragon, New York, 2013, p. 9 and chapters 7 and 8.

6. Joseph Kahn and Mark Landler, “China grabs west’s smoke-spewing factories,” The New York Times, 21 December 2007. William J. Kelly and Chip Jacobs, The People’s Republic of Chemicals (Los Angeles: Vireo 2014).

7. Alexandra Harney, The China Price, New York, 2008, pp. 8-9.

8.Overdressed, New York, 2013, pp. 3, 124-125. Energy consumption: FAO, cited in “Fabric and your carbon footprint, O Ecotextiles, 10 March 2013, at http://oecotextiles.wordpress.com/2013/10/03/fabric-and-your-carbon-footprint/.

9. Niu Yue, “China No 1 dumper of plastic into ocean,” China Daily, February 19, 2015.

10.State Council Decision on Accelerating the Development of Strategic Emerging Industries, October 2010 at http://www.gov.cn/zwgk/2010-10/18/content_1724848.htm.
State Council 12th Five-Year Plan (FYP) on Development of Strategic Emerging Industries, July 2012 at http://www.gov.cn/zwgk/2012-07/20/content_2187770.htm.
MOF and NDRC Interim Measures for the Administration of Special Funds for Strategic Emerging Industries, December 2012 at http://jjs.mof.gov.cn/zhengwuxinxi/zhengcefagui/201301/t20130124_729883.html.

11. Tom Lasseter, “Empty highways,” McClatchy News, August 24, 2006, 11:33PM at http://blogs.mcclatchydc.com/china/2006/08/empty_highways.html.

12. Professor Zhao Jian of Beijing Jiaotong University says, “It is unwise to continue building high-speed rail lines while the current high-speed network has a hard time getting enough passengers and is operating at a loss … The country has built more than 10,000 kilometers of high-speed rail lines and most lines are losing money because of inadequate demand.” Some lines run at only 30 percent of capacity he said, and even the busiest, such as the train from Beijing to Shanghai, “will run a loss for a long time … The rush to build high-speed rail networks indicates that the old investment-driven growth model has hardly changed.” Sun Wenjing, “Government throwing money away on bullet trains, expert says,” Caixin, 10 July 2014 at http://english.caixin.com/2014-07-10/100702343.html.

13. Kevin Lim, “‘Meaningful probability’ of a China hard landing: Roubini,” Reuters, 13 June 2011.

14. Wang is quoted in Tania Branigan, “Riding Beijing’s subway end to end: 88km of queues and crushes on 20p ticket,” The Guardian, 10 September, 2014 at http://www.theguardian.com/cities/2014/sep/10/-sp-beijing-subway-china-metro-queues-ticket-investment.

15. James Fallows, China Airborne, New York, 2012, pp. 28-29. David Barboza, “Airports in China hew to an unswerving flight path,” The New York Times, 3 April 2013. Bloomberg News, “China plan seeks to bolster airports, locally-produced airplanes,” 21 January 2013 at http://www.bloomberg.com/news/2013-01-21/china-plan-seeks-to-bolster-airports-locally-produced-airplanes.html.

16. IPCC, Aviation and the Global Atmosphere: A Special Report of the Intergovernmental Panel on Climate Change, Cambridge UK 1999, at http://www.grida.no/climate/ipcc/aviation/index.htm. George Monbiot, Heat, Cambridge UK 2007, p. 174.

17. Monbiot, Heat, p. 182 and sources cited therein.

18. In the decade from 2000 China’s cities expanded by over 80 percent. A national land survey found that 130,000 square kilometers of farmland, equal to half the area of Germany, was paved over in the urbanization frenzy between 1996 and 2009 – and it hasn’t slowed since. Mandy Zuo, “Stop concreting over prime farmland, China’s big cities told,” South China Morning Post, 9 November, 2014. Cui Zheng, “Scientists issue warning over development of coastal wetlands,” Caixin, 25 November 2014.

19. See Jasper Becker, City of Heavenly Tranquility, Oxford 2008, chapters 17 and 18.

20. See Darmon Richter, “Welcome to Ordos: the world’s largest ‘ghost city’ [China],” The Bohemian Blog, 13 February 2014 at: http://www.thebohemianblog.com/2014/02/welcome-to-ordos-world-largest-ghost-city-china.html.

21. “Housing oversupply causing major crisis for Chinese economy, NTD.TV, 16 May 2014 at http://www.ntd.tv/en/programs/news-politics/china-forbidden-news/20140516/143998-housing-oversupply-causing-major-crisis-for-chinese-economy-.html. Eg. George Steinmetz, “Let a hundred McMansions bloom,” The New York Times Magazine, 21 September 2014. Neil Gough, “A muddy tract now, but by 2020, China’s answer to Wall Street,” The New York Times, 3 April, 2014.

22. Lillian Liu, “A question of time, FinanceAsia, 8 September 2010 at http://www.financeasia.com/News/231364. Vincent Fernando, CFA, “There are now enough vacant properties in China to house over half of America,” Business Insider, 8 September 2010 at http://www.businessinsider.com/there-are-now-enough-vacant-properties-in-china-to-house-over-half-of-america-2010-9. Robin Banerji and Patrick Jackson, “China’s ghost towns and phantom malls,” BBC News Online, 13 August 2012 at http://www.bbc.com/news/magazine-19049254. Yifei Chen, “Chasing ghosts: where is China’s next wave of empty ‘new towns’?” South China Morning Post, February 13, 2015.

23. “China’s real estate bubble,” CBS 60 Minutes, 11 August 2013 at http://www.cbsnews.com/videos/chinas-real-estate-bubble/. Gus Lubin, “Satellite pictures of the empty Chinese cities where home prices are crashing,” Business Insider, 10 December 2011, 1:48PM at http://www.businessinsider.com/china-ghost-cities-2011-11#. David Barboza, “Chinese city has many buildings but few people,” The New York Times, 9 October 2010.

24. Zarathustra, “China’s crumbing infrastructure model,” Macrobusiness, 28 July 2012 at 9:49AM at http://www.macrobusiness.com.au/2011/07/is-chinas-growth-model-a-train-wreck/.Wall Street Examiner reporter/blogger Russ Winter posted several photos of collapsed bridges in his “Yes, China is truly different” Winter Economic and Market Watch, 28 August 2012 at http://www.wallstreetexaminer.com/blogs/winter/?p=5290.

25. Lu Chen, op. cit. After the collapse of an apartment in Fenhua, Zhejian Province in April 2014, officials warned of a “coming wave of such accidents as the ‘fast food’ buildings built in the 1980s and 1990s enter their 30s and 20s.” Building safety experts warned people not to purchase apartments in certain localities known to be particularly risky. Most “won’t last 50 years, or in some cases about 25 years,” and they present constant safety hazards. Zheng Fengtian, “Weak buildings threaten life,” China Daily, 11-14 April 2014.

26. Frank Langfitt, “Chinese blame failing bridges on corruption,” National Public Radio, 29 August 2012 at http://www.npr.org/2012/08/29/160231137/chinese-blame-failed-infrastructure-on-corruption.

27. US E.I.A., China, updated 4 February 2014 at http://www.eia.gov/co.

28. Lily Kuo, “China’s nightmare scenario: by 2025 air quality could be much much worse,” posted 12 March 2013 on Quartz at http://qz.com/61694/chinas-nightmare-scenario-by-2025-air-quality-could-be-much-much-worse/. Wang Yue, “China unlikely to reduce coal use in the next decade,” Chinadialogue.org, 10 February 2014 at https://www.chinadialogue.net/blog/6718-China-unlikely-to-reduce-coal-use-in-the-next-decade/esn. US EIA, China, 4 February 2014, op cit.

29. Zeke Hausfather, “Global carbon dioxide emissions: increases dwarf US reductions,” Yale Forum on Climate Change & the Media, 2 July 2013 at http://www.yaleclimateconnections.org/2013/07/global-co2-emissions-increases-dwarf-recent-u-s-reductions/.

30. Chris Buckley, “China’s plan to limit coal use could spur consumption for years,” The New York Times, 25 July 2014. As Xi Jinping and Barack Obama concluded their “historic” accord in November 2014 to cut both country’s carbon dioxide emissions and Xi promised to reduce China’s reliance on coal for power generation and boost renewables, the news that China’s coal consumption actually fell by 2.5 percent in 2014, the first decline in a century, gave cause for optimism. Combined with the fact that China continues to lead the world in annual additions of wind and solar power, many hoped that China’s coal consumption was finally peaking. But as Andrew Revkin points out, while China’s coal production and imports declined in 2014, half of China’s coal is used outside the power sector, in heavy industry, which use has fallen as the overall economy has slowed in recent years. Coal consumption in the power sector continues its relentless climb: In 2014, China’s newly added coal power capacity exceeded new solar energy by 17 times, new wind energy by four times, even new hydro power by more than three times. In just this one year, China added more new coal-fired power plants than Britain’s entire fleet. These new plants will be pumping out greenhouse gases for many decades to come and in fact, most of China’s coal-fired power plants are less than 15 years old so could they could still be running half a century from now. In short, for all the promises, coal is still king in China. Moreover, the economic slowdown is also likely to be short-lived as the government is furiously pumping money into the economy to revive growth. Andrew Revkin, “A look behind the headlines on China’s coal trends,” Dot Earth, The New York Times, 18 February 2015: 6:00 PM at http://dotearth.blogs.nytimes.com/2015/02/18/a-look-behind-the-headlines-on-chinas-coal-trends/?_r=0.

31. William J. Kelly, “China’s plan to clean up air in cities will doom the climate, scientists say,” InsideClimate News, 13 February 2014 at http://insideclimatenews.org/news/20140213/chinas-plan-clean-air-cities-will-doom-climate-scientists-say.

32.Reuters, “China’s coal expansion may spark water crisis, warns Greenpeace,” The Guardian, 15 August 2012. See also the accompanying documentary photos by Lu Guang: “China’s mega coal power bases exacerbate water crisis – in pictures,” The Guardian, August 21, 2012 at http://www.theguardian.com/environment/gallery/2012/aug/21/china-mega-coal-water-crisis-in-pictures.

33. See Sophie Beach, “China’s fracking boom and the fate of the planet” in China Digital Times 19 September 2014 at http://chinadigitaltimes.net/2014/09/chinas-fracking-boom-fate-planet/.

34. Investigators have found that only a third of China’s wastewater treatment plants are operating. Cui Zheng, “Seas of sewage,” CaixinOnline, 12 October 2012 at http://english.caixin.com/2012-10-12/100446374.html.

35. Ma Jun, China’s Water Crisis, Norwalk 2004, p. vii.

36. Sun Xiaohua, “Pollution takes heavy toll on Yangtze,” China Daily, 16 April 2007.  Shai, Oster, “It may be too late for China to save the Yangtze goddess,” The Wall Street Journal, 6 December 2006.

37. Xu Nan, “Poisoned groundwater sparks media storm in China,” China Dialogue, February 2, 2013 at https://www.chinadialogue.net/blog/5749-Poisoned-groundwater-sparks-media-storm-in-China/en.

38. Cecilia Torajada and Asit K. Biswas, “The problem of water management,” China Daily, March 5, 2013. Gong Jing and Liu Hongqiao, “Half of China’s urban drinking water fails to meet standards,” China Dialogue, June 6, 2013 at https://www.chinadialogue.net/article/show/single/en/6074-Half-of-China-s-urban-drinking-water-fails-to-meet-standards.

39. Ten years previously, a pollution tide had killed fish and sickened thousands of people. By 2001, the government claimed to have shut down polluters and declared the cleanup a success. But the Huai is now a symbol of the failure of environmental regulation in China. After spending more than $8 billion over a decade to clean up the Huai basin, the State Environmental Protection Administration concluded in 2004 that “some areas were more polluted than before.” Jim Yardley, “Rivers run black, and Chinese die of cancer,” The New York Times, 12 September 2004. An Baijie, “Polluted river flows with carcinogens,” China Daily, 8 August 2013 (on pollution of the Huaihe in Anhui Province by manganese, nitrates and other carcinogens from local factories).

40. Dr. Linda Greer (NRDC), “Top clothing brands linked to water pollution scandal in China,” China Dialogue, 9 October 2012 at https://www.chinadialogue.net/blog/5203-Top-clothing-brands-linked-to-water-pollution-scandal-in-China/en. (Armani, Calvin Klein, Marks and Spencer, Zara and others.)

41. Xue Haitao and Liku Hongqiao, “Sip of death plagues cancerous river villages,” CaixinOnline, 9 October 2013 at http://english.caixin.com/2013-10-09/100589447.html. Yu Dawei et al., “The poisoning of the Nanpan river basin,” CaixinOnline, 1 September 2011 at http://english.caixin.com/2011-09-01/100297332.html.  Sophie Beach “Shangba, China’s village of death,” posted 3 December 2007 on www.sprol.com/?p=371. Mary Ann Toy, “Waiting for death in fetid cancer villages,” Sidney Morning Herald, 26 May 2007. Jim Yardley, “Rivers run black, and Chinese die of cancer,” The New York Times 12 September 2004. Staff, “South China river polluted by thallium, cadmium,” China Daily, 6 July 2013. Elizabeth Economy, The River Runs Black.

42. Michael Wines, “Smelter in China poisons more than 1,300 children” The New York Times, 21 August 2009. Staff, “Anhui battery factory poisons 200 children,” Caixin slide show, 6 January 2011 at http://english.caixin.com/2011-01-06/100214424.html.

43. Luna Lin, “China’s water pollution will be more difficult to fix than its dirty air,” China Dialogue, 17 February 2014 at https://www.chinadialogue.net/blog/6726-China-s-water-pollution-will-be-more-difficult-to-fix-than-its-dirty-air-/en. Zhang Chun, “China ‘lacks experience’ to clean up its polluted soil,” China Dialogue, 14 April 2014 at https://www.chinadialogue.net/article/show/single/en/6897-China-lacks-experience-to-clean-up-its-polluted-soil.

44. Matt Currell, “Losing lifeblood in north China,” China Dialogue, September 17, 2010 at https://www.chinadialogue.net/article/show/single/en/3823-Losing-lifeblood-in-north-China.

45. Economy, “The great leap backwards,” Foreign Affairs, September-October 2007.

46.Reuters in Beijing, “China says more than 3m hectares of land too polluted to farm,” South China Morning Post, 30 December 2013.

47. Ministry of Environmental Protection, Huanjing baohu bu he guotu ziyuan bu fabu quanguo turang wuran zhuangkuang diaocha gongbao (Environmental Protection Ministry and Land and Natural Resources Ministry release countrywide soil contamination condition survey bulletin), 17 April 2014 at http://www.mep.gov.cn/gkml/hbb/qt/201404/t20140417_270670.htm.

48. See Sam Geal and Elizabeth Hilton, “Culture of secrecy behind China’s pollution crisis,” and Angel Hsu and Andrew Moffat, ” China’s soil pollution crisis still buried in mystery,” both in Pollution and Health in China: Confronting the Human Crisis, special issue of China Dialogue, 9 September 2014 at https://s3.amazonaws.com/cd.live/uploads/content/file_en/7289/chinadialogue_health_journal.pdf.

49.Xinhua, “More than 40 percent of China’s arable land degraded,” China Daily, 5 November 2014.

50. Liu Hongqiao, “The polluted legacy of China’s largest rice-growing province,” China Dialogue, 30 May 2014 at https://www.chinadialogue.net/article/show/single/en/7008-The-polluted-legacy-of-China-s-largest-rice-growing-province. Zheng Yesheng and Qian Yihong, Shendu Youhuan  –  Dangdai Zhongguo de Kechixu Fazahan Wenti (Grave Concerns: Problems of Sustainable Development for China) (Beijing: China Publishing House 1998), pp. 8-10.

51. John Dearing, “China’s polluted soil and water will drive up world food prices,” China Dialogue, 3 March 2015 at https://www.chinadialogue.net/article/show/single/en/7768-China-s-polluted-soil-and-water-will-drive-up-world-food-prices.

52. For example, antebellum southern planters produced cotton, tobacco, sugar and indigo entirely for market, indeed for the world market. But they did so with slave labor. This hybrid capitalist-slave mode of production was obviously radically different than production for a market based on free labor in the North and it had broad implications for productivity, economic development, and more. It gave their economy an entirely different character, dynamic and trajectory, and it had profound economic, social, political and psychological consequences, many of which we still deal with today.

53. James McGregor, No Ancient Wisdom, No Followers: the Challenges of Chinese Authoritarian Capitalism (Westport: Prospecta Press: 2012), p. 4-5, 16-19 (quote from p. 57) and the sources cited therein, including the head of the State-owned Assets Supervision and Administration Commission (SASAC).

54.No Ancient Wisdom, p. 2

55. Andrew Szamosszegi and Cole Kyle, “An Analysis of State-owned Enterprises and State Capitalism in China,” October 26, 2011. US-China Economic and Security Review Commission (USCC), pp. 21-22 at http://origin.www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf.On state control of the banking sector, see Carl E. Walter and Fraser J.T. Howie, Red Capitalism: The Fragile Foundations of China’s Extraordinary Rise (Singapore: Wiley & Sons, 2012), pp. 31-33 and passim. Also: Henry Sanderson and Michael Forsythe, China’s Superbank (Singapore: Wiley & Sons, 2013). Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge: MIT 2007), pp. 190, 299-304, 325.

56. Thus with respect to the banking sector, Szamosszegi and Cole write that: “The state banking sector dominates the landscape in China and tends to favor SOEs at the expense of private sector firms. Second, SOEs are in general an important instrument of government policy. The government uses SOEs to facilitate structural change in the Chinese economy, to acquire technology from foreign firms, and to secure raw material sources from beyond China’s borders. For example, in 2009, the government turned to its SOEs and state‐owned banks to provide stimulus to the domestic economy. Third, the CCP and SASAC maintain important influence over the executives of SOEs. These executives face two sets of incentives. On the one hand, the entities they control are supposed to be profitable, and SOE executives are now rewarded based on financial performance. On the other hand, the appointments of top executives to SOE management and their future career paths upon leaving the SOE are determined by the Central Organization Department of the CCP. Thus, SOE executives have an incentive to follow the government’s policy guidance. Recent examples, as well as financial disclosure documents, indicate that if maximizing shareholder value conflicts with state goals, SOEs and their wholly owned subsidiaries are likely to pursue the goals of the state.” “An Analysis of State-owned Enterprises” op.cit. p. 3.

57. McGregor, No Ancient Wisdom, p. 59.

58. Walter and Howie, Red Capitalism, p. 24, 187.

59. Ben Blanchard, “Chinese billionaire mining tycoon Liu Han is executed over his links to a ‘mafia-style’ gang,” Sydney Morning Herald, 9 February 2015. Most accounts say that his real crime was his link to the Zhou Yongkang clique.

60. Becker, City of Heavenly Tranquility, pp. 287-289.

61. Sydney University’s Kerry Brown says the number of “high-level cadres” (gaoji ganbu) who run the ministries, the state conglomerates and the administration, all concentrated in Beijing, total no more than 2,562, which means, he says, that China is effectively “run by group of people that is smaller than most villages in Europe.” The New Emperors: Power and the Princelings in China, New York 2014, pp. 20-21.

62. Richard McGregor, The Party, New York 2010. Carl E. Walter and Fraser J.T. Howie, Red Capitalism, Singapore 2012, pp. 22-25 and passim.

63. Eg. Shi Jiangtao, “Struggle for supremacy by party factions now on display,” South China Morning Post, 13 October 2012. Matthew Robertson, “China’s ‘hatchet man’ set to be purged in party struggle,” Epoch Times, 30 May-3 June 2014 (reporting a rumored threat to Xi Jinping’s life by the Bo Xilai faction). Teddy Ng, “Rising star Li Yuanchao forges ties with all political factions in China, South China Morning Post,1 October 2012.

64. Quoted in Bloomberg News, “Xi Jinping millionaire relations reveal fortunes of elite,” 29 June 2012.

65. Quoted in David Barboza, “The Corruptibles,” The New York Times, 3 September 2009. See also again, Robertson, “China’s ‘Hatchet Man’ set to be purged … ” in op cit.

66. Outgoing Premier Wen Jiabao, incoming Premier Xi Jinping, and other wealthy princelings were profiled in Bloomberg News and The New York Times, in 2012 and 2013 – which got both papers shut down in China and their reporters denied visa renewals in 2013. See “Heirs of Mao’s comrades rise as new capitalist nobility” and links to related stories in Bloomberg News, 26 December 2012 at http://www.bloomberg.com/news/2012-12-26/immortals-beget-china-capitalism-from-citic-to-godfather-of-golf.html. Also again Richard McGregor, The Party and Kerry Brown, The New Emperors.

67. David Barboza, “Billions in hidden riches for family of Chinese leader,” The New York Times, 25 October, 2012.

68.Zhongguode xianjing (China’s Pitfalls) (Hong Kong: Mingjing chubanshe, 1997)

69. “Heirs of Mao’s comrades rise as new capitalist nobility,” op cit. p. 11.

70. Ex-Premier Zhu Rongji, quoted in Richard McGregor, The Party, p. 45.

71. Quoted in Walter and Howie, Red Capitalism, p. 23. In October 2014, one high-level cadre in the energy ministry caught up in Xi Jinping’s anticorruption sweep, had stashed away 200 million yuan (HK$252 million) in banknotes in one of his apartments. The pile of banknotes weighed more than 2.3 tons.

72. Quoted in Richard McGregor, The Party, pp. 140-41.

73. “Heirs of Mao’s comrades rise as new capitalist nobility,” Bloomberg News, 26 December 2012 p. 3 at
http://www.bloomberg.com/news/2012-12-26/immortals-beget-china-capitalism-from-citic-to-godfather-of-golf.html. Further citations below are from articles in this collection.

74. Yang Dali and Dai Qing were quoted in Bloomberg News, “Heirs” op cit. pp. 5,6 and 10.

75.Bloomberg News, “Heirs,” pp. 1,5.

76. Chinese fly cash to North America, by the suitcase,” The Wall Street Journal, 2 January 2013. Shen Ming, “Chinese military officers secretly moving money offshore,” Epoch Times, 28 June 2012. Benjamin Robertson, “US1.25 trillion moved out of mainland China illegally in 10 years, says report,” South China Morning Press, 16 December 2014.

77. James Ball and Guardian US Interactive Team, “China’s princelings storing riches in Caribbean offshore haven,” The Guardian, 21 January 2014, reporting on the findings of a two-year reporting effort by the International Consortium of Investigative Journalists (ICIJ). Bloomberg News, “Heirs” p. 6.

78. “China murder suspect’s sisters ran $126 million empire,” Bloomberg News, 13 April 2012.

79. On SOE restructuring and growth of the planned economy, see Peter Nolan, Transforming China: Globalization, Transition and Development, London 2004, chapter 5.

80. James T. Areddy and Laurie Burkitt, “Shake-up at China firm shows reach of graft crackdown,” The Wall Street Journal, 23 April 2014.

81. So for example, with respect to China’s investment in mines in Zambia, Professor Ching Kwan Lee quotes a Chinese mining executive who says “We don’t need to maximize profit, but we need to make some profit. The state won’t support us if we make losses year after year.” Lee adds, “between profit optimization and profit maximization lies the space for achieving other types of return – political influence and access to raw materials.”  “The spectre of global China,” New Left Review 2/89, September-October 2014, p. 36.

82. Thus James McGregor writes: “Despite their chronically imprudent lending habits, SOE banks are kept afloat – and reap huge profits to boot – through government-set interest rates. With a ceiling on the interest rates for deposits and a floor on lending rates, China’s banks have enjoyed a comfortable spread of about three percentage points, which guarantees profits.” No Ancient Wisdom, p. 65.

83. Long Youngtu, China’s chief negotiator at the WTO, quoted in James McGregor, No Ancient Wisdom, p. 5 (my italics).

84. Liu Jianqiang, “China’s environment ministry an “utter disappointment,” China Dialogue, March 7, 2013 at https://www.chinadialogue.net/article/show/single/en/5788-China-s-environment-ministry-an-utter-disappointment-.  Tang Hao, “China’s food scares show the system is bust,” China Dialogue, 31 August 2012, at https://www.chinadialogue.net/article/show/single/en/5142-China-s-food-scares-show-the-system-is-bust.

85. See Brian Tilt, The Struggle for Sustainability in Rural China, New York 2010, chapter 6. Han Wei, “Officials failing to stop textile factories dumping waste in Qiantang River,” China Dialogue, 1 August 2013 at https://www.chinadialogue.net/article/show/single/en/5589-Officials-failing-to-stop-textile-factories-dumping-waste-in-Qiantang-River.

86. Liu Qin, “China’s environment ministry launches anti-graft reforms,” China Dialogue, 11 March, 2015.

87. John McGarrity, “One year on after “war” declared on pollution, Beijing air scarcely improves,” China Dialogue, 2 February 2015. https://www.chinadialogue.net/blog/7695-One-year-on-after-war-declared-on-pollution-Beijing-air-scarcely-improves/en. Xu Nan, “China’s noxious air ‘as deadly as smoking: study,” China Dialogue, 4 February 2015 at https://www.chinadialogue.net/blog/7697-China-s-noxious-air-as-deadly-as-smoking-study/en.

88. Lu Hongqiao, “China set to miss safe rural drinking water targets,” China Dialogue, March 5, 2015 at https://www.chinadialogue.net/article/show/single/en/7762-China-set-to-miss-safe-rural-drinking-water-targets. Huang Hao, “Village water supplies in China hit by scarcity and contamination,” China Dialogue, March 5, 2014 at https://www.chinadialogue.net/article/show/single/en/7209-Village-water-supplies-in-China-hit-by-scarcity-and-contamination. Abigail Barnes, “China’s bottled water: the next health crisis? China Dialogue, July 22, 2014 at https://www.chinadialogue.net/article/show/single/en/7152-China-s-bottled-water-the-next-health-crisis-.

89. Judith Shapiro writes that “There are competing and conflicting emphases on growth, government legitimacy, clean development, and stability, creating a confusing policy-making landscape in which actors sometimes work at cross purposes or with uncertain lines of responsibility … Economic realities and concerns about unemployment and social unrest often push the government away from environmentally friendly action. The Ministry of Environmental Protection is hardly in a position to close the enormous state-run iron and steel plants in the great north-eastern rust belt, where unemployment is exceedingly high and shutdowns would mean even more job losses.” Shapiro, China’s Environmental Challenges, Cambridge UK 2012, pp. 69-70.

90.China Airborne, p. 99.

91. China’s Communist Party currently counts around more than 85 million members. Last year, the government reported that more than 71,000 cadres were “investigated for violating Party regulations.” Of these only 23,000 “received Party or administrative penalities,” mostly censures, and comparatively few were actually sent to prison or are executed. Pretty good odds. “Disciplinary watchdogs seek to fight factionalism within the Party,” People’s Daily, 12 January 2015 at http://en.people.cn/n/2015/0112/c90785-8834538.html.

92. Barmé is quoted in Andrew Jacobs, “In China’s antigraft campaign, small victories and bigger doubts,” The New York Times, 16 January 2015.

93. Michael Forsythe, “As China’s leader fights graft, his relatives shed assets,” The New York Times, 17 June 2014.

94. “China’s selective crackdown,” 17 January 2015.

95. Alice Yan, “Don’t go back on your old ways when our backs are turned, CCDI warns cadres,” South China Morning Post, 5 November 2014.

96. Andrea Chen, “Some cadres shrugging off anticorruption campaign, graft-buster warns,” South China Morning Post, 25 October 2014.

97. Jane Perlez, “Corruption in military poses a test for China,” The New York Times, 14 November 2012.

98. On this see my “Capitalism and the destruction of life on earth: six theses on saving the humans” Real-world Economics Review, July 2013 at http://www.paecon.net/PAEReview/issue64/Smith64.pdf and my “Climate crisis, the deindustrialization imperative, and the jobs vs. environment dilemma” in Truthout, 17 November, 2014 at http://www.truth-out.org/news/item/27226-climate-crisis-the-deindustrialization-imperative-and-the-jobs-vs-environment-dilemma.

99. IPCC, Climate Change 2014: IPCC Fifth Assessment Synthesis Report (November 2014) at http://www.ipcc.ch/report/ar5/syr/. James Hansen, Storms of My Grandchildren, New York 2009.

100. Ecofys, WWF Report 2015, It’s Time to peak: why China’s corporate sector needs to set ambitious greenhouse gas reduction targets,” (WWF, February 2015) p. 11 at http://www.ecofys.com/files/files/wwf-ecofys-2015-it-is-time-to-peak.pdf.

101. Eg. Chrystia Freeland, “The triumph of the family farm,” The Atlantic, 13 June 2012. Also: “Rebuilding America’s Economy with Family Farm-centered food systems,” n.a., Farm Aid, 2013 at http://www.farmaid.org/makethecase. Alan Bjerga, “Organic lets family farms prosper in industrial-agriculture era,” Bloomberg News, 28 June 2012 at http://www.bloomberg.com/news/2012-06-28/organic-lets-family-farms-prosper-in-industrial-agriculture-era.html.

102. Eg. He Guangwei, “China faces long battle to clean up its polluted soil,” He Guangwei, “The victims of China’s soil pollution crisis, Chu Han, “The human cost of living in the ‘mercury capital’ of China [Guizhou province],” Angel Hu and Andrew Moffet, “China’s soil pollution crisis still buried in mystery,” all in Pollution and Health in China: Confronting the Human Crisis, special issue of China Dialogue, September 9, 2014 (in Chinese with some English summaries) at https://s3.amazonaws.com/cd.live/uploads/content/file_en/7289/chinadialogue_health_journal.pdf.

103. “Almost half of wealthy Chinese want to leave, study shows,” The Wall Street Journal, 5 September 2014. Benjamin Carlson, “As war on corruption mounts, China’s rich flee to America, Global Post, 9 February 2014. John Kennedy, “China has at least 1.18 million ready-to-flee ‘naked officials,’ anticorruption rant reveals,” South China Morning Post, 27 February 27, 2013 at  http://www.scmp.com/comment/blogs/article/1159628/china-has-least-118-million-ready-flee-naked-officials-anti-corruption.

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Sabesp considera fim do Cantareira e corre contra o tempo (Exame)

JC, 5201, 22 de junho de 2015

A crise da água em São Paulo ainda não acabou

Depois que a seca do ano passado deixou São Paulo à beira de um racionamento severo de água, as chuvas do final do verão deram à Sabesp – a grande culpada pela crise, segundo autoridades municipais – uma segunda chance para aumentar investimentos em infraestrutura.

Com o início da estação seca, há uma corrida contra o tempo para desviar rios e conectar sistemas antes que os já prejudicados reservatórios de água fiquem baixos novamente.

A corrida contra o tempo ressalta a situação precária da maior metrópole da América do Sul após duas décadas sem nenhum grande projeto hídrico.

Os reservatórios ainda não se recuperaram da seca do ano passado e os meteorologistas estão prevendo meses mais quentes à frente por causa do fenômeno climático El Niño.

“A infraestrutura não foi a prioridade da Sabesp nos últimos anos. Eles não adotaram medidas para evitar a crise”, disse Pedro Caetano Mancuso, diretor do Centro de Referência em Segurança da Água da Universidade de São Paulo.

“Embora a Sabesp esteja disposta a fazer a lição de casa agora, a questão é se ela será concluída ou não a tempo de evitar um problema ainda maior”.

A Sabesp – empresa sob controle estatal -,disse que foi a severidade da seca do ano passado, e não a falta de investimentos em infraestrutura, a causa da crise.

“Nós estávamos preparados para uma seca tão ruim ou pior que a de 1953”, quando a Sabesp enfrentou uma crise similar, disse o presidente Jerson Kelman a vereadores, em uma audiência no dia 13 de maio.

“O que aconteceu em 2014 foi que tivemos metade do volume de chuva daquele ano. Para isso, nós não estávamos preparados”.

‘Previsível’

Em um relatório, em 10 de junho, a Câmara de Vereadores de São Paulo culpou a Sabesp pela crise que cortou o abastecimento em alguns bairros, dizendo que a seca já era previsível.

“Se a Sabesp tivesse investido os dividendos distribuídos na Bolsa de Nova York em obras para modernizar os sistemas que abastecem a capital e na manutenção da rede, não estaríamos enfrentando o racionamento travestido de redução de pressão”, disse Laércio Benko, vereador que liderou a comissão criada para investigar a escassez no abastecimento de água em São Paulo.

O maior dos projetos de infraestrutura que a Sabesp necessita neste ano para garantir o fornecimento de água potável está atrasado.

O projeto para conectar o Rio Pequeno ao reservatório da Billings, originalmente programado para ser concluído em maio, não será terminado até agosto devido a atrasos nas licenças ambientais e de uso da terra, disse a assessoria de imprensa da Sabesp em uma resposta a perguntas por e-mail. Se concluído neste ano, o pacote de cinco obras de emergência em que a Sabesp está investindo seria suficiente para evitar o racionamento, segundo a empresa.

Reservatório principal

Sem os projetos, e se as chuvas ficarem no nível do ano passado ou abaixo dele, a Sabesp projeta que seu reservatório principal – conhecido como Cantareira – poderá secar até agosto, segundo projeções internas obtidas pela Bloomberg News.

No pior cenário previsto pela empresa, poderá haver cortes no abastecimento de água na maior parte da área metropolitana de São Paulo cinco dias por semana, segundo o documento, que foi preparado como parte de um plano de contingência para São Paulo.

A Sabesp disse no e-mail que as chuvas, até agora, têm sido positivas. Para acelerar os investimentos de emergência agora, a Sabesp está cortando gastos e aumentando os preços da água. A empresa reduzirá os gastos com coleta e tratamento de esgoto pela metade neste ano, disseram executivos em uma teleconferência com investidores em abril. O aumento de tarifa reflete o “estresse financeiro” da Sabesp, disse o diretor financeiro Rui Affonso na conferência.

Queda das ações

As ações da Sabesp caíram 4,8 por cento na segunda-feira, pior desempenho das negociações em São Paulo, depois que a Federação das Indústrias do Estado de São Paulo (Fiesp) afirmou ter entrado com uma liminar para impedir o aumento de tarifa.

“A seca do ano passado será totalmente sentida nos resultados deste ano”, disse Alexandre Montes, analista de ações da Lopes Filho Associados Consultores de Investimentos, em entrevista por telefone, do Rio. “Mesmo se a seca diminuir agora, e mesmo se tudo sair bem, os resultados da Sabesp vão cair”.

(Revista Exame)

Investimento em mudanças climáticas já é realidade para as empresas (Envolverdes)

Juliana Guarexick
17/06/2015

85% declararam que o Brasil deveria adotar posições mais ambiciosas frente a outros países –

Pesquisa realizada pelo Instituto Datafolha com 100 empresas listadas entre as mil maiores do Brasil mostra que as mudanças climáticas já fazem parte da agenda de investimentos da iniciativa privada e que uma ação mais firme do governo para lidar com o desafio seria bem-vinda. Impressionantes 82% das empresas entrevistadas já estão adotando ações de mitigação ou adaptação às mudanças climáticas e 71% acham que políticas públicas relacionadas ao assunto beneficiariam a economia. O levantamento, encomendado pelo Observatório do Clima e pelo Greenpeace, teve como objetivo conhecer as ações adotadas pelas maiores empresas brasileiras sobre mudanças climáticas.

Os números mostram que os empresários vêem as medidas de mitigação e adaptação como algo positivo para os negócios, redundando em impactos financeiros positivos para 73% deles. A pesquisa também mostra que não há uma bala mágica para resolver o problema – as iniciativas em curso citadas foram bastante variadas e vão desde soluções para reduzir o consumo de água e energia (40%) a ações para mitigar poluentes (23%) e campanhas de educação e conscientização (12%). Entre os que estão focando na questão energética, 15% já estão utilizando energias renováveis.

“Dentro do tema ‘mudanças climáticas’, a preocupação com energia mostrou-se relevante”, destaca Carlos Rittl, secretário-executivo do Observatório do Clima. “Na pesquisa, ela aparece tanto quando falamos dos planos das empresas como quando perguntamos ao empresário o que ele acha que o governo deve fazer”, completa.

Perguntados sobre ações que o governo pode adotar para lidar com as mudanças climáticas que favorecem a inovação, os investimentos de longo prazo e retornos financeiros para as empresas, os entrevistados citaram 28 iniciativas. Entre as mais mencionadas estão a adesão à energia limpa, como solar e eólica (18%), investimentos em novas tecnologias para diminuir poluentes (12%), o incentivo tributário à preservação ambiental (12%) e ações de conservação do meio ambiente (12%). Quando questionados sobre as ações que o governo pode adotar em relação às mudanças que podem trazer retornos financeiros para o país, a energia renovável aparece com 20% de menções, atrás apenas dos investimentos em tecnologia (32%).

Para 71% dos entrevistados, as ações do governo em relação às mudanças climáticas beneficiariam a economia. Tanto que 85% declararam que o Brasil deveria adotar posições mais ambiciosas frente a outros países para lidar com as mudanças climáticas. A realidade, no entanto, não condiz com essa percepção: para 46% dos entrevistados, as iniciativas governamentais em relação ao tema são ruins ou péssimas. Para apenas 4% elas são boas ou ótimas. As opiniões dos empresários espelham as da população brasileira, avaliadas numa pesquisa anterior do Datafolha: para 48% dos entrevistados, o governo faz muito pouco contra a mudança climática.

A nova pesquisa identificou também que o tema gera algum temor: dois terços da amostra (66%) acham que os impactos das mudanças climáticas sobre a economia serão muito negativos. As principais preocupações são com a produção (queda na produtividade, diminuição no volume de vendas etc.), com o fornecimento de matérias-primas (aumento nos custos, redução da oferta) e com a produção de energia. Juntos, esses itens foram citados por 78% dos entrevistados. “O empresário já percebeu que as mudanças do clima afetam os negócios. Se eles enfrentarem o problema, pode haver impacto positivo. Se não fizerem nada, as mudanças climáticas poderão prejudicar sua atividade”, sintetiza Ricardo Baitelo, coordenador de Clima e Energia do Greenpeace Brasil.

A pesquisa foi realizada entre 17 de março e 23 de abril de 2015 por meio de entrevistas telefônicas com os cargos executivos responsáveis pelas áreas de planejamento e/ou investimentos de cem empresas que integram a lista das mil maiores corporações que atuam no Brasil segundo o ranking do Valor Econômico. Três quartos da amostra ouvida eram de nível de diretoria. O levantamento contemplou organizações dos mais variados setores econômicos: comércio varejista, alimentos, agropecuária, metalurgia e mineração, química e petroquímica, eletroeletrônica, construção e engenharia, comércio atacadista, água e saneamento, veículos e peças, transporte e logística, plásticos e borracha, papel e celulose, mecânica, energia elétrica, TI e telecom, têxtil e vestuário, petróleo e gás, açúcar e álcool, materiais de construção, fumo, educação e ensino. (#Envolverde)

Hardly the soft sciences (The Hindu)

ROHAN D’SOUZA

June 10, 2015

The social sciences and humanities will be critical in helping us understand what the sciences will become in the future

DISMANTLING THE OLD:“There is an urgent need to initiate a generational change in India’s university leadership.” Picture shows graduation day in the University of Hyderabad.— PHOTO: MOHAMMED YOUSUF

DISMANTLING THE OLD:“There is an urgent need to initiate a generational change in India’s university leadership.” Picture shows graduation day in the University of Hyderabad.— PHOTO: MOHAMMED YOUSUF

Common sense has defeated the social sciences and humanities in India. As the rush for college seats begin, parents worry if there are any viable options outside of medicine, engineering, management or studying abroad. What good would a B.A. in history or sociology do other than a roll-of-the-dice chance at the civil services? As a historian, I have often faced blunt questions: what can a job prospect possibly be if you spend three/four years learning the causes of Mughal decline or the Permanent Settlement of 1793? This ably describes why most people see the social sciences, with the exception of economics, as a losing proposition. But has the tide begun to turn?

One of the most significant bursts of funding in the social sciences and the humanities occurred during the Cold War years. The United States, keen as it was then to establish spheres of influence, invested heavily to learn about how societies understood themselves and which ideology appealed to what individual. The money ran into hundreds of millions of dollars with the Ford Foundation, the Rockefeller Foundation and the Carnegie Corporation of New York pulling funds from deep pockets. The Social Science Research Council and the American Council of Learned Societies were other key players who helped sponsor innumerable workshops, conferences and academic seminars. These efforts resulted not only in a vast number of publications, but helped develop many enduring concepts which arguably continue to explain the world we live in. Scores of scholars, research communities and university departments, in being caught up in strategic concerns, ended up harnessing the social sciences and humanities to understand how nations and societies dealt with authority, ideologies, politics and power. Hardly the ‘soft sciences’!

With the fall of the Berlin Wall and the collapse of the Soviet Union, funding for the Area Studies expectedly dried up. On the other hand, academic explorations under the rubrics of nation-making, democracy, globalisation and multiculturalism could hardly wield the previous heft.

In a study published in Research Trends (2013), Gali Halevi and Judit Bar-Ilanit point out that globally the financing for humanities sharply fell between 2009 and 2012. In part, while the 2008 financial crisis could be blamed for the sudden yanking of the proverbial rug, the loss in the lustre of the social sciences had already begun by the mid-1990s following the steady commercialisation of education. Unsurprisingly, student debt and education loans fell harder on those in the social sciences, arts and humanities than they did on those pursuing vocational skills such as engineering. At heart, however, this big turn against the ‘soft sciences’ was what Bill Reading described, in his classic The University in Ruins (1996), as the sustained attempt to transform the university from previously serving as an “ideological arm of the nation-state” to instead now being redesigned as a “consumer oriented corporation”. By morphing the citizen-student into a consumer-student (weighed in by debt), the actual rout of the social sciences was announced.

Reduced funding

It is amidst the aftershocks of this change in the meaning of education that we should make sense of Ella Delany’s startling report in The New York Times (December, 2013) in which she catalogues a growing disquiet against the humanities and social sciences. In 2012, a task force convened by Governor Rick Scott of Florida recommended that students majoring in liberal arts and social science subjects be made to pay higher tuition fees as they were in “nonstrategic disciplines”. Australian Prime Minister Tony Abbott in 2013 “reprioritised” 103 million Australian dollars from research in the humanities into medical research. In Britain, Robin Jackson, chief executive of the British Academy for the humanities and social sciences, in 2011 announced that direct government funding for humanities had been withdrawn and was to be replaced by tuition fees “backed up by government loans”.

Is this total defeat? Ironically, just as the social sciences and the humanities are being written off in many countries, there have emerged vigorous calls for resituating its importance. Notably, climate change research and global environmental change programmes the world over are stridently advocating for what they term as the urgent need for “integrated analyses”. It is imperative, they argue, that the natural sciences be drawn into productive dialogues with the social sciences in order to explore critical themes such as global sustainability and green development.

One of the most significant international science initiatives in recent times called the Future Earth has, in fact, in their ‘Strategic Research Agenda’ (2014) urged for initiating a new generation in interdisciplinary and integrated research which can grapple with the realities of a warming planet. The initiative, however, is not entirely novel. For decades now, interdisciplinary efforts such as science studies, environmental history and full-fledged post graduate programmes under the rubric of science-technology-environment-medicine (STEM) have successfully broken down the hard divides between the natural sciences, social sciences and the humanities. These interdisciplinary initiatives have also compellingly revealed that the natural sciences are ideologically driven and are often oriented by political practice. In effect, the social sciences and humanities will be critical to help us understand what the sciences will become in the future. Significantly, given that an entirely new script for economic behaviour is being drafted in the context of climate change, these conversations have acquired pressing strategic consequences for the developing world.

The Indian scenario

The university system in India is, unfortunately, ill-prepared to take up these challenges. In part, it has put all its research and teaching eggs on the vice-chancellor system for administering higher education. The vice-chancellorship, as an organisational logic, is an ailing legacy and remains a bad marriage between the Mughal Jagirdari system and the rigidity of the British colonial bureaucracy. The higher you go up the administrative ladder, there is less transparency, accountability and intellectual oxygen.

There is an urgent need to initiate a generational change in our university leadership, with fresh blood and new ideas brought in with rigorous metrics to judge the performance and contributions at the very top of the administrative chain. If the social sciences and the humanities in India are to be cutting edge by providing knowledge for the future, then the old has to be entirely dismantled.

(Rohan D’Souza is associate professor at the Graduate School of Asian and African Area Studies, Kyoto University.)

The natural sciences should be drawn into dialogues with the social sciences to explore critical themes such as global sustainability

Explosive intervention by Pope Francis set to transform climate change debate (The Guardian)

The most anticipated papal letter for decades will be published in five languages on Thursday. It will call for an end to the ‘tyrannical’ exploitation of nature by mankind. Could it lead to a step-change in the battle against global warming?

Pope Francis on a visit to the Philippines in January.

Pope Francis on a visit to the Philippines in January. Photograph: Johannes Eisele/AFP/Getty Images

Pope Francis will call for an ethical and economic revolution to prevent catastrophic climate change and growing inequality in a letter to the world’s 1.2 billion Catholics on Thursday.

In an unprecedented encyclical on the subject of the environment, the pontiff is expected to argue that humanity’s exploitation of the planet’s resources has crossed the Earth’s natural boundaries, and that the world faces ruin without a revolution in hearts and minds. The much-anticipated message, which will be sent to the world’s 5,000 Catholic bishops, will be published online in five languages on Thursday and is expected to be the most radical statement yet from the outspoken pontiff.

However, it is certain to anger sections of Republican opinion in America by endorsing the warnings of climate scientists and admonishing rich elites, say cardinals and scientists who have advised the Vatican.

The Ghanaian cardinal, Peter Turkson, president of the Vatican’s Pontifical Council for Justice and Peace and a close ally of the pope, will launch the encyclical. He has said it will address the root causes of poverty and the threats facing nature, or “creation”.

In a recent speech widely regarded as a curtain-raiser to the encyclical, Turkson said: “Much of the world remains in poverty, despite abundant resources, while a privileged global elite controls the bulk of the world’s wealth and consumes the bulk of its resources.”

The Argentinian pontiff is expected to repeat calls for a change in attitudes to poverty and nature. “An economic system centred on the god of money needs to plunder nature to sustain the frenetic rhythm of consumption that is inherent to it,” he told a meeting of social movements last year. “I think a question that we are not asking ourselves is: isn’t humanity committing suicide with this indiscriminate and tyrannical use of nature? Safeguard creation because, if we destroy it, it will destroy us. Never forget this.”

The encyclical will go much further than strictly environmental concerns, say Vatican insiders. “Pope Francis has repeatedly stated that the environment is not only an economic or political issue, but is an anthropological and ethical matter,” said another of the pope’s advisers, Archbishop Pedro Barreto Jimeno of Peru.

“It will address the issue of inequality in the distribution of resources and topics such as the wasting of food and the irresponsible exploitation of nature and the consequences for people’s life and health,” Barreto Jimeno told the Catholic News Service.

He was echoed by Cardinal Oscar Rodríguez Maradiaga of Honduras, who coordinates the Vatican’s inner council of cardinals and is thought to reflect the pope’s political thinking . “The ideology surrounding environmental issues is too tied to a capitalism that doesn’t want to stop ruining the environment because they don’t want to give up their profits,” Rodríguez Maradiaga said.

The rare encyclical, called “Laudato Sii”, or “Praised Be”, has been timed to have maximum public impact ahead of the pope’s meeting with Barack Obama and his address to the US Congress and the UN general assembly in September.

It is also intended to improve the prospect of a strong new UN global agreement to cut climate emissions. By adding a moral dimension to the well-rehearsed scientific arguments, Francis hopes to raise the ambition of countries above their own self-interest to secure a strong deal in a crucial climate summit in Paris in November.

“Pope Francis is personally committed to this [climate] issue like no other pope before him. The encyclical will have a major impact. It will speak to the moral imperative of addressing climate change in a timely fashion in order to protect the most vulnerable,” said Christiana Figueres, the UN’s climate chief, in Bonn this week for negotiations.

Francis, the first Latin American pope, is increasingly seen as the voice of the global south and a catalyst for change in global bodies. In September, he will seek to add impetus and moral authority to UN negotiations in New York to adopt new development goals and lay out a 15-year global plan to tackle hunger, extreme poverty and health. He will address the UN general assembly on 23 September as countries finalise their commitments.

However, Francis’s radicalism is attracting resistance from Vatican conservatives and in rightwing church circles, particularly in the US – where Catholic climate sceptics also include John Boehner, Republican leader of the House of Representatives, and Rick Santorum, a Republican presidential candidate.

Earlier this year Stephen Moore, a Catholic economist, called the pope a “complete disaster”, saying he was part of “a radical green movement that is at its core anti-Christian, anti-people and anti-progress”.

Moore was backed this month by scientists and engineers from the powerful evangelical Cornwall Alliance for the Stewardship of Creation, who have written an open letter to Francis. “Today many prominent voices call humanity a scourge on our planet, saying that man is the problem, not the solution. Such attitudes too often contaminate their assessment of man’s effects on nature,” it says.

But the encyclical will be well received in developing countries, where most Catholics live. “Francis has always put the poor at the centre of everything he has said. The developing countries will hear their voice in the encyclical,” said Neil Thorns, director of advocacy at the Catholic development agency, Cafod. “I expect it to challenge the way we think. The message that we cannot just treat the Earth as a tool for exploitation will be a message that many will not want to hear.”

The pope is “aiming at a change of heart. What will save us is not technology or science. What will save us is the ethical transformation of our society,” said Carmelite Father Eduardo Agosta Scarel, a climate scientist who teaches at the Pontifical Catholic University of Argentina in Buenos Aires.

Earlier popes, including Benedict XVI and John Paul II, addressed environmental issues and “creation”, but neither mentioned climate change or devoted an entire encyclical to the links between poverty, economics and ecological destruction. Francis’s only previous encyclical concerned the nature of religious faith.

The pontiff, who is playing an increasing role on the world stage, will visit Cuba ahead of travelling to the US. He was cited by Obama as having helped to thaw relations between the two countries, and last week met the Russian president, Vladimir Putin, to discuss the crisis in Ukraine and the threat to minority Christians in the Middle East.

The pope chose Francis of Assisi, the patron saint of animals, as his namesake at the start of his papacy in 2011, saying the saint’s values reflected his own.

Opinion: Pope Francis’s anticapitalist revolution launches on Thursday (Market Watch)

Published: June 16, 2015 10:16 a.m. ET

June 18 treatise from Pope Francis will get the ball rolling on an anticapitalist revolution

Reuters. Pope Francis hugs children during a meeting at the University of Santo Tomas in Manila.

Mark your calendar: June 18. That’s launch day for Pope Francis’s historic anticapitalist revolution, a multitargeted global revolution against out-of-control free-market capitalism driven by consumerism, against destruction of the planet’s environment, climate and natural resources for personal profits and against the greediest science deniers.

Translated bluntly, stripped of all the euphemisms and his charm, that will be the loud-and-clear message of Pope Francis’ historic encyclical coming on June 18. Pope Francis has a grand mission here on Earth, and he gives no quarter, hammering home a very simple message with no wiggle room for compromise of his principles: ‘If we destroy God’s Creation, it will destroy us,” our human civilization here on Planet Earth.

Yes, he’s blunt, tough, he is a revolutionary. And on June 18 Pope Francis’s call-to-arms will be broadcast loud, clear and worldwide. Not just to 1.2 billion Catholics, but heard by seven billion humans all across the planet. And, yes, many will oppose him, be enraged to hear the message, because it is a call-to-arms, like Paul Revere’s ride, inspiring billions to join a people’s revolution.

The fact is the pontiff is already building an army of billions, in the same spirit as Gandhi, King and Marx. These are revolutionary times. Deny it all you want, but the global zeitgeist has thrust the pope in front of a global movement, focusing, inspiring, leading billions. Future historians will call Pope Francis the “Great 21st Century Revolutionary.”

Yes, our upbeat, ever-smiling Pope Francis. As a former boxer, he loves a good match. And he’s going to get one. He is encouraging rebellion against super-rich capitalists, against fossil-fuel power-players, conservative politicians and the 67 billionaires who already own more than half the assets of the planet.

That’s the biggest reason Pope Francis is scaring the hell out of the GOP, Big Oil, the Koch Empire, Massey Coal, every other fossil-fuel billionaire and more than a hundred million climate-denying capitalists and conservatives. Their biggest fear: They’re deeply afraid the pope has started the ball rolling and they can’t stop it.

They had hoped the pope would just go away. But he is not going away. And after June 18 his power will only accelerate, as his revolutionary encyclical will challenge everything on the GOP’s free-market capitalist agenda, exposing every one of the anti-environment, antipoor, antiscience, obstructionist policies in the conservative agenda.

Just watch the conservative media explode with intense anger after June 18, screaming bloody murder, viciously attacking the pope on moral, scientific, economic and political grounds, anything. But most of all, remember, under all their anger, the pope’s opponents really are living in fear of what’s coming next. What’s dead ahead.

Here are eight of the pope’s key warning punches edited in the Catholic Climate Covenant, from his “Apostolic Exhortation,” and in London’s Guardian and other news sources, warnings on the dangerous acceleration of global-warming risks to our civilization and the environment, along with our responsibility to “safeguard Creation, for we are the custodians of Creation. If we destroy Creation, Creation will destroy us.”

For Pope Francis, there’s no room for compromise, and his enemies know it. Listen for his warnings to be expanded in his encyclical on June 18:

1. Capitalism is threatening the survival of human civilization

A “threat to peace arises from the greedy exploitation of environmental resources. Monopolizing of lands, deforestation, the appropriation of water, inadequate agro-toxics are some of the evils that tear man from the land of his birth. Climate change, the loss of biodiversity and deforestation are already showing their devastating effects in the great cataclysms we witness.”

2. Capitalism is destroying nonrenewable resources for personal gain

“Genesis tells us that God created man and woman entrusting them with the task of filling the earth and subduing it, which does not mean exploiting it, but nurturing and protecting it, caring for it through their work.”

3. Capitalism has lost its ethical code, has no moral compass

“We are experiencing a moment of crisis; we see it in the environment, but mostly we see it in man. The human being is at stake: here is the urgency of human ecology! And the danger is serious because the cause of the problem is not superficial, but profound: it’s not just a matter of economics, but of ethics.”

4. Capitalists worship the golden calf of a money god

“We have created new idols. The worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money” … Francis warns that “trickle-down economics is a failed theory” … the “invisible hand” of capitalism cannot be trusted … “excessive consumerism is killing our culture, values and ethics” … and “the conservative ideal of individualism is undermining the common good.”

5. Capitalists pursuit of personal wealth destroys the common good

Without a moral code, “it is no longer man who commands, but money. Cash commands. Greed is the motivation … An economic system centered on the god of money needs to plunder nature to sustain the frenetic rhythm of consumption that is inherent to it.” Instead, the pope calls for a “radical new financial and economic system to avoid human inequality and ecological devastation.”

6. Capitalism has no respect for Earth’s natural environment

“This task entrusted to us by God the Creator requires us to grasp the rhythm and logic of Creation. But we are often driven by pride of domination, of possessions, manipulation, of exploitation; we do not care for Creation, we do not respect it.”

7. Capitalists only see the working class as consumers and machine tools

“Nurturing and cherishing Creation is a command God gives not only at the beginning of history, but to each of us. It is part of his plan; it means causing the world to grow responsibly, transforming it so that it may be a garden, a habitable place for everyone.” Everyone.

8. Capitalism is killing our planet, our civilization and the people

Pope Francis warns that capitalism is the “root cause” of all the world’s problems: “As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems,” as environmental damage does trickle down most on the world’s poor.

Pope Francis’ historic anti-capitalism revolution is divinely inspired

Imagine Pope Francis addressing a hostile GOP controlled joint session of the U.S. Congress in September. There’s no chance of changing the minds of those hard-right politicians, all heavily dependent on fossil-fuel special-interest donations. But he’s clearly laying the groundwork for a global revolution, and his enemies know it.

And watch the ripple effect, how his historic “Climate Change Encyclical” adds fuel to the revolution after Pope Francis addresses the UN General Assembly … how the revolution picks up steam after the UN’s Paris Climate Change Conference announces a new international treaty approved by the leaders of America, China and two hundred nations worldwide … how the revolution kicks into high-gear after the pope’s message has been translated into more than a thousand languages … and broadcast to seven billion worldwide, billions who are already directly experiencing the climate change “evils that tear man from the land of his birth.”

Bottom line: Given the global reach of his encyclical, Pope Francis’ revolution will accelerate. So the GOP’s 169 climate deniers, Big Oil, the Koch Empire and all hard-right conservatives better be prepared for a powerful backlash to their resistance.

Pope Francis’s 2015 war cry is to lead a global anticapitalist revolution, a revolution leading billions to take back their planet from a fossil-fuel industry that’s lost its moral compass to the “golden calf” and is destroying its own civilization on Planet Earth.

B.C. First Nations group rejects $1-billion offer for LNG venture (Globe and Mail)

The proposed Pacific NorthWest LNG project would be built on Lelu Island, near eelgrass beds that nurture young Skeena salmon. (www.lonniewishart.com/Pacific Northwest LNG)

BRENT JANG
VANCOUVER — The Globe and Mail

Published Wednesday, May. 13 2015, 1:15 AM EDT

Last updated Wednesday, May. 13 2015, 12:40 PM EDT

Lax Kw’alaams members voting in the final of three meetings have unanimously rejected a $1-billion cash offer from Pacific NorthWest LNG, declining to give aboriginal consent sought by the project while creating uncertainty for plans to export liquefied natural gas from British Columbia’s north coast.

Globe and Mail Update May. 12 2015, 7:30 PM EDT

Video: Can Petronas overcome the opposition to its LNG project?

The lure of the money, which would be spread over 40 years, is being overshadowed by what the native group views as excessive environmental risks. The Lax Kw’alaams fear the Pacific NorthWest LNG project led by Malaysia’s Petronas will harm juvenile salmon habitat in Flora Bank, located next to the proposed export terminal site on Lelu Island.

“The terminal is planned to be located in the traditional territory of the Lax Kw’alaams,” the aboriginal group’s band council said in a statement Wednesday. “Only Lax Kw’alaams have a valid claim to aboriginal title in the relevant area – their consent is required for this project to proceed. There are suggestions governments and the proponent may try to proceed with the project without consent of the Lax Kw’alaams. That would be unfortunate.”

In the first vote in Lax Kw’alaams, 181 eligible voters unanimously stood up to indicate their opposition to the LNG proposal. In the second vote in Prince Rupert, the pattern continued as 257 eligible voters declined to provide aboriginal consent. Tuesday night’s vote at a downtown Vancouver hotel made it three unanimous rejections in a row, said Lax Kw’alaams Mayor Garry Reece.

In Vancouver, 112 Lax Kw’alaams members stood up to convey their no votes, two sources close to the native group said. Dozens of others phoned and e-mailed band officials to signal their opposition.

The voting tally “sends an unequivocal message this is not a money issue,” the Lax Kw’alaams band council said. “This is environmental and cultural.”

Mr. Reece and 12 elected councillors will make the final decision on behalf of the 3,600-member band. They left the door open for good-faith negotiations, as long as those discussions don’t involve being too close to Flora Bank.

“Lax Kw’alaams is open to business, to development and to LNG,” including talks with Pacific NorthWest LNG, according to the statement.

An estimated 800 people live in the community of Lax Kw’alaams, while roughly 1,800 are based in Prince Rupert and another 1,000 in Vancouver and elsewhere.

Besides the cash offer from Pacific NorthWest LNG, the B.C. government is willing to transfer 2,200 hectares of Crown land, valued at $108-million and spread over the Prince Rupert harbour area and other property near Lax Kw’alaams. TransCanada Corp.’s Prince Rupert Gas Transmission pipeline plan is also under scrutiny by the First Nations group.

The band council said there needs to be better co-ordination among the provincial and federal governments, with the latter represented by the Prince Rupert Port Authority (PRPA). Lelu Island and nearby waters are under jurisdiction of the port authority.

“To date, it is the considered opinion of the Lax Kw’alaams that there has been indifference to the point of negligence or willful blindness, or both, by PRPA in respect” of the Pacific NorthWest LNG project, according to the band council’s statement.

Pacific NorthWest LNG filed its environmental impact statement in February, 2014. The Canadian Environmental Assessment Agency expressed concerns to the joint venture in May, 2014. Catherine Ponsford, the agency’s project manager for the Pacific and Yukon region, emphasized the need for Pacific NorthWest LNG to take heed of what is currently the picturesque setting of Lelu Island. “The project would convert large parts of Lelu Island, an undeveloped area of 192 hectares, into an industrial site,” she wrote in a five-page letter to Michael Lambert, Pacific NorthWest LNG’s head of environmental and regulatory affairs.

Ms. Ponsford sent another letter to Mr. Lambert in February, noting that Pacific NorthWest LNG agreed to conduct “3-D sediment dispersion modelling” to study the complex system that effectively holds Flora Bank in place. Ten weeks after that letter, Pacific NorthWest LNG submitted a new study by engineering firm Stantec Inc., dated May 5, that argued the construction of a suspension bridge and trestle from Lelu Island to Chatham Sound would not have an adverse effect on salmon habitat in Flora Bank.

The Canadian Environmental Assessment Agency, which began its review of Pacific NorthWest LNG in April, 2013, is expected to rule on the project by October.

“The significance of the Skeena River estuary to area First Nations cannot be overstated,” the band council said. “Lax Kw’alaams has on staff a team of scientists directed to assess the environmental challenges posed by the existing design for movement of LNG from the terminal.”

How Facebook’s Algorithm Suppresses Content Diversity (Modestly) and How the Newsfeed Rules Your Clicks (The Message)

Zeynep Tufekci on May 7, 2015

Today, three researchers at Facebook published an article in Science on how Facebook’s newsfeed algorithm suppresses the amount of “cross-cutting” (i.e. likely to cause disagreement) news articles a person sees. I read a lot of academic research, and usually, the researchers are at a pains to highlight their findings. This one buries them as deep as it could, using a mix of convoluted language and irrelevant comparisons. So, first order of business is spelling out what they found. Also, for another important evaluation — with some overlap to this one — go read this post by University of Michigan professor Christian Sandvig.

The most important finding, if you ask me, is buried in an appendix. Here’s the chart showing that the higher an item is in the newsfeed, the more likely it is clicked on.

Notice how steep the curve is. The higher the link, more (a lot more) likely it will be clicked on. You live and die by placement, determined by the newsfeed algorithm. (The effect, as Sean J. Taylor correctly notes, is a combination of placement, and the fact that the algorithm is guessing what you would like). This was already known, mostly, but it’s great to have it confirmed by Facebook researchers (the study was solely authored by Facebook employees).

The most important caveat that is buried is that this study is not about all of Facebook users, despite language at the end that’s quite misleading. The researchers end their paper with: “Finally, we conclusively establish that on average in the context of Facebook…” No. The research was conducted on a small, skewed subset of Facebook users who chose to self-identify their political affiliation on Facebook and regularly log on to Facebook, about ~4% of the population available for the study. This is super important because this sampling confounds the dependent variable.

The gold standard of sampling is random, where every unit has equal chance of selection, which allows us to do amazing things like predict elections with tiny samples of thousands. Sometimes, researchers use convenience samples — whomever they can find easily — and those can be okay, or not, depending on how typical the sample ends up being compared to the universe. Sometimes, in cases like this, the sampling affects behavior: people who self-identify their politics are almost certainly going to behave quite differently, on average, than people who do not, when it comes to the behavior in question which is sharing and clicking through ideologically challenging content. So, everything in this study applies only to that small subsample of unusual people. (Here’s a post by the always excellent Eszter Hargittai unpacking the sampling issue further.) The study is still interesting, and important, but it is not a study that can generalize to Facebook users. Hopefully that can be a future study.

What does the study actually say?

  • Here’s the key finding: Facebook researchers conclusively show that Facebook’s newsfeed algorithm decreases ideologically diverse, cross-cutting content people see from their social networks on Facebook by a measurable amount. The researchers report that exposure to diverse content is suppressed by Facebook’s algorithm by 8% for self-identified liberals and by 5% for self-identified conservatives. Or, as Christian Sandvig puts it, “the algorithm filters out 1 in 20 cross-cutting hard news stories that a self-identified conservative sees (or 5%) and 1 in 13cross-cutting hard news stories that a self-identified liberal sees (8%).” You are seeing fewer news items that you’d disagree with which are shared by your friends because the algorithm is not showing them to you.
  • Now, here’s the part which will likely confuse everyone, but it should not. The researchers also report a separate finding that individual choice to limit exposure through clicking behavior results in exposure to 6% less diverse content for liberals and 17% less diverse content for conservatives.

Are you with me? One novel finding is that the newsfeed algorithm (modestly) suppresses diverse content, and another crucial and also novel finding is that placement in the feed is (strongly) influential of click-through rates.

Researchers then replicate and confirm a well-known, uncontested and long-established finding which is that people have a tendency to avoid content that challenges their beliefs. Then, confusingly, the researchers compare whether algorithm suppression effect size is stronger than people choosing what to click, and have a lot of language that leads Christian Sandvig to call this the “it’s not our fault” study. I cannot remember a worse apples to oranges comparison I’ve seen recently, especially since these two dynamics, algorithmic suppression and individual choice, have cumulative effects.

Comparing the individual choice to algorithmic suppression is like asking about the amount of trans fatty acids in french fries, a newly-added ingredient to the menu, and being told that hamburgers, which have long been on the menu, also have trans-fatty acids — an undisputed, scientifically uncontested and non-controversial fact. Individual self-selection in news sources long predates the Internet, and is a well-known, long-identified and well-studied phenomenon. Its scientific standing has never been in question. However, the role of Facebook’s algorithm in this process is a new — and important — issue. Just as the medical profession would be concerned about the amount of trans-fatty acids in the new item, french fries, as well as in the existing hamburgers, researchers should obviously be interested in algorithmic effects in suppressing diversity, in addition to long-standing research on individual choice, since the effects are cumulative. An addition, not a comparison, is warranted.

Imagine this (imperfect) analogy where many people were complaining, say, a washing machine has a faulty mechanism that sometimes destroys clothes. Now imagine washing machine company research paper which finds this claim is correct for a small subsample of these washing machines, and quantifies that effect, but also looks into how many people throw out their clothes before they are totally worn out, a well-established, undisputed fact in the scientific literature. The correct headline would not be “people throwing out used clothes damages more dresses than the the faulty washing machine mechanism.” And if this subsample was drawn from one small factory located everywhere else than all the other factories that manufacture the same brand, and produced only 4% of the devices, the headline would not refer to all washing machines, and the paper would not (should not) conclude with a claim about the average washing machine.

Also, in passing the paper’s conclusion appears misstated. Even though the comparison between personal choice and algorithmic effects is not very relevant, the result is mixed, rather than “conclusively establish[ing] that on average in the context of Facebook individual choices more than algorithms limit exposure to attitude-challenging content”. For self-identified liberals, the algorithm was a stronger suppressor of diversity (8% vs. 6%) while for self-identified conservatives, it was a weaker one (5% vs 17%).)

Also, as Christian Sandvig states in this post, and Nathan Jurgenson in this important post here, and David Lazer in the introduction to the piece in Science explore deeply, the Facebook researchers are not studying some neutral phenomenon that exists outside of Facebook’s control. The algorithm is designed by Facebook, and is occasionally re-arranged, sometimes to the devastation of groups who cannot pay-to-play for that all important positioning. I’m glad that Facebook is choosing to publish such findings, but I cannot but shake my head about how the real findings are buried, and irrelevant comparisons take up the conclusion. Overall, from all aspects, this study confirms that for this slice of politically-engaged sub-population, Facebook’s algorithm is a modest suppressor of diversity of content people see on Facebook, and that newsfeed placement is a profoundly powerful gatekeeper for click-through rates. This, not all the roundabout conversation about people’s choices, is the news.

Late Addition: Contrary to some people’s impressions, I am not arguing against all uses of algorithms in making choices in what we see online. The questions that concern me are how these algorithms work, what their effects are, who controls them, and what are the values that go into the design choices. At a personal level, I’d love to have the choice to set my newsfeed algorithm to “please show me more content I’d likely disagree with” — something the researchers prove that Facebook is able to do.

Here’s Why Companies Are Desperate To Hire Anthropologists (Business Insider)

MAR. 27, 2014, 4:22 PM

red associates talking

ReD Associates. A Red Associates staffer consults with a client

At a time when we’re debating the value of majoring in the humanities, major companies are increasingly hiring anthropologists.

Google, for example, hired an ethnographer to ferret out the meaning of mobile. Intel has an in-house cultural anthropologist, and Microsoft is reportedly the second-largest employer of anthropologists in the world.

So the question becomes: Why are giant corporations now seeking cultural expertise?

While most execs are masters of analyzing spreadsheets, creating processes, and pitching products, anthropologists — and other practitioners of applied social science — can arrive at customer insights that big data tends to gloss over, especially around the role that products play in people’s lives.

That information is more valuable than you might think. What customers want from a product and what companies think they want can be totally different, but it can take an anthropological lens to learn why.

Take Adidas, for example. The brand has always been associated with elite performance: Jesse Owens, Muhammad Ali, and Zinedine Zidane all wore the brand. Founded by cobbler and athlete Adi Dassler in 1948, the assumption within the company had been that people bought athletic gear to gain a competitive edge. But in the early 2000s VP James Carnes noticed something strange: He kept running into people who were jogging around the city, headed to the gym, or on their way to yoga.

While they led the active lives of potential customers, these people weren’t training for a competition. “Is yoga a sport?” Carnes asked in an offsite meeting in 2003.

Trying to figure out the disconnect, he brought in a consultancy called Red Associates, which has a client list that includes Intel, Samsung, and Carlsberg, the European beer giant. Unlike elite consulting firms such as McKinsey, Red isn’t in the business of big data and management science. Instead, it focuses on arriving at insights that can only be found through the applied liberal arts, or what it calls “the human sciences,” a strategy that is detailed in its new book “Moment of Clarity: Using the Human Sciences To Solve Your Toughest Business Problems.” That’s why most of the Red’s 70-some employees aren’t MBAs; they come from disciplines like philosophy, sociology, and anthropology.

When Red collaborated with Adidas, it trained members of Adidas’s design team in conducting anthropological research. Design staffers spent 24 hours straight with customers, eating breakfast with them, joining them on runs, and asking them why they worked out. As detailed in the Economist, a Red staffer sent disposable cameras to customers, asking them to take a picture of the reason they exercised. Thirty women responded, and 25 of them sent a picture of a little black dress.

A little black dress is quite different than a marathon finish line or gold trophy.

To use a favorite word of Red partner Christian Madsbjerg, the little black dress shows an “asymmetry.” The traditional thinking at Adidas was that people bought their gear to help them win. But after observing their behavior through the lens of anthropology, it became clear that customers wanted products to help them lead healthy lifestyles, not win competitions.

Christian Madsbjerg red associates

Christian Madsbjerg, a Red Associates partner 

How had Adidas misunderstood its customers for so long? Because Adidas executives thought they understood their customers’ motivations and lives, but they had never observed them closely enough.

Running, mountain biking, hitting the gym, going to yoga — people did these things to live healthier lives. But these “urban sports” weren’t like the traditional competitions that the company was originally organized around.

That was Carnes’s realization: His consumer’s definition of “sport” had changed, and his company had to change along with it. As described in “Moment of Clarity”:

If urban sports are on par with basketball or soccer, Adidas must then deliver on products with functionality, aesthetics, and quality. Adidas must lead, not copy in this whole new category of lifestyle sport …

The company went from being a sports brand exclusively for athletes … to becoming an inclusive brand inviting all of us to join a movement of living a healthier and better life. It went from creating corporate credos aimed at high-performance sports aficionados, such as “Impossible is nothing,” to sending democratic, yet aspirational message like “All In.”

With the help of Red, Adidas was able to understand the world of its customers. Interestingly, it’s the human sciences — literature, arts, anthropology — that allow for understanding the unique worlds that people live in. By observing people’s daily lives and the ways in which they interact with products, consultancies like Red are able to discern what products mean to customers in a way that big data can’t determine.

Why literature helps you understand customers

“If you look at launches of a new product, most of them fail,” Madsbjerg says. “That’s because people don’t understand the worlds in which we operate.”

The problem with standard corporate research, Madsbjerg says, is that it’s incredibly difficult to get around your own preconceptions. Even if your analytics are fresh, you’ll read old assumptions into them. By applying the humanities, however, you can get around them.

Say, for instance, you read an epic novel by Fyodor Dostoyevsky. In doing so, you’re not just processing words on a page, you’re beginning to understand a character’s world in Russia in a specific place, specific time, and from a specific perspective. To hear Red tell it, making an empathetic understanding of a character in a novel is very much like trying to understand a customer — Ford, after all, would be immensely interested in the world of someone buying a car.

It’s anthropological research, like Red helped the Adidas design team with, that allows for understanding the customer’s world.

This is different from the approach of most corporations, which rely on measures like surveys and focus groups. The problem with those is that people have a terrible time reporting their own preferences, Madsbjerg says. In one Swedish study, for instance, everyone reported that they were an exceptional driver, which is obviously impossible. By the same token, asking customers to tell you why they like a particular vodka doesn’t necessarily reveal their motivations.

That’s why Red emphasizes ethnographic interviewing, where you interview a subject again and again and observe them in a range of environments, looking for patterns of behavior. The long-form, in-depth research helps to reveal the worlds that people live in and their real motivations. Major insights follow — that little black dress told Adidas way more about their customers’ world than a survey ever could.

Finding an industry’s need

In another case, Red consulted for a leading pharmaceutical company specializing in diabetes. Back in the day, it was common practice for sales reps to use a “frequency and reach” strategy, talking to as many doctors as possible and pushing a brand message. The sales reps would get the time with doctors by giving them free flights and concert tickets. But then the law changed, and giving swag to doctors was made illegal. All of a sudden what was once a long courtship turned into a 90-second phone call.

In order to sell drugs in this new situation, they needed to recalibrate the conversation.

During the course of interviewing physicians, Red discovered a major concern that most doctors shared: “How do I get my patients to understand their conditions? How do I change their lifestyles?” Medication, it turned out, was the third most important aspect of treating diabetes — diet and exercise were much more vital.

As a result, Red’s associates worked with doctors to find different ways to help people change their diets, and they worked with sales reps to present that info to doctors. Since so many of the diabetes patients didn’t know how to cook, basic meal preparation became part of the sales material. Correspondingly, the pharmaceutical company became way more resonant: By understanding the world of the doctor, the brand saw a 15% increase in key indicators, like doctors’ trust.

The secret was to understand the world of the physicians and to give them what they needed, even if they didn’t consciously realize it yet.

Read more:  http://www.businessinsider.com/heres-why-companies-aredesperateto-hireanthropologists-2014-3#ixzz3Ux42Y7ks

When aid brings conflict, not relief (Science Daily)

[If economists and agronomists read sociological and anthropological assessments of development programs, this would not be a novelty to them]

Date: January 28, 2015

Source: University of Illinois College of Agricultural, Consumer and Environmental Sciences (ACES)

Summary: Although you might expect that providing aid to impoverished villages in the Philippines could only bring them relief, a study found that the villages that qualified for some forms of aid actually saw an increase in violent conflict.


Although you might expect that providing aid to impoverished villages in the Philippines could only bring them relief, a University of Illinois study found that the villages that qualified for some forms of aid actually saw an increase in violent conflict.

“Interestingly, those municipalities that were eligible to receive aid but didn’t accept it saw the largest increase in violence,” said U of I economist Ben Crost. “During what’s called the social preparation phase, it becomes known that the village is eligible for aid. Insurgent forces from the communist New People’s Army or a Muslim separatist group attack and then the village drops out of the program because they are intimidated. That’s why the places that didn’t participate saw the most violence.”

Between 2003 and 2008, more than 4,000 villages received aid through a flagship community-driven development program in the Philippines. The program used an arbitrary threshold of 25 percent to determine the poverty level at which communities qualified to receive aid.

“Only the 25 percent of the poorest municipalities qualified to receive aid,” Crost explained. “Those above the threshold are barely too rich to get it, and the others are just poor enough to get it. That means that these places should be comparable in all respects with the one exception that these slightly poorer places were much more likely to receive aid than the slightly richer places. So they were almost the same in poverty levels and in background levels of violence.” The same, until they became eligible for aid, that is.

“The way they targeted it with this arbitrary 25 percent cutoff allowed us to compare places that were just below the cutoff to places that were just above it,” Crost said.

Aid data from the World Bank were analyzed with data on conflict in the Philippines that was provided by his co-author from Stanford University, Joe Felter.

Ironically, projects anticipated to be most appreciated by the people receiving them may place them at a higher risk of being attacked. “We think that one mechanism that explains our results is that the insurgents actually tried to derail the project,” Crost said. “They didn’t want it to succeed. The insurgents had an incentive to strike and try to sabotage the program before it ever took off because its success would weaken their support in the population. We know that some of the municipalities actually dropped out of the program for this reason — because they were worried about insurgent attacks.”

Crost’s recent research is looking for ways to provide aid to those who need it that doesn’t also make them visible targets that are easy to attack. He said that because of the very public participation component in the community-driven development program, it was easier to derail.

“The aid in this case was given for improvements in infrastructure,” Crost said. “We need to find a more hidden way to give aid. One program we’re looking at now is conditional cash transfers, in which poor families get money if they do things like send their kids to school or have them vaccinated. These programs are popular in many developing countries. We have found some suggestive evidence that this kind of aid led to a decrease in violence — or at least we don’t find any evidence that it leads to an increase like we saw in this study.”

Crost said that, unfortunately, most of the evidence that has come out since this paper was published points in the same direction. “There’s evidence on U.S. food aid and on the national rural employment guarantee scheme in India, which is a huge anti-poverty program. Both of these studies found the same effect — that conflict increases in the places that get aid.”

“Aid Under Fire: Development Projects and Civil Conflict” was published in a recent issue of American Economic Review and written by Benjamin Crost, Joseph Felter, and Patrick Johnston.


Journal Reference:

  1. Benjamin Crost, Joseph Felter, Patrick Johnston. Aid Under Fire: Development Projects and Civil Conflict†American Economic Review, 2014; 104 (6): 1833 DOI: 10.1257/aer.104.6.1833

O que se pode fazer para vencer a crise da água? (A Conta d’Água)

26 de janeiro de 2015

Especialistas acreditam que medidas tomadas pela Sabesp e pelo governo do estado são insuficientes para resolver o problema do abastecimento, além de mascararem uma escassez que existe em diversas regiões do estado

Texto: Guilherme Franco e Vinicius Gomes da Revista Fórum

Fotos: Mídia NINJA

Na primeira segunda-feira (5) do ano, a Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) lançou mais uma de suas ações para combater a crise de saneamento de água: a distribuição de dispositivos de torneira para economizar água, com o mote “Se usar bem, ninguém fica sem”.

Como se ainda estivesse em 2014, a estratégia adotada para contornar o problema hídrico continuou sendo a mesma. Apelar para a boa vontade da população, atribuindo a ela, de forma direta ou indireta, parte da culpa pela crise. Há exatamente um ano, diversas cidades do litoral sul de São Paulo ficaram sem água próximo à época do Reveillon e, na ocasião, o governador de São Paulo Geraldo Alckmin (PSDB) afirmou que a falta d´água havia ocorrido por conta de um “consumo inesperado” dos turistas que desceram a serra para as festas. Afinal, por que alguém esperaria aumento de consumo em períodos de forte calor, não é mesmo?

Ao longo de todo o ano passado, enquanto os paulistas incluíam as palavras “Sistema Cantareira” e “volume morto” em seu vocabulário diário, cada vez mais regiões da capital e do interior paulista passavam a sofrer com a falta sistemática de água. A cidade de Itu, na região metropolitana de Sorocaba, foi um dos casos mais simbólicos (Veja o vídeo).

Mesmo assim, o governador sempre foi resoluto em afirmar que não faltava água no estado. No último debate entre os postulantes ao governo paulista, no início de outubro passado, Alckmin, ainda candidato à reeleição, foi taxativo: “Não falta e nem vai faltar água em São Paulo”. Porém, neste novo ano que começa a notícia é velha. Para evitar o caos no abastecimento de água, o governo tucano decidiu impor uma sobretaxa para forçar a redução do consumo da população.

Se usar bem, ninguém fica sem?

“É importante que fique claro que a responsabilidade pela crise d´água não é da população”, afirma Edson Aparecido da Silva, sociólogo e coordenador da Frente Nacional pelo Saneamento Ambiental.

O especialista é um dos muitos que não possuem dúvida alguma de que o verdadeiro motivo para a crise hídrica em São Paulo não é a falta de consciência da população no uso d’água — que de fato existe — , mas sim porque os sucessivos governadores que passaram pelo Palácio dos Bandeirantes não tomaram as medidas necessárias. “Estamos enfrentando essa crise porque o governo não fez no tempo certo as obras que deveriam ter sido feitas. Ele não iniciou uma campanha de redução de consumo com a antecedência devida”, acrescenta.

Dona Rute, moradora do Jardim Umuarama, vive um racionamento não oficializado pelo governo, que pode durar até 9 dias sem água na torneira. Foto: Sarah Pabst

Na mesma linha de Aparecido, o diretor de base do Sindicato dos Trabalhadores em Água, Esgoto e Meio Ambiente do Estado de São Paulo (Sintaema), José Mairton, afirma que o cenário atual poderia ser outro, caso o governador de São Paulo tivesse decretado o racionamento no início de 2014. “A estiagem prolongada previu a falta de água. Hoje poderíamos ter uma situação menos preocupante. A coordenação da campanha eleitoral do atual governador do PSDB não queria passar uma falha gravíssima de sua gestão anterior, sendo assim, persistiram em um erro que considero um dos maiores golpes políticos já visto”, avalia.

Mas, na contramão dos fatos, Alckmin nunca assumiu a necessidade de decretar racionamento, pelo menos assim o fez durante todo o ano de 2014 — um ano eleitoral.

De acordo com Edson Aparecido, apesar de o racionamento não ter sido decretado oficialmente, ele já existe desde que a Sabesp começou a fazer redução na pressão da rede durante o período noturno. “Quando uma pessoa chega em casa do trabalho, vai tomar banho, abre a torneira e descobre que a água só virá no dia seguinte, é um racionamento.”

Depoimentos que desmentem o discurso do governador são abundantes. “Aqui falta água faz tempo já, não é verdade que não tem racionamento em São Paulo”, relata o poeta Binho, fundador do Sarau que leva seu nome e morador do Campo Limpo, vizinho ao terminal de ônibus da região. “A gente tem que ficar de plantão o dia inteiro, esperando a água chegar. Aí corre pra encher balde, panela e guardar tudo”, conta a carroceira Dona Rute de Carvalho na favela Godoi, Jardim Umuarama — ambos na capital paulista.

Com o nível do segundo volume morte ora se estabilizando ora caindo, mas raramente subindo significativamente, e com o período de chuvas se aproximando do seu final, existe algum motivo para que o governador não decrete o racionamento?

Primeira solução para a crise: assumir que há uma crise

Pode parecer óbvio para muitos que, para se resolver um problema, precisa-se, primeiro, reconhecer que ele existe. Mas nem sempre o óbvio é assim tão evidente. “Em momentos de crise como esse, o governo estadual deveria fazer duas coisas — além de decretar oficialmente o racionamento : apresentar um “pacotão” de medidas — um plano de contingência para enfrentar essa crise que tende a se aprofundar ao fim do período de chuvas (final de março), e que esse pacote fosse precedido de um diálogo com as prefeituras diretamente envolvidas com a crise”, afirma Aparecido que cita as prefeituras das regiões metropolitanas da capital paulista e de Campinas, junto com os comitês de bacias hidrográficas do Alto Tietê e do PCJ (Piracicapa-Capivari-Jundiaí). “[Mas] o governo do Estado continua em uma linha de ação individual, autoritária, sem transparência e isso tem sido péssimo”, lamenta.

Fluxo de água na primeira cota do Volume Morto, inaugurado pelo governador Geraldo Alckmin. Foto: Mídia NINJA

Para ele, era necessária uma conversa com todas as prefeituras — com a ajuda do governo do estado e da Sabesp — para desenvolver um plano para a redução do consumo excessivo de água, além da adoção de algumas das medidas como: mapear todas as possibilidades de poços artesianos nas regiões e requisitar que o DAEE (Departamento de Águas e Energia Elétrica de São Paulo), que é o responsável pela outorga de utilização de poços, apresentasse, com as respectivas prefeituras envolvidas, uma lista com tais possibilidades, tendo como prioridade o abastecimento humano.

Outras medidas deveriam envolver também dois grandes consumidores de água no estado: os setores agrícola e industrial. Aparecido entende que o governo deveria negociar com ambos a busca por novas tecnologias para utilizar menos água em suas produções, inclusive com incentivos fiscais. “Partindo do princípio que a água tem que usar usada prioritariamente para o abastecimento humano, o governo também tinha que chamar a Fiesp [Federação das Indústrias de São Paulo] e fazer um plano de redução de consumo desse setor”, sugere o especialista.

Continuar pedindo o sacrifício da população é insuficiente

Perguntado se um, até o momento, hipotético decreto de racionamento residencial seria suficiente para aplacar a crise, Aparecido Silva é direto: não.

Segundo dados oficiais do DAEE, o setor industrial utiliza 40% de toda água disponível para abastecimento em rios, poços e reservatórios da Grande São Paulo e Baixada Santista e, como afirmou o geógrafo Wagner Ribeiro, professor titular da Universidade de São Paulo (USP), outras medidas futuras podem começar a ser discutidas, como a presença de indústrias nas regiões metropolitanas, que são áreas de escassez hídrica. “É fundamental reavaliar a conveniência de manter indústrias funcionando aqui”, acredita.

E quanto aos empregos na área industrial? O estudo mais recente da Federação das Indústrias do Estado de São Paulo, feito entre os dias 12 e 26 de maio de 2014 com 229 empresas de micro e pequeno porte (até 99 empregados), 140 de médio porte (de 100 a 499 empregados) e 44 de grande porte (500 ou mais empregados), revelou que já foram fechados mais de 3 mil postos de trabalho devido à falta de água. As demissões decorrem da redução do ritmo da produção e da queda da produtividade das indústrias pela falta do recurso hídrico. A tendência, segundo a Fiesp, é que o quadro se agrave nos próximos meses.

“A situação já estava muito ruim no que diz respeito ao crescimento econômico”, declarou Anicia Pio, gerente de meio ambiente da Fiesp. “Naturalmente, que a falta d’água teve uma parcela importante nessas demissões. A escassez de água está levando à redução da produtividade e toda vez que isso acontece é necessário cortar custos, ou seja, demitir o funcionário. A nossa perspectiva é que a nova equipe que vai assumir decrete medidas amargas, mas necessárias para que cause o mínimo de sofrimento a todos os setores”, ponderou.

O estudo ainda apontou que, em cada três empresas, duas estão preocupadas com a possível interrupção no fornecimento de água na região. A possibilidade de racionamento ainda neste ano é um fator de preocupação para 67,6% das 413 indústrias entrevistadas pelo Departamento de Pesquisas e Estudos Econômicos (Depecon) da Fiesp.

Calamidade Privada — A crise da água em Itu from A conta da Agua on Vimeo.

Anicia defende que o racionamento deveria ser decretado em todos os setores, inclusive para as empresas. “O correto é que a redução seja para todo mundo. As indústrias têm feito a lição de casa nesse sentido. Desde 2007, as empresas que captam água direto dos mananciais tiveram uma redução de mais de 50%. O setor industrial, na região metropolitana, responde por 10,6% de toda a água utilizada em termos de uso direto (rios, águas subterrâneas)”, afirma.

Além do plano de contingência, ela sugere incentivos fiscais para empresas que atuam no segmento de produtos químicos. “Quanto menos água, mais caro fica o tratamento. O governo poderia diminuir ou dar incentivo para a redução dos impostos de produtos químicos, evitando assim que a população seja obrigada a pagar mais caro pela água”, conclui.

De acordo com Aparecido, o governo do estado deveria enviar à Assembleia Legislativa de São Paulo uma lei reduzindo ou isentando de impostos da esfera estadual, como ICMS, equipamentos hidráulicos que possam reduzir o consumo de água para incentivar a indústria e o comércio — com os usuários domésticos substituindo seus equipamentos por outros de baixo consumo.

Outras medidas sugeridas pelo especialista seriam revisão de calendário de eventos nesses períodos de muito calor, onde se consome muita água; rever o calendário escolar — como campeonatos esportivos, feiras, congressos, a extensão do período de férias de verão e o cancelamento das férias de inverno, além de um controle maior para que todas as administrações, tanto estadual quanto municipal, reduzissem o uso de água na lavagem de equipamentos públicos e rega de jardins, por exemplo.

E a Sabesp?

Em 1994, a Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) se tornou uma empresa de capital misto com o argumento de que vendendo parte de suas ações seria possível arrecadar mais recursos para investir na sua função: saneamento básico e abastecimento de água.

Passados 20 anos, a empresa viu seu faturamento saltar de R$ 6 bilhões para R$ 17,1 bilhões entre 2002 e 2012. A quantia nada modesta seria mais do que o suficiente para a ampliar a rede de captação e saneamento, evitando assim qualquer problema relacionado à escassez de água. Enquanto parte da população da região metropolitana vê as torneiras secas há meses, os acionistas da Sabesp têm um faturamento nada escasso.

Festa em Nova York, seca em São Paulo: ao som de “Oh Happy Day”, diretores da Sabeps comemoraram o lucro de R$ 4,3 bilhões em 2012 Foto: Sabesp

Diante da lógica da maximização dos lucros, a companhia não tomou as medidas necessárias para conter a crise já em 2013, quando o nível dos reservatórios estava baixando. Políticas de racionamento, com penalização de quem desperdiçasse água, e de informação não foram feitas, como explica Anderson Guahy, técnico em gestão da Sabesp e diretor de formação do Sintaema.

“Em vez da empresa buscar a universalização do saneamento, levar saneamento e saúde para toda a população do estado, ter feito a manutenção das redes de água, ela vem atuando no sentido de garantir lucros cada vez maiores para seus acionistas. No que diz respeito à Sabesp, a responsabilidade pela crise deve ser direcionada à alta gestão e não aos trabalhadores concursados que vêm sendo perseguidos nos últimos meses”, diz Guahy.

Seguindo uma linha de raciocínio semelhante, Anicia Pio sugere que dois blocos de ações que deveriam ter sido executados mas não foram: obras e transparência. “Desde 2004 o governo sabia da necessidade de investir no sistema de abastecimento da Grande São Paulo, mas nada foi feito. Ao mesmo tempo, faltou autoridade e competência para chegar na população através da mídia e explicar a gravidade da situação”, afirma. O caso de 2004 a qual ela se refere é a outorga que autorizava a Sabesp a retirar água do Sistema Cantareira e fornecê-la para oito milhões de pessoas na capital paulista e na região metropolitana, ação que já constava entre as diretrizes para reduzir a demanda, pois o sistema poderia não suportar uma situação como a atual.

“E a Sabesp ainda não apresentou nenhum plano para a redução da perda de água, quer dizer continua perdendo um terço da água ainda na distribuição”, argumenta Aparecido. O especialista afirma que seria importante que ela interrompesse o pagamento de dividendos ou de juros sobre o capital próprio para os seus acionistas.

Em meio a pior crise enfrentada pelo Estado mais rico do Brasil, que possui a maior cidade da América Latina em um país que diferente de muitos outros, foi “abençoado” por inúmeros recursos hídricos disponíveis em seu território, os acionistas podem comemorar o ano que passou: somente em 2014, a Sabesp captou aproximadamente R$ 800 milhões. A população paga a conta.

Is a climate disaster inevitable? (Book Forum)

From De Ethica, Michel Bourban (Lausanne): Climate Change, Human Rights and the Problem of Motivation; Robert Heeger (Utrecht): Climate Change and Responsibility to Future Generations: Reflections on the Normative Questions; Casey Rentmeester (Finlandia): Do No Harm: A Cross-Disciplinary, Cross-Cultural Climate Ethics; and Norbert Campagna (Luxembourg): Climate Migration and the State’s Duty to Protect. Harvard’s David Keith knows how to dial down the Earth’s thermostat — is it time to try? Renzo Taddei (UNIFESP): Alter Geoengineering. Tobias Boes and Kate Marshall on writing the Anthropocene. People don’t work as hard on hot days — or on a warming planet. James West on 2014 was the year we finally started to do something about climate change. How much is climate change going to cost us? David Roberts investigates. Is a climate disaster inevitable? Adam Frank on what astrobiology can tell us about the fate of the planet. If we’re all headed for extinction anyway—AND WE ARE—won’t it be a lot more enjoyable to run out the clock with everyone looking a little more pleasant? Welcome to the latest exciting opportunity in the sights of investors: the collapse of planet Earth. You can download Tropic of Chaos: Climate Change and the New Geography of Violence by Christian Parenti (2011). You can download Minimal Ethics for the Anthropocene by Joanna Zylinska (2014).

[Emphasis added]

Oxfam: Em 2016, 1% mais ricos terão mais dinheiro que o resto do mundo (Carta Capital)

19/1/2015 – 09h33

por Redação da Carta Capital

pobreza Oxfam: Em 2016, 1% mais ricos terão mais dinheiro que o resto do mundo

A redução da pobreza é um dos eixos da agenda de desenvolvimento pós-2015. Crianças na favela de Kallayanpur, uma das favelas urbanas em Daca, Bangladesh. Foto: ONU/Kibae Park 

ONG britânica divulga dados sobre a desigualdade social no mundo para tentar guiar as discussões do Fórum Econômico Mundial

Um estudo divulgado nesta segunda-feira 19 pela ONG britânica Oxfam afirma que, em 2016, as 37 milhões de pessoas que compõem o 1% mais rico da população mundial terão mais dinheiro do que os outros 99% juntos. O relatório tem o objetivo de influenciar as discussões a serem travadas no Fórum Econômico Mundial (FEM), que reúne os ricos e poderosos no resort suíço de Davos entre 21 e 24 de janeiro.

O estudo da Oxfam é baseado no relatório anual sobre a riqueza mundial que o banco Credit Suisse divulga anualmente desde 2010. Na versão mais recente, divulgada em outubro 2014, o Credit Suisse mostrou que o 1% mais rico (com bens de 800 mil dólares no mínimo) detinha 48,2% da riqueza mundial, enquanto os outros 99% ficavam com os 51,8%. No grupo dos 99%, também há uma significativa desigualdade: quase toda a riqueza está nas mãos dos 20% mais ricos, enquanto as outras pessoas dividem 5,5% do patrimônio.

No estudo divulgado nesta segunda, a Oxfam extrapolou os dados para o futuro e indica que em 2016 o 1% mais rico terá mais de 50% dos bens e patrimônios existentes no mundo. “Nós realmente queremos viver em um mundo no qual o 1% tem mais do que nós todos juntos?”, questionou Winnie Byanyima, diretora-executiva da Oxfam e co-presidente do Fórum Econômico Mundial. Em artigo publicado no site do FEM, Byanyima afirma que o fórum tem em 2015 o duplo desafio de conciliar a desigualdade social e as mudanças climáticas. “Tanto nos países ricos quanto nos pobres, essa desigualdade alimenta o conflito, corroendo as democracias e prejudicando o próprio crescimento”, afirma Byanyima.

A diretora da Oxfam lembra que há algum tempo os que se preocupavam com a desigualdade eram acusados de ter “inveja”, mas que apenas em 2014 algumas personalidades como o papa Francisco, o presidente dos Estados Unidos, Barack Obama, e a diretora do Fundo Monetário Internacional (FMI), Christine Lagarde, manifestaram preocupação com a desigualdade social. “O crescente consenso: se não controlada, a desigualdade econômica vai fazer regredir a luta contra a pobreza e ameaçará a estabilidade global”, afirma.

A Oxfam mostra que a riqueza do 1% é derivada de atividades em poucos setores, sendo os de finanças e seguros os principais e os de serviços médicos e indústria farmacêutica dois com grande crescimento em 2013 e 2014. A Oxfam lembra que as companhias mais ricas do mundo usam seu dinheiro, entre outras coisas, para influenciar os governos por meio de lobbies, favorecendo seus setores. No caso particular dos Estados Unidos, que concentra junto com a Europa a maior parte dos integrantes do 1% mais rico, o lobby é particularmente prolífico, afirma a Oxfam, para mexer no orçamento e nos impostos do país, destinando a poucos recursos que “deveriam ser direcionados em benefícios de toda a população”.

Para a Oxfam, a desigualdade social não deve ser tratada como algo inevitável. A ONG lista uma série de medidas para colocar a diferença entre ricos e pobres sob controle, como fazer os governos trabalharem para seus cidadãos e terem a redução da desigualdade como objetivo; a promoção dos direitos e a igualdade econômica das mulheres; o pagamento de salários mínimos e a contenção dos salários de executivos; e o objetivo de o mundo todo ter serviços gratuitos de saúde e educação.

* Publicado originalmente no site Carta Capital.

A Crise de Escassez Hídrica no Brasil e seu Gerenciamento no Estado de São Paulo – Posição da Diretoria da Associação Brasileira de Engenharia Sanitária e Ambiental – Seção São Paulo (ABES-SP)

Posição da Diretoria da Associação Brasileira de Engenharia Sanitária e Ambiental – Seção São Paulo (ABES-SP) sobre a crise hídrica, apresentada no seminário “A Crise de Escassez Hídrica no Brasil e seu Gerenciamento no Estado de São Paulo”, realizado no dia 02 de dezembro de 2014, no auditório do CREA-SP:

  1. O país vive crise de escassez hídrica de dimensões inéditas e não antecipadas pelas previsões climáticas. A crise atinge um vasto território do Sudeste e Nordeste brasileiros, com forte incidência em São Paulo, e afeta os diversos usos da água, revelando conflitos que precisam ser tratados de imediato. Embora não haja precisão nas previsões meteorológicas, é provável que seja de grande duração, requerendo estratégia de longo prazo para seu enfrentamento.
  1. A crise vem demandando ações emergenciais para assegurar a continuidade do abastecimento público, que necessitam ser reforçadas e adequadamente explicadas à população, pelas autoridades e pelas entidades técnico-científicas. O abastecimento vem sendo mantido por um sofisticado conjunto de medidas operacionais, que será tão mais eficaz quanto mais bem compreendido for pela sociedade.
  1. Em geral, passadas as restrições legais do período eleitoral, é necessário reforçar a comunicação social sobre o enfrentamento dos problemas, trazendo a sociedade para apoiar ativamente o combate aos desperdícios e o uso racional, e reduzindo o espaço para visões equivocadas e para a exploração oportunista dos efeitos da crise. Além da comunicação, ações mais diretas junto à população são cabíveis, como, por exemplo, a assistência técnica para a adequação das caixas d’água nos imóveis com deficiência de reservação.
  1. Os valores extremamente baixos e inéditos de precipitações e de vazões afluentes aos sistemas indicam uma situação nova, que exige a revisão do planejamento existente, antecipando intervenções e aumentando capacidades. É necessário aumentar a disponibilidade de vazões regularizadas, para fazer frente à nova situação. Particularmente, são importantes a interligação dos reservatórios Jaguari e Atibainha, para dar segurança hídrica à plena recuperação e utilização do Sistema Cantareira no futuro, e a construção das barragens Duas Pontes e Pedreiras e respectivo sistema adutor, para assegurar o abastecimento dos municípios das bacias do PCJ. Outros projetos de abastecimento, estruturantes do desenvolvimento econômico do estado, necessitam ser avaliados, detalhados e implementados no curto prazo.
  1. A antecipação de investimentos e o aumento de capacidade de reserva que as novas condições exigem significam o aumento do custo da água para os diversos usos. Esta nova realidade torna economicamente mais atrativas e socialmente mais necessárias políticas permanentes de redução de perdas, uso racional da água, proteção e recuperação de mananciais e de nascentes e de reuso de água tratada.
  1. O aumento de custos deve ser refletido nas tarifas dos prestadores de serviços. O setor de abastecimento de água e esgotamento sanitário no estado de São Paulo é sustentado por um sistema tarifário que remunera os investimentos e os custos dos serviços, com um processo regulatório sofisticado, em fase final de implantação. Esta é a forma socialmente mais justa e eficiente de alocar os recursos necessários à prestação dos serviços, que deve ser preservada. Empresas e autarquias economicamente viáveis e sólidas são a melhor garantia da qualidade da prestação, e da manutenção de esforços continuados, como é o caso da redução de perdas de água, por exemplo.
  1. O ajuste tarifário, além preservar a viabilidade econômica das entidades responsáveis pelos serviços, o que pode e deve ser feito protegendo os segmentos socialmente mais vulneráveis, deve ser tratado como um importante, talvez o mais importante, mecanismo de redução de consumo excessivo. A acentuação das diferenças entre blocos tarifários, com penalização mais pesada às faixas de maior consumo, é um forte estímulo econômico à moderação. Esse valor adicional nas faixas de maior consumo poderia ser separado, como um fundo especial para as obras de segurança hídrica, não incidindo no cálculo do resultado econômico das prestadoras de serviço.
  1. A penalização econômica do uso excessivo de água deve se somar a outras ações de combate ao desperdício, por parte das autoridades públicas, especialmente as autoridades municipais, que têm poder de polícia. A fiscalização deve se somar à comunicação ampla e ao convencimento.
  1. As intervenções não diretamente ligadas à prestação dos serviços, como as obras de aumento da segurança hídrica, não poderão ser inteiramente custeadas pelas tarifas, e necessitam de recursos não onerosos dos orçamentos públicos. No caso da Sabesp, a primeira fonte deveria ser os dividendos e juros sobre capital próprio distribuídos ao Governo Estadual.
  1. Os estudos mais recentes, como o Plano de Abastecimento da Macrometrópole Paulista, demonstram que a densidade do desenvolvimento econômico do estado e o uso intensivo dos recursos hídricos impõem que se passe a planejar e gerir o uso da água na região de modo efetivamente integrado. A crise de escassez vem acentuar essa constatação. As agendas entre municípios e Governo Estadual, entre este e os demais estados vizinhos, e a União, demandam a ampliação e o aprimoramento dos instrumentos técnicos e dos recursos humanos voltados a essas tarefas.
  1. A gestão integrada implica uma intensa agenda entre municípios, os estados de São Paulo, Rio de Janeiro e Minas Gerais, a Agência Nacional de Águas, e o Governo Federal, agenda que tem se desenvolvido de modo promissor nas últimas semanas. E contempla também os graves conflitos e restrições entre os diversos usos da água a serem mediados. Quanto a estes, ressalta a importância de rediscutir com o setor elétrico ajustes imprescindíveis nas regras atuais, para fazer prevalecer a primazia do uso para abastecimento público, como assegurado legalmente.
  1. Muitas das medidas de enfrentamento da crise são e terão que ser emergenciais, com o uso de procedimentos expeditos de contratação e execução. É importante que as mesmas se combinem com um processo de revisão de planos, de elaboração de projetos e de reestruturação de cronogramas de implantação de empreendimentos que organize desde já a continuidade dos programas de expansão e melhoria dos serviços, necessários para a universalização do atendimento e a manutenção da qualidade.

Diretoria da ABES-SP.

Risk analysis for a complex world (Science Daily)

Date: November 18, 2014

Source: International Institute for Applied Systems Analysis

Summary: Developing adaptable systems for finance and international relations could help reduce the risk of major systemic collapses such as the 2008 financial crisis, according to a new analysis.


Developing adaptable systems for finance and international relations could help reduce the risk of major systemic collapses such as the 2008 financial crisis, according to a new analysis.

The increasing complexity and interconnection of socioeconomic and environmental systems leaves them more vulnerable to seemingly small risks that can spiral out of control, according to the new study, published in the journal Proceedings of the National Academy of Sciences.

The study examines risks are perceived as extremely unlikely or small, but because of interconnections or changes in systems, can lead to major collapses or crises. These risks, which the researchers term “femtorisks,” can include individuals such as terrorists, dissidents, or rogue traders, or factors like climate change, technologies, or globalization.

“A femtorisk is a seemingly small-scale event that can trigger, often through complex chains of events, consequences at much higher levels of organization,” says Princeton University professor and IIASA Distinguished Visiting Fellow Simon Levin, who adopted the term (originally suggested by co-organizer Joshua Ramo) together with an international group of experts during a 2011 IIASA conference on risk modeling in complex adaptive systems.

Levin explains, “A complex adaptive system is a system made up of individual agents that interact locally, with consequences at much higher levels of organization, which feed back in turn to affect individual behaviors. The individual agents can be anything from cells and molecules, to birds in a flock, to traders in a market, to each and every one of us in the global environment.”

The complexity of such systems makes it difficult or even impossible to model the outcomes of specific changes or risks, particularly very small or seemingly insignificant ones. The study examines several examples of such femtorisks that set off major crises, including the credit default swaps that led to the 2008 financial crisis, the recent protests in the Middle East and Ukraine that led to the broad upheavals in both regions’ political systems, and the warming temperatures in the Arctic that have led to massive international interest in the region for mining and economic development.

Risk management for an unpredictable world 

In light of such unpredictable risks, the researchers say, the most resilient management systems are those that can adapt to sudden threats that have not been explicitly foreseen. In particular, the researchers suggest a model drawing on biological systems such as the vertebrate immune system, which have evolved to respond to unpredictable threats and adapt to new situations.

“In practice it is generally impossible to identify which of these risks will end up being the important ones,” says Levin. “That is why flexible and adaptive governance is essential.”

The general principles of such management include: effective surveillance, generalized and immediate initial responses, learning and adaptive responses, and memory, say the researchers. Levin says, “We need to design systems to automatically limit the potential for catastrophic contagious spread of damage, and to complement that with effective and flexible adaptive responses.”


Journal Reference:

  1. Aaron Benjamin Frank, Margaret Goud Collins, Simon A. Levin, Andrew W. Lo, Joshua Ramo, Ulf Dieckmann, Victor Kremenyuk, Arkady Kryazhimskiy, JoAnne Linnerooth-Bayer, Ben Ramalingam, J. Stapleton Roy, Donald G. Saari, Stefan Thurner, Detlof von Winterfeldt. Dealing with femtorisks in international relationsProceedings of the National Academy of Sciences, 2014; 201400229 DOI: 10.1073/pnas.1400229111

A profecia da Crise (Medium)

Margem do Rio Tietê, na altura da cidade de Itu, interior paulista. Foto: Mídia NINJA

Em 2003, quando a Sabesp teve seu capital aberto ao mercado, parlamentares e movimentos sociais já se preocupavam com a priorização de interesses privados sobre a universalização do acesso à água.

Por Felipe Bianchi do Barão de Itararé

19 nov 2014


Apesar de atingir seu estopim em 2014, as razões para a grave crise hídrica pela qual passa o estado de São Paulo remetem a episódios que pouco têm a ver com falta de chuva ou caprichos da natureza. Um deles nos leva de volta a 2003, quando a Assembleia de São Paulo (Alesp) aprovou — na calada da noite — o Projeto de Lei 410/2003, de autoria do PSDB e responsável por abrir o capital da Sabesp ao mercado financeiro. Foram 55 votos contra 22, em sessão iniciada às 4h30 da madrugada do dia 27 de agosto.

Com a mudança na forma de gestão da empresa, 50,3% do seu capital encontra-se mãos do Governo do Estado de São Paulo, enquanto a bolsa de Nova Iorque (NYSE) detem 24,9% e a BM&F Bovespa abocanha 24,8% das ações. Ao longo desse período, a empresa atingiu números impressionantes: sua valorização bateu a marca de 601% e seu valor de mercado passou de R$ 6 bilhões a mais de R$ 17,1 bilhões.

Em 2012, os expressivos resultados foram comemorados no ‘Sabesp Day’, em plena Big Apple, com uma série de atividades especiais na bolsa nova-iorquina. Durante as festividades, a presidente da empresa, Dilma Pena, reafirmou o compromisso de “oferecer 100% de água tratada, 100% de coleta de esgoto e 100% de tratamento de esgoto em todo o interior do Estado de São Paulo até 2014”. Celebrada pelos acionistas, a dirigente argumentou que “a cada novo ano, a Sabesp mostra ter condições de executar seu objetivo com eficiência, de maneira sólida, dinâmica, inovadora e sustentável em termos financeiros, ambientais e sociais”.

Ou faltou combinar com o governador de São Paulo, Geraldo Alckmin, ou trata-se de uma realidade paralela. A conta da água não fecha. Apesar do sucesso da Sabesp na bolsa de valores, São Paulo sofre com a falta de abastecimento — o sistema da Cantareira, por exemplo, opera com 11% de sua capacidade e já utiliza a segunda cota do volume morto, levantando a seguinte questão: o modelo de gestão da Sabesp é o mais adequado para garantir a universalização do direito básico que é o acesso à água?

Sobre política e profecias

Na ocasião da votação que selou a entrada da Sabesp no mundo financeiro, a então deputada estadual Maria Lúcia Prandi fez uma declaração ‘profética’ sobre o tema, indagando se a empresa seria capaz de manter seu caráter público e priorizar os interesses da população ou se voltaria suas atenções aos desejos dos acionistas.


“Na prática, é uma quase privatização da Sabesp, que poderá perder seu caráter de empresa pública, abrindo espaço para os interesses privados, que visam lucros e não o benefício comum (…). Quem comprar as ações da Sabesp terá grande poder na gestão da empresa. Como ficará a questão das tarifas? Até que ponto a empresa vai querer investir em áreas carentes ou de difícil atendimento, como os morros? Como conseguir que as redes de esgoto e de distribuição de água cheguem a comunidades mais distantes?”


10 anos depois, ela comenta que “não se trata de profecia, mas de visão de mundo e de Estado”. Para a deputada federal, sua fala em 2003 foi uma “demonstração de que, a médio ou longo prazo, a população poderia pagar caro pela escolha que o governo estava prestes a fazer”.

Prandi recorda que, enquanto o PL 410/2003 estava em pauta, houve uma grande resistência na Alesp por parte de partidos à esquerda, que chegaram a realizar longos estudos sobre o tema para embasar o posicionamento contrário à matéria. “A Sabesp, à época, estava muito endividada. Tanto que havia forte pressão sobre os municípios não-conveniados. A capitalização foi uma das ferramentas que o governo lançou mão para sanar a situação e, na votação, foram vitoriosos”.

A tese de Prandi, no entanto, parece jogar luz sobre as origens de uma crise tratada de forma obscura pelo poder público paulista. “Ao vender ações, você sofre pressão de acionistas para aumentar o lucro, colocando os interesses dos donos das ações em primeiro lugar”, argumenta. “O acesso a um serviço essencial como o abastecimento de água nunca poderia ter sido relegado ao segundo plano”.

De acordo com ela, o governo poderia ter feitos ótimos investimentos que prevenissem crises como essa, já que há uma seca história no estado e o governo federal destina um significativo aporte financeiro para essa finalidade. “Mas a prioridade”, sugere, “parece ser agradar os acionistas”.

Primeira cota do Voume Morto, no sistema cantareira, São Paulo. Foto: Mídia NINJA

Governo optou por tratar água como negócio

Para Edson Aparecido da Silva, sociólogo e coordenador da Frente Nacional pelo Saneamento Ambiental, a opção feita 10 anos atrás pelo governo estadual foi de tratar a gestão da água como negócio. “Na época, a justificativa foi de que era preciso captar recursos em agências financeiras e bancos internacionais. Aderir à bolsa daria segurança aos que emprestassem dinheiro à Sabesp”, explica.

“Uma empresa pública com gestão privada”. Assim o sociólogo define a Sabesp, desde que passou a operar segundo a lógica de ampliação do lucro e de distribuição dos dividendos aos acionistas.

O principal problema, na avaliação de Silva, é a absoluta falta de transparência no modelo de gestão vigente. “Ainda que a quantidade de recursos investidos seja significativa — cerca de R$ 2 bilhões anuais -, não se tem a menor ideia de como é empregado. Os relatórios dizem apenas se foram feitos na região metropolitana, no interior ou no litoral, sem maiores detalhes, sendo que dentro desse valor podem estar embutidos, por exemplo, pagamentos a empresas terceirizadas que prestam serviço de má qualidade. A crise prova que os investimentos da Sabesp nos últimos anos podem ter sido péssimos”.

Ele repudia a postura de Geraldo Alckmin em não reconhecer publicamente a dimensão da crise e a responsabilidade que cabe à sua gestão, mesmo depois de pedir R$ 3,5 bilhões ao governo federal para bancar um pacote de medidas emergenciais. “Alckmin nsiste em negar que há redução da pressão da água durante certos períodos do dia, sendo que boa parte da população das periferias de São Paulo enfrenta o problema quase que diariamente. O governo poderia optar por uma política transparente, informando o cidadão das faixas de horário de racionamento a fim de reduzir, inclusive, o desperdício”.

Uma marca de cerveja nunca dirá ao seu consumidor ‘não compre cerveja’. É essa regra de mercado que a Sabesp tem seguido, mas seu produto é um serviço público, direito de todos”, afirma Edson Aparecido da Silva


Os números da Sabesp: declínio iminente?

O estatuto da Sabesp prevê que os acionistas podem receber até 25% do lucro líquido anual da empresa, mas desde a aprovação da regulamentação, o índice nunca foi menor que 26,1%. Em 2003, por exemplo, logo após a vitória de Geraldo Alckmin nas urnas de São Paulo, a porção que morreu nas mãos do capital privado atingiu obscenos 60,5% do montante total. Estima-se, ainda, que um terço do lucro líquido total da Sabesp já foi repassado aos acionistas, o que significa aproximadamente R$ 4,13 bilhões — o dobro do que a Sabesp investe anualmente em saneamento básico, segundo os cálculos do Jornal GGN

Presidente do Sindicato dos Trabalhadores em Água, Esgoto e Meio Ambiente (Sintaema) entre 1988 e 1994 e atual vice-presidente da Central dos Trabalhadores e Trabalhadoras do Brasil (CTB), Nivaldo Santana ressalta que a antes vigorosa taxa de lucro da Sabesp já tem acusado o golpe da crise: “A diminuição da receita tarifária, por conta da menor oferta de água, faz com que a empresa torne-se pouco atraente para os acionistas, até porque o investidor de Nova Iorque, por exemplo, não está preocupado se falta água para a população de São Paulo, mas sim com o retorno de seu investimento. Por isso, a tendência é que a queda nos números se acentue cada vez mais”.

Segundo ele, “o que se vê na Sabesp é uma administração privatista, que segue a lógica privada mesmo tendo uma gestão, ao menos em tese, mista”. “No curto prazo, a aprovação do PL 410/2003 visava fazer caixa para a Sabesp, mas a longo prazo, é parte de um projeto de redução do papel do Estado nos serviços públicos”, assinala.

Por fim, Santana destaca o fator ‘mídia’ como um grande empecilho para a discussão do problema: os grandes meios de comunicação não abordam a dimensão política da crise, em sua opinião, “dando enfoque excessivo ao problema da seca, ao fenômeno natural, como se nos restasse apenas torcer para que chova muito”. Para ele, “trata-se de uma cortina de fumaça sobre os investimentos insuficientes e ruins feitos pela Sabesp, poupando o governo estadual de críticas por parte da opinião pública”.

São Pedro não tem ações da Sabesp (Medium)

19 Nov 2014

Reserva da Represa Jaguari/Jacarei no sistema Cantareira, em São Paulo. Foto: Mídia NINJA

No meio de uma crise sem precedentes no abastecimento de água de São Paulo, empresa deve chegar ao fim de 2014 com lucro perto de R$ 1,9 bilhão

por Arnaldo Pagano, especial para a Ponte

Diz a máxima que o capitalismo privatiza os lucros e socializa os prejuízos. No caso da Sabesp, a frase é ainda mais verdadeira: a privatização dos lucros e a socialização dos prejuízos ocorre simultaneamente.

No ano de 2014, marcado por uma crise sem precedentes no abastecimento de água no Estado de São Paulo, a Sabesp apresentou no segundo trimestre um lucro líquido de R$ 302,4 milhões e deve chegar ao fim do ano com um montante próximo do R$ 1,9 bilhão de lucro de 2013.

Isso mesmo! Enquanto parte da população da região metropolitana vê as torneiras secas há meses (como mostra o site colaborativo faltouagua.com), os acionistas da Sabesp têm um faturamento nada escasso. Diante desse quadro, o governo estadual tenta convencer a população de que a culpa é da falta de chuvas. Não é!

Culpar São Pedro pela crise hídrica em São Paulo é brigar com os fatos e desconhecer — ou querer esconder — a ineficiência da gestão da Sabesp, em grande parte provocada pela forma como a empresa é constituída economicamente e pelos interesses que tem de atender.

Dentre alguns pontos discordantes aqui e ali, pode-se tomar essa conclusão do debate realizado na USP na terça-feira (11/11) com acadêmicos especializados em urbanismo e gestão de recursos hídricos. No encontro promovido pelo CENEDIC (Centro de Estudos dos Direitos da Cidadania), discutiram o tema Gabriel Kogan, arquiteto mestre em gerenciamento hídrico no IHE (Institute for Water Education), Antonio Carlos Zuffo, professor do Departamento de Recursos Hídricos da Unicamp, Luis Antonio Venturi, professor da USP na área de Geografia dos Recursos Naturais, e Nabil Bonduki, professor na Faculdade de Arquitetura e Urbanismo da USP, vereador pelo PT e membro da CPI da Sabesp.

A questão político-econômica

Para entender a crise da água em 2014 é preciso voltar 20 anos no tempo. Em 1994, a Sabesp deixou de ser 100% estatal, tornando-se uma empresa de economia mista e capital aberto. Até 1997, ela era negociada no mercado de ações de balcão, com o governo dono de 95% da empresa.

Foto: Vagner Magalhães/Terra

Em 1997, as ações foram transferidas à Bovespa e, em 2002, passam a ser negociadas também na Bolsa de Valores de Nova York. Hoje, o Governo de São Paulo detém 50,3% das ações. O restante, 49,7%, é negociado nos mercados financeiros brasileiro e norte-americano.

Para Gabriel Kogan, essa configuração já é um problema. “Água é algo muito estratégico para ser gerido de maneira privada”, analisa. Para ele, o que ocorreu desde a abertura do capital foi uma maximização dos lucros dos acionistas ao mesmo tempo em que os investimentos que poderiam ter evitado a crise atual, como ampliação da rede de captação e saneamento, foram minimizados.

Agora, a crise é enfrentada com a externalização dos custos. O governador Geraldo Alckmin (PSDB-SP) pediu ao Governo Federal uma verba de R$ 3,5 bilhões para combater a crise hídrica com projetos a longo e médio prazo. Gabriel Kogan lembra que a quantia equivale a dois anos de lucros dos acionistas.

Ou seja, a Sabesp terá mais dinheiro público, agora da União, sendo que seus acionistas têm esse dinheiro. Mas a externalização de custos pode ser ainda mais cruel. Nós estaremos financiando a Sabesp e seus acionistas, mas e o prejuízo do dono de restaurante da região periférica, que fecha as portas porque falta água quase diariamente porque a Sabesp não investiu no passado? Quem o indenizará?

Para Nabil Bonduki, esse tipo de gestão da Sabesp é totalmente incompatível com o uso sustentável da água. “A água virou objeto de lucro. A Sabesp vive de vender água. Quanto mais água usarmos, maior vai ser a lucratividade da empresa”, comentou.

Dona Rute, moradora do Capão Redondo, vive um racionamento não declarado que pode durar até 9 dias sem água na torneira. A redução do consumo não interessa à lucratividade da empresa. Foto: Sarah Pabst

Para o vereador, a conscientização sobre o uso racional deve ocorrer, inclusive na época de abundância da água, para que os reservatórios estejam sempre cheios, já que, uma vez que eles estejam vazios, a recuperação torna-se muito mais difícil, devido ao chamado “efeito esponja” (com as represas esvaziadas, parte do solo argiloso que antes ficava submersa fica exposta e seca. Quando a chuva acontece, o solo absorve a água como uma esponja, antes de ser capaz de armazenar o líquido precioso).

Diante da lógica da maximização dos lucros, a Sabesp não tomou as medidas necessárias para conter a crise já em 2013, quando o nível dos reservatórios estava baixando. Políticas de racionamento, com penalização de quem desperdiçasse água, e de informação não foram feitas.

Ao contrário, o governo decidiu dar um bônus a quem economizasse. Para Nabil, essa foi a única medida séria, mas totalmente ineficiente, já que gerou uma economia “pífia” de 5%. Muito mais poderia ser obtido se houvesse um investimento da Sabesp na redução de perdas com vazamentos.

Integrante da CPI da Sabesp na Câmara Municipal de São Paulo, Nabil Bonduki diz que é preciso investigar como a redução de perdas de 2009 a 2014 foi de 0,6% (de 20,4% para 19,8%) sendo que o contrato estabelecia um investimento nada modesto de R$ 1,1 bilhão — um investimento bilionário para um resultado insignificante.

Mas a Sabesp não teve apenas um ano para tomar medidas que evitassem o problema atual. O esgotamento do sistema Cantareira já era previsto no ano de 2001 por Aldo Rebouças, professor emérito do Instituto de Geociências da USP, falecido em 2011. À época, Aldo Rebouças disse que o problema era seriíssimo, porque o nível estava perto do limite do sistema.

A Sabesp poderia ter feito um planejamento para “salvar” o Cantareira, mas optou por outra medida, como mostra a reportagem “Sabesp maquia crise no sistema Cantareira”, de Mariana Viveiros, da “Folha de S.Paulo”, em 29 de março de 2001. A repórter obteve um documento interno produzido pela Superintendência de Comunicação da empresa. A orientação era esconder a crise.

Propaganda da Sabesp veiculada no site da Revista Veja na semana de 17 de Novembro de 2014.

E não é de hoje que a influência do capital prejudica o abastecimento sustentável da Grande São Paulo. Em uma entrevista à Agência Fapesp em 2012, a geógrafa Vanderli Custódio, do Instituto de Estudos Brasileiros da USP, disse que a vazão do Tietê quando atravessa a região metropolitana é de 82 metros cúbicos por segundo. A Sabesp, com todos os seus sistemas em capacidade máxima, produz aproximadamente 67 metros cúbicos de água por segundo.

O Tietê, portanto, abasteceria São Paulo inteira e ainda sobraria água, mas isso hoje é totalmente inviável dada a poluição do rio, que tem origem na concessão feita na década de 1920 pelo governo paulista à Light, quando se permitiu a inversão do curso do Rio Pinheiros visando à exploração dos recursos hídricos da Bacia do Alto Tietê para a geração de energia.

Tais problemas levam à questão central pela qual passam as possíveis soluções para a crise: a reestatização da Sabesp. Como uma empresa sem controle público e sob a lógica do capital poderia gerir um recurso essencial à vida? Para Gabriel Kogan, essa mudança será impossível “sem o povo nas ruas”.

Protesto contra a falta de água e má gestão hídrica em frente a sede da Sabesp, em São Paulo. Foto: Mídia NINJA

A questão natural

Só a água do Aquífero Alter do Chão, na Amazônia, abasteceria a humanidade inteira por três séculos. A água do Aquífero Guarani, mais 150 anos. O dado impressionante foi um dos exemplos utilizados pelo professor Luis Antônio Venturi para ilustrar o fato de que a água é, numa perspectiva geográfica dos recursos naturais em escala planetária, o recurso mais abundante do planeta. É praticamente inesgotável.

Tendo em vista que a fonte das águas continentais são os oceanos, enquanto eles existirem, enquanto o sol aquecê-los, enquanto a Terra girar para levar a umidade aos continentes e enquanto a lei da gravidade permitir as precipitações – o que deve acontecer “por um certo tempo”-, não é possível pensar na finitude da água.

Mas, e numa escala local? Segundo Venturi, o mapa hidrográfico de São Paulo é de dar inveja a qualquer região. Por que estamos nessa crise, então? Venturi estabelece sete motivos:

1- Os sistemas não são equilibrados em relação à oferta e demanda. O sistema Rio Grande estava com o dobro de água do Cantareira para atender uma população cinco vezes menor.

2- Os sistemas não estão eficientemente articulados em rede. Deste modo, toda a água que temos não está disponível para todos.

3- Problemas de perdas na rede de distribuição. A média mundial de perdas é de 11%, enquanto em São Paulo é de 19,8% (segundo os dados oficiais, embora especialistas acreditem que essa porcentagem seja maior; na Holanda é de 0%).

4- Algumas represas, como Atibainha, são em formato de pires, com grande superfície de evaporação e baixo armazenamento (o formato ideal seria de uma xícara, por exemplo).

5- Os sistemas só estão sendo equipados agora para usar o volume morto, necessário em planos emergenciais. Sem planejamento, estamos correndo atrás do prejuízo.

6- Você já reparou que a água que bebemos é a mesma água limpíssima que usamos para dar descarga? Sem a utilização da água de reúso, ocorre uma perda qualitativa da água. Metade da água usada em casa poderia ser não-potável.

7- Estiagem natural.

Governador Geraldo Alckmin. Foto: Autoria desconhecida

De acordo com Luis Antônio Venturi, o governo de São Paulo, ao falar com a população sobre a crise, inverte a ordem, colocando a estiagem natural como primeira causa, sem assumir as outras causas, que refletem erros da Sabesp. E mais: essa estiagem não é a maior, já que a falta de chuvas foi mais grave nos anos de 1963 e 1984. Além disso, a estiagem era previsível. São Paulo possui uma ampla base estatística que permite saber quando haverá períodos de mais ou menos chuva.

O professor Antônio Carlos Zuffo revelou alguns fatos que mostram que o atual período não é excepcionalmente seco em São Paulo. Vemos em 2014 seca em São Paulo e na Califórnia, e enchentes na Amazônia e na Europa (na Croácia é a pior da história).

No ano de 1953 o quadro foi rigorosamente o mesmo, com direito a grave estiagem em São Paulo e a maior enchente do Amazonas. Zuffo ainda recordou uma reportagem do jornal O Estado de S. Paulo de 27/11/1953, com o título “Mudanças Climáticas ameaçam a produção de café no Brasil”.

O curioso, segundo Zuffo, é que em 53 não havia nem Transamazônica. Para o professor, a ação humana (antrópica) é ínfima perto da influência dos ciclos solares no clima global. Esse assunto ainda gera mais discussão entre os especialistas, mas o fato mostra que a estiagem em São Paulo não é sem precedentes e que era previsível.

“Como São Paulo fica à mercê de chuva como as sociedades primitivas?”, questiona Luis Antônio Venturi. O professor ainda nota que o governo de São Paulo pode ficar em uma situação desconfortável em breve.

Morador da cidade de Itu, no interior de São Paulo, toma banho de chuva depois de meses de estiagem e racionamento de água. Foto: Itu Vai Parar

Quando começar a chover, o problema da água não será resolvido, dada a situação dramática do Cantareira. Haverá alagamentos, como já houve há algumas semanas. O governo certamente colocará a culpa das inundações na chuva, não no assoreamento ou impermeabilização do solo.

Surgirá, então, a incômoda questão: Como é possível faltar água pela escassez de chuvas e ao mesmo tempo haver enchente pelo excesso de chuvas?

São Pedro merece ser poupado dessa. Ele não está no mercado de ações.