Speculation in agricultural commodities may not have reached fever pitch yet but with food shortages expected in 2010, it could.
Jim Rogers, one of the world’s most astute investors has been bullish on commodities in general for several years. On agricultural (or soft) commodities, he says: ‘Food inventories worldwide are at the lowest in decades as the world continues to consume more than it produces. We even have a shortage of farmers now since agriculture has been such a terrible business for three decades. We should all hope prices go higher or there may soon be a time when there will be little or no food at any price.’
Mr Rogers, who created his own commodities indices, has put his name to several index funds. The Elements Jim Rogers International Commodity Index Agriculture Total Return which is listed on the New York Stock Exchange has, for instance, risen by about 6 per cent since the start of 2009.
Interest in soft commodities has had an impact on prices.
‘Whenever there are buyers of anything, it affects the prices. For example, if you live in an apartment or house, you are affecting the price of housing in Singapore,’ adds Mr Rogers.
There are several ways to invest in soft commodities including the futures contracts on commodities exchanges like the Chicago Board of Trade (CBOT).
The index funds alluded to by the FAO include the more rarefied market of exchange traded funds (ETFs) that typically attract institutional investors.
There are more prosaic ways as well.
In China, the bubble people are talking about now is not in real estate but in garlic.
Worries about persistent swine flu prompted a spike in garlic consumption in 2009 and soon, everyone was hoarding it in hopes of making a quick buck. Prices are said to have gone up by 50 per cent in the last few months.
Rice could be next. Barclays Capital Research economist Leong Wai Ho says: ‘The bigger problem for food prices is an old one – physical hoarding that can limit physical availability, unlike derivative trading.
‘Rice prices are now at levels that are likely to induce physical hoarding in Vietnam and Thailand. And also in stricken countries – authorities in Southern Guangdong have introduced anti-hoarding measures in the wake of the ongoing drought.’
And Mr Leong also believes the significance of food prices may not have been factored into inflation either.
For 2010, the Singapore government’s inflation forecast has been revised from 1-2 per cent to 2.5-3.5 per cent. Citing rising Thai fragrant rice prices, the prospect of El Nino weather conditions, higher import demand from Asian countries, Barclays’ 2010 inflation forecast for Singapore is higher at 4 per cent, up from 1.5 per cent previously.
Still, the verdict is out on how this will impact the economic recovery.
‘I don’t think there will be a meaningful impact on growth,’ says Mr Leong. ‘While the monetary policy stance will be tightened from where it was before, the overall policy stance will still be largely accommodative in 2010. The exchange rate will be used to lean into imported inflation, while liquidity will still remain flush and fiscal policy still expansionary,’ he added.
Economists will nevertheless be ‘keeping an eye’ on food prices.
What a great move for the Labor govts in Oz to grant mining rights to the barbarians at BHP and the other Neanderthal low-IQ Big Miners over the most fertile arable land in both NSW and Qld, just at the time when sugar prices are at historic highs and every astute investor is screaming that farmland is a buy. If we had any brains we’d be hoarding our minerals until prices spiked in a decade, and we’d be focusing on innovation in solar power and recycling technologies instead of digging dirty ditches and selling our precious metals for worthless paper.
But no, let’s sell everything we’ve got RIGHT NOW! What forethought, what genius, what planning, what brilliance! Well done, Rudd, well done Bligh, well done what’s-her-name-puppet-of-the-Labor-Right-in-NSW!
This proves conclusively to me that (1) there is no God and (2) the NSW and Cth govts are infested with the dumbest people on this God-forsaken planet.
It’s mildly reassuring when another analyst is suicidal about the future. It reassures me that I am not totally alone.
I disagree with Faber on two points however.
First, it’s unlikely we will see hyperinflation and the “pure” monetisation of the trillions in US debt. No hyperinflationist thinks through the precise mechanism of monetisation. To increase the budget deficit by even more, the US govt will have to increase its own debt levels. Bonds yields will likely spike at some point. Then the Fed will try to buy the bonds to keep prices up (yields low). This will allow relatively limited leakage of money to the US govt’s friends, but in no way plug the hole left by the collapse in the housing bubble. Not only will govt spending not replace the hole left by Peak Credit, govt spending further distorts the economy, resulting in more failed private businesses the further away you get from the US govt’s largesse.
You’ll end up with millions of debt-slaves sycophantically praying to the bankers and the Fed govt, running around doing the bidding of their Masters, and economic chaos and widespread starvation beyond the tiny green gated communities of bankers and govt employees.
Kabul is a good future model for the major Western economies (especially the US): There are some massive luxury (tasteless!) villas going up in Kabul. I’ve seen them. They are the houses for the govt ministers and associated hangers-on from the opium trade. Nearby are the hotels the UN employees frequent. Beyond these few blocks, hundreds beg for food from aid agencies and there’s complete chaos. But within these tiny communities connected close to the corrupt govt, the opulence is incredible. Govt banquets are frequent, whilst literally right outside the banquet halls, local Afghanis are starving.
That is our future. Kabul is our future.
And remember – Kabul is a city now created by the US. It is what the US govt “wanted” to create (or at least what it did create after taking over).
So that’s the best the US and UK govts can do today when “creating” a city. That’s the proof regarding what they are capable of. Sad, but true.
So that’s what they will continue to produce at home.
“Kabul” does not spell hyperinflation to me. It spells stag-deflation with a possible sudden depreciation of the US dollar at some point – but not hyperinflation. So I still think US govt bonds and gold are a better bet than US stocks if I was forced to choose. Of course, long-term, farmland, security services, and govt jobs will all be highly sort after. But I wouldn’t be buying canned food just yet. You don’t want it to go out-of-date before you need to eat it.
Second, there will be war, but it won’t be to distract people from their debt problems. It will be over the rapidly diminishing supply of food and water and oil. The malinvestments caused by the decade-long low-density housing boom in the West have actually caused massive environmental destruction as well as financial chaos. Literally millions of acres of fertile arable land across the US and Australia and other countries has been re-zoned and “redeveloped” (destroyed) for what is euphemistically termed a “more intensive use” (i.e. “for speculative property development”) – just at the time when unprecedented climate change has destroyed many “food basins” around the world (Myanmar, Thailand, Cambodia, Australia, China, Europe and the US have all experienced tsunamis, typhoons, hurricanes or drought in their vital farming areas).
CCD is also a massive threat to our food supply. It is still a problem that no media organisation wants to talk about. The cause is unknown (I suspect GM crops, but who knows?).
No one seems to have connected up the housing boom and bust with massive unprecedented and irreversible environmental destruction.
But they will. Eventually.
Remember when “all Labor” Cth and State govts were finally going to “deliver” in contentious areas such as water rights, health and tax sharing?
Finally, there would be “no excuses” to deliver on these vital issues of national long-term interest.
Ha Ha Ha.
Paul Sheehan comments on the complete failure of that idea in today’s SMH, at least as it applies to the environment and water rights.
Last week I received shocking photos of the Wyangala Dam, which once held several times the volume of Sydney Harbour but is now reduced to a chain of brown pools. The Lachlan River, which once fed a majestic floodplain with regular healthy flooding, has been blocked off below Condobolin to ensure water supplies for the town. This has never happened before. A rich flood plain has become an arid zone.
We don’t have to wait for global warming for adverse climate change in Australia. It’s already here, and all man-made. The landscape of the Murray-Darling Basin was changed on a large scale, and the climate of the Murray-Darling Basin has changed.
With Labor in power in Canberra and every state except Western Australia, it was logical to expect a policy pay-off over an issue as crucial as water. But no. The National Water Commission recently issued its biennial assessment of the national water initiative and the report reads like a horror novel if you read between the lines of the report’s cautious sober language.
The commission, charged with saving the Murray-Darling Basin from the massive over-allocation of water rights by state governments to irrigators, has encountered a morass of inertia caused by jurisdictional complexity, bureaucratic infighting and state parochialism. On the most important single issue facing the nation – water security – federalism has failed. NSW and Queensland are replaying the State of Origin tribal warfare, except that the stakes are real and enormous.
The Water Commission’s chairman, Ken Matthews, allowed himself some venting in a recent speech when he referred to the ”bickering, arguing and delaying” by state governments. And these are all Labor governments.
To make the problem worse, these same governments have been busy granting mining leases for projects that could need as much ground water as will be saved from the river system by the $10 billion the Federal Government is spending to buy back water rights from irrigators.
Coal-mining leases have been granted, or applied for, over 16,000 hectares in the Maranoa, Balonne and Condamine river basins in Queensland. Petroleum leases have been granted, or applied for, over 23,000 hectares of these same basins.
”One-third of the Murray-Darling Basin is in Queensland where a massive increase in mining for coal, petroleum and liquid natural gas is under way,” said Kathy Ridge, a member of the Basin Community Committee which advises the Murray-Darling Basin Authority.
”There are currently eight liquid natural gas projects proposed in Queensland with a total capital expenditure in excess of $40 billion. If all of the projects were to proceed, their water consumption would amount to almost half the total amount of water entitlements purchased [by the Federal Government] to return environmental flows to the Murray Darling River …
”The water that comes out of mining is heavily polluted with salt and other heavy metals. No one knows what to do with it apart from evaporating it in huge storage dams, causing ongoing water and land pollution.
”NSW is similarly for sale when it comes to mining, particularly coal seam methane, and much of the prospecting for coal-seam methane gas occurs on prime agricultural land, or land with high conservation values.”
Over the next 30 years, governments in Canberra, Sydney and Brisbane expect to receive about $40 billion in royalties from these mines, but these royalties will not cover the economic costs to repair the ecosystem. That cost will be carried by the taxpayer, and absorbed by the environment.
Incoherent environment policy is further personified by the Federal Government ramping up Australia’s emissions with the largest immigration program in Australia’s history – a policy unmentioned during the 2007 election campaign – while at the same time talking about reducing emissions with a massive carbon trading scheme.
Carbon trading is a system dismissed by the world’s most influential scientist on global warming, James Hansen, who, as director of the Goddard Institute for Space Studies in New York, essentially invented and popularised the concept of human-induced global warming.
Hansen believes carbon trading schemes, especially those as complex and compromised as the scheme proposed by the Rudd Government, are misguided: ”These cap-and-trade trading schemes are a terrible idea. They are a way to continue business as usual … ”
Business as usual is exactly what the Rudd Government, the unions and the Labor patronage machine are all about. The soaring rhetoric about climate change is just carbon emission.
Having our water table at the mercy of Queenslanders is so frightening I’m almost going to take the Lithium the doctors have recommended for me. I have not met one Queensland environmentalist. Put a $ bill in front of any Queenslander and they seem to reflexively salivate like one of Pavlov’s dogs. The granting of new mining rights in these vitally important areas is MADNESS.
Allowing mining on fertile arable land, near our national water table is MADNESS.
But never underestimate the madness of a govt deep in debt and looking for any way out. Will the Queensland govt prostitute our children’s futures to the mining industry for some filthy lucre to pay off the debts they’ve stupidly accumulated, rather than negotiating a sensible way out directly with the major creditors and the Cth govt?
Another Aussie environmental disaster in the making, this time 100% Labor-made.
This does not make me proud to be an Australian.
Peter Garrett must think we’re monkeys.
Government suppression of the appalling pollution still resulting from the oil spill off NW WA has been truly impressive. It’s like it never happened.
Have you heard of any updates on the story since August 2009? Have you heard whether or not Indonesian fishermen’s allegations regarding aged oil still appearing in Indonesian waters is correct? Have you heard whether the leak has been completely plugged? Have you heard when the investigation will start as to the cause? Have you heard whether PTTEP will continue to enjoy access to mining rights in Australia?
No, I haven’t either.
All we got after the leak was (supposedly) plugged was a SINGLE GRAINY STILL PICTURE (no live shots or video) of a burnt out oil platform and soothing words from the govt that the leak had been contained. That’s it. End of story.
I have a few additional questions for those with longer memories (longer than 5 minutes that is):
1. Has the leak been proven to have been completely plugged or is there evidence of leaks still continuing?
2. Why has no video footage been released of the oil rig? Can the media now have access to the area? If not, why not?
3. How long will it take for the investigation to start? The longer this drags on the more likely evidence of culpability will be covered up.
4. Has the govt accepted liability for any damage to Indonesian fisheries arising from the spill? What is the estimated compensation? When will this be determined?
5. Has any preliminary study been done of the ecological damage caused by the spill? If not, why not?
6. Will any long-term study be undertaken of the potential after-effects, such as contamination of sea life and potential contamination of our own food supply? Have there been any recommendations regarding the banning of fishing in the waters surrounding the oil spill? If not, why not?
7. What is ASMA doing to ensure the risks of future accidents such as this one are reduced? What recommendations have ASMA issued to oil rig owners? What investigations or compliance visits will be done by ASMA in the coming months on oil rigs, if at all? Who at ASMA is taking responsibility for the oil spill? Anyone? Or was it an “act of God” in ASMA’s view?
The tragic loss of farmland and livelihoods in central NSW is NOT a natural disaster.
The NSW government has stemmed the flow of the Lachlan River, so farmers around Lake Cargelligo are dying just as much as the Lake is dying.
This is too important to treat lightly. My heart is heavy seeing these pictures in my own State:
To quote directly from SMH:
Lake Cargelligo, a settlement of 1300 in the geographical heart of NSW, was once a holiday haven for swimmers and waterskiers. Now empty shops line the street and even the post office is for sale.
On Tuesday hundreds of those who are still here gathered to listen to a travelling roadshow of water bureaucrats about what was going to be done with the little bit of water that remains in the dam upstream.
The Lachlan River, muse of Banjo Paterson and lifeblood to tens of thousands in the region, is being cut off at Condoblin, with only small flows being released below. Towns further south-west will go without.
If they did not do this, State Water staff told the meeting, the dam would be sapped by February.
The plan was met with uproar.
”Why are we expected to take the pain for the whole valley?” one man yelled. ”You’ve forgotten a whole section of the river,” a woman said through tears.
In splitting the river, the State Government has split the people of this region. It is not the first time water has been held back to conserve what is left. A similar plan involving controlled releases is in place for the Namoi River.
But since the Water Minister, Phil Costa, made a decision to restrict the river earlier this month, tempers have flared among those downstream.
Farmers with thirsty cattle want to know why people upstream in Forbes are still allowed to put sprinklers on their lawns, and why fruit farms still receive water, albeit at reduced rates.
They also want to know if this is the future of water management in a state where almost 74 per cent of the land is in drought, and hotter and drier conditions are on the way.
”If this is the Government’s climate change policy,” said Patti Bartholomew, a cattle farmer, ”then God help NSW.”
The Lachlan River winds from Wyangala Dam, through Cowra, Forbes, Condoblin and almost to the Victorian border. It is a region heavy with grain, cattle and sheep that has endured three devastating droughts in the past century.
”Just now there is a howling drought. That pretty near has starved us out,” wrote Paterson more than 100 years ago of Boolilgal, a town at river’s end.
But this is a dry like no other.
Ten years ago Wyangala Dam was at 99 per cent, a wall of water 25 storeys high licked the top of its wall. Since then the inflows have been the lowest on record, less than half of what they were during the Federation drought. The dam is now less than 5 per cent full.
As water disappears, cracked creek beds and muddy embankments are left exposed. Animals searching for water are getting bogged up to their necks.
The Herald saw a farmer crawl out on logs and sink his hands deep into the thick mud to wrench out his neighbour’s sheep. Most of the people the Herald spoke to are sceptical about climate change, but according to CSIRO and other climate models, they are some of the hardest hit. ”Certainly the southern part of the Murray-Darling Basin, which includes the Lachlan, [is] looking at hotter and drier projections in the future,” a senior research fellow at the Climate Change Research Centre at the University of NSW, Dr Jason Evans, said.
Upstream, at a meeting in Forbes on Monday, scenes were very different. There were no interjections from the floor. People stayed for tea and sandwiches. One man, who asked not to be named, said he would be voting Labor for the first time at the next state election.
Ian Smith, a cattle farmer, has bores on his property that provide him with a secure water supply. ”I can’t really see they’ve mismanaged anything,” he said. ”There’s just been no rain.”
Bores are being sunk all along the Lachlan as towns such as Boolilgal and Oxley look to shore up their supply of water. But it is not an option for many Lake Cargelligo farmers. Some have invested heavily only to discover the water is salty and useless.
Rod Middleton and his wife Leanne live with their three sons on a cattle and grain farm.
The creek that has been their water source, a tributary of the Lachlan, is dry. The pump sits on the exposed creek bed. ”I think the worst thing about it is the mines and fruit trees still getting water and we’re not,” Mr Middleton said.
The young farmer, whose parents came to the area 30 years ago, said he would have preferred to see the river run its course, whatever the consequences. ”The fairest thing would’ve been to let it run till everyone’s out, rather than have the top end get themselves through till next year and us being out now.”
Let history record that this is not a natural disaster, that this was and is perfectly predictable, that this is one of the worst cases of government negligence in the long history of government stupidity and insane zoning and planning, that this is comparable to the loss of the Aral Sea in Central Asia due to EXACTLY the same idiotic short-term government planning!
First, maps showing average rainfall are now available for all of NSW (indeed for the whole country). We all know these areas are subject to drought. This is a once-in-a-hundred year drought – but these droughts should occur once in a hundred years, so they are going to happen. You have to plan for them.
What is the obvious solution?
The obvious solution was never to grant farming leases and farming rights on areas of NSW land that would be subject to sustained drought or over-farming.
Farming land should have been retained in areas of high rainfall, close to the population centres of NSW, so that food security for the NSW population was maximised. Areas in Dural, in Hornsby, in Penrith, in Southern Sydney… all these outer “suburbs” of Sydney should have had their zoning as farmland preserved. Farmers should be on this land – not on land in drought-striken central NSW!
Why are they way out there and not close to the cities? Zoning decisions of a NSW govt bureaucrat!
The “natural market” would have prevented this if there were no zoning laws arbitrarily imposed by govt. Farmers on marginal land (without drought assistance) would have given up on farming in central NSW decades ago and focused on farming in more productive high rainfall areas. Most farmers in these productive areas would never have sold their land to residential developers, because the returns from farming would have been strong.
You don’t believe me? Go to Europe. Before insane govt bureaucrats took over zoning, people “naturally” organised themselves. In old European cities you can still see farms within 20 kms of major metropolitan areas. There are farms within a 20 minute drive from Paris! A 15 minute drive from Amsterdam!
Why? Because these “plans” were not drawn up by a NSW govt bureaucrat, but by God. This could be considered “anarchic” – but it works! Farms are still close to cities. People can still buy farm-fresh produce produced locally.
In Australia, as a young, highly bureaucratised nation, local govts wanted to squeeze every last drop of money out of surrounding land so re-zoned ALL the land around cities as either residential, or industrial/commercial. There is no mix of residential and rural anywhere in Australia close to our major cities.
This is not natural. This is not the way it should be. Sydney has one of the highest rainfall yields of any area in NSW. People originally settled here because it was fertile land. Then govt came along and tried to squeeze every last drop of development rights from our highest yielding farmland. Millions of megalitres in Sydney gets flushed down stormwater drains, whilst farmers get pushed to the edge of the earth, pushed into marginal areas never meant to be farmed.
If I hear from one more idiotic govt spokesperson that this is a “tragic” natural disaster, I think I’m going to puke.
There is no hope for this State with idiots like this in charge of our future.
And just recently, adding to the pain, Kristina Keneally (possibly the dumbest person in politics – and that’s saying something!) took a photo opportunity beside a central NSW dam at 4% capacity, trying to show compassion to the local people for this “natural” disaster.
(1) The dam is man-made, by govt (so is its location).
(2) Govt zoned the area fit for human settlement years ago.
(3) Govt gave excessive water rights to farmers that produced the disaster.
(4) Govt zoned other areas closer to major cities as exclusively residential, so that’s why farmers are pushed out to these unsustainable areas.
This is a classic example of criminally negligent, short-term govt planning, resulting in a predictable man-made disaster.
And now a govt idiot sits there beside the dam they built, looking on forlornly as though this is an act of God.
These are the same idiots who want to tackle climate change. When these govt disasters follow them in the Co2-laden jetstream to Copenhagen.
I really can’t stand this level of stupidity any more. I just can’t take it.
Finally! A few mainstream media outlets are writing about this stuff.
More interest, more research, more scientists, more money to agriculture, (and hopefully birth control for the Third World), less of a pelican problem in a few decades’ time.
and some are making the very reasonable prediction that the food supply will collapse with monetary collapse.
Reviewers in the US are labelling the film Collapse as extremist, nightmarish, apocalyptic…
But no one has analysed and critiqued the facts of a rising urban population, a squeeze on arable land, a spike in oil, a collapse in bee production and pollination, a collapse in the division of labour, a systemic crisis in the financial markets (which very nearly did happen in Sept 2008) or many other allegations that serious scientists and analysts are making.
Is everyone who follows conclusions logically from their facts extremist for following the facts to their logical conclusion? Just because we haven’t seen collapse in our lifetimes doesn’t mean it can’t happen. China, Japan, indigenous peoples around the world, the Mayans, the American Indians, the Romans, the Egyptians… all these civilizations have experienced (or are experiencing) catastrophic environmental and social collapse.
The question is not “How could this happen?”, rather “How can it not?”
I’ve been screaming for years about the upcoming food crisis and the “silent” crisis of dry land salinity, of a “phosphate depletion” crisis, of the destruction of arable land from commercial farming.
No one listens.
When will this catch on?
And why the Hell are blind corrupt govt bureaucrats screaming about a non-issue like global warming when this very real crisis is staring us in the face?
Gary North calls for the jailing of fraudulent climate scientists for wasting everyone’s time.
Off with their heads too!
As a committed, card-carrying Libertarian Taoist-Buddhist Anarchist, I believe in both the practical possibility and definite desirability of “Order Without Law.”
Robert Ellickson’s book of the same name was an eye opener for me, and I based my LL.M. thesis on his ideas regarding spontaneous order without law, which drew me into anarchist-libertarian thought. Which is where I live now, depressed, apocalyptic about the future, knowing how govt oppresses and destroys, confident in their ability to destroy our futures.
But as a practical man, I understand that the Mafia will always exist in any society. I respect Hans Hermann-Hoppe’s analysis of various forms of Mafia-Government, and agree that monarchical states produce fewer “bads” than democracies, where the two wings of the same bird of prey simply take turns in oppressing us.
Accordingly, I would much prefer to live in Bhutan, a monarchical Buddhist nation-state that is endowed with the best government in the world right now, and has the only truly sustainable environmental policies of any govt, but practical circumstances and the limitations of immigration laws condemn me to live in a quasi-fascist hell-hole “democracy” run by criminal embezzling international bankers-Freemasons-Illuminati-Reptilians called the land of Oz.
Given this reality, I try to nudge people around me (and the criminal govt) towards sustainable sanity. But given I cannot even get my neighbours to throw rubbish in the right garbage can, I despair at my pitiful efforts. As a failure, I often contemplate the only logical “out” for anyone seeing their society kill itself (suicide) but continue to live just to see whether I’m proven wrong. I doubt it, but hope springs eternal.
On this basis, I accept the oppression, the stupidity, the lies, the brutality, the corruption, the venality, the pompousness of coercive govt. However, I would like to educate govt on how to kill us more slowly. There’s no point engaging in the business of oppressing us so successfully that they kill us within a few decades, or a few years. Give us at least a century before completely cannibalising us. Sadly, given the current direction of Western Fabian-controlled criminal govts, there is the real prospect in the UK, the US and Australia that we will die in a few short years from a second GFC.
Nevertheless, in the hope that my words cause a small ripple, let me share an insight with you: The most elegant, the most profound, the most brilliant piece of market regulation ever devised in the late 20th century was “accidently” passed by the Australian govt in 1974. It had an effect far beyond the drafter’s wildest expectations, has been the most successful piece of market-regulation ever introduced in Australia, is easy to understand by the layman, is intuitive and gave a property right in truth.
That piece of legislation is a simple one line section in the Trade Practices Act (Cth) 1974. Section 52 of the TPA states:
The inadvertent genius of this piece of legislation is that it was easy to understand and could be enforced by market participants (not only govt bureaucrats). Market participants suddenly were given a property right in truth! And as Murray Rothbard has forcefully argued, the market works best when people are given standing to sue on a property right.
This little unassuming section has revolutionised commercial litigation in Australia. It is the most-used, most-cited section in commercial law pleadings and cases. By creating a property right in truth it allowed self-regulation by market participants.
It was truly a work of genius – subtle, using the power of property rights and the market, aligning the community’s interest with the interest of individual market participants who were given standing to sue for commercial lies.
It has killed gross misrepresentations and overt lying in real estate, in banking, in insurance, in a whole host of industries that are subject to “sharp commercial” practice in virtually every other Western jurisdiction. No other major Western country has such a powerful legislative protection from commercial liars. The US has no such protection, and therefore lying is rife in commerce. No one is given a property right in truth in the US, and therefore it is an undervalued commodity.
Using the lessons learnt from this piece of legislative genius, I have a suggestion as an alternative to an ETS. How about we introduce this piece of legislation instead:
A person shall not engage in polluting activity that is likely to cause significant and sustained harm or damage to the property or health or livelihood of any other person.
“Person” in this context is intended to include “corporation” and “government agency”.
Any person has standing to sue on the above section and any parent has standing to sue on the basis of the above section on behalf of a born or in utero child.
If two entities are polluting each other, then (obviously) the costs can be “netted out” and offset against each other, with the “greater” polluter compensating the other party for the net costs of the polluting activity.
“Livelihood” includes the right to natural habitat or access to fishing areas, hunting areas etc for indigenous peoples and sustainable self-sufficient farmers.
This would provide a property right in clean air, clean water – a property right in not being “injured” by pollution. It would be enforced by market participants. It would be for the courts to determine cause and effect – not a govt bureaucrat. It would allow evolution in jurisprudence. It would be self-regulating. It would be cheaper (far cheaper) than an ETS.
It would provide for order with minimal law.
What about it?
I have written previously that I am concerned about polluting externalities in the supply chain. This is despite my Austrian leanings (some Austrians believe the “market price” – even in today’s debt-based monetary system – can appropriately balance disposal consumption with recycling).
There is a huge plastic waste dump site in the Pacific Ocean that is twice the size of Texas (although some scientists allege it is much bigger, perhaps up to twice the size of the continental United States). This is killing fish and ocean life, as many sea creatures mistake plastic for seaweed or other edible food. This is contaminating the whole food chain in the Pacific Ocean, with evidence of cancers occurring in whales and other sea creatures, because of this toxic contamination of the food chain.
The problem is an extreme example of an externality: No one “owns” the ocean, so no one has standing to “sue” for damage to this “property”. So the costs of pollution are not included (“endognised”) into the price. The price of plastics “should be” (hypothetically) around double the price it is today, just to pay for the costs of cleaning this waste up and encouraging recycling. If George Soros or Goldman Sachs or Al Gore or Israel owned the Pacific Ocean, I guarantee every single piece of plastic trash would be paid for by someone.
However, at the moment no one owns the Pacific Ocean, so no one sues, so no one cares and the price of plastic doesn’t reflect the true costs of both the production and waste of this product. It’s “out of sight, out of mind” for most people. Until their child contracts cancer from contamination in the food chain.
We ultimately eat the fish that swim through these waters. Clearly we have a vital interest in fixing this problem, aside from the simple moral imperative of cleaning up after ourselves.
I fail to see how this is sustainable, or aligns with our long-term values, or appropriately “endogenises” all the “externalities” involved in the production of plastics. We may need to control this out-of-control process by increasing the cost of plastic production to “endogenise” these long-term costs, because the madness of the debt-based monetary system ‘artificially” skews incentives towards disposal consumerism. A higher oil price would achieve this, and reduce “greenhouse gases”. What’s wrong with a higher oil price?
Alternatively, we need to get back to a gold standard, where savers are rewarded for saving and “disposable” items become more expensive relative to real incomes (and housing prices collapse in real terms).
This is not sustainable, and I defy anyone – Austrian, Keynesian, Marxist, Fabian – to say that it is:
An interesting piece pouring scorn on the “recycling” fetishists.
I don’t know whether this is the best application of Austrian analysis to a problem for the following reasons:
1. As Michael Rowbotham points out, the current monetary system pushes us towards debt-based overconsumption. Gold would reverse this process and reward savings to a much greater degree. So the real concern is that the whole monetary system is pushing us towards unsustainable overconsumption – something both Mises and Rothbard would have seen had they been alive. Their PRINCIPAL concern was the monetary system skewing incentives and creating malinvestments. This is what Austrians should be worrying about. Not trashing recycling.
2. Perhaps I’m a soft Austrian, but there are externalities which are not “endogenised” in the price system currently. The full long-term polluting effects of oil production, of cyanide-based and mercury-based gold production, of coal mining… all of these have externalities in the form of pollution of river systems and the air which are not captured by the price system because no one owns these rights. So I do believe we may not be appropriately pricing inputs for the long-term, which means that recycling may make more sense than this “Austrian” believes.
It’s funny that in the old days when there was more stable money, there was actually more recycling. I still remember glass bottles of milk being picked up in country towns in Australia each day for recycling. I still remember aluminium cans being collected for their recycling value. I still remember “stuff” being re-used all over the house by my grandmother. What’s changed? The cost of these “throw away” items relative to our income has gone down, but the cost of housing relative to our income has gone up. Massively. So we worry about our mortgages and our jobs – but not about our savings or the milk bottles.
Return to gold and yet another problem would be addressed – that of pointless debt-based over-consumption. The cost of housing relative to our income would go down. The cost of “throw away” items relative our income would go up. And so we’d throw away less.
Climate change as academic game-playing BS goes mainstream.
More verifiable allegations:
- “They are making scientific progress more difficult now,” says Willie Soon, a physicist, astronomer and climate researcher at the solar and stellar physics division of the Harvard University-Smithsonian Center for Astrophysics. “This is a shameful, dark day for science,” he said in an interview…
- Soon also suggested that there has been systemic suppression of dissenting opinion among scientists in the climate change community, ranging from social snubs to e-mail stalking and even threats of harm.
- Many in the environmental policy community are outraged about the disclosure that the data has been lost. “The scientific process has become so appallingly corrupted,” James M. Taylor, senior fellow in environment policy at The Heartland Institute, told FoxNews.com.