It doesn't happen very often but sometimes in my trolling through the Internet I come across something which totally changes my perspective of the world.
The video clip below is from a lecture by a Swedish lecturer on international health statistics. The lecture (which is 24 minutes long) explains how far the world has come in terms of health outcomes in the past thirty years. Its well work watching.
Friday, October 26, 2007
It doesn't happen very often but sometimes in my trolling through the Internet I come across something which totally changes my perspective of the world.
Posted by Peter King at 10:04 AM
Thursday, October 18, 2007
They call it "the lucky country" but to my mind there is nothing particularly lucky about our neighbouring continent, Australia. For the past 60,000 years the only people who saw any value in it at all were the various indigenous 'aboriginals' (not a name they gave themselves). The Asians, who sailed by, just saw a big, ugly, flat desert full of nothing. A great place to live if you like flies, sand, and eating lizards. So they left it alone, preferring the fecund tropics further north.
It was the white fullahs (many of whom arrived in chains with very limited life expectancies) who called it the "lucky country". For a start there was all this land. Land as far as you could ..well, and even further. Once you'd wiped out all the natives you could become lord of all you surveyed! And then they discovered things. Once you'd wiped out all the pesky roos, crocs and emus you could farm real animals. Real animals like cows and sheep. You could grow wine! and man, talk about the minerals! No flippin' end of them. How lucky could you be?
Well, you could be New Zealand. In fact New Zealand has more available quality land because it has better water supply. It has huge quantities of minerals, the world's fourth largest maritime territory, natural renewable energy out the wazoo, and no small amount of fossil fuel either. New Zealand is two-thirds the size of Japan, another ring of fire island chain, and larger than England. On that basis it could probably easily support 60 million people. I doubt that Australia could support another 20 million.
For my contention is that Australia isn't lucky at all. Not inherently lucky, anyway. What makes Australia "lucky" is the attitude of the Australians. The Australians have never been shy of being proud of their nation. They have never been shy of dreaming big dreams and then making them happen. Nor have the Australians been scared of telling other nations where to get off.
You could argue that New Zealand's anti-nuclear position was an up-yours to the Americans. But it was a fairly pathetic bit of rudeness by a small child to a kindly visiting uncle. New Zealand is geographically fortunate (lucky again) that it doesn't have to think about defence very seriously because the only nation which can threaten it is Australia. So New Zealanders should get over themselves and recognise when it comes to serious bullies, like the French, we fold like the chicken shits we are. Only one case of terrorism in it its history and where are Alain Marfart and Dominique Prieur today? Not in a kiwi jail that is for sure.
But New Zealand is not a lucky nation. If Australia is the twinkle eyed charming youth, New Zealand is a buck-toothed, thick spectacled, little girl. Why aren't we lucky? Because we don't think like we are. We listen with big eyes to every opinion every passer-by cares to have of us. If they don't like us we rush to our room sobbing. "So what do you think of New Zealand?" is the question every tourist hears again, and again and again and again. We are so insecure we take every report about us incredibly seriously. Then we tie ourselves up in knots in nervous anxiety about what to do about it.
No where is the difference between our two nations more evident than when it comes to climate change and the environment. To Australians the environment is something you make money with. To New Zealanders its something you idolise way beyond its economic value. The Australians set reasonable climate change goals and then manage their way to achieving them. Oh yes, they may not have signed up to Kyoto but they will still meet their targets. Meanwhile New Zealand lets itself get talked into silly targets and then its officials spend years going round in circles not managing them. The only way we will meet our Kyoto obligations is by buying hot air.
Both nations face the European protectionist threat behind "food miles". But only New Zealand is planning to cripple itself with its all gases emissions trading scheme to show Mother England (who is talking up the market while she has hot air to sell) that its doing good on climate change. Not that Mother England's farmers and consumers give a toss about whether we have an emissions trading scheme or not. A more ignorant bunch of self-servers you would be unlikely to meet.
By contrast Australia doesn't give a monkey's about European protectionists. America and China are the powers in the Pacific and as far as Australia is concerned its only what they think that matters. Californian movie stars may worry about Green credentials but the rest of California? Certainly Japan, China, Singapore, Hong Kong and Korea seem to be rather more sanguine about climate change than Britain is. Australia knows its future is in Asia and it is busily digging up vast tracts of its mineral wealth to sell there now so it can be wealthy and happy.
New Zealand doesn't want that. It wants to think of "future generations". It wants to be "pure". It wants to be well regarded by Brits and Germans - peoples who, to be blunt, do not have very good histories of thinking about anyone other than themselves. So we forego being rich in order to be 'sustainable'.
How long is it since you heard New Zealand Prime Minister Helen Clark talk about 'returning to the top half of the OECD'? Frankly it should be a doddle. The only problem is the New Zealand government which has absolutely no understanding of commercial realities and couldn't develop a kennel into a dog-house. So she's changed tack. Now we are going to lead the world in sustainability. That means punishing the private sector - something the government can do without even thinking about (and usually does). So that officials can travel to all sorts of exotic locations for 'talks' we will be purer than the driven snow.
To be brutally honest New Zealand doesn't need to have a problem with climate change. All we need to do is plant 2,500km2 in pinus radiata (10mT CO2e) and the problem goes away. It's a lot of work but not impossible. The Department of Conservation (which has inexplicably done nothing to assist the nation with climate change over the past 15 years) has land mostly growing rabbits for such a task.
People talk about looking after the interests of our children. I have four children. And what I wish is that I was a lot richer so that I could assist them more as they grow up so that they could be freer. The same applies to nations. Not developing now just means there is more for the kids to do later. That means they are more beholden to foreigners and less able to make their own decisions.
The question is do we want to be a nation of bellhops for foreigners who come to look at our pristine scenery or do we want to be something more? I say, its time we got over our hangups and removed the red-tape we tie ourselves up in so that we can become seriously rich. Because in the end a growing, powerful economy is the only security we can bequeath.
Posted by Peter King at 9:44 PM
Friday, October 12, 2007
"I don't know you, I don't know anything about your company and I don't know anything about your product. Now, what was it you were you trying to sell me?"So wrote David Ogilvy in his famous ad for advertising back in the 1960s.
These days there would be few companies that did not appreciate the importance of advertising and corporate communication. The role is simply too important as a generator of sales. Even central government does a good job in informing the public about what its thinking about, what it is planning to do, and how the public can get involved.
But when it comes to local government which is currently pleading with the New Zealand public to give it some kind of mandate, the communication and control function is almost non-existent.
Ask anyone on the street what are the main issues confronting their local council and the probability is they couldn't tell you. They don't know what local government does, they don't know who made what decisions, and they don't really care.
Should they? Of course they should! Local Government collects millions in rates and spends it on roading, water, rubbish collection and civic amenities. Under the outrageously restrictive terms of the Resource Management Act and Building Act they practically own the land we live on, and we have to go cap in hand to them to allow us to spend our own money on our own properties – and pay them hefty fees for the privilege.
And more important the lack of of electoral representation fundamentally undermines the mandate of local government. Although this would not stop local Government if we had a half-way decent democracy there would be some form of law/court or commission which would insist that certain actions can only be carried out when an organisation has a clear mandate to carry them out. For any real democracy that would not be a threat but for local government at this juncture it certainly would be.
Because at the moment more often than not what happens is that local government gets captured by developers or interest groups who use ratepayer money to further agendas the voting public has no idea about and wouldn't approve of, if they did.
So why don't we vote? Because we don't know what Councillors and mayors are accountable for and we don't know what they have or haven't achieved. We have no idea who the candidates are, what their records are or whether their platforms have anything to do with what their role would be.Why not?
First, because news about Council decisions is restricted by Councils carrying out so much business in committee. Second, there is no such thing as an opposition when it comes to local body decision-making. And thirdly our local bodies are the wrong size.
In my view the French have the best appreciation of petty politics. Two thirds of the funds spent in local body politics in France are spent by communes. A commune is about 1,200 households. It is, in essence, a neighbourhood. As such everyone knows everyone else. Thus: "If that fat bastard Bertrand things I am paying my rates so he can swan off on a 'fact-finding' trip overseas, he has another think coming". Everyone in the neighbourhood knows what is happening, they know and care where the money is going and where it's being spent. That is the very essence of accountability.
People understood the Boroughs. They could see the benefit of collective action at a neighbourhood level. Borough dealt with pot-holes, intersections, play-areas, libaries and all the little resources a community wants to provide itself with in a way that remote District Councils never can and never will.
Of course petty politics is essentially petty. Above that you need a more substantial organisation. The logical step is Provincial Council embracing all the District Council functions in a Province. This would look after major road links, water, catchments, parks and reserves etc. It would also need some heavy duty representation including one delegate from each Borough, and a serious sized directly elected council. In Germany the State Governments actually nominate delegates on to the upper house of parliament but that is another story.
Provincial Government would be in a far better position to further the economic, social and environmental aspirations of our provinces than a hotch-potch of district and city councils loosely linked by an over-developed catchment authority (Regional Council). It would be better understood by the media and voters alike and by dint of having more power would stimulate more interest in local body elections.
Until we get local government that conforms to our natural heirarchy of collective interest: neighbourhood; province; and nation, local government will continue to irritate its constituents with interventions based on an inadequate mandate.
The simple fact is the combination of the local government reforms of the 80s and the Resource Management Act of the 1991 have failed to deliver a local government structure that New Zealanders have any confidence in. Unpleasant as it may be, it must be changed, and preferably sooner rather than later.
Posted by Peter King at 2:35 PM
Tuesday, October 9, 2007
The Emissions Trading Scheme being proposed by the Ministry of Economic Development will not reduce New Zealand's emissions but will result in New Zealanders paying a lot of money to dubious business-people overseas.
New Zealand is coming under intense consumer pressure to be seen to 'do something' about climate change. As our traditional customers for high value foods express disquiet about the long distances our exports must travel before arriving in their markets exporters seek methods to reassure them. The Government's response is an Emissions Trading System which frankly looks as if it has been designed by officials to benefit officials rather than do the country any good.
The New Zealand's Emissions Trading Scheme is to be "world leading". It will be world leading because it will embrace forestry (2008), liquid fuels (2009), and agriculture (2013). By contrast the European Emissions Trading Scheme (which has been in operation for two years) started only with large industry and electricity generators. In general New Zealand's examples of "world leading" developments in public administration have, to date, left rather a lot to be desired. This has not however dampened the enthusiasm of officials who are insulated from the effects of their miscalculations. Instead they are rewarded with trips to far off conferences to present papers on "lessons learned" – at taxpayer expense.
Like all markets the Emissions Trading System will be about demand and supply. Unlike fish or Securities, there is no innate demand for Carbon units. The only reason for any demand for carbon units is that those lucky firms designated by the Government will have to purchase them and/or face a range of chastisements from the Government. With the relish our Scottish heritage has for such things the officials have recycled chastisements from the Inland Revenue Department ranging from stinging fines to the incarceration of the Directors of uncooperative companies.
Each company designated as having an obligation to purchase carbon credits will be assigned a shopping list based on the level of emissions above those made in 1990. In some cases where emissions are less than the 1990 levels they will be assigned a credit. This means that the oil companies, electricity companies and agriculture which have all had significant increases in emissions face a large obligation to purchase carbon credits.
So who will supply them? Some, such as municipal waste processors who have installed methane capture technology, will have a few. But on the domestic market it is hoped, by officials, that the vast bulk of the supply will come from forestry.
The problem is there is an enormous spanner in the works. Under the Land Use and Land Use Change (luluCF) provisions of the Kyoto Protocol harvested wood is deemed to be released to the atmosphere the instant it is felled. Those logs you see being hauled around the country and stacked up in ports for shipping to other nations? Well, under Kyoto they don't exist. Some might say that's because the developed world didn't want to have to account for the huge amount of embodied carbon it imports from the developing world (but I couldn't possibly comment). For foresters, however, this has dramatic implications.
It means that under the Emissions Trading Scheme they will have credits to sell for each year's carbon sequestration from 2008. However when they harvest the forest they will have a carbon liability for every tonne of carbon sequestered since the forest started growing. To give you some idea of numbers a Pinus Radiata forest absorbs 40 tonnes per hectare (more or less) per year. But on harvest "releases" 800 tonnes a hectare. In other words unless the forest you enter into the scheme was planted in 2008 every forester must, under this scheme, eventually end up with a net loss (present value of cashflow excluded).
Under such rules it is very hard to see any incentive for foresters to enter the scheme. Moreover the Government has announced a $50 million afforestation package designed to stimulate planting in those forests that don't enter the scheme. In short there is a disincentive to participate and an incentive to not participate. Despite this Officials speculate New Zealand forestry carbon credits will be sold with a "New Zealand Pure" brand premium on international markets.
So if forestry isn't going to provide the bulk of the carbon credits who will? Officials leave open two additional sources, both from overseas.
Under the Kyoto Protocol every nation has so many "Assigned Amount Units" which is the level of CO2 equivalent each nation emitted in the reference year (typically 1990). Some nations, notably the Russian Federation and the Ukraine, today emit considerably less CO2 than they did in 1990. These extra Assigned Amount Units (colloquially termed 'hot air') may be sold (for real money) to other Kyoto signatories who need to balance the difference between their 1990 allocation and their current emissions. It is widely thought this is the only way Japan will meet its Kyoto targets. Officials have left open the possibility that obliged companies in New Zealand may buy foreign AAUs and convert then to New Zealand Units under the Emissions Trading System.
At present it is impossible to tell how much these units will sell for as none have been traded. The Russians and Ukrainians have a difficult balancing act in that their AAUs only have value under the Kyoto Protocol. If there is no continuation of the Protocol past 2012 their AAUs could be valueless. They also have so many AAUs that they could easily swamp their own market and devalue their asset. It is likely that during this commitment period (2008-2012) they will trickle AAUs on to the market keeping the pressure on in order to maintain prices until the very last moment.
Another provision under the Kyoto Protocol is the Clean Development Mechanism. Under the Clean Development Mechanism firms which invest in projects which reduce emissions over 1990 Business-as-Usual can have those reductions registered by the United Nations. These Certified Emissions Reductions can then be traded and will be able to be bought into the New Zealand market so long as they meet the market balance dates (end of the Calendar year). The price of CERs (or their derivatives) depends largely on how far long the certification process they are. In general projects tend to over-claim reductions in their initial phases ( attracting a discounted price) before they finally become certified (when they achieve a general market price).
Naturally the price of AAUs and CERs will depend on the market for them. Unfortunately the rules of many markets cited by New Zealand officials are unknown because they haven't been developed yet. It is notable that none of them will be as comprehensive (read "bold") as the New Zealand ETS. The exception is the European ETS which excludes Russian and Ukrainian AAUs altogether (because, one suspects, this would discount the value of British and German "hot air") and only allows firms to meet 10% of their obligation with CERs. Currently the UN has registered 80 million CER ( about what the New Zealand oil firms would need for the 2008-12 period) but has 2 billion worth of (high risk) projects registered for the 2008-12 commitment period.
The price for CERs on the European exchange will depend very much on the supply and demand for them. In March 2006 prices on the European ETS collapsed because it was discovered that the supply of credits was greater than the supply of debits so there was no scarcity. Previous to that the price was around 40 Euro. Today the price is around 17 Euro. Officials "think" the New Zealand price will be lower than that. Even so at 17 Euro New Zealanders would face an increase of about 10 cents a litre for diesel and 8 cents a litre for petrol. This money would be paid to those people selling the CER credits.
What does all of this mean?
One possibility Officials 'wink' about is the possibility that New Zealand will become a carbon laundering nation. That is selling "Pure NZ" forestry carbon credits, while covering itself with cheap Chinese CERs or Russian AAUs. Unfortunately such naivete does not wash with the Europeans who are more likely to blast us for such cheap tricks than participate in such a back-handed game.
One thing is certain and that is New Zealand consumers will end up footing the bill. All energy will cost more and farmers will end up spending a significant proportion of their income covering their carbon emissions. There is no guarantee that forestry will rebound from the deforestation that pre-Kyoto jitters and high land values have prompted.
But at least the officials will have a good story to tell in the far off capitals of the world on the conference circuit.
Posted by Peter King at 2:05 PM
Monday, October 8, 2007
Watch the various Rugby commentators squeal with outrage as the All Blacks plummet from their smug pedastal, toppled once again by the pesky French.
It was 1999 all over again and those of us for whom Rugby is not a religion could not help but derive a little satisfaction that this over-hyped, over-sold, sport's bone-crunching collision with the up-right face of reality.
For the fact is that the All Blacks were not running rings around the French. At no stage did that game look like a walk-over stymied by biased refereeing. The fact was the French were:
a. not cowered by the All Blacks
b. ready to play a hard forward game to meet the All Black onslaught
c. not giving up possession with stupid blunders
d. fresh when our boys were exhausted
All of this points to some pretty stupid strategic decision-making. The French had reserves with punch at the end of the match, just like they did in 1999. The All Blacks looked tired, lumbering and hesitant. Again. The French had weathered their forward assault and after that the All Blacks were out of ideas. The dazzling, non-stop set-plays which won the Cup in 1987 were no-where to be seen.
The fact is the Southern hemisphere teams spend far too much time in front of the Super-14 mirror. They pout, they ponce, they sign the deals. In the Northern hemisphere they just focus on the World Cup and then they win it. We don't see their best teams because they only send out reconnaissance teams between Cups. That gives them loads of information and denies us any.
And while the games commentators (all of whom profit from the All Black mystique) may call for the sacking of Graham Henry and want inquiries, the real problem is indemic in the sport as an industry. For the fact is rugby is selling machismo not performance. Look at the ads. Chest beating, hairy-chested nonsense. Me tough All Black, you wimpy froggy. Well, serves you bloody right.
What our national game really needs is a serious kick up the arse from a major sponsor or two. One who says ' you're a pack of bloody losers, come back when you have something to show for it other than your high opinion of yourselves.' Then we might see the humility, the hunger, the intelligence, the imagination and the tenacity which made us proud in 1987.
In Rugby as in war, winning requires:
1. A team that has practised and practised and practised together for years
2. More new tricks and manoevers than the opposition can deal with
3. In-depth tactics for the whole duration of the match, not just the beginning.
4. Excellent intelligence on the opposition's strengths, weaknesses and probable approach
Rugby deserves this lesson in humility. If it doesn't learn it this time, it sure will, in front of a home crowd in 2011. And that will be even more painful.
Posted by Peter King at 12:51 PM