Sunday, August 30, 2015

Sustainable Development by Jeffery Sachs

Took this awesome course on Coursera - here are my notes from it.

World Population has been hovering around 300-400 million from 2,000 years ago to 1750. Due to medical advancements began to increase and reached 1 billion in 1830, 2 billion in 1930, 3 billion in 1960, 7 billion in 2011 and 8 billion expected in 2024. IMR in 1950 134, 37 today. Life expectancy 47, 71 today. 1 billion people still struggle for daily survival. Avg Annual Income/person is $12000 - World economy = $80-90 trillion (this has a huge impact on environment)

Term given by scientists - Anthropocene Age - Age of humans
Due to human intervention, there have been major changes in earth even from geological point of view. Fossil fuel (coal, oil, gas) use leading to CO2 emissions causing climate change leading to massive changes to life on earth (temperatures rising, frequent extreme weather conditions, glaciers melting, nitrogen and phosphorous cycle altered, high fresh water usage, loss of biodiversity, oceans acidic, air polluted, chemical pollution, ozone depletion, deforestation.

"We honor and respect planetary boundaries as we improve our well being, a combination of economic prosperity, social inclusion, ending poverty and ensuring environmental sustainability that is the holistic objective of sustainable development."

Business as usual will have some benefits such as economic growth but will it be socially inclusive? could eventually be very violent outcomes. BaU keeps transgressing beyond the planetary boundaries and the environmental dangers of that are much more extreme and dangerous. One path to improvement is to use technology in a clean manner. Essence of sustainable development is problem solving

Income inequality is a major factor - some countries have $50,000 annual income others have < $500 even though a few centuries ago they were all at the same (very low) level of income equality. Industrial revolution led to some parts of the world experiencing sustained increase of growth making them rural to urban centred, peasant agriculture to modern industry.

Agriculture advent 10,000 years ago till Industrial revolution (1750) economic growth was very very slow, since then its grown exponentially, due to output/person increase and high population growth. Lack of growth is explained by Keynes as the absence of technological growth and lack of capital accumulation.

Agriculture productivity increased due to learning, urbanization, trade, property rights, rule of law taking hold, especially the steam engine invention by James Watt (1776) was a major component of the industrial revolution. (technological trigger). There were special conditions also, coal and iron ore deposits near england and the above changes allowed for the industrial era. Adam Smith (father of economics) published Wealth of Nations and the American colonies declared independence in 1776 also. Modern world economy was being set in new industrial/factory towns with steam engines pulling rail roads and steam ships transforming transportation and coal burning in factory towns. In summary, natural resources combined with technical know-how and spreading market economy helped start industrialization.

Karl Marx detailed this growth in world economy but highlighted the bourgeois as the new capitalists who were pushing all other classes into the background.

New modern economic growth was under way, markets and technology drove this economy in a few places at first but slowly in the entire world. Economic growth = increase in GDP/person, or Gross World Product/World Population, has gone up significantly over 200 years but with vast disparity in different regions of the world. England was the tech leader in early 19th century, then mid-late 19th century Germany and early 20th century USA took over. Innovations and tech advancements allowed them to have a stronger sustained growth.

Other countries, due to various reasons, stayed back while others coasted ahead (eg China did not industrialize at that time), developing economies are doing so now, trying to close the gap by taking on those technologies. Leaders innovated, followers replicated through investments, copying etc.. Both required different types of institutional development.

Endogenous growth of technological leaders came in 5 tech advancement waves.
1) Steam Engine - 1770-1830
2) Railway and Steel - 1830
3) Electricity - Incandescent bulbs (Edison) - 1880-1930
4) Auto-mobiles, petrochemicals (plastic/new materials) and innovation (Model T - Henry Ford) 1930-1960
5) Knowledge economy - Computers - Transistor 1970 - 2000 (Moores law - double processing every 18-24 months)
Could the 6th wave be a sustainable development technology?

Diffusion of knowledge to other nations happened sooner in some places than others, some 2 billion people still dont have access to electricity. Diffusion of technology didnt happen in many places due to various factors, esp proximity/ access to market, due to sea trade (development at coasts before inland), predicted by Adam Smith. Strong agriculture is a second factor allowing for industrial development in cities. Local energy resources allow a big advantage in speeding up economic growth. Healthy environment for humans helps the diffusion factor and good politics is critical to the growth.

The development started with Great Britain in Europe, and the diffusion happened in a ripple like manner spreading eastwards. It then spread to new settlements like USA, Australia, Canada and then to countries with favourable climate (temperate) Argentina, Uraguay Chile, Japan. Most of the rest of the world had to wait till latter portion of 20th century. Big factor, no independence, no sovereignty. British and French empires had control over all of Africa and most of Asia disallowing diffusion to happen there because they wanted to maximise their own well-being at home. Using them as primary sources for low pay labor not as areas of economic development.

Economic development had grown steadily for imperialist powers until the first world war which led to severe destruction, epidemic such as flu, Bolshevik revolution leading to Soviet era communism, economic instability and role in economic depression leading to rise of fascism forces such as Hitler leading to World War two. Technology had advanced, technology leaders had taken a big hit but USA was unharmed and became the strongest, most influential economy.

Post WWII, the world was divided into 3 parts, first world was US, Eastern Europe and vanquished Japan. Richest group.Market economic system trading amongst each other, technological change leader, Second world was Soviet Communism, (soviet union and 17 republics of Western Europe) and China. Third World were the former colonial powers (with weakened imperial powers they had become decolonized; gained freedom/independence this process took a few decades) India, Indonesia, Africa, rest of Asia etc. Third world countries were non-aligned with the top 2 worlds. There also are 4th world countries which are in absolute, abject, poverty.

First world recovered very quickly, endogenous technology driven economic growth took hold, modern economic growth and rising living standards. Second world had industrialization but by the 70's economic development under non-market communism system slowed things down, they began to reform starting with China, under Deng Xiaoping, which grew very very fast. Russia reformed towards a open market economy under Gorbachov in the 80's, then eastern Europe countries revolutionised. Third and fourth world had diverse backgrounds, economies and strategies and very few followed the first world model (such as Korea, Taiwan, Hong-Kong, Singapore, the Asian Tigers) who integrated with the first world and opened their country to foreign companies to manufacture/develop products there, becoming a part of the global economy. a special kind of industrialization. They grew very quickly in the 60's-70's. Other developing countries saw this and decided to become aligned (not politically but economically) and opened their doors to trade and investment, allowing MNCs to use their cheap labor and resources. This is how globalization came into being. Diffusion, allowing countries, to grow and a new global industry centred around MNC doing global production backed by improved technology, transport (inter-modal - containerization of trade), computer assisted design and manufacture, internet and mobile telephony revolutionized the ability of companies to engage global production systems. Hence, the companies became the main agents for continuing the ripples of diffusion of economic growth.

Japan, described this as the flying geese model. A formation in which they all follow each other. Japan industrialized followed by Asian Tigers, then Indonesia, Malaysia, Thailand, China, Vietnam, Cambodia, Laos. As the leading country moved from textiles to electronics to auto mobiles to advanced info tech, the country behind it moved from agriculture to textile to electronics into its own technology innovation and the geese follow one after the other.

Coastal areas were the first to advance (as predicted by Adam Smith), China invited investments and became an export base for world manufacturing production. By the end of the 20th century, the spread of economic developed had reached the entire world, almost. Those that came late to this, due to their history, politics, resource base are low income and least developed countries.

Sustainable development makes the point that economic, social and environmental systems are interlinked. Need to understand the environment systems so we can balance the three, economic growth, fairness and social inclusion and environmental sustainability. In search for economic development, we have passed some of the planetary boundaries. We need to quantify the safe limits of economic growth to stay within planetary boundaries.

Climate change is the biggest challenge, caused by fossil fuel use which produces some gases (Co2, Nitrous Oxide, Methane) that allow sunlight in but traps the energy on its way out, leading to planet warming up. Ocean acidification comes from CO2 levels in the air. (dissolving into ocean forming carbonic acid), various animal life is affected. PH of ocean has decreased by 0.1 unit (30% acidity increase). Ozone depletion CFCs used in various equipments would cause ozone to dissociate, especially across Antarctica in 1998. Nitrogen/Phosphorous loading - Only some of the fertilizer is taken up by the crops, a lot of fertilizer goes into the soil and into water/rivers. Causes a lot of ecological destruction. Fresh water use - 70% of fresh water used for irrigation, 20% for industry, 10% for households. Water sources being depleted due to over-pumping. Land being taken over from pastures/forests to farming. Other species going into extinction. Aerosol loading -  Air-pollution, damaging for lungs, and the environment Chemical pollution - Mining, petrochemical, steel industries produce deadly chemicals which damage human, animal and plant life. Biodiversity loss - All of the other factors above, make species disappear at a very fast rate. We are causing the 6th extinction wave of planet earth. All previous ones were naturally caused.

Humanity is causing major dislocation, 6/7th of population looks to locate to developed countries. To reconcile economic growth and planetary boundaries we need to grow in a different way. Different energy, transportation, food production methods. Problem is lesser developed countries have a lot of catching up to do in economic development and this growth can do more damage to the environment. 


Growth Convergence Theory - Country at half the annual income / capita of another country, can grow at 1.4 % points more than the growth of the leading country
  
So essentially, developing countries are growing (economically) faster and given the population growth, we will be 9 billion people by 2040, by end of 21st century we will be near 11 billion. Currently World growth is @ 1.1% by 2100 it will be close to 0% growth. World economy would be worth about $ 270 trillion (given no massive natural disasters)

Energy
Pre-steam engine, there wasnt a way to have sustained economic growth due to lack of energy creation capacity. Fossil fuels were our friends at that time, but now they are our enemies due to greenhouse gas emissions caused by them. Energy efficiency is not sufficient, more energy is required from sustainable sources. For every $1,000 increase in Annual income/person, energy production/person increases by 0.19 tonnes of oil. 1 tonne of energy production releases 2.4 tonnes of CO2 into the atmosphere. Coal sourced energy equivalent to 1 tonne of oil creates 4 tonnes of CO2,  From Oil, its 3.1, for gas equivalent its 2.4, for hyrdo-electric, solar, nuclear etc its 0.

In 2010, World economy was $68 trillion, * energy use/unit of economy (.19) * amount of CO2 released/unit of energy (2.4) = 31 billion tonnes of CO2 emission. We emit CO2 in other ways also, eg cutting trees. 54% of CO2 emitted goes into natural sinks (ocean, plants). So nearly 14 billion tonnes of CO2 stays in the atmosphere due to 2010 human activity.

For every 7.8 billion tonnes of CO2 put up in the atmosphere, the concentration of CO2 goes up by 1 ppm. 

In the last 800,000 years, its hovered roughly between 200-250 ppm. In the last 100 years, its gone up to 400 ppm, which is a seriously deadly change. 450 ppm would mean a temperature increase of 2 degrees since the industrial revolution = massive climate changes and disproportionate ones.

Were expected to reach 450 ppm at current production levels in 25 years. Assuming no change in world economy growth. But as read earlier, its expected to triple i.e. 5-6 ppm increase in CO2 concentration annually. We have to change course very very quickly otherwise were headed for massive global disaster. Solution in the form of solar, wind power technologies are getting cheaper and must be adopted.

Food
Agriculture sector has a larger impact than energy. It causes impact on every aspect of earth systems and planetary boundaries (Nitrogen/Phosphorous cycles, biodiversity loss, land use change, fresh water use, chemical pollution) and GHG emissions (climate change). Malthus (Principles of Population - 1798), population would increase geometrically, food production would increase arithmetically, so eventually people would starve due to the variance and hence bring things back to normal, he didnt anticipate food production increase accurately but he was right that current food production rates arent accomplished sustainably. Sustainable development calls for a reform, upgrading of tech systems to grow food. Also for us to eat wisely, not eat endangered species etc.

1- Apart from CO2 caused through production and use of fertilizers, as well as through agriculture production processes (harvesting, sowing etc) agriculture produce transportation, storage etc, other GHGs such as methane are produced through (uncontrolled) anaerobic digestion into the air, animal digestions and Nitrous Oxide is emitted through chemical decomposition of nitrogen based fertilizer into rivers and oceans.

2- Food production increase has required a takeover of the habitat by agricultural production from various other species, hence their numbers are falling and becoming extinct. 3- By relocating various plant species we are re-adjusting bio-geography (invasive species) leading to local species coming under threat.

4- Overuse of nitrogen and phosphorous, increases its presence in water systems leading to algae bloom, which when decomposing reduces oxygen content in the water (hypoxia) leading to fish and other species dying, especially in dead zones which are becoming common in estuaries (where fresh water rivers mean salt water oceans).

5- Industrial breeding of poultry leads to recombination of genes and viruses resulting in infectious diseases such as SARS. 6- Overuse of water for food production purposes leads to water scarcity which is dangerous for human development.

New farm systems are required based on local soils, local climate, culture, ecological conditions which are sustainable.

Population
More the population, bigger the challenge of sustainable development. (social inclusion, ending extreme poverty, respecting the planetary boundaries). Population forecasts are very sensitive to slight changes in fertility rates. The expected population in 2100 is 10.8 billion.

Literacy, age of marriage, access to contraception, gender discrimination, labor force participation, rural-urban mix, child survival rates, abortion legalization are all major factors of fertility rates.

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Must say this was an awesome experience. I hope i continue taking more courses and wish more people utilize this opportunity to learn about the world and its people.

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