Saving the Planet for Nothing (Georgie George)

One of the challenges with science is that you can't really prove things. You can disprove things. With maths we know the rules because we set them based on obviously true conceptual facts and build up from there. Science is more complicated. There are normally lots of people arguing. It is tempting to just find the people that agree with you. Sometimes the experts are wrong because the smart people have moved on to unsolved problems. Sometimes the consensus is wrong. Ask Galileo. I still think you can make reasonable life choices if you keep your wits about you and keep half an eye out for whether you are on the side of the crazies. Bad science gets found out. 

For the Australians out there, I apologize for Georgie's banter. I recognise it well, we met representing our respective residences at university. My residence was for the good looking, intelligent, athletic, witty and inspirational guys. His was for the others. Despite that, he's a good guy.

Saving the Planet for Nothing
Georgie George

In 1988 James Hansen (who none of you have ever heard of), a climate scientist from NASA, gave testimony before the United States Congressional hearings on the “Global Warming trend”. This testimony gave way to the conference in Rio De Janeiro which then gave way to the Kyoto protocol which then gave way to the Intergovernmental Panel on Climate Change. Again, most of you would probably only have heard of the Kyoto Protocol? In short, what all these conventions and expert panels are supposed to achieve is a common agreement between all participating countries on the levels of atmospheric emissions we should limit each country to, to ensure that the average global temperature increase does not exceed 2 degrees. The idea is that the more harmful gases (specifically carbon dioxide and methane) we emit into the atmosphere, the warmer the planet is going to get. It’s like sitting in your car in the hot sun, windows closed, chain smoking and eating a lot of baked beans. It’s not going to end well!

Between Hollywood and South Park, some of these concepts should be familiar? There have been numerous models demonstrating the impacts on the planet with a 2 degree rise in temperature, like the rise in sea levels by 1m in some places, completely swallowing California (not so great) and parts of Australia (I can live with that), the shift of the global weather patterns which completely destroys global food security. Essentially the “worst parts of the Bible”, or any apocalyptic movie… that does not have Zombies, or Aliens, or flying sharks…

Anyway… what was my point?.... oh yes…  Most of you probably haven't made up your mind on the whole issue of climate change or global warming. 'The fact is the science is darn confusing and there is just as much research disproving global warming as there is proving that it is already occurring.' The most common excuse is that “the planet is just in another natural warming cycle, things will balance out”. I am by no means an expert on the topic. There are many more qualified people out there with many more consonants behind their name that are much more appropriate to speak on the subject. But I'm pretty sure the planet didn’t have large industries, cars, Burger King (that’s right you big yellow M franchise… you have been replaced in colloquial language) or the internet. Surely there must be some merit to the argument that humans had/have a hand in destroying the planet?

Let’s forget for a moment all the science and all the theories that have been put forward on the warming of the planet or the death and destruction that awaits us all. Let's just focus on our (the humans) impact on the planet and see if we can appreciate the part we play in it. Let's limit our sphere of influence to a single day, from getting up in the morning to going to bed at night (I'm going with a basic case where you are a single individual living in a one bedroom apartment, driving a modest car…ok, you can have a convertible, and you have a corner office in a trendy part of town…any town…except anywhere in Australia… or Canada… there is nothing trendy there). I'll try not to go into too much detail, but I want you to think about every activity throughout this period in terms of “using energy” i.e. electricity, gas, or generating waste i.e. “trash or anything you have to flush away, or expel into the atmosphere”. Does it make sense?

Ready? … let's give it a try

• 5:30  - wake up
• alarm clock probably plugged in – energy used
• if you are guy, you probably broke wind  - waste expelled
• If you are a lady… you probably did too – but it was cute and I won’t count it
• Unplug smartphone –energy used
• Check Facebook, twitter, tumblr etc and check how many “likes”, “retwits” you got – poke a few people- retweet etc– how much energy is used to “Power the internet”? Answer – a lot of energy and a lot of waste expelled (take my word for it… I still have a few consonants in the relevant field after my name)
• Evacuation (like in Austin powers?) – waste expelled (if you had curry the night before… a lot of it evacuated…painfully)
• Brush teeth – waste expelled (not sure if you want to switch evacuation and this one?)
• 5:45 – Cup of coffee
• Boil kettle – energy used
• Coffee – energy used at some point to buy it… more energy used and waste generated getting the coffee to the shelf. =>  does this make sense? If you are in London and are drinking coffee, there is no way was grown in TESCO’s backyard. The coffee beans were grown in some poor country where even poorer people picked the fruit, and roasted the fruit to get the beans which were transported to another country that was then roasted again and then ground to a coarse texture. Then it had to be packaged, branded and then shipped to the store shelf. I am leaving out a great amount of detail here. But you get the point? Things don't just appear on the shelf. It has gone through a process to get to you. => don't forget, at some point, you will throw that tin of coffee away => waste generated
• Milk from the fridge – energy used to keep milk cold, waste generated from milk carton at some point => now do the same thinking process for milk, or electricity that we did for coffee :-)
• 6:00 -  all packed and out the door
• Get in car, drive to gym -  energy used, waste expelled
• Most of you probably used your phone while driving? – energy used, waste expelled
• 6:30 – 7:30  - gym and shower
• Using a facility with excessive lighting, TV’s everywhere, loud music and central air conditioning – copious amounts of energy used and lots of waste expelled
• 8:00  - drive to work - energy used, waste expelled
• 8:15 – another cup of coffee – energy used and waste expelled
• But you used a paper cup – waste generated
• And there was a plastic spoon – waste generated
• Oh… but you spilt some coffee on the floor, need a paper towel – waste generated (because you are a decent person and you wouldn't leave it for the janitor)
• 8:30 – 10:00 – Check emails / surf daily news – energy used and waste expelled
• 10:15 – Toilet break – waste generated
• 10:17 – Coffee break 2 – see above
• 10:30 – Meeting – death by PowerPoint, more coffee => energy used, waste generated and expelled 
• This is getting tedious… fast forward to getting home at 18:00 (there was lots of internet surfing, office banter, checking of social media / using smartphone and more coffee drinking during the course of the day… you probably printed a few reports that no one will ever read) => lots of energy used and lots of waste generated
• Shower – energy used and waste expelled (geyser was probably on all day… so lots of energy used and lots of waste expelled somewhere)
• Supper, take out – waste generated
• 20:00 – Watch TV – energy used, waste expelled.
• 22:00 – go to sleep
• If you are a guy, you definitely broke wind – waste expelled
• If you are lady… stop it… it was only cute the first time!

This was a very brief example and by no means exhaustive. The point I was trying to make was that every action we take has a consequence, either from the amount of energy we consume to the amount of waste we generate. Now add in your family members to the scenario above, co-workers, friends, random strangers, all those cows to give us those delicious bovine products (especially Biltong). Suddenly there is a lot of energy being used and there is a lot of waste being generated / expelled. But where does all the waste go? Well…the large amounts of gases go into the atmosphere… and the solid stuff…goes… into landfills, or the oceans <= The real picture of the actual waste disposal process is not pretty, so I'll leave it vague.

I wasn't trying to convince you of the link between human emissions and climate change. What I was trying to illustrate was that:

• you spend too much time on your smart phones / social media / reading useless pieces on the internet (not this one of course)
• you need to drink a few more glasses of water a day
• you need a bit more roughage (it will make evacuation easier)
• your impact to the environment and the planet is not inconsequential.

Whether you are convinced that the planet is getting warmer, or that there may be a human influence on climate change or not, you have to appreciate the impact you have on the environment around you? Hopefully you will think a bit more about you actions going forward, who knows, you might even join a Facebook campaign to save the planet… 

Hard and Soft

The backers of most ways of thinking think of their approach at its best. Whether you call yourself a Communist, Socialist, Capitalist, Scientist or you are Religious, I think we all aspire to the good life and I haven't ever met someone who is malicious in their belief.

Capitalism at its best is similar to Science at its best. It is not an answer. It is a recognition that we don't know and things are complex, so we follow a process that needs continual tweaking. This recognition that no one actually has the answer is what lead to a devolvement of central control that along with the Industrial Revolution has helped in making an incredible dent in poverty. Poverty remains not because there isn't enough to go around, but because of some of the negative side effects. In absolute terms it is hard to find groups of people who are worse off.

Fewer people in the world are poor. #Poverty #DataViz #Inequality From: http://t.co/4wJQAPcBsv pic.twitter.com/KilGUhR2Yx
— Max Roser (@MaxCRoser) December 16, 2014

Capitalism at its worst is similar to Religion at its worst. Once you have found something that works, you can become more resistant to change and more entrenched. When your business model becomes about defending something that used to work, or slowing progress in order to eek out extra profit. The thing is this isn't Capitalism in the same way that Science isn't a defence of anything. If it turns out to be wrong it should be changed. Any reluctance to challenge the status quo can't be defended by anyone proclaiming to be a 'Capitalist' or a 'Scientist'. This is the same as Muslims who are abhorred by ISIS and argue for people to stop even referring to them as Islamists. Good Capitalism, Good Science and Good Religion evolve as our needs change, understanding improves and morality progresses.

Here are four interrelated problems that people who defend Capitalism will be very aware of. The point is the solution is still being figured out.

1. Incentives

The fingers pointed at 'Evil Bankers' presume that investors in banks are happy about the situation as well. Capitalism is good at figuring out through supply and demand what the price should be for products and so shifting around resources effectively. What is still being figured out is how to motivate and compensate people. Money can lead to quite dysfunctional behaviour as the single, objective, bottom-of-the-line measure of what you think of someone's performance and how they are rewarded. Since there is normally no internal 'market mechanism' for what someone gets paid, it ends up being a poker game with their boss. Pay them enough so they don't leave, but not enough that they get lazy. If you can get a sense of how much value they are adding, you still want to be paying them quite close to that is slightly above what would make them leave. This means money ends up being focused on far too much in remuneration discussions and in most jobs where value is even slightly subjective, it will likely be a source of unhappiness.

2. Risk

This is also linked to 'Evil Banker' accusations. The heart of what makes a good businessman is the ability to manage risk. Risk is at once an insanely complicated thing and ridiculously simple. The complicated bit is that we actually really don't know what is going to happen in the future. That is the point of creative destruction. Things work till they stop working, there is a little chaos, you lose some fat, and you move on. There may be lots of pseudo-science that goes into pretending we can manage risk, but actually it is really the Black Swans* that blow you out of the water. The problem with 'Evil Bankers' is connected to the incentives issues and risk management. As an investor, approaching banks is a nightmare. You know that the incentives end up being focused on short term gains while ignoring long term risks. Designing the correct incentive structure is an unsolved problem. A lot of investors don't touch banks because of their size and complexity and think it is a problem. Banks are really useful things and part of the destruction of mass poverty. That doesn't mean all internal problems are solve. The simple bit is that if you guard against putting your eggs in one basket, but keep focused enough investments that are in productive assets, you can have decent control over risks and sleep easy. You. Have. To. Keep. It. Simple.

Two ways at looking at risky Black Swans. Portman is hotter than Taleb obviously.
*A Black Swan is a very high impact, very low probability event

3. Waste

This is an example of both the incentive problem and the 'like religion at its worst problem'. Once a company is successful, clients are comfortable, and staff are comfortable, the incentive is to milk the cash cow for all it is worth rather than being on the edge and risking new competitors. There is a lot of work for works sake. Go to a hairdresser and he will tell you you need a haircut. Go to a plastic surgeon and she will tell you you need some wrinkles removed. Ask a website designer if your page needs a refresh and there is very little chance they will say, 'actually, everything is fine'. The answer isn't that central planning would reduce the waste. It is just that friction still exists. Companies like Uber, ZipCar and AirBnB are examples of how eventually, forces do exist to eat away at that fat.

4. Agency

This one drives me nuts. The agency problem comes about because you need to delegate. If you are going to guard against the risk of having your eggs in one basket, you have to hand some of your eggs to someone else. The person running the business and doing the work is different from the person whose resources are being used to do the work. It is good that you can separate your own resources from your own labour in order to manage risk and play to your skills. But this separation means you need to get the incentives right so that there is less waste and the risk is controlled. Your eyes can't be on all the eggs so you have to trust the person you have given the other eggs to. Their eyes are obviously primarily motivated by what they get paid or other things (power, prestige etc.) . Capitalism has allowed the globalisation of the world which has huge benefits in terms of things getting done by the people who are best at them. But it also means that there is distance between you and the people who are doing the things for you. Distance and trust are unhappy bedfellows. There is still nothing better than looking someone in the white of their eyes, knowing their name, and perhaps even knowing where they live (that sounds a bit creepy).

So those who argue for Capitalism are not saying it is perfect. There are lots of unsolved problems. What we actually need is for more of the people who 'hate money' to get involved and understand the challenges. The solution to many of the softer problems lies on the other side of the hard problems. We aren't going to get to them if we define ourselves as soft or hard. The external problem is also that we actually get very upset by relative wealth disparity even if we are richer, and it becomes tougher and tougher to accept absolute poverty in a world where there is already enough to go around.