Saturday, July 21, 2007

The Happy Planet Index

The New Economics Foundation, a think tank whose aim is "to improve quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environment and social issues," has issued a Happy Planet Index which combines a country's environmental impact with human well being to show the relative efficiency with which nations convert the planet’s natural resources into long and happy lives for their citizens.

The worst nations on the list include the United States, Russia, and most of Africa. The United States ranked 150th out of 178 countries. Europe did not fare much better. Excluding the former Soviet countries, Austria ranked the best, coming in 61st place. Portugal was the lowest, coming in 136th place.

The Pacific archipelago of Vanuatu ranked first. Some Central and South American countries also fared well. Columbia was ranked second, Costa Rice third, Panama fifth, Cuba sixth, Honduras seventh, and Guatemala eighth. The last two suggest a weakness in the index. Although I've visited their and loved the countries, many of the indigenous and poor peoples still face enormous prejudice and harassment from their governments.

Taking this weak point into account, the Happy Planet Index is a useful measure of our environmental well being and should be given wider notice.

You can calculate your own HPI here.

Friday, July 06, 2007

Peak Oil Is Seeping In Around the Edges

We are into our third year of an oil production plateau, while consumption has continued to climb. To date, this has not resulted in any major crisis, but lately there have been a growing number of stories about countries suffering energy shortages, indicating that tight oil supplies may be squeezing the edges of the world's economy--countries that can't compete with richer nations for the supplies available.

In some countries, such as Iran, the shortages are aggravated by government policies. Iran has heavily subsidized gasoline prices causing demand to soar. With Iran's refineries unable to keep up with demand, resulting in imports approaching $5 billion a year. In an attempt to dampen demand, the government imposed rationing, setting off some violent protests. Iran is also experiencing a growing natural gas shortage forcing it to look to neighboring countries to fill its needs.

Energy price controls in Argentina helped fuel an economic boom for the last five years. But now, the country faces rationing and cutbacks in electricity and gas, threatening to bring the economy to a screeching halt.

In Pakistan, population growth combined with economic expansion has pushed demand for energy up, while IMF influenced privatization of power companies has hampered energy production. Efforts to build alternate and renewable sources of energy have been bogged down in bureaucratic delay. As a result, Pakistan's power shortages are reaching critical proportions.

On the other side of the subcontinent, Kathmandu is experiencing serious gasoline shortages. As in other Asian countries, the number of cars and trucks has grown dramatically. Lately they have been unable to import enough gas from India to keep up with demand, resulting in long lines of cars at gas stations, and strains on the economy.

Uganda's ongoing electricity shortages have been worsening recently, again due in part to World Bank privatization policies combined with heavy government subsidization of electricity. The government has considered developing thermal power, but it is expensive, and the government is burdened by the cost of maintaining diesel power.

Gas shortages have even returned to the U.S. for the first time since the 1970s as North Dakota dealers have had to scramble to find supplies. Minnesota and South Dakota have also begun to feel the shortages. The shortages, blamed on refinery slowdowns, have forced the governor to wave regulations on truckers in an attempt to bring in more supplies from other states. The recent flooding of an oil refinery in Kansas will only worsen the situation. Market demand in nearby Chicago has left the smaller states to compete for dwindling supplies. "South Dakota has only 750,000 people, compared to millions in Chicago," according the Dawna Leitzke, head of South Dakota's petroleum marketing association, "They get gasoline before we do."

Straws in the wind, each with its own local conditions contributing to the problem, but all taking place in the context of an ever tighter world market for oil and gas. Poorer and badly managed states are the first to feel the squeeze, but they will be followed by others.