Thursday, July 8, 2010

Do As I Say, Not As I Do

Despite all the talk of moving towards clean fuels and renewable energy sources, the actual policies in place by first-world economies and its leading institutions result in funding the worst of the old fossil fuels practices. This reliance on oil and coal despite its devastation to the environment indicates clearly that the balance sheet for the biggest players on the globe do not account for the costs of the damage paid by humanity and the environment all over the world. From the Bretton Woods Project:

Despite recent attempts to restyle itself as a green institution, the World Bank's energy lending suggests that it remains wedded to fossil fuels. Meanwhile, independent evaluators and civil society groups have raised serious concerns about the developmental benefits of the Bank's approach to energy efficiency and renewables.

The US itself has created an entire economy based upon destructive practices that remain off the balance sheet. I've been on the National Priorities Project site, and I got into the dataset and generated a report on US gov't expenditure on housing in California 1983 - 2009, chart above (click to enlarge).

Since 2001, there has been an astronomical level of Federal funding pushed into housing. This, along with the repeal of Glass-Steagall at the end of Clinton's term in 2000, generated the entire housing bubble, leveraged by the banking sector. Why was this done? To create "consumer demand" with easy credit, create an artificial asset (nonexistent home equity) that drives sales, employment, development, everything. As well as creating an empire of debt, not real equity. All of this takes a lot of oil, naturally, in energy (power) as well as production of goods and their transportation. More houses, more traffic. And on and on. None of the costs of this are on the corporate or governmental books.

US business has off shored everything else and doesn't create anything of significant value in this country any more. Foreign investment and corporations fund a lot of the industrial and service business that we do have here. It's not local capital, and it's managed outside of this country. The artificial bubble was created to prop up the economy, but as any short-term investment strategy does, there's a big balloon payment at the end of the cycle. The asset is not real, hence there's no way to get out of the bubble except to pop it. Iceland found that out the hard way, as has Ireland, Greece and Spain. It's called "Disaster Capitalism".

While the US Government was fueling a huge real estate bubble as de facto policy, it is also, in the meantime, putting legislation in place to deal with greenhouse gasses under pressure from the global community. Since the government couldn't attack its main engine for creating "wealth", its regulations targeted emissions from traffic, power plants, manufacturing, etc. which produces visible carbon emissions. This policy does not address the embodied energy used to build, produce and furnish new real estate as is accounted for in the LEED energy standard, which emerged from the design and planning community. The GHG emission standards focus on pollution (rightly so) but leave out the biggest cumulative generator of GHG emissions, real estate development. That's not even counting the subsequent demands that this burdens the local environment with, specifically water, power, fuel, traffic, increased trash and other municipal services. So there's a very myopic view of the entire picture of the carbon cycle and its resulting impact, which fails to address the true flaws of unbridled growth. Deliberately. Don't wanna look at it, right?

So California is simply a subset of this whole fiasco, still trying to pump money out of a dry well, once again using Federal money and rerouting state funds to create more of a housing market. Just pushing an already failed strategy that burns oil to stay alive and costs significant tax dollars so that development can claim a profit.

That explains why trying to implement conservation strategies and sustainable design practices is so difficult and happening on a state-by-state basis. The Federal government, including its world institutions, isn't walking its talk.

This current administration is more open to setting guidelines and policies on a national level that reflects the true scope of the energy and resource issues, as well as conservation. Until the sustainability movement can establish concrete returns on investment, it will be difficult to change the Federal policies that put us into our current economic crisis. The global development guidelines will have to change the accounting system, incorporating natural capitalism and social networking to leverage investment, rather than the old accounting tricks that have brought the global community to the brink of fiscal and environmental disaster. When this kind of reform is implemented, then the new technologies and practices will be able to move rapidly to invoke system-changing paradigms and move the economy and our environmental impacts in a constructive direction.