When the Tide Comes In

“Workers at a Honda plant in China recently went on strike over wages and work conditions. The Chinese have had enough of slaving in factories for $30 per week while Americans sit home on their couches, collect $400 per week in unemployment benefits, and consume the goods that the Chinese make. Chinese manufacturers are now being forced to increase the wages they pay to workers and these costs will be passed on to American importers of Chinese goods like Wal-Mart.” This according to the National Inflation Association will lead to all sorts of economic problems for the USA in the form of higher cost of living and inflationary prices.

I prefer to take longer look at events such as a growing third-world economy and China’s policy regarding international monetary markets and the value of their currency.

The Chinese are finally experimenting with the value of their currency, the Yuan, by allowing limited float like every other currency in the world. Floating currencies change in value relative to other currencies such as the US Dollar, and they reflect a country’s economic strength and can help balance trade. It works like this. Under the communist regime, the Chinese economy was weak just a few decades ago. The Communist Party determined to embrace capitalistic investment in their country and their lower wages and lack of regulations made them more competitive than US and European manufacturers. So, Chinese manufacturing grew and their economy gained strength which would under normal international monetary policies lead to a stronger Yuan. But, the Chinese authorities until recently would not allow their currency value to float in the world currency market. If the value of the Yuan is allowed to gain strength against the US Dollar, Chinese goods become effectively more expensive for US consumers. The stronger Yuan also makes US goods and services more affordable for Chinese consumers. The net effect of a stronger Yuan would be less Chinese imports into the US and more US exports into China, and for the USA, a smaller trade deficit.

For organizations like the National Inflation Association, increased prosperity in China is seen as a negative for the US economy. I have a substantially different view of these turns of events.

As a life-long conservationist, I have been saying for decades that environmental laws and regulations in the USA are driving businesses offshore. To be sure, cheap labor in Asia and other locations has been a huge competitive disadvantage for a number of industries in the United States. But, many people have failed to take into account the high costs of cleaning up our waterways, reducing air pollution, and preventing hazardous waste from entering our ecosystems. Do not get me wrong; I am a strong supporter of cleaning up and protecting our nation’s air, water, and soil is important, and within limits, it is worth paying more for goods and services to live in the cleanest environment the world has to offer. But, the unintended consequence of our stronger environmental legal and regulatory framework has been to substantially increase the cost of generating power, manufacturing goods, providing services, and growing food for the world. Some of those higher expenses have been mitigated by improved technology and more efficient production methods. But, it is an incontrovertible fact that cleaning up our environment has caused a lot of industry to move to countries that do not value their environment as highly as we do.

Indeed, the globalization of the economy and the associated increases in pollution in third-world countries is because some countries would gladly sacrifice their environment for jobs and prosperity for their people. In response, the environmental activist industry has gone international as well. The problem with the environmentalist’s message is that they believe those third-world countries should shun industry and thus prosperity in favor of maintaining their pristine environments. What the environmental community fails to recognize is that prosperity is the environment’s best friend.

If you think about it, the only reason the USA has the cleanest air, water, and soil in the world is because Americans could afford, and therefore agreed, to pay more for goods and services in order to clean up our land. To put it another way, look at the polling data on American concerns about the environment when the economy takes a downturn. When we are in a recession, Americans show much greater concern about job creation and much less interest in new environmental restrictions. This was recently demonstrated when the Cap and Trade Bill effectively died in the Senate because people saw the bill as a job killer. At this point in time in most American’s minds, jobs are more important than the environment. It is not insignificant that, even in the face of the largest oil spill in history in waters of the United States, Americans chose jobs over a bill designed to reduce our reliance on oil and other carbon products.

For decades now, I have told people who were concerned about the increased pollution associated with the industrialization of the third-world to relax. “Once those people have a taste of prosperity, they will become interested in cleaning up their land, water, and air,” I would say.

There was a time when Chinese workers beat a path to the $30 a week manufacturing job. But, now they have a television and a computer with internet access. They see the world news and they begin to compare their situation with others around the world. “If Americans can get $400 a week for doing nothing, why can’t I get a higher wage for making the goods those Americans are buying,” they reason. And, now that they have a job and some level of economic security, organizing into unions and contemplating going on strike is much more palatable than it was ten years ago. And so prosperity will spread across the third-world and with prosperity and increased economic security there will be a greater desire to breath in cleaner air, to have safe drinking water, to not have toxic chemicals oozing from the soil, or fish dying in the rivers. I believe we will see a grassroots environmental movement spring up in these third-world countries, just like it did in the USA back in the sixties and seventies. But, it won’t be because some extreme environmental group made them feel guilty for having a little prosperity; it will come from within because of increased wealth and economic security.

And the really good news to come out of all of this is that, in time, higher wages and more environmental awareness resulting from increased prosperity will result in more jobs coming back to the United States and more lucrative markets for US products overseas. The old adage about how an improved economy is good for everyone will be enhanced to read, “When the tide comes in, all the ships—big and small—float a little higher in cleaner water and under clearer skies.”

Everglades in Danger?—This Time Don’t Blame the United Nations

Secretary of the Interior Ken Salazar announced he wants Everglades National Park to be re-inscribed to the List of World Heritage in Danger saying “…when we achieve restoration, we can remove the park from the list of sites that [are] in danger.”

Many people have argued over the years that being on the World Heritage List somehow puts the United Nations in charge of United States property and impinges on private property rights. I am very familiar with the World Heritage Convention, the World Heritage Committee, its Operating Guidelines, and the Rules of Procedure and I disagree with those who believe the U.S. surrenders it sovereignty and that property rights are violated. I base my conclusion on knowledge acquired while serving as a Deputy Assistant Secretary of the Interior for Fish and Wildlife and Parks and leading the U.S. Delegation to the World Heritage Committee for five years.

However, when the Clinton Administration talked the World Heritage Committee into putting both Yellowstone and the Everglades on the List of World Heritage in Danger in the early 1990s, the flames of fear and loathing against the United Nations and UNESCO, which runs the World Heritage Program, were fanned into a conflagration.

Neither park should be considered “in danger.” The List of World Heritage in Danger is a tool the World Heritage Committee uses to gain the attention of the owner of a World Heritage Site when its conservation is “threatened by serious and specific dangers.” Putting a site on the In-Danger List achieves two ends. It is designed to encourage the country in which the site is located to take action or actions necessary to ensure the site’s conservation and it makes international assistance (technical and monetary) available to the property owner for such conservation actions. A country or private owner of a World Heritage Site is under no obligation to take any action requested by the World Heritage Committee. Under the World Heritage Convention conservation only occurs through “cooperation and assistance.” If in the final analysis a property loses its Outstanding Universal Value for which it was inscribed as a World Heritage Site, the Committee may then vote to remove the site from the List of World Heritage.

The World Heritage Committee removed Everglades National Park from the List of World Heritage in Danger in 2007. Many people cried foul blaming the Bush Administration for advancing the idea of removing the site from the In-Danger List before the restoration is complete. Here are the facts. The World Heritage Committee has been monitoring Everglades for nearly two decades and they have been continuously awe struck at both the dollars spent and efforts taken by the U.S., the State of Florida, and others to restore this site. Taking action is all the Committee ever wants to see. They do not expect restoration to be complete before taking a site off the List of World Heritage in Danger, especially when the restoration of the Everglades is likely to be a 20-40 year process. The Committee expressed a desire to remove the Everglades from the In-Danger List at every meeting where I represented the U.S. from 2002 to 2006. In 2007, they had seen enough and they asked Deputy Assistant Secretary for Fish and Wildlife and Parks, Todd Willens, to make a motion to remove the site form the List of World Heritage in Danger. He did, and though the Committee usually does not vote, but seeks consensus, no member of the Committee or any one else present spoke against the motion.

The United States should not seek to re-inscribe Everglades to the List of World Heritage in Danger. Instead, Americans should be proud that the international community recognizes our significant and costly efforts to undertake the largest ecosystem restoration project the world has ever known. The restoration is far from complete and nothing should deter the ongoing commitment and efforts to restore and conserve this unique and valuable marsh land habitat. Unfortunately, some environmental groups cannot stand success. Success apparently does not sell enough memberships and does not perpetuate their power base. Too bad, because the United States does more for conservation than any other nation in the world and we should welcome the international recognition of our leadership in this area and the well-deserved pat on the back for doing the right thing for Everglades National Park and the South Florida Ecosystem.

Research Suggests Winds Dying Down

A recent story by AP Science Writer, Seth Borenstein, says researchers believe winds in the United States are dying down, especially east of the Mississippi River. Obviously, this research was not conducted in Washington, DC, where the wind bags continue at hurricane force.

“The idea that winds may be slowing is still a speculative one, and scientists disagree on whether that is happening,” the article says. And, the cause, of course, may be global warming.

After four years of college and a degree in economics and biology, the only thing I can say with certainty is, “There is no such thing as a free lunch.” This principle has its roots in physics, “Energy or matter can neither be created nor destroyed.” In policy making, it becomes, “There are no solutions—only trade offs.”

With all the buzz about renewable energy and non-carbon-emitting sources of energy, I have been patiently waiting for the other shoe to drop and the reality of physics to set in. You see, it takes energy to create the energy we most often use—electricity. In fact, because of inefficiencies and physical principles such as friction, it takes more energy to produce electricity than you get back out of the electrical energy.

For instance fuels cells, which burn hydrogen and oxygen with only water vapor for emissions, require a supply of pure hydrogen. That hydrogen is usually separated from water (H2O) or methane (CH4) and the physical fact of the matter is that it takes more energy to make hydrogen fuel than you get back from burning the same hydrogen.

If you generate electricity from solar panels then you are using solar energy that normally would be absorbed by the earth, the atmosphere, or its various life forms. Sooner or later, that energy loss to the earth’s system will have some effect on life forms or the climate.

And wind power converts wind energy to electricity. When the power of wind is used to run a turbine, the result is less wind because the wind energy has been converted to electricity.

When will some scientist point out that wind and solar power generation could have an impact the climate. A small impact you say. Well, as the environmentalists are so wont to say, all small impacts result in cumulative impacts. Many scientists are skeptical that human-caused carbon dioxide emissions have a significant impact on the climate, so it only follows that some would say wind and solar power will have no effect on the climate.

However, if the global warmists have one ounce of intellectual integrity, they would readily admit that all forms of energy production could have some impact on our climate, no matter how insignificant. The question is whether our impacts are meaningful or significant, and if they are, then it would appear that the only solution is for mankind to be removed from the system. But, then that is what the extremists want, isn’t it?