Crunching Sustainability Pt. 1: Iceland

Smash the Mirror tries to bring solid economic and rational thinking to sustainability, geopolitics, and current events. To that end, this is a pilot post for a new series on how the Credit Crunch of 08-09 will impact the environmental sustainability of human life. Posts in this series will appear under the tag “Crunching Sustainability“.

By now, the collapse of Iceland’s governing coalition has been circulating through the media for a while. To sum it up in a single phrase, the cause of the fall was the economic crisis and monetary policy. That is why, according to the Washington Post article, there is a new push by some citizens and the country’s Democratic Socialist Party to join the European Union.

Fishing Boats

Fishing boats tied up along a pier.

The Euro has rapidly cemented its reputation as a stable currency, and that appeals to the Icelanders who feel they have been betrayed by inadequate policy-making. Unfortunately, the EU also has its failures, and the fishery management policies are foremost among them. Continue reading

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Transatlantic Carbon Trade

New York Times

Out of Brussels comes word that the European Union wants to work with the United States to lead a cap-and-trade emissions system for wealthy nations. A well-implemented cap-and-trade system has the perks of providing an absolute maximum for the traded emissions, and of taking advantage of the efficiency of the competitive market equilibrium (the CME is always in the Core, to put it technically). In short, an ideal cap-and-trade system allows for fully effective environmental regulation within the market system, rather than throwing the baby out with the bath water.

Unfortunately, the EU plan previously has been the model of how not to implement a cap-and-trade system. Individual countries would routinely demand vastly overinflated quotas so that they would not have to make an effort to actually restrict emissions. The New York Times says however, that word out of Europe is that they are well on their way to improving the system: Continue reading

Intimacy Instead of Consumption

“Have More Sex to Save The Planet” reads the headline on this Times Online Green Central Blog Post. Certainly, it’s quite an attention grabber. Unfortunately the post itself is quite simplistic and does little to create a positive image of sustainability and environmentalism. Humans will have to grapple with shrinking the environmental footprint of our activities, and soon. As the Times Online post highlights, drawing happiness from non-market goods such as family time, or intimate relationships might provide greater fulfillment and less waste.

One wonders though, what kind of imagery that language conjures. The modern environmentalist community has been careful to avoid associations with so-called “hippies” of the 1960s. Talking about sex saving the planet evokes images of utopian communes. Still more alarming is Flintoff’s unsubstantiated, doom-and-gloom assertion that emission cutbacks will cause wholesale economic collapse Continue reading

Toyota Electric Car Unveiled in Detroit

Posted on the Australian CarsGuide website, comes the interesting headline “$20,000 electric car: Toyota FT-EV“. It gets more interesting: since it’s an Australian website, presumably that is the Australian price tag, which makes the American figure $13,162 at the time of this writing (via Google), although the price is still speculation.

Continue reading

If Global Warming Is Real Then Why Is It Cold

An amazing collection of idiotic political cartoons pushing the “If Global Warming Is Real Then Why Is It Cold” talking point:

http://ifglobalwarmingisrealthenwhyisitcold.blogspot.com/

Bill Gross on CNBC (1/8/2009)

William Gross, founder of Pimco was interviewed on CNBC today about the federal government’s role in solving the financial crisis. Obviously, Mr. Gross is a very smart man, and he discussed a number of issues.  I do, however, have to take issue with one of his points:

If you have to put 20% down on a new home, that becomes a struggle in these times and to the extent that the FHA can come in there and allow a 3 or a 4% down payment, then that combination–I think–can support the housing market.

Certainly it is true that there must be liquidity for the economy to come back, and many leading economic thinkers such as Paul Krugman believe the US Economy is in a liquidity trap and needs a sustained, extremely loose money supply. Even so, it is difficult to accept that the solution to the mortgage crisis is to create new, unconventional mortgages with little payment upfront and huge amounts of debt. Gross is certainly right that loosening the standards for loans will keep housing prices high, but perhaps prices before the crash were just unrealistic, the product of fervor and lax appraising standards. Does chasing these inflated prices risk another wave of foreclosures in the future?