Category Archives: Economics

Chinese economic ascendancy? Maybe India is a better bet.

Economic growth and investment has shifted considerably towards India and China over the past few decades – that’s no secret. But to what extent is all the hype (ex. the RMB will be the major international reserve currency by 2020) accurate? It’s hard to predict what the future will look like between all the prophecies of western decline coupled with predictions of future Chinese economic dominance.

But then you see anecdotes like this – entire cities sitting completely empty and hugely inefficient infrastructure investments – they do make you question how sustainable Chinese growth is, not to mention their political system. China has the savings to continue these projects and keep their labor force employed, but will the inefficiencies in the system catch up with it somehow?

Sure, China is nominally a market economy, but the allocation of investment is still largely state-supported and in many circumstances, state-directed, in contrast to western economies which are much more capitalist and free market. Our economic and political systems make it harder for us to respond resolutely to economic circumstances (such as the recent financial crisis) but investments are much more efficient.

China has the cash reserves to take the hit in case these inefficient investments go south, but to what extent would that impact global confidence in the foundations of their economy?

I think investments in India are a better bet for several reasons, most notably the following: First, Chinese labor costs will inevitably rise as a result of the one-child policy. Over the next generation, every Chinese worker will have to support two parents and four grandparents, putting tremendous financial pressure on social programs for the elderly. India has no such policy, meaning that labor costs will stay low and rise very predictably.

Figure: Chinese median age is already higher than India’s. It will rise even further over the next generation. The pool of working-age labor will rise in India while it will plateau in China.

Second, despite rampant corruption in India and a massively inefficient judicial system, India has twelve times the number of English speakers China does, making it much better-suited for international commerce.

I’m no colonial apologist, but I do agree with Niall Ferguson when he says colonial powers have left behind institutions that could give former colonies advantages in their economic development. 

India certainly has its problems – there are more poor people in India than in all of Africa combined. But lastly, India is a democracy, and generally (barring aberrations such as Singapore), democracies produce greater economic growth over time.

Would love to hear what you think on this!


Pace of innovation accelerating in Clean Tech

Aug 9, 2011 2:08 PM

I came across these two articles demonstrating the rapid pace of technical improvement in clean energy. In spite of all the bad news from the debt deal (funding cuts for clean energy research), at least we’ll see returns from previous investments.

A lot of the breakthroughs below come from innovation in academic settings. More and more, it seems like public investment in applied academic research yields high returns.

5 breakthroughs will make solar power cheaper than coal

1. Nano-templated molecules that store energy
MIT associate professor Jeffrey Grossman and others successfully created a new molecule called azobenzene using carbon nanotubes to structure the molecules so that they “lock in” stored solar thermal energy indefinitely.
2. Print solar cells on anything
An MIT team led by professor Karen Gleason has discovered a way to print a solar cell on just about anything, using low temperatures and vapor as opposed to liquid solutions that are expensive, require high temperatures and degrade the substrate materials.
3. Solar thermal power in a flat panel
Professor Gang Chen was been working on a revolutionary new way to make solar power — micro solar thermal — which could theoretically produce electricity at 8 times the efficiency of the word’s best solar panel. Solar thermal usually requires huge arrays of mirrors that heat up an element to run a steam turbine.
4. A virus to improve nano-solar cell efficiency
MIT graduate students recently engineered a virus called M13 (which normally attacks bacteria) that works to precisely space apart carbon nanotubes so they can be used to effectively convert solar energy.
5. Transparent solar cell could turn windows into power plants
The world’s cities are packed with miles and miles of glass. What if all that glass could be used to harness the sun’s rays while maintaining their transparency?

Wind Power Gains as Gear Improves

Challenges remain, but the technology has come a long way in recent years, and wind farm operators have learned plenty of tricks, too, like the importance of shutting down the machines in high winds and the best places to put them to begin with.

The turbines have grown larger, and more effective. One model made today by Vestas, a Danish turbine manufacturer, can produce 300 times as much power as a turbine sold 15 years ago, according to Finn Strom Madsen, the president of technology research and development for Vestas.

But experts say that vast improvements in wind technology still lie ahead — which makes sense for an industry that is about 100 years behind, say, that of the automobile.

Read more at NYTimes.

DoD tolerates human trafficking and foreign national abuse on US bases

Jun 20, 2011 9:57 AM

I’m reading Sarah Stillwell’s article in the June 6th issue of the New Yorker. She spent months interviewing foreign workers on American military bases abroad.

The Pentagon issues logistics contracts to big companies like Halliburton and Fluor that subcontract to smaller foreign companies. These companies then contract with recruiting firms in poor countries in Africa and South Asia, selling these jobs as cushy, high-paying gigs in the Middle east, accepting bribes above $4000 for them.

The workers are then flown to American military bases where they are paid wages as low as $275 a month and housed in shipping containers. Their legal status is not covered by American Law, regulation, or requirements, and the Pentagon doesn’t monitor the final arrangements that they work under.

Ultimately, these foreign workers are lied to and paid a fraction of what the American taxpayer pays for their services, in addition to the human rights abuses they endure.

Is this what we’re fighting for? Gates is a good man, but the American military behemoth has grown far beyond his control.

CAPper Kate Gordon gets big love from Nat Geo

May 26, 2011 1:47 PM

Kate Gordon got a huge shout out from National Geographic’s The Great Energy Challenge today. Mike Casey essentially casts her debate as the definitive blueprint for the defense and advocacy of clean energy.

My time at CAP ends tomorrow and being here for the inception of this coherent platform has been a tremendous privilege. The world is on the verge of something big in clean energy and CAP is going to be at the forefront of articulating its potential.

The video of Kate’s debate at Cato:

Here’s an excerpt from Casey’s post:

Clean Energy Advocate Gives a “How to” Clinic on Rebutting Fossil Energy Disinformation

Over the past few months, I’ve made the case that dirty energy lobby plays a full contact game against clean energy, using lobbying and disinformation as business weapons to drive the idea that clean energy is “expensive, unreliable and not ready.” Cleantech, I’ve said, needs to step up its advocacy game dramatically, including driving an honest debate about who is really “expensive.”

At the WINDPOWER International trade show this week, I spoke on a panel that fielded a number of questions about how to do that. It’s hard to find a better place to start by highlighting the clinic put on by Kate Gordon of the Center for American Progress at a recent “debate” at the fossil-funded front group, the Cato Institute.

Gordon faced off against a rising star in the dirty energy experts-for-rent stable, Andrew Morris, whose disinformation platform is the Koch-funded (and Koch-founded) “Mercatus Center.”

Gordon faced Morris on his home turf, a forum completely stacked against her and the clean energy side. Cato named the debate, “The false promise of green energy,” (I’m not making this up) and “moderated by anti-cleantech Cato Institute “Senior Fellow”Jerry Taylor (typical quote: “if wind energy were a sensible economic investment, it would not need the lavish federal and state subsidies already in place”). There’s got to be an operations manual for fossil fuel front groups to do this sort of thing: functions like a propaganda machine, but sport a neutral, benign and thoughtful name. Position yourself as good guys who just happen to come down on the side of the dirty energy interests that fund them. Invite clean energy advocate who can be counted on to bring a bunch of numbers, armload of facts and a strong belief in intellectual honesty and a reasonableness. Frame the conversation against clean energy advocate, put in well-trained mouthpiece, and route clean energy advocate. Claim victory and intellectual triumph.

Except, it was Gordon put on a clinic of not just how to stand up to dirty energy “experts,” but that you have to stand up to them in the first place.

Read the rest at National Geographic’s The Great Energy Challenge.

Wind and Solar among top ten thriving industries – WSJ

May 17, 2011 3:54 PM

According to the Wall Street Journal, Wind and Solar are among the top ten thriving industries in America.

The wind industry grew at 17% in the last decade and Solar grew at 2.7%, but they’re forecasted to grow at 11.2% and 7.9% respectively in the next six years.

Sector Revenue 2010 (in millions) Growth 2000-2010 Forecast Growth 2010-2016
Voice Over Internet Protocol Providers (VoIP) $12,498 194% 17.4%
Wind Power $3,388 16.9% 11.2%
E-Commerce & Online Auctions $95,005 12.2% 9.4%
Environmental Consulting $18,153 7.7% 9.4%
Biotechnology $86,971 11% 9.6%
Video Games $38,622 6.2% 8.3%
Solar Power $69 2.7% 7.9%
Third-Party Administrators & Insurance Claims Adjusters $57,530 6.9% 7.7%
Correctional Facilities $34,373 9.1% 7.5%
Internet Publishing & Broadcasting $32,573 25.2% 6.8%

It doesn’t take a genius to see which way the wind blows.


Regulatory capture: FCC Commissioner joins Comcast-NBC

May 11, 2011 11:39 PM

No matter how strongly I feel about an issue, I try to keep my discussions civil. Things like this really strain the standards of common decency.

Regulators are tasked to serve the public interest, but for Atwell to play a major role in approving the Comcast/NBC merger and then accept a fat paycheck from them months afterward is absurd. The American people have forgotten the meaning of “conflict of interest” and regulatory capture rules the day.

I really hope people get worked up about this.

F.C.C. Commissioner Leaving to Join Comcast

8:02 p.m. | Updated WASHINGTON — Four months after the Federal Communications Commission approved a hotly contested merger of Comcast and NBC Universal, one of the commissioners who voted for the deal said on Wednesday that she would soon join Comcast’s Washington lobbying office.

Meredith Attwell Baker, a former Commerce Department official who worked on telecommunications issues in George W. Bush’s administration, announced that she would leave the F.C.C. when her term expires at the end of June. At Comcast, she will serve as senior vice president for government affairs for NBC Universal, which Comcast acquired in January.

The announcement drew immediate criticism from some groups that had opposed the Comcast-NBC merger. They said the move was indicative of an ethically questionable revolving door between regulatory agencies and the companies they oversee.

The revolving door between government and the lobbyists who seek to influence public policy and legislation on behalf of companies or other organizations was a target of reform by President Obama even before he took office. During the 2008 campaign, he vowed to “close the revolving door” and “clean up both ends of Pennsylvania Avenue” with “the most sweeping ethics reform in history.”


Job Search — Clean Energy and Pakistan

May 9, 2011 5:19 PM

So my internship is rapidly approaching its end and it’s go time for finding a new gig. I’ve been working with the Energy Opportunity team at the Center for American Progress for the past three or so months (which explains all of the energy-related posts) and I’ve enjoyed it very much.

I think Energy is going to be the defining issue of the next decade and I’m anxious to be a part of it. In this Stanford Thought Leaders talk, Tony Siebel says the IT revolution is pretty much over and, with the world’s population approaching 10 billion by the end of the century, innovation is going to come in providing people with basic needs like food, water, and energy.

Our ability to feed people in the twentieth century has been a function of using petroleum-based fertilizers and plant-breeding techniques pioneered by Norman Borlaug. But people that study world agriculture will tell you that the status quo is remarkably unsustainable — half of Iowa’s topsoil has washed away in the past fifty years, modern agriculture is hugely dependent on petroleum-based fertilizers, and runoff has created a colossal dead zone in the Gulf of Mexico.

But energy is a universal input into all activities, and reforming how we produce and use energy will be the prime mover of addressing climate change and the Earth’s diminishing resources. If energy becomes clean and cheap enough, a lot of our present problems become considerably more manageable.

In the medium term, I think it would be cool to work on AfPak issues. My parents are Pakistani and I can speak Urdu fairly well, so I might be helpful to organizations working on that endeavor. Even better – energy projects in AfPak!

So that’s where I’d like to be in the future. But realistically, my gig ends May 31st. I’ll entertain pretty much anything (besides working for the GOP or Big Oil)! Get in touch if you have any ideas!

Here’s a copy of my resume.

Cleantech saves soldiers’ lives

Apr 26, 2011 11:39 PM

The military is the one area where government spending on R&D is tolerated by the GOP. Republicans tried to gut the Department of Energy’s hugely successful ARPA-E program during the last budget fight, but left DoD’s DARPA virtually untouched. But Defense is picking up the slack by demonstrating a practical application of clean energy: to fight and win wars!

It’s fantastic to see the military take the lead on this when the rest of us in the clean energy space have had such difficulty. Using energy innovation to save the lives of American servicemen – that’s a proposition the Grand Oil Party can’t argue with.

Takeaways –

1.   One soldier is wounded or killed for every 50 convoys transporting fuel.

2. The U.S. military uses more energy than two-thirds of the world’s nations.

3. The military has demonstrated that clean energy can fully power the world’s most demanding endeavors. Three bases in Afghanistan run almost entirely on solar power.

The military has a history of technological innovation that has huge carry-on benefits for civilian uses (see the INTERNET, microwave etc.). Let’s hope their leadership on clean energy is a harbinger of broader acceptance stateside.


DoD official: Clean tech saves lives

By Darius Dixon

4/26/11 1:49 PM EDT

Clean energy development is a race to the battlefield as much as to the marketplace, a top Defense Department official said Tuesday.

Case in point: U.S. soldiers fighting in Afghanistan during routine patrols carry about 18 pounds of batteries apiece for radios and other equipment. That’s a burden they shouldn’t have to bear, Deputy Defense Secretary William Lynn III said during a White House panel discussion on energy security.

New energy technology and efficiency save lives along vulnerable U.S. supply lines by reducing fuel shipments that are prone to insurgents’ ambushes or bombing attacks, he said.

“More than 70 percent of the convoys in Afghanistan are used just for fuel or water,” Lynn said, adding that more than 3,000 troops and contractors have been killed or wounded protecting those types of convoys.

And the Pentagon’s $15 billion annual energy bill, one that “consumes more energy than is used by two-thirds of all the nations on earth,” is largely dependent on foreign sources, Lynn said.

Last year, the Pentagon and the Energy Department entered into a partnership to promote energy efficiency and clean technology throughout the U.S. military.

“Clean energy technology is one way to lighten the load and give our troops more capability,” Lynn said. He said marines in Afghanistan started deploying solar panels in Helmand Province last fall so that two bases in the region now run completely on solar power and a third cut its consumption of diesel fuel by more than 90 percent.

The deployment of flexible solar panels, he added, reduced soldiers’ need for battery resupply on extended missions.

Read the rest at Politico Pro (subscription required).