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Carbon Standard 300/30 Story part 2

Carbon Standard 300/30 Story part 4

Climate Change.

There are basically two schools of thought on the subject:-
1. The increase in manmade Carbon Dioxide levels in the atmosphere is causing temperatures to rise.
2. The increase in the levels of the suns radiation is causing the Earth to warm and this is heating up the oceans and releasing the Carbon Dioxide that is stored there.
Rationally the temptation is to pick one of the two as the right answer. This would be a mistake, as both arguments have merit, but we are not at this moment in time in possession of all of the facts, or indeed the knowledge to interpret the facts if we did have them. So both arguments could be part of the answer.
Each of the proponents has backing, and the motives of these backers, are cited by the opposing side as reasons to doubt the theory.
1. Manmade Carbon Dioxide as well as the destruction of forests that pump down Carbon Dioxide are bound to have some effect, however the old saying that “actions speak louder than words. “Tends to undermine the argument in that, “The greatest threat to mankind” is under funded by such a large amount. This leads people to conclude that it is just another way to increase taxes. Then there is the “Peak Oil “scenario and it is a way to get people to become less dependent on fossil fuels. In essence the failure of government to show any meaningful leadership, leads people to doubt the severity of the problem.

2. The suns radiation does fluctuate and the argument that variations in Carbon Dioxide levels are a natural phenomenon is also true. People tend not to believe this, “Business as usual “is seen as being in the interests of the oil industry and therefore suspect.

These are seen as examples of vested interests seeking to defend or expand their territories, it is only by rising above the melee that a clearer picture for the discerning viewer becomes more apparent.

The man who has done this most succinctly is James Lovelock CBE. Since 1964 he has operated as an independent scientist, as opposed to one whose mortgage payments depend on him producing the answers that his employers want. His work, the Gaia Hypothesis gives us a chance to see how the pieces fit together.

How he came up with the Gaia Hypothesis is also enlightening!! Back in the early 1960s he was asked by N.A.S.A. to help with their quest to discover if there was life on Mars. James Lovelock and a colleague Dian Hitchcock reasoned that the composition of the atmosphere of a dead planet would be different to that of a planet with life on it, because any organisms that lived there would be obliged to use the atmosphere, as a source of raw materials and a depository for their waste products.

They had no success in persuading their life-science colleagues at the Jet Propulsion Laboratory that atmospheric analysis was a valid method of life detection. This was for the simple reason that such an admission would have led to the cancellation of an impressive array of life detection experiments that were to be carried by the Viking mission to Mars and to unemployment among space biologists and their suppliers, as their mission could be replaced by an Earth based telescope!!!

This threat to the territory of establishment science caused it to vigorously defend its habitat. This attitude continued even though when the Viking Mission arrived on Mars in 1977 and sent data back confirming it to be a lifeless planet. It was not until 1988 that the American Geophysical chose the Gaia Hypothesis as the subject of one of its prestigious Chapman Conferences, some twenty four years after the concept was originally proposed.

Establishment science is gradually confirming the predictions the Gaia Hypothesis indicates, but, looking at things from a multi-disciplinary approach, it takes a very long time to reach a consensus and establishment science, seeing with multifaceted vision of a house fly is regularly overtaken by glaciers travelling in the fast lane!!!

The major advantage of the Gaia Hypothesis apart from being continually proved right is that it is simple and easily understood by non-scientists. If climate change is to be tackled successfully, it will need the support and engagement of most of the human population, otherwise it is likely to be as successful as the “ War on drugs “, or any other road to hell paved with good intentions that you care to cite.

Gaia Hypothesis treats the whole earth as a living organism, and as we are living organisms with separate living organisms in a symbiotic relationship living within us, e.g. bacteria in the gut. We can look at ourselves and draw parallels in human terms that are easy to understand. If you want to know what increased levels of Carbon Dioxide feel like, then hold your breath!!

Healthy Planet = Healthy People.

Without any medical training, most people can give an opinion about the current state of someone’s health. E.g. You look tired, well, perky, pale, sick, glowing, happy, sad, young, old, “ bright eyed and bushy tailed “ ( even if the person has no tail !!), blue with cold, bunged up, in a right state, etc, etc. This natural observation and produces a top down view of the observer’s impression. Doctors tend to ask “What is wrong with you then?” Vets ask the owner what is wrong with their pet. Only when faced with a patient that cannot communicate will they fall back on their expensive training!!!

There is a long tradition of natural observation that dates back at least five thousand years, and this was the basis of medicine, it is only since the industrial revolution that we have stopped looking at things from a natural perspective, and subjugated our own common sense to the rule of expert opinion. The consequences of this abdication are the fruits of the life we enjoy today. Common sense, looking at things from a top down perspective would have told us to be discerning enough, to be selective not to be entirely seduced by the shiny and new things that the bottom up observer, who knows more and more about less and less would dazzle us with.

Natural Observation and Action.

The health of anything can be described as a state of balance or homeostasis, anything else is dead, because all of the energy is used up. The following is a simple approach to observation and action. This approach is designed to maximise change for the better and minimise change for the worse.
1. Diagnose first. Find out what is wrong.
2. Assess Vitality. Is it strong or weak?
3. Assess Nervous balance. Is it over or under reacting to stimuli?
4. Assess circulatory dynamics. Is the flow too great, constricted or blocked?
5. Assess encumbrance. What is the nature of the imbalance?
6. Assess elimination. How can the imbalance be rebalanced?
7. Do no harm. Do not make matters worse.
8. Treat the cause. Do not get side-tracked by symptoms created by the cause.

This may seem vague as a template, and it is, but as the way to be truly sure of the pathology of a system is to do a post mortem, the need to be able to act sooner becomes obvious. Even by using the rational thinking approach is not as precise as its proponents would have us believe.
The “War on Terror “ has been underway for more than five years, costs billions of dollars and thousands of lives. It has been conducted by the most powerful empire the world has ever known with the most modern surveillance technology, that can see a scorpion catch its lunch. When asked for a prognosis the Secretary for Defence Donald Rumsfeld/ replied:

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know."

Well it’s good to know that they are keeping an eye on the ball, so to speak.

Meanwhile the “ War on Terra “ is progressing well with the latest report from the United Nations saying that between ten to thirty percent of all species that we know of will be extinct by the end of the century, plus lots of the ones that have not been identified, so we don’t need to worry about them either. We can also expect several hundred million people to become climate refugees, famines and disease will increase as agriculture fails and the land becomes desert and people turn to military measures to secure scarce resources. Wow and we are not even trying yet!!!

Most people do not wish to spend their lives on the planetary equivalent of a Sink Estate, blighted by violence, poverty, pollution and disease, especially when it is not necessary. It is now time to look at the prime driver as far as humans are concerned money.

Money = Unifood. Unifood would be nature’s equivalent of money.

Most animals in their survive and reproduce lives, eat and breathe, they build up reserves of body mass and fat so they can survive, grow, attract a mate, build a nest, have offspring, give these a good start in life, etc, etc.
Humans have the same objectives, but our survival depends not on the land to provide but the ability to earn money, which can then be exchanged for whatever we hunger for. All we need is money and money is so powerful that if we have enough money we can be sated while someone else goes hungry. So we compete against each other to possess it, because we know that without it, starvation happens and death follows soon after.
We have seen starvation on the television, and when we first saw Biafran children with bloated bellies, we were shocked and sent them money to help out, but now after only a few years we have become used to seeing this type of image. It is not shocking anymore it is normal, and even if you spice things up a bit more with rape and murder such as in Darfur, still we are not moved. The world has got smaller but we are more separated.

There is nothing intrinsically wrong with the idea of money, but as with many things, it is not what you do but the way that you do it that counts. Inconveniently for politicians and economists, the universe pays homage to the laws of mathematics and this where the problems start.

In our democratic western economies politicians get elected by making promises to take some of one person’s money and give it to someone else. The general idea is to find someone with money who, thanks to the power of envy is deemed different to the many more people who don’t have much money and give some of it to them. They being more numerous will vote for that politician and he will win power. Although the flaws in this system are obvious it represents an improvement over dictatorship, under whatever name it likes to call itself.

Politicians who generally, will have promised more than they can deliver will seek the help of economists’ to make good their promises. The economists will do the sums, and identify the shortfall, which means that more money will have to be created. Because taxes are unpopular, the printing press will be started, but more money chasing the same amount of goods means that prices will rise and everyone is back where they started or worse because of the extra work involved in the redistribution effort.

In natural economies there is an absence of money, tax and credit for good reason, namely that they are a drag on activity, and the natural economy would grind downhill until it came to rest, not necessarily in peace but in pieces.

Imagine you are goose who flies every year from Siberia to the South of France. You know that you need a certain amount of calories in order to give you the energy to fly the three thousand miles. However unknown to you the food you eat has been given a dose of inflation and so you need to eat twice as much to get the same number of calories. Having eaten the food you are now too heavy to take off!!! What do you do? You go to the bank and say lend me some food so I can grow some bigger wings and are able to fly again.

The bank says O.K. but you have to pay interest in the form of air cargo; you must carry ten percent of your weight in seeds because the trees are sinking because the permafrost is melting and they need to move to somewhere drier. You agree to this, because you have no choice and are about to take off, when the Big Bald Tax Eagle grabs you and says “Oi goose you have got more calories than your allowance for this year, give me forty percent of the extra calories and. because you are in the air freight business now you are emitting more Carbon Dioxide and so I want one of your eggs too as a green tax.

In our economy such expenses are known as Fiscal Drag, and the more of it there is the slower things move. Being unable to move under your own weight, you seek help from the politicians in the form of a subsidy known as Goose Grease which allows you to slide down a hill fast enough to reach take off speed !!! However you are now dependant on a regular supply of Goose Grease just to stay in business and so the politician has to print some more calories for your subsidy.

Inflation, the tax that dare not speak its name.

Inflation when introduced to an economy is a parasite the eventually consumes its host. Its favourite habitat is fiat currencies, and it is so successful that there has never been a fiat currency that has survived its presence, the one hundred percent mortality rate does not seem to have deterred its supporters, from inviting it to take up residence in the currencies they are charged to protect.
The usual way to protect against inflation was to have the money issued backed by a commodity such as gold, the U.K. left the gold standard in 1913 and gave up the mantle of world reserve currency for the pound sterling, The world reserve currency then became the U.S. Dollar, which gave up the gold standard in 1971. Since that time we have all been part of the greatest financial experiment ever undertaken, to see if an idea that had never worked for long throughout history, might be made to work for longer, if not indefinitely.

Before the decimalisation of the British Pound Sterling in 1971, which disguised the effects of the U.S. Dollar going off the gold standard in the same year. I look at this from a customer of money point of view. I could buy a portion of chips for six old pence i.e. one fortieth of a pound or the equivalent of two and a half new pence. A portion of chips in 2007 will cost ninety new pence.

This represents a decrease in the value of the pound of thirty six times in thirty six years. Curiously if you add the numbers one to thirty six together you have a total of six hundred and sixty six, which prompts the question, “What the devil happened?”

The first observation is that it took the same amount of sunshine to grow the potato, the same number of calories to heat the chip fryer and the same amount of oil to fry the chips in. The really disappointing thing is that I put two and a half new pence away in the drawer back in 1971, just in case I wanted a portion of chips in 2007 and the man in the chippie gets cross when I try to pay him with the two and a half new pence.

What is happening is paying the price of using tomorrow and today up yesterday. Just as individuals and organisations need to balance their books to avoid bankruptcy, The resources that the money represents are finite, but the supply of money is in theory infinite, and this leads to inflation.

The main consequence of this mathematical imbalance is that the rich get richer and the poor get poorer. The mechanism for this is the banking system, which operates under the fractional reserve system. Lending someone some money from one individual to another is not a problem as there has been no net increase in the amount of money in circulation. With a fractional reserve of ten percent banks can really pump up the money supply. Most people do not realise that when they deposit some money in their bank account they are lending the bank their money. They assume that they are putting it somewhere where it will be in safe keeping.
The bank, because it is a bank, can lend out the money many times over. If for example the fractional reserve is ten per cent and you lend your bank a hundred pounds by depositing it in your savings account, the bank can lend 90 + 81 + 72.9 + 65.61 + 59.05 + 53.14 + 47.83 + 43.05 + 38.74 + 34.87 + 31.38 + 28.24 + 25.42 + 22.88 + 20.59 + 18.53 + 16.68 + 15.01 + 13.51 + 12.16 + 10.94 + 9.85 + 8.86 + 7.98 + 7.18 + 6.46 + 5.82 + 5.23 + 4.71 + 4.24 + 3.82 + 3.43 + 3.09 + 2.78 + 2.50 + 2.25 + 2.03 + 1.82 + 1.64 + 1.48 + 1.33 + 1.20 + 1.08 + 0.97 I will stop there because I have illustrated the point, to save you adding up the total is 885.46.

So after a year, you get your hundred pounds back plus five pounds in interest and the bank makes £785.46 which represents the loans it made to other people, and these people are buying the same things as you and because they have this money that you helped the bank create in the first place, so it is no wonder the price of things keeps going up and people have to keep borrowing more money just to stay where they were.

However most banks have fractional reserve ratios that are much lower than ten percent, so the practical result is they can lend as much money as their imaginations can dream of. The Bank of Canada apparently went to zero fractional reserve ratios in the 1990s.

The point of all this is that rich people have access to credit on much better terms than poor people, and this gives them a mathematical advantage that enables the rich to profit on a deal that the poor would make a loss on. The prime example of this is called the carry trade, where a fund borrows Japanese Yen at 0.25%, and buys U.S. Dollars that pay 5% and pockets the difference. This is like social security for the well off. On a smaller scale it is called Stoozing, where you borrow on a credit card offering 0% for six months and put the money into your savings account and collect the interest.

The more credit that is around the bigger these imbalances become, and more of the economy becomes dependant on credit for survival. Credit begins to behave as an addictive drug such as cocaine, and withdrawal is stressful and painful. In severe cases families lose their homes and never recover their financial health, just like drug addicts and their health.

Eventually because of rising defaults, the credit bubbles deflate, prices drop, people panic and go broke, lose confidence to invest in the future and are generally depressed, hence the term depression, which the last one in 1929 was called the “ Great Depression “, it certainly was not great for those involved. It was great in the same way as the Great War was great. They could have called the Great War, the big bloodbath and the great depression the deep depression, it would have been more descriptive.
Then comes the time to rebuild the crashed and the smashed and people look for something to trust. Usually it is gold and silver, because this has been the trusted store of value for thousands of years, that is why central banks like to have pile of the stuff to make people feel more confident in the money that the bank issues.

This time however people are faced with more than one problem, in fact five of them.
1. Energy becoming more expensive
2. Exodus of wealth, power and income from west to east.
3. Empire peaking out in the Middle East by not winning.
4. Experiment of fiat money, quantity explodes quality collapses.
5. Economic cycle for a quarter century credit expanded, now it will contract.

There will be a new global reserve currency, but what will it be ? What is tangible that people can trust, that will offer the necessities of life in return for support ? Could it be life itself?
Although started as a new tax raising ploy, Carbon Trading, offers the potential to deliver the world a new reserve currency, backed by a tangible commodity, Carbon that is not locked up in a vault somewhere so that the players that already own it have an unfair advantage. The idea is simple, and wealth can be stored by on the land either in topsoil or vegetation.

The idea would be attractive to farmers, who would receive carbon credits when the grow crops as well as the price for the crop. Good practice would be rewarded because the topsoil would be counted as carbon reserves and as the depth of topsoil increases so do the reserves.

Existing forests would be an asset even if there was nothing done to them. Chopping down forests to grow soya beans or corn would not be a profitable thing to do. Eventually everyone would have their own carbon account and therefore be motivated to build up their own carbon reserves.

The unleashing of economic forces to combat climate change is the only method that is likely to bring sufficient resources and enthusiasm in to play. Beating people with a taxation stick will cause drag and resentment without addressing the problem in a meaningful way. A glance back at the history of the war on drugs, illustrates the complete failure of this approach, up to the point where it has been so profitable to be in the drugs business, that the participants have many times more resources than the authorities. The action of making things illegal, purely puts up the price, and nobbles the weaker competition so that the main players get a clearer run and greater profits. In effect the illegality creates a massive subsidy for an undesirable industry !!

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Carbon Standard 300/30 Story part 2

Carbon Standard 300/30 Story part 4