2008年12月3日 星期三

Clinton Global Initiative Asia

Six conclusions of CGI
1. CGI is a verb, not a noun (i.e. we need action)
2. Sustainability is only possible with profit
3. Mass participation is important
4. Inclusion matters
5. Private-public cooperation is crucial to development
6. The current financial crisis is no excuse for delayed action

Impressive people
1. Lee Kwan Yew has a distinctive insight about all the most urgent global problems -- overpopulation, the solution of which is to promote education for women and equal job opportunities

2. Bill Clinton's last speech with the two stories, first about a Cambodian child and second about a family which has only one child out of ten surviving the Tsunami, was incredibly touching

3. Jet Li obviously showed deep understanding about disaster relief, which supposedly is the conceptual basis of his One Foundation. His honest and candid style is certainly worthy of additional appreciation

... and many many others

How CGI works
A annual meeting that attempts to bring positive impact to the specified areas (e.g. climate change, healthcare, etc.) through sharing, discussion, interaction and commitment.

- what CGI is offering to members
a) a unique opportunity to socialize with many political, business and civil society leaders from different parts of the world
b) chance to listen to the viewpoints from the most important decision makers worldwide
c) continuous support in many different areas for members to realize their commitments

- what CGI is asking for from members
Commitments to make a contribution whose nature is new, specific and measurable, those who does not realize their commitment will have their membership terminated

2008年4月26日 星期六

Are we even asking the right questions now?

Food or fuel? The policy choice becomes agonising
Published: April 25 2008 19:31 Financial Times, last updated: April 25 2008 19:31

In 1959, after years of lobbying from Texas oil men, President Dwight Eisenhower imposed a quota on US crude oil imports. The idea of the world’s biggest oil importer putting up barriers to keep out foreign crude now seems ludicrous. With fuel shortages looming, the quotas were abandoned by Richard Nixon in spring 1973.
Yet the arguments marshalled in support of the quotas are all too familiar. Protecting the domestic industry was vital to national security, the oil men said: America needed to invest in production capacity in case foreign supplies were cut off.
Today, the US ethanol industry is running its campaign out of the same playbook: there is a lot of talk about energy security and producers are protected by a 54 cents a gallon import tariff. In the European Union, the focus is more on the supposed environmental impact, but the results are similar: the industry is also protected by a tariff and further import restrictions are being talked about in Brussels.
The combined crisis of food prices soaring as oil
reached almost $120 a barrel this week should be the decisive signal that those policies are no longer tenable.
Biofuels such as ethanol are not the only reason, or even the main reason, that food prices are rising. The International Monetary Fund thinks the use of crops such as corn for biofuels accounts for only about 20 per cent of the rise in prices over the past couple of years; other estimates suggest the effect is even smaller.
But it is clear we have moved into a new era, in which food prices and fuel prices are tied more closely than ever before. That realisation has led some environmental groups – among them those, such as Friends of the Earth, who were among biofuels’ biggest cheerleaders only a few years ago – to urge policymakers to stop the growth of biofuels.
Some politicians, with Gordon Brown, the UK prime minister, in the vanguard, have responded to these concerns by
calling for a rethink of biofuels policy. Targets for the EU to meet 10 per cent of its fuel demand from biofuels by 2020 and for the US to have 36bn gallons of “renewable” fuels in its consumption by 2022 now look at risk.
Yet putting a brake on the expansion of biofuels is not an easy way out. At $120, the oil price has almost doubled in the past year. It is an extra problem that a fragile world economy really does not need, and abandoning biofuels would make it worse.
High oil prices are a sign that the balance of supply and demand is very tight. Policymakers can help curb demand: the new fuel economy standards for cars in the US will be a step in the right direction, although their effect is likely to be modest. Higher fuel taxes would be better: the call from John McCain, the Republican presidential candidate, for the federal petrol tax to be suspended over the summer is entirely counterproductive.
Changing demand patterns takes time, however, and while the world gets used to a permanently higher level of energy prices, there is a need for additional supplies.
Biofuels last year contributed about 1.3 per cent of world oil supplies: a small proportion, but still more than Indonesia, one of the earliest members of Opec, the oil producers’ cartel. Over the next few years, their contribution as a share of the increase in oil supplies is expected to be much greater. If that contribution were lost, the supply-demand balance would be even tighter and the oil price even higher.
The effect of cutting biofuels production could be to make food inflation even worse: higher oil prices push up the prices of fertiliser and transport, some of the biggest components of agricultural costs.
It seems policymakers are damned if they do back biofuels, and damned if they do not.
The deus ex machina favoured by many politicians, especially in the US, is “second-generation” biofuels, such as cellulosic ethanol, which can be produced from straw or other plant waste and so do not compete with food supplies.
The pious declarations of support for cellulosic ethanol amount to pure wishful thinking, however: it is nowhere in large-scale production. There is a lot of corporate and government-supported research and development under way, but even supporters of cellulosic ethanol reckon commercial viability could be five years off. Cynics say it always will be.
There is a solution, however: the US and Europe can open their markets to more Brazilian ethanol made from sugar cane. Brazil has the potential for huge growth in ethanol production on land today used as pasture, where the impact of expansion on either food supply or deforestation would be small.
Brazilian ethanol is not the whole answer, but it can help, and other low and middle-income countries could with the right support also develop biofuels industries in ways that need not necessarily compete with food supplies.
Having opened the floodgates to foreign oil, Nixon had a change of heart after the Arab oil embargo. By the end of 1973, he was evoking the spirit of the moon landings and the Manhattan Project as he called for the US to make itself self-sufficient in energy by the end of the decade.
That bold initiative failed, of course; as all attempts at energy independence are doomed. If there is one good thing that can come out of the food and fuel crisis, it should be the recognition of that reality.

Apart from the Olympics debate, the food and oil crisis is definitely one of the more heated topics on the western newspaper lately. The problem here being, has the surge in food prices been caused by the use of biofuel? The logic here is that because more farmland is used to grow biofuel-making crops, less is used to grow food crops. Some insisted it has been so, while others say yes but the use of biofuel is not the main factor. Those who are crying out 'NO' usually go with an alternative answer that the soaring oil price is the culprit because it increases the costs of transportaion and fertilizers, which are both significant part of food costs.

There is no settlement by now on which side is correct. And probably such a settlement will never come. Nonetheless, there are some questions that are left almost completely undiscussed, at least not in the media or public, about the food, energy and perhaps also environmental crisis that we are facing here.

1) Is biofuel beneficial for the environment to make it worth the fuss?

Some facts:
  • Some biofuel-making crops were grown on land that was originally rainforest, which is carbon-reducing.
  • Some biofuel was produced by using coal-fuelled plants, which are very carbon-enhancing.
  • The use of biofuel apparently has enhanced the overall global energy supply, which helped keep the oil price down and its consumption up.

2) How are those in the developed countries responding to the negative impact of use of energy on the environment?

Some facts:
  • Norway has recently struck a deal with an African country that more trees would be planted on the African country whenever Norway consumes too much energy -- similar to the process Clean Development Mechandism.
  • US Presidential candidate John McCain talked about cutting taxes on petrol in US during the summer, which will definitely drive up oil consumption if enforced.

3) How are those in the developed countries responding to the food crisis, which has been killing a lot of people in the developing countries?

Some facts:
  • the US is still heavily subsidizing their farmers, which has essentially pushed up food prices
  • of course, people are still wasting a whole lot of food in the developed countries
  • most developed countries are not meeting the even half of their aid target, not to say match the currently increasing food price with an increase in aid

Ya, so those in the developed countries, like everybody else on the earth, are facing food, energy and perhaps also environmental crisis here. But let's not cut on our own consumption of food and energy, let's do the following,

  1. Transfer the carbon burden to the developing countries because the richer guys can buy out the poorer guys, which of course including buying out their environment
  2. Keep producing biofuels because the developed countries neither want to cut energy consumption nor do they want to invest heavily in real clean and renewable energy
  3. Keep unfreeing our gluttony because the developed countries cannot physically afford not to consume so much food and can financially afford the food anyway
  4. Protect corporate farmers from international competition through tariff or subsidies or both and push the food prices further, nevermind, who in the developed countries actually cannot afford the food? (indeed, some really cannot afford, but they are not counted while we are talking about the developed countries)

My rough guess: our problem now is with our mentality, we, in the developed countries, do not think at all we are consuming too much of food or energy.

2008年2月24日 星期日

Time to compare apple with orange

Perhaps since the success of the Gates foundation, there has been a lot of voices to call for running a non-profit organization (NPO) like a for-profit one. The rationale behind is that NPOs are usually unaccountable to their financial supporters (i.e. donators) and may well waste a lot of money, a situation that is much better controlled, though not completely avoided, in for-profit organizations (FPO). Yet the synchronization of operation styles between the two may prove difficult because of one crucial difference between them -- the availability of a ultimate performance indicator (UPI).

What is the UPI for a FPO? Without doubt it is the profit they make for their investors. But for a NPO, the answer is much less clear. All we know is that it is not for profit, we do not really know what are they collectively for. The most sensibly answer will be to save the lives of those on the verge of dying and raise the quality of life for those not dying soon but still in need. Unfortunately, such a UPI is neither unique nor measurable.

And it is no good news. A unique and measurable UPI allows comparison of different organizations' performance on the same dimension: you can compare the performance of HSBC and Microsoft (although such a comparision may not be perfect all the time), but you cannot perform the same due diligence on Amnesty International and Oxfam. There is just no single dimension.

Economic theory tells us that when a company perform badly, the capital goes away to more efficient companies, balancing different companies' profit performance and reducing waste of capital. The same will not naturally happen in the non-profit sector. Hence, inefficient NPOs can survive for way longer than their counterparts in the for-profit sector because no one can easily catch their ineffieicncies by looking at their income statements or balance sheets.

A single, cross comparable UPI for NPOs will do great help to resource allocation since inefficient NPOs can be singled out and elminated. And niche NPOs which are making real impact will get more assess to donations, i.e. money does not only go to the big names.

To achieve this, an independent agency with sufficient authority and manpower can replace the role of profit indicator through assessing performance of every NPO, granting a rating/impact indicator to each of them and publishing report regularly on their performance. This is, however, not an easy task.