All posts by Garry Peterson

Prof. of Environmental science at Stockholm Resilience Centre at Stockholm University in Sweden.
Reorganization

Financial crisis: bad models or bad modellers

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Australian economist, John Quiggin writes on Crooked Timber about the contribution of models to the financial crisis:

The idea that bad mathematical models used to evaluate investments are at least partially to blame for the financial crisis has plenty of appeal, and perhaps some validity, but it doesn’t justify a lot of the anti-intellectual responses we are seeing. That includes this NY Times headline In Modeling Risk, the Human Factor Was Left Out. What becomes clear from the story is that a model that left human factors out would have worked quite well. The elements of the required model are

  1. in the long run, house prices move in line with employment, incomes and migration patterns
  2. if prices move more than 20 per cent out of line with long run value they will in due course fall at least 20 per cent
  3. when this happens, large classes of financial assets will go into default either directly or because they are derived from assets that can’t pay out if house prices fall

It was not the disregard of human factors but the attempt to second-guess human behavioral responses to a period of rising prices, so as to reproduce the behavior of housing markets in the bubble period, that led many to disaster. A more naive version of the same error is to assume that particular observed behavior (say, not defaulting on home loans) will be sustained even when the conditions that made that behavior sensible no longer apply.

…More generally, in most cases, the headline result from a large and complex model can usually be reproduced with a much simpler model embodying the same key assumptions. If those assumptions are right (wrong) the model results will be the same. The extra detail usually serves to produce more detailed results rather than to produce significant changes in the headline results.

Adaptation

Ethan Zuckerman’s Propositions for Successful Development Innovations

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Ethan Zuckerman writes about innovation in developing countries in Innovating from constraint and suggests seven “rules” or propositions about how innovation proceeds in the developing world.  He writes:

I’d been asked by the organizers [of the seminar on the Information Society in Barcelona] to talk about how NGOs and social change organizations innovate, with the special challenge that I wasn’t supposed to celebrate innovative projects so much as I was to talk about the process of innovation. As I thought about this, I realized that I a) didn’t have much understanding of how social entrepreneurs innovate and b) didn’t have much confidence that social entrepreneurs generally did a good job of innovating with social media tools. Generally, I think that social entrepreneurs place far too much faith in social media tools and assume that they’ll be more popular, useful and powerful than they actually turn out to be.

So I offered a talk about some very different types of innovation – African innovations including the zeer pot, William Kamkwamba’s windmill, biomass charcoal, and endless examples of innovation using mobile phones. My argument was that innovation often comes from unusual and difficult circumstances – constraints – and that it’s often wiser to look for innovation in places where people are trying to solve difficult, concrete problems rather than where smart people are sketching ideas on blank canvases.

I offered seven rules that appear to help explain how (some) developing world innovation proceeds:

  • innovation (often) comes from constraint (If you’ve got very few resources, you’re forced to be very creative in using and reusing them.)
  • don’t fight culture (If people cook by stirring their stews, they’re not going to use a solar oven, no matter what you do to market it. Make them a better stove instead.)
  • embrace market mechanisms (Giving stuff away rarely works as well as selling it.)
  • innovate on existing platforms (We’ve got bicycles and mobile phones in Africa, plus lots of metal to weld. Innovate using that stuff, rather than bringing in completely new tech.)
  • problems are not always obvious from afar (You really have to live for a while in a society where no one has currency larger than a $1 bill to understand the importance of money via mobile phones.)
  • what you have matters more than what you lack (If you’ve got a bicycle, consider what you can build based on that, rather than worrying about not having a car, a truck, a metal shop.)
  • infrastructure can beget infrastructure (By building mobile phone infrastructure, we may be building power infrastructure for Africa – see my writings on incremental infrastructure.)

The most experimental part of a very experimental talk was applying these seven principles to three ICT4D experiments – One Laptop Per Child, Kiva and Global Voices. Ismael has a review of my talk including the scores I offer for each of the projects on these criteria.

Ecological Economics, Ecosystem services

Creating new forest commons

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From Northern Woodlands Magazine an article about a forest commons movement the Vermont Town Forest Project – A Forest for Every Town:

Food is one of our basic needs, so it makes sense that many of these movements focus on it. No less essential to society, however, are other goods and services, which small groups of people in communities across the nation are trying to encourage with “buy local” campaigns. It makes sense that our other basic needs – water and shelter – can also be met locally.

That’s the basic premise behind the Vermont Town Forest Project, which was founded by the Northern Forest Alliance in 2004 “to help communities across Vermont maximize the community benefits derived from their town forests and to help support the creation of new town forests statewide.”

These benefits include everything from watershed protection, forest products, and wildlife habitat to public recreation and community rallying points. They function in the same way town commons have for centuries in New England and New York. Every community member is responsible for their stewardship, and every member also benefits from their presence.

The concept of town commons, and even town forests, is not a new one. In fact, the enabling legislation for creating town forests in Vermont was enacted in 1915. But these forests haven’t been on the top of everyone’s mind. At least until lately. Now, thanks to projects such as the Vermont Town Forest Project, they are experiencing an exciting revival.

… Hinesburg is fortunate to own not one but two town forests: the
“older” (it dates to 1940), composed of 837 acres of mixed woodlands,
and the “newer” (just purchased), with 301 acres boasting extensive
wetlands and calcium-rich soils.

Hinesburg’s forests exemplify town forest potential. They have
recreation: world-class mountain biking trails, along with skiing,
hiking, and horseback riding. They also serve as outdoor classrooms,
both for local teachers and for the University of Vermont, whose
students have conducted dozens of projects there.

And the older forest also has active forest management: one recent
harvest took out white ash, which was then milled and kiln-dried
locally and installed to replace the floor of the Hinesburg Town Hall,
which had been sanded so many times that the tongue of each
tongue-and-groove board was exposed. All this at a total cost of $2.48
per square foot, about what you’d pay commercially.

Ecosystem services

Agriculture unaffected by pollinator declines?

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Nature News reports Agriculture unaffected by pollinator declines. A new paper in Long-Term Global Trends in Crop Yield and Production Reveal No Current Pollination Shortage but Increasing Pollinator Dependency from Current Biology (doi:10.1016/j.cub.2008.08.066) shows that:

Bees and many other insects may be in decline almost everywhere — but agriculture that depends on pollinators has been surprisingly unaffected at the global scale.

That’s the conclusion of a study by Alexandra Klein at the University of California, Berkeley, and her colleagues. Using a data set of global crop production — maintained by the Food and Agriculture Organisation of the United Nations (FAO) — which spanned 1961 to 2006, they compared the yields of crops that require pollinators with those that don’t.

They found that crop yields for both crop types have gone up consistently, seeing average annual growth rates of about 1.5%. There was also no difference when the researchers split the data into crops from developing countries and crops from developed countries.

And when the researchers compared crops that are cultivated almost exclusively in tropical regions, they found no difference between the success of insect-pollinated crops — such as oil palm, cocoa and the Brazil nut — and those crops that need only the breeze to spread their pollen.

General

James K. Galbraith economics and the financial crisis

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An interview with economist James Galbraith in the NYTimes.com

..There are at least 15,000 professional economists in this country, and you’re saying only two or three of them foresaw the mortgage crisis? Ten or 12 would be closer than two or three.

What does that say about the field of economics, which claims to be a science? It’s an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless.

And a review of the impact of the crisis.

During the go-go investing years, school districts, transit agencies and other government entities were quick to jump into the global economy, hoping for fast gains to cover growing pension costs and budgets without raising taxes. Deals were arranged by armies of persuasive financiers who received big paydays.

But now, hundreds of cities and government agencies are facing economic turmoil. Far from being isolated examples, the Wisconsin schools and New York’s transportation system are among the many players in a financial fiasco that has ricocheted globally.

General

Books on global sustainability

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From the New Scientist, reviews of twelve recent books on consumption and sustainability:

Continue reading →

General

Increasing sustainability science at universities

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From Naturejobs

Scientists who seek intensely interdisciplinary study could be the beneficiaries of increasing interest in the emerging field of sustainability research, with new university programmes offering novel opportunities. Portland State University in Oregon and Cornell University in Ithaca, New York, are the most recent entrants to the field. They follow the example set by institutions such as the School of Sustainability at Arizona State University in Tempe.

Broadly defined, sustainability bridges disciplines to determine how to meet the resource needs of the present without adversely affecting future generations. In practice, that means assembling teams of ecologists, economists, biologists and social scientists to find solutions and strategies for big problems, such as meeting future energy needs.

Ecosystem services

European biodiversity and ecosystem scientists merge

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From European Science Foundation: European biodiversity and ecosystem scientists merge and gear up for long term research

Measures to tackle the human impact on biodiversity require long term research and collaboration between many countries working with common goals and frameworks. This emerged from a recent workshop organised by the European Science Foundation (ESF), which moved towards establishing an ESF Research Networking Programme (RNP) for ecosystem and biodiversity analysis on the back of existing initiatives.

Before finding conservation solutions, the big challenge is to understand how human activities and their possible consequences, such as climate and land use change, interact with ecosystems and alter biodiversity, according to Markus Fischer, convenor of the ESF workshop. The big first step will be to bring key researchers within Europe into a single “big tent” focusing on the whole field of biodiversity and associated ecosystem processes, from the molecular to the ecosystem level and across all groups of organisms. Until now, research into biodiversity and research into ecosystems have tended to be conducted separately even though the issues and underlying science are closely related. Thus, “the most important result of the workshop was the rapid consensus that the two previously separated fields – biodiversity and ecosystem research – should team up and integrate their results more intensively,” said Fischer. “The best way to arrive at a better integration is by harmonising methodological protocols and agreeing on a sampling design for joint investigations on diversity and ecosystem processes.” The workshop has laid the ground for such harmonisation.

The workshop identified the need to understand what features enable some species to benefit from changes and others to be driven out following various kinds of human activities, over both the short and long term.”We can learn a lot about functional consequences of changes in biodiversity by comparing ecological traits of rare and endangered species with those from increasing or invasive species, or by comparing how these two groups of species respond to changes in the environment,” said Fischer. “However, biodiversity research cannot be successful if it limits itself to the species level. Clearly, evolutionary biology must be integrated within innovative biodiversity research. Moreover, biological interactions need to be considered, including pollination, seed dispersal, predation, and decomposition, all constituting integral elements of ecosystem functioning.”

All these objectives can only be met through a common approach linking suitable local projects on the ground across the whole of Europe. “It was generally agreed that functional biodiversity research requires a network of field sites distributed across Europe to cover different types of habitats, landscapes and land-uses,” said Fischer. “Furthermore it was recognised that all facilities must allow the conduction of long-term research because of the non-linear, slow and often delayed response of ecological systems.” In the long run, an integration of the network into currently emerging European research initiatives such as ANAAE and LIFEWATCH will allow the full potential for synergy to be realised.

For more information please click here

Adaptation, Reorganization

Björk discusses Iceland’s response to financial crisis

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From Pitchfork – the Icelandic musician and star Björk, on the Icelandic response to the financial crisis (which locked up Iceland’s imports as massive bank failures lead to a currency crash):

… the Náttúra Campaign, the Icelandic environmental movement co-founded by Björk. Náttúra’s original mission was to protest the construction of foreign-backed aluminum factories in Iceland, but in recent weeks, the movement has taken a dramatic turn. ….

Björk: For the last two weeks, Icelanders are getting a crash course in economics. I mean, I didn’t know about these things two weeks ago. The news is full of right-wing guys saying, “Stop the environmental value stuff! We should just build factories everywhere now, because that’s where the money is!” …

These aluminum smelters, nobody wants to build them in Europe, because there’s so much pollution. So it’s like, “Oh, just go dump them in Iceland.” We are getting them energy for so cheap that they are saving so much money by doing all this here.

Instead, what we are saying is, we’ve got three aluminum factories, let’s work with that, we cannot change that. Why not have the Icelandic people who are educated in high-tech and work already in those factories in the higher paid jobs, why not let them build little companies who are totally Icelandic with the knowledge they have? Then they get the money and it stays in the country. Then we can support the biotech companies and the food companies and all these clusters. I think that if you want to be an environmentalist in Iceland, these are the things you’ve got to be putting your energy into.

A lot of investors [are] coming, and I’m hoping they will want to invest in the high-tech cluster. There are money people here that did not lose a lot of money. For example, here is one investment company in Iceland only run by women. They are doing fine. [laughs] They aren’t risk junkies. They just made slow moves. The people who are crashing, they took a huge loan and then another huge loan, and so on. And it’s all just air. But these women didn’t build on air.

…

I’ve also been trying to get someone to Iceland to suggest green industries to Icelanders and introduce us to the companies that haven’t even been built yet in the world. This man Paul Hawken, who is famous in the States, he has agreed to come here in November. He’s supposed to be a green capitalist. He’s a functionalist, not just an idealist. I’m hoping he can unite these two polarized groups in Iceland. I’m setting up a meeting with him and the people in power. Because I think private money people can put money into those seed companies, but most of all, the government has to do it. It has to be a mixture of two things. It cannot just be visionary money people.