Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Greatest threat to recovery: caution

The economy is growing again, albeit anemically. The Bureau of Economic Analysis recently downgraded 2009 third quarter growth from 3.5 to 2.8 percent. Neither of these are encouraging numbers, folks, considering without the federal government pumping money into the economy economic growth would be nonexistent, or more likely still pointing south.

But let’s cut to the chase, unemployment, the indicator that really matters to most people, would be much higher. Tomorrow, the Obama administration is holding a jobs summit to talk with a bunch of experts about what can be done to reduce unemployment. I’ve seen the guest list, and it looks to me like there are plenty of good people invited who can deliver the strong message the administration needs to be hear. More stimulus—fast, please.

Call it a “jobs bill,” if a euphemism is the only way to get Congress to take seriously another stimulus, but this is what lowering the unemployment rate apparently is going to require.  Without new spending by government, unemployment won’t go down because government spending is the only thing creating demand right now in the economy. There are indications that the first stimulus is already running out of strength. From the Wall Street journal yesterday:

Highway-construction companies around the country, having completed the mostly small projects paid for by the federal economic-stimulus package, are starting to see their business run aground, an ominous sign for the nation's weak employment picture.

2010 Hunger Report: A Just and Sustainable Recovery

Bread for the World Institute’s latest annual hunger report, its 20^th edition of this esteemed report, appears today. A Just and Sustainable Recovery analyzes what needs to happen to reduce hunger and poverty as the U.S. and global economy recover from the worst economic crisis since the Great Depression.  

A jobless recovery will not suffice and does not have to be what we get if policymakers grasp the opportunity to rebuild the economy in ways that put people at the forefront of policies to stimulate and sustain growth. 

The report highlights policies that can ensure a sustainable future in spite of the ups and downs that are inevitable in business cycles. It calls for new investments in the nation's energy infrastructure, as to create lots of jobs; rebuilding the manufacturing sector, also to create jobs but more importantly to get America producing things people want to buy, besides risky financial products; reducing inequalities in areas like housing, health care and education policy; helping low-income families to save and build assets for the future, just as the government does for middle and upper income families; and revitalizing neglected communities throughout the country, places so far on the margins they are effectively excluded from participating in the rest of the national economy, except for low-paying work in the service sector. This report has a big agenda, but we're at an opportune moment for making a fresh start and thinking big about the future.

The report also makes the case for U.S. leadership in reducing hunger and poverty around the world and in addressing climate change. Without addressing the triple threats of hunger, poverty, and climate change, the report argues, the coming decades augur far greater instability around the world. 

The release of the report coincides with a launch event at the National Press Club, including speakers David Beckmann, president of Bread for the World and Bread for the World Institute, Robert Greenstein, president of the Center on Budget and Policy Priorities, Gawain Kripke, director of research and policy at Oxfam America, and Reverend Lennox Yearwood, president of the Hip Hop Caucus. The report’s website, including everything in the print edition plus many other features, will be adding video from the National Press Club event within a few days.

Here on Institute Notes we’ll be blogging regularly about the report, as issues discussed in the report, from hunger to climate change to health care reform and jobs and inequality, continue to be in the news everyday.  So check in and participate in the discussion with us if you like. 

Rightside Up and Upside down on Clean Energy

The American Climate and Energy Security (ACES) bill, aka Waxman-Markey, passed narrowly in the House of Representatives last week, 219-212. It’s a lousy bill for those of us who were looking forward to the U.S. finally doing something serious about climate change, but we mustn’t overlook the fact it still passed and that’s an important step forward in itself.

U.S. climate policy can only get better going forward. But we have the start of a climate policy – keep your fingers crossed the bill doesn’t get killed in the Senate, and don’t be surprised if even more accommodations aren’t made to industry lobbyists. 

Why clean energy in the United States never matured from its promising beginnings in the 1970s is symptomatic of what’s gone wrong with the U.S. economy in general over this time and why we’re in the deepest recession since World War II. 

In the 70s, as clean energy technologies were quickly evolving, the United States jumped far ahead of all other countries technologically and commercially. By 1980, the U.S. was producing 80 percent of all wind energy in the world. We can thank Jimmy Carter for this, as we can blame Ronald Reagan for undermining the achievements we had made. Remember it was Reagan who ripped the solar panels off the White House roof that Carter had placed there. This isn’t why the clean energy industry in the United States went into hibernation but it was indicative of the contempt Reagan had for clean energy and wind energy in particular. I imagine him going to his grave never having got over those turbines gumming up stretches of the California horizon.

Good Jobs, Green Jobs

That's the name of a conference that took place in Washington, DC last week. It was sponsored by the Blue-Green Alliance, a consortium of environmental and labor groups like the Sierra Club, Natural Resources Defense Council, Steelworkers, Teamsters, and Laborers, groups recognizing they all stand to gain by working together to push a green policy agenda. 

For environmentalists, its easy to understand their excitement about greening anything, but for labor it may not be so clear how they stand to gain. Everybody's worried about climate change. Green jobs mean burning less carbon to slow the pace of climate change. The industries that can do the most to reduce carbon dioxide emissions are some of the most unionized. For instance, take construction work. Forty-percent of all carbon emissions are from buildings. Retrofitting buildings to be more energy efficient will be done by workers in the construction trades, adding extra layers of insulation, caulking up energy leaks, upgrading heating and ventilation systems. 

There was a tremendous amount of energy at the conference and confidence in President Obama to deliver the promise of a green economy to fruition. As the conference was taking place, negotiations on the stimulus package were going on a couple of miles away on Capitol Hill. During the 3-day conference, there were several keynotes from members of Congress, all Democrats not surprisingly, encouraging participants to get over to the Hill if they could and make their voices heard in support of provisions in the bill for green jobs. Sheila Jackson, the new EPA administrator, spoke about how her agency was poised to help rewrite environmental laws to put clean air, clean water, and environmental justice at the forefront of policymaking again. Van Jones, leader of Green for All, was there and gave an electrifying speech about the intersection of green jobs and poverty reduction (more on this in the future).  

I attended several workshops and it was clear to me from listening to the work being done at the local, state and regional level that a green revolution is already in motion. While it would have been nice if the Bush administration had been a partner, no individual or group represented at the conference let that slow them down. The difference between President Obama and President Bush on environmental issues is like the difference between green and whatever color in the spectrum that represents the most opposite. That helps to explain some of the excitement, some of the optimism and sheer our-moment-has-arrived energy in the room. Whatever impact the stimulus has on spurring on a greener economy, one thing was certain to me about the people who came to this conference. They won't stop charging forward.   

Where does Bread for the World fit into this? Well, it's becoming increasingly clear, as we realized in writing the 2009 Hunger Report, climate change and hunger are becoming increasingly the same.

Is Stopping Climate Change Worth the Cost?

That is the provocative question posed in a “60 Second Science” note on the website of Scientific American reporting on a recent debate in New York City sponsored by Intelligence Squared U.S. While none of the debate participants denied the reality of global warming, the question of whether doing anything about it was worth the expense (estimated by some to be as much as 1 percent of global gross domestic product) provoked strong arguments on both sides.

The debaters – three on each side – touched on the costs of mitigation relative to overall benefits, the technical feasibility of climate change mitigation, the prospects for deterring poor countries from following the fossil fuel dependent development course followed by rich countries, and the willingness of residents of the developed world to pay the additional costs involved. And, apparently, the skeptics prevailed, at least in this forum, with the percentage of the audience agreeing that stopping climate change was NOT worth the cost going from 13 percent before the debate to 42 percent after.

What didn’t come up in the debate, however, was the profoundly disproportionate impact of climate change and global warming on poor people and poor countries. Most scientific experts agree that the effects of climate change will be felt most by small, island nations and the countries of Sub-Saharan Africa, South Asia, Central America – i.e., the world’s poorest and most vulnerable. And there are two facets to this issue: First, that of justice – of expecting the poor to paying for the indulgence and negligence of the rich. The second is that of the risks to global security that would result from the huge numbers (in the tens of millions) of displaced people from, for example, coastal India and Bangladesh. Had this point in favor of taking steps to address climate change been introduced, would the outcome have been different?  One would hope so.

It’s essential that this country begin to think more broadly about the global security and ethical implications of climate change -- it’s about much more than us. The failure of the so-called experts to even raise these issues is reflective of a severely limited vision.

The Mother of all Stimuli

Yesterday, House Speaker Nancy Pelosi released some details about what Democrats are thinking about how to spend the Mother of Stimuli packages that will inaugurate the Obama era of government. 

“In the next two weeks, the Congress will be considering the American Recovery and Reinvestment Bill of 2009,” starts the memo coming out of the Speaker’s office. The memo informs us of all the areas the sectors of the economy the bill plans to address:

• Clean, Efficient, American Energy
• Transforming our Economy with Science and Technology
• Modernizing Roads, Bridges, Transit and Waterways
• Education for the 21st Century
• Tax Cuts to Make Work Pay and Create Jobs
• Lowering Healthcare Costs
• Helping Workers Hurt by the Economy
• Saving Public Sector Jobs and Protect Vital Services

Then we get the breakdown of the expected investments. It’s positively breathtaking. There’s no other way to describe it, tens of billions of dollars, one program after the other. Here are some examples:

“Clean, Efficient, American Energy: To put people back to work today and reduce our dependence on foreign oil tomorrow, we will strengthen efforts directed at doubling renewable energy production and renovate public buildings to make them more energy efficient. 
• $32 billion to transform the nation’s energy transmission, distribution, and production systems by allowing for a smarter and better grid and focusing investment in renewable technology.
• $16 billion to repair public housing and make key energy efficiency retrofits.
• $6 billion to weatherize modest-income homes.

“Transform our Economy with Science and Technology:  We need to put scientists to work looking for the next great discovery, creating jobs in cutting-edge-technologies, and making smart investments that will help businesses in every community succeed in a global economy.  For every dollar invested in broadband the economy sees a ten-fold return on that investment.   
• $10 billion for science facilities, research, and instrumentation.
• $6 billion to expand broadband internet access so businesses in rural and other underserved areas can link up to the global economy.

“Modernize Roads, Bridges, Transit and Waterways: To build a 21st century economy, we must engage contractors across the nation to create jobs rebuilding our crumbling roads, and bridges, modernize public buildings, and put people to work cleaning our air, water and land.
• $30 billion for highway construction;
• $31 billion to modernize federal and other public infrastructure with investments that lead to long term energy cost savings;
• $19 billion for clean water, flood control, and environmental restoration investments;
• $10 billion for transit and rail to reduce traffic congestion and gas consumption.

“Education for the 21st Century: To enable more children to learn in 21st century classrooms, labs, and libraries to help our kids compete with any worker in the world, this package provides:
• $41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion).
• $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education.
• $15.6 billion to increase the Pell grant by $500.
• $6 billion for higher education modernization.

And there’s more still…

It's United Nations Day

If there is one thing that has changed this fall, it's the awakening to the fact that the nations of the world are interconnected in fundamental ways--the global meltdown as a result of the US housing market and the financial instruments that depended on it has underscored what experts and advocates have been saying about climate change and the hunger crisis caused by poor policy choices that led to food prices doubling in the span of a few weeks earlier this year. We live in a world now where our choices and actions have global consequences, intended or unintended.

The founders of the United Nations and other multilateral institutions could not have imagined the world we live in today but they took steps to provide venues for having those conversations. Unfortunately, the nations of the world have not been very good at using these venues to have an honest dialogue about the challenges facing humanity. Instead these institutions have been used to pursue national agendas and protect national interests even if they were at the expense of the global good, leading many to be cynical about the usefulness of these institutions and multilateralism more generally. 

I don't think we have a choice anymore...we need to get real about the world we live and create systems that will help the international community understand the nature of global problems and come up with global solutions. We cannot afford to live in a world where half of world's people, the poor half, the ones who are most vulnerable are "collateral damage," to quote a NY Times article from today, when the financial system implodes or as a result of climate change or our biofuels policy.

With those thoughts, happy United Nations Day!

Risk and Opportunity

Over at the Overseas Development Institute Simon Maxwell has posted an interesting blog titled Can We Move From a Risk Framework to an Opportunities Framework in International Development? Maxwell begins by citing economic risk analysis which looks at the likelihood of a given event/catastrophe and its economic cost. Some events such as severe inland flooding are fairly costly, but also fairly unlikely. Other events such as a commodity collapse are more likely and carry far higher costs. Economic risk analysis helps provide a picture of what planners should be prepared for. Maxwell goes on to observe,

... risk analysis is only half the story. We are missing the opportunities. A sensible guide to making decisions and spending money should take account of risks, but also of opportunities. Where is the opportunity analysis?

Perhaps there is no better example of opportunity analysis than the Copenhagen Consensus.

Climate Change -- Adapt or Die

That is the title of an article in the Sept. 11 issue of The Economist, that focuses on the growing urgency – and appreciation of that urgency on the part of global leaders – of dealing with the effects of climate change, particularly in poor countries. For too long, environmentalists have focused on preventing climate change rather than adapting to it. That is changing; priorities appear to be shifting.

Two things have changed attitudes. One is evidence that global warming is happening faster than expected. According to a story in the Sept. 26 Washington Post, carbon is building up in the atmosphere faster than predicted. And Manish Bapna of the World Resources Institute, a think-tank in Washington, DC, believes "it is already too late to avert dangerous consequences, so we must learn to adapt."

Second, it is becoming increasingly clear that climate change hits two specific groups of people disproportionately and unfairly. They are the poorest of the poor and those living in island states: 1 billion people in 100 countries. The first impact of global warming has been on the very things the poorest depend on most: dry-land agriculture, tropical forests, subsistence fishing. Global warming erodes coastlines, spreads pests and water-borne diseases and produces more erratic weather patterns. Kirk Smith, a professor at the University of California, Berkeley, calls climate change the world’s biggest regressive tax: the poorest pay for the behavior of the rich. The following map depicts the cumulative carbon emissions of the global community from 1950 to 2000. The contribution of the poorest countries can be seen to be miniscule, yet they are the ones that will bear the brunt.

Climate Change: The US Government Begins to Climb on Board

Last week the State Department delivered its report to Congress, required by the Omnibus Appropriations bill passed last December, on the adaptation needs of developing countries and US government’s plans regarding adaptation. As such, the report puts the administration on record as acknowledging what has already has accepted by other developed countries: That developing countries will be most severely effected by climate change; that these impacts will occur across a broad range of sectors; and that the costs of adaptation – i.e., making the changes in human and natural systems which would moderate harm or exploit beneficial opportunities arising from climate change – will overwhelm the current development assistance resource flows.

The report contains a broad-brush overview of some of the climate impacts faced by developing countries and inventories on-going USG programs that do address adaptation needs; e.g., the Asia Flood Network, development of hurricane hazard maps for the Caribbean, understanding health effects of climate change and predicting disease dynamics, an assessment of mangrove systems in Asia, and support to CGIAR (the Consultative Group for International Agricultural Research) on agricultural adaptation.  However, most of these are relatively small, research efforts, with a total FY 2008 budget of approximately $27 million.

The report begs the question of how the full costs of adaptation, which it estimates at between $10 and $50 billion annually, will be met, noting simply that, “The scale of the potential cost suggests that adaptation efforts should leverage funds dedicated to development assistance, and that the donor community alone cannot take responsibility for adaptation in the developing world.” The report makes no reference, for instance, to the Clean Development Mechanism, which could generate significant resources for adaptation. The responsibility of donors, according to the report, should be “to provide tools, information and assistance to developing countries so they can entrain the resources of the private sector as well as donors to build resilient futures.” True enough, up to a point -- developing countries will have to bear a major share of the cost. But as the parties responsible for the predicament in the first place, don’t rich countries have a greater responsibility to help poor countries adapt?