Climate change, politics and food security

Back in 2009, Elinor Ostrom and Oliver Williamson won the Nobel Prize in Economics for their work on economic governance.  Ostrom was noted for her research on how the “tragedy of the commons” could be overcome through cooperative management from those who use these common resources (e.g. fish stocks, pasture land, ground water).  Williamson, in a different vein, was lauded for his theoretical work on how businesses themselves, in certain situations, are better placed to resolve conflicts of interest internally rather than through the market itself (i.e. to make it rather than source it). (Read the Nobel Prize press release if you’d like to learn more).

In the context of climate change, Ostrom’s and Williamson’s research is particularly insightful.  If Ostrom’s research is to be believed, it lends hope to the possibility that the world’s leaders can find an adequate solution for addressing the effects of climate change — both in terms of adapting to the changes we are already experiencing as well as mitigating future climate change.  Williamson’s theory forces us to ask which types of institutional arrangements (e.g. within businesses, between businesses, between businesses and consumers, via government regulation, etc) would be most likely to produce a climate-smart solution.

This year’s negotiations have already been written off by many media and policy pundits (read BBCICTSDXinhua or Sky News to name only a few).  The Kyoto Protocol, the current international climate agreement whose successor is being debated now, is set to expire in 2012.  Thus, climate negotiators have one more year to find a replacement solution (the 2011 negotiation will be hosted by South Africa.)

But many businesses and countries are not waiting around for a global agreement. Rather, they are passing laws domestically to address their perceived needs. (Read this recent Reuters article for examples of what they are doing.)  And the emerging economies, especially China, are playing ever more important roles as power brokers within the negotiations.  And as competitors for the next generation of green technologies. Also, businesses are coming together to either call for better dialogue with regulators or to demand further investment in green growth.

Climate change presents several unique challenges: its scale as a “common good” is unparalleled; the distribution of its impacts is not shared equitably; its future impacts can only be estimated rather than calculated.  However, it seems that Ostrom’s and Williamson’s Nobel Prize-winning work may shed some answers in how climate solutions may be refined and who may be involved in finding a potential solution.

For businesses, the necessary incentive could come from reduced costs to their supply chain, improved risk management (e.g. of accessing key resources or markets) or potential reputational gains in the eyes of key stakeholders.

This blog post also appears on the Glasshouse Partnership blog.

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My Letter to the FT on the Complexity of Food Security

One of the realities of working in corporate communications is that the lionshare of our time is spent reading, thinking and writing on behalf of our clients, and we are left with little time to write things in our own names.

But since much of my time these days is spent thinking about agriculture (from a variety of perspectives) on behalf of my clients, it struck me when two “food security” articles appeared in the Financial Times on the same day, one highlighting a surge in global cereal stocks and the other lamenting a serious famine in the West African country of Niger.

Below is the resulting letter to the editor, published in today’s FT (or read it here online).  It alludes to two interesting pieces of client work in which I am currently involved.  The first is the Farming First coalition which advocates for a farmer-centric, science-based set of solutions for sustainable agriculture; the second is a sub-Saharan African seed security initiative being implemented by the Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) – which also received coverage in the Guardian recently.

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(from the May 14 edition)

Sir, Two FT articles highlight how complex, and often befuddling, the issue of food security can be to manage. On one side, Javier Blas reports the US Department of Agriculture’s claim that “surging [cereal] production has … allayed recent concerns about the world’s ability to meet rising food, feed and fuel needs” (“Crop stocks set to rise for third year in a row”, May 12).

On the other side, Tom Burgis reports from Niger of “a food crisis spanning the Sahel” due to “high prices and lack of rain” (“Niger is on brink of food shortages”, May 12).

Whether it be food surge or food shortage, what these articles reveal is that food security at the global level is about much more than food availability. It is about local access to inputs and information as well as a set of policies that reflects farmers’ needs first. For example, the Southern African Development Community is piloting an innovative scheme to harmonise the seed regulatory systems in Malawi, Swaziland, Zambia and Zimbabwe so farmers can access quality seeds more reliably and at a lower cost.

Food security is about production, but it is also about policies.

The End of the ‘My-Era’?

One of the most prolific social and etymological phenomena of the last decade has been the rise of the ‘my-word’. Companies like MySpace, MyYahoo, MyHotel, and yes, even MySushi (down the block from my office) all catered to the consumer who was looking for a unique, customised experience.

The demands of a maturing capitalist economy have prodded more sophisticated marketers to tailor their messaging to an ‘audience of one’, instead of to the larger homogeneous demographic segments which consumer research used to try to capture.

This demand has conveniently been met by the proliferation of internet-based research tools and management systems which can collect and sort huge amounts of information. For instance, people can now personalize their Nikes, or they browse books on Amazon which correspond to the past purchases they’ve made.

A lot of these trends are for the better. Who doesn’t like to have to their every need or whim satisfied after all? Everyone from development advocates to luxury fashion houses push for our rights to access andenjoy a greater set of freedoms.

But at what stage do the privileges of the individual begin to be outweighed by the responsibilites we share as a group? Where does the ‘my-right’ of a smoker become less important than the ‘our-right’ of those wanting to drink in a smoke-free bar? The ‘my-right’ of a person wanting to gorge on unhealthy food without exercise rather than the ‘our-right’ to not have to pay higher taxes into the public healthcare system? The ‘my-right’ of someone listening to music on the bus compared to the ‘our-right’ of not having to listen to bad hip hop music on our morning commutes?

It seems that every community has a different threshold for where this equilibrium is drawn. When I was in China, I was dumbfounded at how insignificantly society as a whole valued individual’s wishes. In England, on the other hand, I am equally amazed at how assertively people demand their individual benefits and personal space at the expense of what I would consider a friendly, more open culture.

There is a whole class of goods which cannot and should not be regulated by the ‘my-era’ population. And will this generation of people be able to pull away from their own interests long enough to think about the common good (or, even better, of the interests of those not yet born)?

Take a look at these night satellite images of Europe and the USA from space and then imagine that the global population is expected to from 6 billion to 9 billion by the year 2050.

It isn’t easy to bridge the gap between the competing forces of a self-indulgent culture focused on the individual and the restrictive collective action we need to oversee. Personally, I think government needs to make sure industries are effectively monitoring themselves or else be empowered to put more strict regulations in place.

The recent dismissal of a criminal charges being brought against six Greenpeace activists who defamed a coal-fired power plant in the UK shows one instance where the tide may be changing. According to an article in the Guardian, Greenpeace argued that the collective damage being done to property around the world (i.e. the environment as a whole) as a result of the individual power station provided them a ‘lawful excuse’ for what they did.

Ironically, I think it will still take the directed action of certain individuals to drive this new wave of collective action forward at first.  Also, the questions remains whether this will be seen as a ‘my-era’ or whether it is actually a ‘my-generation’.

Are You Happy?

On Friday, I went to see two Iranian documentaries playing at the British Museum. The second of these documentaries, directed by Ali Tamadon and entitled “Are You Happy?”, sees the film crew visits different areas of the country and ask local families this most fundamental of questions. Throughout the 50+ minutes of tape, the range of responses continued to surprise me. Most people — perhaps out of shyness, naivete, or sheer optimism — claimed to be happy in their lives. A few of the more nuanced responses stood out to me:

– A middle-aged mother discussed how happiness and sadness are two sides of the same coin. To know one, you must know the other.

– A teenage boy, squirming in front of the camera, confesses to being unhappy, full stop, but begs the director to not force him to reveal why.

– An old woman, who looks to be in her 80s, talks of hardships and the deaths of her loved ones. She prays to Allah that she will be taken to a place where these burdens will be taken away.

– A Tehran-based documentary filmmaker claims he is happy only when he is allowed to speak his mind and express freely what he sees around him.

The film never bored. The camera frames were beautifully set and simple, showing the interviewee in his home with his family in the background. It drove the point home to me that happiness (or contentment, as I prefer to think of it) is a mindset and is only tangentially linked to actual events of your life.

This truth was echoed in the memoirs of a young autistic savant, which my friend Stephane sent me. Called Born on a Blue Day, it describes the life of 27-year-old Daniel Tammet, the oldest of nine children born to a poor East London family. Tammet’s childhood could be seen as brutal: several bouts of epilepsy, Asperger’s syndrome, poverty, homosexuality, and social dislocation at home and school. Despite all this, he manages to find a decent life for himself by just being upfront, embracing his savant abilities, and openly admitting his quirks and apparent ineptitudes.

This focus on happiness is particularly useful in a time when material excess is increasingly the norm in the developed world. Clothes, appliances, furniture — even houses, for that matter — are increasingly made to be disposable. Fat middle-aged Americans are now making way for fat Chinese children. Almost 1/3 of the food purchased and brought home in the UK is thrown out. Something doesn’t seem right.

This debate has even entered the academic world. While studying at the London School of Economics, I came across the work of Richard Layard, one of the university’s professors who has pioneered a branch of economics that he refers to as “happiness economics.” Rather than allocating resources to maximise wealth, Layard argues that they should be allocated to maximise people’s happiness. A simple enough premise to argue for, but how do these models differ? When measuring optimal economic outcomes, he claims that neo-classical economics fails to consider (or purposefully disregards) the psychologically damaging impacts of inequality, the implicit costs of our evolving tastes, and our path dependency for material objects which we have grown accustomed to. The effect is a society which works harder than it should and is less happy (Incomes contribute to greater happiness, studies suggest, only up until $10-15,000 US dollars annual income… maybe that’s why so many Japanese are committing suicide…)

And Layard is not alone in the academic world. Other economists, such as Cornell University’s Robert Frank, argue for an entirely new form of taxation which is based on consumption rather than earnings (Look out for his book Luxury Fever for a more detailed explanation). Frank argues that high wage-earners who save their money should not be disincentivised from being productive; tehy are, in fact, facilitating future investment (either directly or through middlemen such as banks) by saving what they have earned. On the other hand, the more they consume, on average, the more they should be taxed, with items considered most luxurious taxed at the highest rate. This way, non-productive consumption could still have a place in the market, but its social cost (in terms of the inequality it produced) would be more properly reflected.

The Rise of Personal Branding

One of the themes of these blogs will likely end up revolving around how pornographic I think the developed world is today. Particularly in places like London, the drive to “make it” and distinguish yourself from your peer group can be pretty strong. Everything seems to be a commodity which is either for sale or for exchange.

My week’s comings and goings have been good subject matter for reflecting on the different ways that people go about representing themselves and relating to others. The idea for a blog came about on Thursday when I was reading an article in the Financial Times by Stefan Stern about a woman who charges £1200 ($2400) for a series of 3 personal branding consultations.

Working in corporate branding, I’m fairly well-acquainted with the concept (and, for the record, think that it is quite useful for organisations or for personal corporate profiles). At the same time, I find it a bit odd to apply the concepts to one’s personal life. Brands are means of communicating messages more concisely and more efficiently; they help organisations differentiate themselves and build a legacy that lasts from one leader to the next.

However, I also believe humans to be inherently inconsistent or even paradoxical (and that is often what makes me find them interesting). We are not meant to produce consistent messages as humans or else how would we be allowed to evolve or even change our views on life.

When talking to a friend about my idea for this blog, he turned to philosophy and debated the choice between being who we are and being who we want to be. Ulitmately he argued that our identity — our meaning — is a choice which we make for ourselves consciously. There are no right or wrong answers in his opinion, but the caveat is that we must be accountable for the direction that we eventually decide to take (or for the decision to remain indecisive).

I like this answer, and I suppose that this is the closest thing to a “personal brand” that I’ll ever get. It places me somewhere between the person I am and the person I want to be — fallible to the end but always cognisant of my ability to improve.

My Favorite Photograph

“As photographs give people an imaginary possession of a past that is unreal,” Susan Sontag wrote, “they also help people to take possession of space in which they are insecure.”  I look back now on the five or six years when I traveled and photographed extensively as an extended effort to find my place in the world.  Many of the photos now have come to represent the trips themselves; experiences not captured by my camera often need to be refreshed to me through friends that I met along the way.

At other times, elements of the pornographic — which Sontag talks about so much in her own thinking on photography — come to mind.  The photographer striving to capture, or even to own, the experience he has just had or the person he has just met.  In some ways, just like sex, this pursuit ends not in elation or an essential discovery but in the death of the very nature of the experience itself.

I took this photo about three years ago, and it still hangs in my flat as my favorite photograph.  I took it out of a car window when driving through the Uyuni salt flats in Bolivia/Chile.  It is so abstract that I often don’t register it as a photo.  The small road in the left middle ground reminds me of the fact that man has been there, yet remains pretty trivial compared to the landscape itself (just like the small boats, temples, or people hiding in corners of Chinese watercolour landscapes).

Microfinance 101

A friend of mine works at a law firm in London which does pro bono work for microfinance organisations. She, like a few others I know, want to know more about the intended and actual impacts that microfinance is argued to have in developing countries. Here is my take and some (hopefully) useful links to learn more… Please leave your own comments or other good links in the Comments section below…

The Basics

At its heart, microfinance tries to employ market-based principles to produce developmentally-progressive results. The guru of microfinance is a Bangladeshi professor called Muhammad Yunus, who started an organisation called the Grameen Bank. As the legend goes, around thirty years ago, Yunus came across a group of female basket weavers in his home country who were prepetually in debt because of the high interest rates that local loan sharks were charging them to buy the materials they needed. Unable to get out of debt, these women could never save enough money to invest more substantially in their craft business. Yunus sympathised and loaned them about 25 dollars to get out of debt; to his surprise, they quickly repaid the debt in full. This basic concept laid the groundwork for a concept which serves about 50 million borrowers and another 50 million depositors (with even more growth projected over the next decade).

In the beginning, microfinance worked a lot like a typical bank does, except with much smaller loans/deposits (most less than $100) and with alternative means for establishing collateral (because they don’t have any!). Loans are most often given to rural women who are assembled in small groups, whose collective credit rating depends on each of the members repaying their loans. This forces them to monitor each other and to help them out with business advice or support.

Since then, these microfinance concepts have been expanded to include the urban poor, HIV/AIDS and other sufferers, and even marginalised groups in the developed world such as immigrants and even schoolchildren. Still, the market is estimated to only be meeting between 5 to 10% of estimated demand.

But microfinance has also been challenged by some as a means of keeping poor people in debt or that it does not even reach the poorest of the poor (when these groups should simply be given humanitarian relief). The pressure to repay these loans has resulted in reports of suicides and continued patronage of loan sharks. In other words, it does not empower people but keeps them in a cycle of debt-fed poverty. Others argue that microfinance organisations have simply taken the place of loan sharks and formalised what used to happen on side streets and alleyways. Still others argue that the supposed gender impacts are negligible or even regressive.

Current Microfinance Debates and Trends

There is no doubt that the breadth of microfinance institutions (MFI) around the world has expanded in recent years. A noted example is the Mexican MFI Banco Compartamos which was just publicly listed and gave shareholders whopping returns while being accused of charging excessively high interest rates on its loans to poor people.

Simultaneously, mainstream investment banks have begun loaning increasing amounts of their money to MFIs in developing countries so that they have the funds necessary to grow more quickly. These banks get a set rate of return on their “big” loans (often less than their traditional loan rates) without having to do the work on the ground collecting all of the repayments/deposits and drumming up customers.

So is microfinance just like any other commercial activity or is it a developmentally progressive concept that happens to be market-based? Alex Counts, the current CEO of the Grameen Bank, argues that this is a “false choice”. It can be both, or neither, he claims. In a recent article in the Stanford Social Innovation Review, Counts argues that microfinance moves into previously untapped markets and helps deliver a number of financial, business, and social services to people who had previously not been reachable. Counts terms this microfinance benefit as that of a platform rather than a product. Thinking long-term and high yield (many users) but low margins (low profits per user), microfinance can get preferential regulatory treatment and develop trust in its users and in the general public.

My view is that — as with every growing industry — new microfinance propositions will emerge quickly, but the market will soon choose the “winners” among them and kick the cowboys out. As the industry matures, regulations will become more streamlined and this more easily monitored and reported. In a recent lecture I went to in London, Alex Counts sums up his view: “Microfinance is firmly rooted as non-profit but is just a fairly efficient way of promoting growth and jobs.”

For an overarching review of 90 academic studies of microfinance, check out Nathaniel Goldberg’s December 2005 article “Measuring the Impact of Microfinance: Taking Stock of What We Know”

For all things microfinance, check out: http://www.microfinancegateway.org/