Tuesday, October 25, 2011

Muller Confirms Climate Change

Berkeley Physicist Richard Muller and his BEST team (Berkeley Earth Surface Temperature Study) have finished their analysis of global temperature studies and have come to a startling conclusion: the Earth is warming substantially, it is largely man-made warming, and the temperature factors cited by the climate skeptics, including Anthony Watts, have at best only a marginal effect on global warming. And this is coming from a KOCH BROS. FUNDED STUDY on climate change, which was undertaken for the purpose of REFUTING the climate change thesis. Furthermore, Muller and his team found that some of the temperature data reported thus far has UNDER-reported the amount of warming that has already taken place.

"Climate Progress actually broke this story back in March — see Exclusive: Berkeley temperature study results “confirm the reality of global warming and support in all essential respects the historical temperature analyses of the NOAA, NASA, and HadCRU.” That was based on an email Climatologist Ken Caldeira sent me after seeing their preliminary results and a public talk by Muller confirming:
  • “We are seeing substantial global warming”
  • “None of the effects raised by the [skeptics] is going to have anything more than a marginal effect on the amount of global warming.”
But now the Berkeley Earth Surface Temperature Study have completed their “independent” analysis of all of the temperature stations and found a rate of warming since the 1950s as high NOAA and NASA and faster than the (much maligned) UK Hadley/CRU data:

data analysis graph

I had posted on this story back in March myself on this EcoSoc blog. My money was on Muller, who I believed was a scientist with integrity who wanted to rigorously test the climate change thesis. The kicker was that he took money from the Koch Brothers to finance the project. My hunch was that he would end up proving that the climate change deniers were wrong, that the climate really was warming, and that this would be the ultimate kick in the skeptics' crotch: using Koch Bros. money to refute their own campaign of lies and disinformation. Bravo, Dr. Muller.

Ironically, Muller even discusses the reality of peak oil, as a liquid fuel shortage, but which he believes can be replaced by compressed natural gas.

Sunday, October 23, 2011

US Govt decides Shale Gas Needs More Openness, Better Data

The Natural Gas Subcommittee for the US Energy Secretary has been tasked with "Improving the Safety & Environmental Performance of Hydraulic Fracturing" The Natural Gas Subcommittee's 90-day interim report is now available. Their 180-day final report is expected on November 18, 2011.

The subcommittee web site links to lots of interesting information, including a resources page with links to loads of useful information, transcripts of over 25000 public submissions (and, helpfully, a summary of the public comments!)

 The interim report is briefly reviewed by ScienceInsider:

The subcommittee to the secretary's Energy Advisory Board was not asked who should be regulating shale gas, Zoback says. Regulation now lies primarily with the states. But "we're pointing out what can and should be done." To regain public trust, the report says, much information about shale gas should become readily available to the public, starting with the chemical recipes for the fluids pumped at high pressure into shale to free up the gas. Those fluids sometimes spill onto the surface and into waterways. And much more information should be gathered on the environment before, during, and after drilling. The debate over whether and how drilling and fracking contaminate groundwater with gas—the infamous flaming water faucet of the documentary Gasland—would benefit especially. "We feel very strongly that having good data will advance a lot of the issues," Zoback says.

Some sort of national organization focused on shale gas should also be formed, the report says. It could create a national database of all public information as well as disseminate best practices to industry as they evolve. Added support for existing mechanisms that aid communication among state and federal regulators would also help.

"It's a remarkable report," says Philip Sharp, president of the think tank Resources for the Future in Washington, D.C. "It's a balanced, high-caliber group with public input. The report is remarkable in having honest, actionable proposals in it. What they say will get attention."

Saturday, October 22, 2011

Network Analysis of A Complex Global System: the 147 Super-Connected Corporations that Run the World

Revealed – the capitalist network that runs the world
By wmw_admin on October 21, 2011

Andy Coghlan and Debbie MacKenzie – New Scientist October 19, 2011

[Caption: The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue.]

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

Previous studies have found that a few TNCs own large chunks of the world’s economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy – whether it made it more or less stable, for instance.

The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.

The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

Concentration of power is not good or bad in itself, says the Zurich team, but the core’s tight interconnections could be. As the world learned in 2008, such networks are unstable. “If one [company] suffers distress,” says Glattfelder, “this propagates.”

“It’s disconcerting to see how connected things really are,” agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.

Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system’s behaviour, he says, requires more analysis.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing won’t chime with some of the protesters’ claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.

Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, “is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups”. Or as Braha puts it: “The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy.”

So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.

The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

* Lehman still existed in the 2007 dataset used


Sunday, October 16, 2011

Cesar Hidalgo on Economic Complexity

As evident from the voluminous discussion of the concept of biodiversity, the significance of diversity within ecosystems has long been recognized.  Generally speaking, this isn't the case in economics where the focus has typically been on identifying a small list of 'factors of production' (labor, capital, technology, etc.) and their transformation into a single comparable product ($ value). Taking a complexity view, Hidalgo and his collaborators argue that Adam Smith and Durkheim (with their emphasis on specialization and the division of labor) provide a more fruitful way of conceptualizing the economic realm.

Conceptually, as shown at the left, Hidalgo divides the countries of the world up into four groups: 1) Countries whose few major products are also produced by a number of other countries (e.g., the sugar producing countries of the Caribbean), 2) Countries with diversified economies, but all their major products are produced in a number of other locations, 3) Non-diversified economies that produce unique and exclusive products (such as Saudi Arabia and other oil based economies) and 4) Countries producing a diverse range of unique and distinct products.

Using a measure of economic complexity described in this paper, Hidalgo locates the economies of the world in a quantified representation of that basic conceptual space. Two points are worth of note. First, the countries locate themselves along a diagonal with almost every world economy being located in either the first or the fourth quadrant. As summarized by Ethan Zuckerman:
The nations that make only a few things all tend to make, more or less, the same things. Basically, we can divide the world into two sets of countries – those that have sufficient personbytes of knowledge to produce a wide range of goods, and those that can produce only a few simple things. The places that make everything make things that few others make. Hausmann explains that products require a specific set of personbytes to produce. When you gain additional personbytes of skill, it’s like getting new letters in Scrabble – you can produce a new set of words, but only within the constraints of the letters (skills, knowledge) you already have.
Second, this approach does a much better job than traditional economic analysis in addressing the classic question: "Why are some countries rich and other countries poor?" It explains 73% of the variance in income across nations.

Hidalgo describes his approach to complexity economics in the following two videos.

The same basic ideas are covered in more detail in this version.


His webpage is a wealth of information, including (among other things) pages with links to all his publications, to supporting materials for classes on complex systems, and access to the data sets used in his research.

Friday, October 14, 2011

Canadian Environmental Network unexpectedly terminated

Here's the first few lines of today's news release:

Future uncertain for network of over 640 environmental groups

Today, the Canadian Environmental Network (RCEN), one of Canada’s oldest, largest, and most well-respected democratic institutions serving the environmental concerns of all Canadians, was forced to lay off its staff and is on the verge of closing its doors and those of its 11 regional offices.
The Network demands to know why it is being shut out of communications with Environment Canada regarding the promised funding for fiscal year 2011-2012. Neither Environment Minister Peter Kent nor his departmental officials have explained why they are not delivering on their promise of continued core funding for the Network, which comprises its key environmental constituency across Canada.

“The Canadian Environmental Network received a letter from Environment Canada in May this year stating their intent to continue core funding in the amount of $547,000 for the current fiscal year. In keeping with our over three-decades-long partnership, we ask that EC honour this letter,” said Olivier Kolmel, Chair of the RCEN.

“The RCEN consists of over 640 highly diverse large and small, rural and urban organisations from coast to coast to coast. The Network forms an invaluable and irreplaceable grid of communication among environmentally concerned Canadians and the Government of Canada.
Resources for petitioning the government to reconsider are available after the break .

Thursday, October 6, 2011

Rifkin on Energy, Communications and Complex Societies

I still don't think that a distributed hydrogen grid could supply the same density of energy that fossil fuels does. I'm not convinced that distributed energy will run the kind of "global" economy that we have now (which, he is right, is in its death throes). If Rifkin followed Rifkin's own thinking, the third industrial revolution is distributed production, in which each locality produces what it needs and trades with other nearby localities. Instead of globalized agribusiness, we have small farms everywhere that produce food for a local market. I can't say with any certainty how a "distributed manufacturing system" would operate.

The biggest hole in Rifkin's thesis is that he's only talking about electricity production: he's not talking about transport energy. Electrified transportation is only good for short distances (compared with gasoline, diesel and jet fuel). Reliance on electricity for transport would be a limiting factor that would tend to localize production, and would discourage trading over long distances. And that's another reason why Rifkin's distributed energy grid won't fuel a globalized economy. But for him to leave the discussion of mobility and transport out of the discussion altogether seriously weakens his thesis. As Robert Hirsch said again recently, the peak oil crisis is a liquid fuel crisis that primarily impacts transportation.