WC Archive

It's one thing to talk about alternatives to globalization. It's quite another to build one.

Dignity Return is a Thai clothing label produced by a tiny textile factory, but it's also a signal flare notifying the world that the choice faced by the developing world isn't simply between exploitation and isolation.

A group of Thai textile workers were made jobless by the collapse of their mismanaged employer. Rather than seek work at yet another garment factory run by remote owners, they decided to band together to start a clothing factory run -- and owned -- by its own workers. Dignity Return is dedicated to showing that it's possible to be a part of the global economic system without exploiting labor.

''Working in this factory is different from factories I have worked in earlier. There is no exploitation or abuse. No labour violations,'' says Sunee, a slim-built woman with shoulder-length hair. ''This place is unique because of that.''

Pausing from the work she was doing on a shirt, Kanchana says that to begin with, the factory ''is completely owned by the workers'' and there is freedom for the ''workers to express our views and get involved in decisions for the factory''.

[...]

Other details set the factory apart from the 2,641 garment factories that dot this country's urban and rural landscape. The workers do not have to wear a uniform, music from radios fills the open, airy factory floor, and the walls are adorned with posters that celebrate labour rights.

The story of a group of former co-workers banding together to start up a scrappy challenger to incumbent businesses is a familiar one in the United States, but is far less commonplace is the developing world. Dignity Return will not have an easy path ahead. The company is not yet a year old, and has not yet paid off all of its initial loans. The management model (collective decision-making) will likely prove difficult to handle as the company grows, and competitors, unhappy with the idea of an employee-owned challenger, will likely do whatever they can to drive Dignity Return out of business. Still, the seed has been planted; even if this company fails, the ideas it embodies will not die.

Representatives from Dignity Return will be speaking this week at the World Social Forum in Mumbai.

Did you know that Hewlett-Packard has a group working on technology enablers for microcredit? Neither did I. But the Microdevelopment Finance Team (MFT) has been around since 2002, combining experts from HP, Grameen Technology Center, and other groups working on microloans. Last month, the MFT began a pilot program in Uganda building an electronic system to manage loan payment and savings information, replacing the somewhat unwieldy manual system. This technology should make it easier to make and manage microloans, and will also connect networks of various third parties (agricultural retailers, gas station managers, etc.) accredited to make financial services more accessible in rural areas.

(Found via Ken Novak's Weblog)

Wired has a good article today on increasing efforts to build business models and ideas for the developing world that don't simply mimic existing American/European practices.

In Africa, there is a huge demand for simple technologies that can be used by people who lack access to banks, phone lines, credit cards and computers that Westerners take for granted. Living in the only country on this continent that has a modern infrastructure -- even while most of its citizens remain firmly entrenched in poverty -- South African entrepreneurs are in a unique position to develop and deliver these products to Africa's poor, says Raven Naidoo, a founder of Radian, a small technology-consulting firm.

"South Africa is a testing ground but also a huge market," he says. "Typically in South Africa people have targeted the high end of the market, but it's a small high end. At the lower level the return might be lower, but there's a volume gain."

"That market out there is two-thirds of the world's population," says Alan Levin, Naidoo's business partner. "No one else is capable of seeing it the way we do, or putting solutions together the way we do."

Businesses cited as examples include "Wizzy Digital Courier" (which uses its own open source applications to archive email and web requests from computers without internet access -- typically those in remote schools -- onto inexpensive USB flash storage devices, rush the stored data to connected computers via milk truck couriers, then return the results the next day) and Fundamo (which allows mobile phone users to make payments via their wireless connection rather than having to use a credit card). And while Wizzy solves an infrastructure problem that will diminish over time as more locations get net access, Fundamo actually implements something that hasn't taken off in the West due to the abundance of the older credit systems:

Levin, of Radian, says the success of Fundamo in Zambia illustrates the changing mind-set among South African tech entrepreneurs, who in the past have struggled to sell their products in saturated Western markets instead of looking to their own backyards.

"These new technologies are taking on very quickly in the developing world, and allowing for a kind of leapfrog effect," he says. "While the First World countries are still in the credit card phase, this turns cell phone companies into banks."

"Leapfrog effect"... hmm... where have we heard that term before?

One of the early WorldChanging pieces I'm most proud to have on the site is Alex's November 2003 essay, The Transcommercial Enterprise. If you haven't read it, you really should; I think that Alex has caught the scent of something big. Transcommercial practices could be a fundamental reshaping of how corporations do business -- and the signs are all around us that people are beginning to wake up to the possibility.

The most recent signifier of a shift towards transcommercial philosophies is today's news about the Google IPO. The idea of making a bundle by going public is hardly earth-shaking (let alone worldchanging), the way Google is doing it -- and the stance the company's founders are taking in their official filings -- may well be. Google is structuring its stock offering to simultaneously reduce the influence of investment banks (which often reward friendly investors with specially-priced stock presales to allow the quick "flip" of the stock at the overheated IPO prices) and reduce the ability of investors to pressure the company to think only in terms of short-term profits. The New York Times has a couple of good articles about the IPO, including the startled reaction among investment bankers to Google offering stock through an auction, and making sufficient amounts of stock available to head off an IPO price spike & crash cycle.

(More discussion in the extended entry...)

It may be inching towards Transcommercialism, it may be greenwashing, it may even just be good policy, but Bank of America now has environmental policies which appear to be heading down the right path:

We, at Bank of America, recognize that climate change and atmospheric pollution represent a risk to the ultimate stability and sustainability of our way of life. Bank of America is committed to addressing climate change issues even more so today, when we believe we can set real and achievable targets for greenhouse gas reductions in both our operations as well as investment opportunities

Goals for their environmental policies include: a 7% across-the-board reduction in greenhouse gases from both their own operations and the operations of their energy & utility investments by 2008; emphasize investments in efficiency and renewable energy; a blanket prohibition of lending to business operations that extract from rain forests and World Resources Institute "intact forest" sites; a prohibition of doing business with companies that directly or indirectly benefit from illegal logging operations; and more.

As corporate efforts go, these are worth applauding, but are hardly revolutionary. Nonetheless, it's good to see a major institution (and banks like B of A pretty much define traditional and conservative) openly embrace the need to do something about climate change and environmental degradation. It also adds to my suspicion that American governmental compliance with global enviro guidelines (like Kyoto) may eventually be moot, as more corporate entities decide on their own to make changes -- because of the need to comply with European rules, because of a perception of what the American market wants, or even because it's the right thing to do...

One thing that has always kind of baffled me about the "Cato said it, I believe it, that settles it" brand of global warming denial is the stubborn refusal to see climate disruption not as an economic threat, but as an opportunity. As my friend Christophe says, someone is going to make a bunch of money off of this. As long as American leaders continue to ignore the problem, the more likely it becomes that that "someone" will be innovators in Europe and China (or even India and Brazil).

Fortunately, even while politicians fiddle, business leaders are starting to take climate disruption seriously. The well-known socialist rag Business Week is even making global warming its cover story this week, and the article makes good reading for anyone interested in the business case for responding to global warming. No matter how familiar you are with the subject, the article is worth reading; many greens don't realize just how widespread the recognition of the danger of climate disruption is in the business world.

[...] taking action brings a host of ancillary benefits. The main way to cut greenhouse-gas emissions is simply to burn less fossil fuel. Making cars and factories more energy-efficient and using alternative sources would make America less dependent on the Persian Gulf and sources of other imported oil. It would mean less pollution. And many companies that have cut emissions have discovered, often to their surprise, that it saves money and spurs development of innovative technologies. "It's impossible to find a company that has acted and has not found benefits," says Michael Northrop, co-creator of the Climate Group, a coalition of companies and governments set up to share such success stories.

These are not wild-eyed activists trying to shut down the modern world -- these are corporate and finance executives who realize that global warming means uncertainty, uncertainty means risk, and that taking steps to mitigate risk now, rather than waiting to see what happens, just makes good business sense.

(Via WorldTurning)

How does your income stack up to the rest of the world? You may be surprised: if you make at least $47,500 a year, you're in the global top 1%. London-based creative media firm Poke has built a handy website called, simply, GlobalRichList, which reveals where you stand financially compared to the rest of the world. Enter in your annual income, tell it which denomination to use (US Dollars, Canadian Dollars, Japanese Yen, Euros, Pound Sterling), click the magic button... and find that you're (for example) the 46,777,566th richest person in the world, approximately.

Or not. This is hardly a scientific exercise; the rankings are based on averages and data from over five years ago. It doesn't take into account cost of living, "purchasing-power parity," or any of the other complexifying factors that make economics so much fun. But it is provocative, because even if the precise ranking is wrong, it's unlikely to be wrong by even an order of magnitude: I may not be exactly the 46,777,566th richest person on the planet, but my "real" ranking is probably within a few tens of millions of that on either side. And even that degree of approximation puts me financially better-off than close to six billion people -- something which I knew to be true, but remains kind of staggering when spelled out in this way. I suspect that many readers of WorldChanging would fall into this same rough ranking.

How rich are you? If you're reading this site, you're very likely in the top 10% of the planet. What are you going to do with your wealth?

(IDFuel also wrote about this site, and their post is worth checking out.)

(Thanks, Jet!)

One of the elements of the Kyoto treaty is the use of carbon markets. This lets those countries either producing under the treaty limits of CO2 or not currently bound by the treaty (for now, mostly developing nations) sell carbon emission rights to treaty-bound over-producers. While this may seem like a way for over-producing countries to just keep spewing excess CO2, it's actually a very good idea: few countries are close to making the Kyoto limits without buying credits, so there's considerable demand; even as more countries get their emissions in order, the emissions allowed will gradually decline over time, making the remaining credits inevitably more expensive; countries will therefore have an economic incentive to be net carbon credit producers instead of consumers. It's definitely an incentive for developing countries to adopt cleaner technologies sooner, so as to continue being sellers and not buyers as they continue to grow. We're now starting to see how these markets will play out.

Reuters reports a partnership between a Norwegian firm and a Brazilian landfill to trap and burn methane emitted by the landfill; this will reduce the net addition of methane (21x more powerful a greenhouse gas than CO2) to the atmosphere. Norway would get the credit -- equivalent to 670,000 tons of CO2 -- and Brazil the cash, currently €8.25 ($10.98) per ton. While this is one of the first deals signed, it's far from the only one around.

Elsewhere around the globe, Telnes [technical director of the Norwegian company, DNV] said about 200-300 clean energy projects were nearing certification in developing nations with perhaps another 1,200-1,300 on the drawing board.

"In the long term I wouldn't be surprised if we saw between 500 and 1,000 projects coming on every year," Telnes told Reuters. DNV, perhaps best known for checking ship designs, is a world leader in certifying environmental schemes.

With the markets now underway, there's a real need for information about their function and efficiency. The World Business Council for Sustainable Development often gets stories from the for-pay Point Carbon, a website which collects information on carbon markets and the UN's "Clean Development Mechanism" which coordinates these developing world carbon-for-cash schemes. Point Carbon has abundant information about carbon markets, from news feeds to market analysis to explanations of just how it all works. Some of the explanatory pieces are free, but much of the material requires a subscription fee.

I'm still looking for a free source of carbon trading info. Any suggestions? This is a process which is definitely worth watching.

Microcredit is one of those brilliant ideas which is at once simple and revolutionary. As many as 100 million people have had their lives made better through loans of very small amounts of money (about 90% of which are paid back). We looked at other forms of microfinance last year, but it's definitely worth revisiting the idea. The World Business Council for Sustainable Development hosts a new article exploring the idea of "micro-insurance" (making insurance protection available to those in poverty) and the need to make remittance transactions less onerous and expensive. These ideas make a huge amount of sense, would be relatively cheap and easy for microfinance institutions to carry out, and would make a huge difference in millions of lives.

It could make a great difference if poor people were given access to insurance, says Dr Johan Bastiaensen, an expert on microfinance at the department of development policy at the University of Antwerp. "Theft or a minor illness can be a life threatening accident for someone struggling to make ends meet," he told IPS. "Insurance is arguably the most wanted financial product in developing countries."

[...]

Funds transferred by migrants to families back home are a vast, reliable and useful income for developing countries, he says. They exceed the level of official development aid (ODA), which stood at $ 68 billion in 2003.

International money transfer agencies like Western Union and Money Gram provide quick and reliable transfers, but charge a juicy commission. "It is one of the most blatant injustices in today's world that poor immigrants need to pay a 15 to 20 percent commission on remittances to their families back home," Bastiaensen argues.

We talk about the Millennium Development Goals pretty often -- as Alex noted over a year ago, they're "the closest thing we have to an international consensus on how to meet the basic needs of everyone on the planet." Economist Jeffery Sachs is the head of the Millennium Project, and while he may not be the most radical thinker when it comes to meeting global development needs, he has some pretty solid ideas. He thinks we can eliminate deeply-rooted poverty, worldwide, by spending "50 cents out of every $100 of rich-world income in the coming decade." But what would that mean, in detail?

This is what it would mean: Investing in Development: A Practical Plan to Achieve the Millennium Development Goals, the Millennium Development Project report, is at once audacious and eminently plausible, a combination that delights both the scenarist and the activist in me. It's a massive document (over 33 MB if downloaded as a high-resolution PDF) but it spells out just what the world needs to do to end the grinding misery of poverty, what it can do, and how. It gives real-world, realizable steps to meeting an idealist's dream:

The report, "Investing in Development," doesn't stop at malaria, though controlling it might be the greatest bargain on the planet. The project's scientists show how special "fertilizer trees" could replenish Africa's soil nutrients and lead to a doubling or tripling of food crop yields in just a few years, enabling farmers to grow more food more reliably and break free of famine. Using these and other cost-effective modern tools, Africa could have its own "green revolution," as Asia did some decades ago. As in Asia, food security in Africa would be a prelude to sustained economic growth.

The study documents how emergency obstetrical care could be provided at local clinics even in impoverished settings, saving hundreds of thousands of mothers who will die in childbirth this year because of obstructed labor and other complications. The project similarly documents how the introduction of low-cost, nutritionally balanced school meals, using locally produced foods, could improve the health, nutrition, school attendance and performance of more than 100 million children in the world's poorest countries.

Taken together, these and similar steps would change the face of extreme poverty -- indeed, put the world on a path to eliminate it in this generation.

People in extreme poverty are outside the global economy, outside the global culture, outside the global future. We can do something about this. We must. And now we can't say we don't know how.

Money is imaginary.

More precisely, money is the tangible manifestation of an agreement between you and other people that the oddly-colored piece of paper in your hands has value. This lets currency rates slip and slide relative to each other, as people try to agree on exactly what the value should be, but it also has another implication. If you can find enough people to agree on its value, you can make up your own money.

In 1998, the residents of the Palmeira District, a slum in Fortaleza, Brazil, did just that. Setting up an organization called Association of Neighbours of the District of Palmeira, the residents created a new bank -- the Bancos des Palmas, or Palm Bank -- and a new currency, the Palmas. The bank and currency not only succeeded, they have thrived.

Shareholder pressure may prove to be a key tool for convincing large businesses to adopt practices less likely to promote global warming. GreenBiz reports that, for the 2005 proxy season, a record number of shareholder resolutions on climate change were filed with automakers, oil companies, real estate firms, financial institutions and power utilities. The landslide may be starting.

State and city pension funds and labor, foundation, religious and other institutional shareholders have filed 31 resolutions requesting financial risk disclosure and plans to reduce greenhouse gas emissions with nine oil and gas companies, six manufacturers, three electric power providers and two automakers. The companies are among the largest greenhouse gas emitters in the country, making them especially vulnerable to the risks of likely regulatory- and market-based limits on carbon dioxide emissions worldwide. In addition to the 31 resolutions, shareholders are also involved in negotiations with several dozen other companies aimed at improving those companies' disclosure and action on climate risk.

The German magazine Spiegel has an astounding interview with Pan Yue, Deputy Director of China's State Environmental Protection Administration. Pan is remarkably candid about China's environmental situation, and about the damage caused by China's rapid development. I can't recall ever seeing a Chinese government official talk this bluntly about the country's problems -- heck, it would be hard to find a government official from any country being this clear and stark.

It's tempting to excerpt the whole thing, but here are some choice bits:

We are using too many raw materials to sustain this growth. To produce goods worth $10,000, for example, we need seven times more resources than Japan, nearly six times more than the United States and, perhaps most embarrassing, nearly three times more than India. Things can't, nor should they be allowed to go on like that.

...This miracle [China's economic growth] will end soon because the environment can no longer keep pace.

...Because air and water are polluted, we are losing between 8 and 15 percent of our gross domestic product. And that doesn't include the costs for health. Then there's the human suffering: In Bejing alone, 70 to 80 percent of all deadly cancer cases are related to the environment.

SPIEGEL: You have advocated the introduction of the so-called "green gross domestic product." What does that entail?

Pan: It is a model that also takes into account the costs of growth, like environmental pollution for example, and is a topic we are discussing with German experts. We want the performance of functionaries to not only be measured in terms of economic growth but also in terms of how they solve environmental problems and social issues.

China Newsweek interviewed Pan in January; an English translation of that conversation is here, and he's just as candid with the Chinese press as he is with Spiegel. Pan Yue looks to be someone to watch in China. If he is removed from his position or is otherwise shut up, China's in deep trouble; if he's promoted or takes on a higher office, China might have a chance. Pan Yue may be the key to a Chinese environmental "win scenario."

(Here's more on China's environmental challenges and promise)

We've been generally enthusiastic about the Clean Development Mechanism of the Kyoto treaty, as it is already leading to pretty large-scale investment by the signatory nations in renewable energy and greenhouse gas-reduction projects in the developing world. In principle, this can be of great benefit to both developed and developing nations, as the CDM projects give the sponsors time to bring down their own emissions while giving the recipients access to new, clean sources of energy. As with all human institutions, however, the CDM is far from perfect; critics claim that the CDM all too often funds projects that don't meet the spirit of the treaty, or pointedly ignore local conditions, even exacerbating problems in poor communities.

The Indonesia-based CDM Watch website actively monitors CDM projects to make certain that they actually benefit the developing world. They collect ongoing statistics on CDM projects, and watch closely for problems. They have a searchable database of CDM projects, as well as links to project proposals. They've also created a CDM Stakeholder's Toolkit document, describing what the CDM is, how it works, and what questions citizens should ask about CDM projects in their countries and communities; the Toolkit is available for free, and in several languages.

Although the UK government's policies on climate disruption sometimes seem forward-looking and aggressive by American standards, many in Britain see them instead as timid and woefully insufficient. Among the voices calling for greater governmental action are the heads of 12 of the biggest companies in the United Kingdom. The CEOs and Chairmen of HSBC Bank, BP, Scottish Power, ABN Amro, and Shell among others have signed a joint letter (PDF) to the recently-re-elected Prime Minister Tony Blair, calling on the UK government to spell out an explicit and consistent policy agenda through 2025:

It is clear that the international community needs to stabilize global greenhouse gas emissions at levels that prevent dangerous climate change. We note the Royal Commission on Environmental Pollution’s recommendation that in order to contribute to achieving this goal at the global level, the UK reduce its carbon dioxide emissions by 60% by 2050. We welcome the UK Government’s commitment to a reduction of this order of magnitude. As business leaders, our concern is with how we can help bridge the gap between today’s economy and the radically different low-carbon future that will be needed to deliver this target. [...]

Atmospheric carbon dioxide is 375 parts per million and rising, expected to push over 400 ppm even in the best-case scenarios. Avoiding ruinous warming means keeping CO2 levels at or below 440 ppm (with some small flexibility if we can get a handle on methane, too). Remaining below that limit means moving as fast as possible away from fossil fuels and towards much greater efficiency across the spectrum of human activities. Mitigation of atmospheric carbon dioxide is generally thought of in terms of large-scale government efforts -- and often carries the whiff of heavy carbon emitters trying to get away from regulation.

But that's not the only scenario.

A combination of tradable carbon credits, carbon taxes and individual carbon offsets has the potential to both drive us towards a much more energy-efficient society and lead us to a world that isn't just carbon-growth neutral, it's carbon-growth negative. Read on to find out how.

Progressives, those concerned about the course of globalization, and supporters of diverse local economies alike lament the power that national and global brands have over our economic choices. In a world of largely-undifferentiated commodities, branding is the medium for distinguishing one product from another, and so many companies put disproportionate effort into building and maintaining brand identity. But this emphasis on brand is arguably a lever for change: as people's attitudes towards a certain issue evolve, brands that become associated with the issue can be harmed. Specifically, as global warming and climate disruption become more widely-recognized public concerns, brands that are linked to climate misbehavior can have their value plummet.

Such is the conclusion of the UK's Carbon Trust, a government-sponsored initiative to study the social and economic factors related to a need to reduce greenhouse gases. In a new report ("Brand value at risk from climate change" -- PDF), the Carbon Trust looks at how corporate identity and value could evolve in a world where climate issues capture the public attention. The summary conclusions are straightforward:

The global insurance industry leads the corporate world in acknowledging the reality of climate change. As we've noted before, the insurance industry (and the re-insurance companies, who insure the insurers against catastrophic claims, in particular) will bear the brunt of any global warming disasters; it's entirely in their interest to examine the science behind global warming as closely as possible, and not to play political games.

European and Japanese insurers are moving faster in this regard, but an article in today's Washington Post demonstrates that American insurance companies are starting to wake up to global warming, too. "A New Worry For Insurers," linked (for the moment) from the front page, argues that insurance companies' growing acceptance of global warming is a manifestation of the post-Katrina era. Although it goes a bit too much into the tiresome "he said/she said" type of journalism, it does give a welcome look at how attitudes within the US insurance industry are evolving:

By and large, people working to improve conditions in the poorer parts of the world consider microcredit -- the practice of offering very small loans to individuals starting small businesses -- to be a successful tool. But microcredit isn't as well-suited for people starting up riskier ventures; the funds needed are often substantially higher, and the more significant risk involved in the startup would inevitably lead to a greater default rate. MIT's Neal Gershenfeld, of Fab Lab fame, described in his book Fab the need for "micro-venture" services in the developing world to support the greater risk and greater upside of local innovation. It turns out that he wasn't alone in seeing that need.

Aavishkaar India Micro Venture Capital Fund started operation in May, 2002, with the goal of promoting development in rural and semi-urban India through funding and operational support. In principle, this differs little from any venture capital company in Silicon Valley or London; the main difference is the size of the required funding: Aavishkaar provides equity ranging from "Rs. 10 lacs to Rs. 50 lacs, approximately USD $20 thousand to USD $100 thousand." They've been careful with the funding -- of the Rs. 5 crore (a bit more than a million US dollars ) raised, Rs. 3.5 crore is yet to be invested.

According to Aavishkaar, their focus is on "sustainable financing" (PDF):

If you think that climate disruption and our resulting global response will be the big story of the 21st century, you have to figure that investment markets will eventually start to pick up on who the winners and losers in such a world might be. And if the market as a whole is on the trail of clean, green companies, then the maxim of "buy low, sell high" suggests that savvy long-term investors will want to get there first. Today's Wired News has what will undoubtedly be one of many articles about how to scope out the investment market in a global warming world. It's a good start.

The article doesn't try to define any winners and losers just yet, but does spell out some steps that those of us thinking about how climate disruption will shape markets should keep in mind. Interestingly, these also make for good rules for catching early indicators of which political figures and non-market organizations are best-positioned to become leaders in the years and decades to come.

Wired's rules, paraphrased, are:

Ecosystem valuation is gaining momentum as a strategy to protect the environment while speaking the language of costs and benefits that governments and taxpayers understand. The classic environmentalist position that "nature is priceless" has, all too often, been translated into "nature is valueless;' ecosystem valuation confronts the price issue head-on, and increasingly often, comes up with compelling reasons why preservation provides more economic gain than resource extraction.

The latest example of the importance of this approach emerged last week in Canada, as the Canadian Boreal Initiative released a report (PDF) demonstrating that Canada's boreal forests -- which cover nearly 60 percent of the Canadian land mass -- are worth substantially more as ecosystem services than if cut down for lumber, cleared for mining, or inundated for hydroelectric power.

The estimated market value of boreal natural capital extraction, in 2002 dollars (the point the study began), is C$48.9 billion, minus an estimated C$11.1 billion in direct air pollution from the work and government subsidies, for a total of C$37.8 billion. The estimated non-market value of boreal ecosystem services in 2002 totaled C$93.2 billion. The ecosystem services are twice the value of natural capital extraction, even if costs are ignored: