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Astraea News and Views - September 2005

• Perspective
• Geopolitics * Risk and terror
• Energy * Climate Change
• IT
• Integral systems and LOHAS
• Activities, Books and Gatherings
• For investment and trade notes see GRI Equity Roundup

Perspective

Ch...ch...ch...changes!

Ray Kurzweil is a leader in articulating the increasing rate of technology change and its impacts.  He himself has been part of this revolution as an inventor of speech recognition, scanners, music synthesizers and more: http://www.kurzweilai.net.   Kurzweil's  Law of Accelerating Returns says that in an evolutionary process, positive feedback increases order exponentially. A correlate is that the "returns" of an evolutionary process (such as the speed, cost-effectiveness, or overall "power" of a process) increase exponentially over time -- in a range of fields including biology, physics, chemistry and psychology. Technology, like any evolutionary process, builds on itself.  And in his new book "The Singularity is Near" he makes a strong argument that technology will itself become intelligent within 3 to 5 decades. "The paradigm shift rate (i.e., the overall rate of technical progress) is currently doubling (approximately) every decade; that is, paradigm shift times are halving every decade (and the rate of acceleration is itself growing exponentially). So, the technological progress in the twenty-first century will be equivalent to what would require (in the linear view) on the order of two hundred centuries. In contrast, the twentieth century saw only about twenty-five years of progress (again at today's rate of progress) since we have been speeding up to current rates. So the twenty-first century will see almost a thousand times greater technological change than its predecessor."   While we see some critical limitations to his extrapolative thinking (systems generally follow an S curve and we may be at the bottom curve, ie accelerating, but that will level off naturally), the sound research and experience foundation of his view underlies the fact that the "rate of change" is accelerating in a logarithmic fashion and will do so for the coming generation. 

Evidence of the acceleration of change in natural phenomena is also rising.  The section on climate change below alerts us to the fact that Arctic ice melt rate is accelerating and the ability of plants to be a net absorber of CO2, a greenhouse gas, is waning because climate temperatures are rising too fast.

This requires a fundamental paradigm shift in human thinking.  Our way of life is built on the status quo - history is the window to the future.  But this is now being undermined.  At the first level of change this may simply mean new technology disrupting social and economic models, for which we will find new models.  But if the change is accelerating in this logarithmic fashion, the foundation of reason may become a moveable reference because natural systems change their laws constantly.  This resonates well with the biology of emerging intelligences. It is clear that humans will think differently in one or few generations.

Today, in order to succeed in this changing world, leaders must think differently:  they must think about a lot more dimensions and in a shorter time frame.   Resorting to institutional logic will not solve the challenges of today.  The following informal opinion from a private think tank illustrates the tension in our global powerhouse America where this challenge is immediate:

Americans invented the telephone, the atomic bomb, and the silicon wafer, and they put a man on the moon, but a very simple scientific fact eludes many of them -- not for 270,000 years has there been as much carbon dioxide in the atmosphere as there is now (~380 parts per million). An atmosphere that traps more heat holds more moisture and produces more frequent extreme-weather events. A 12-year-old could understand this. ... The end run of September 11 was the Iraq war. Will the end run of Katrina be more intensive U.S. oil exploration and fossil-fuel burning? [We] may one day thank the 2005 hurricane season for thwarting the economic arguments against climate action and security. [Ignoring] global warming really is worse than trying to do something about it.

How do we begin to deal with these challenges which seem to have no solution? 

Integral thinking is the leading solution to the challenge and it is therefore a prudent investment to develop this skill.  Unfortunately, it is an emerging science (in whose application we specialise as you, dear reader, will know) which has yet to be adopted by most leading businesses, nations and organisations.  And you have to look carefully to find academic institutions which are applying it - although a number of top executive education organisations are establishing partnerships to develop courses.  A basic model of integral systems analysis is available here.  The underlying approach is founded in natural science and reflects natural systems - flexibility, robustness.  The principle is to analyse situations and organise solutions reflecting a whole system approach.  This incorporates three main spheres physical, intellectual, ethical along a spectrum of emerging intelligence from basic needs (like shelter, or sales), through more complex needs (like organisation and communication) to whole system needs (like equity).  Fortunately integral thinking is innate in all of us though generally repressed by traditional education and institutions, and can be liberated in a reasonable time frame. We are also in the age in which it is emerging. An example of integral thinking is the web:  a self organising, non-hierarchical reflection of all members' (users) needs. 

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Geopolitics

Today 20,000 people will die from poverty related problems in the world's poorest countries. This shocking statistic is at the heart of this year's global anti-poverty campaign. Its simple message is that continuing poverty and death on this scale is no longer morally or politically acceptable.  The September UN summit in New York evaluated progress made in working towards the Millennium Development Goals agreed by world leaders in 2000. Many countries, particularly in sub-Saharan Africa, will not meet the goals - to halve poverty and hunger, to achieve universal primary education, and to halt the spread of Aids - by the target date of 2015.  What is certain is that new thinking is required. How can we learn from development work and avoid the mistakes of the past? What innovations, good science and new resources can be used to defeat poverty? What networks and partnerships can be created to tap into the concern shown by ordinary citizens, business and professionals after the Asian tsunami and during the Live 8 campaign? New models of partnership are emerging between official government aid programmes, business and non-governmental aid agencies.  Micro finance (2005 is the year of) is a fast growing financial sector and offers both attractive investment metrics and poverty alleviation. So progress is being made. But changes in behaviour will only be effective at the personal level where action makes the difference.

This year’s Human Development Report (6.4 mb pdf) by the UNDP takes stock of human development, including progress towards the MDGs. Looking beyond statistics, it highlights the human costs of missed targets and broken promises. Extreme inequality between countries and within countries is identified as one of the main barriers to human development—and as a powerful brake on accelerated progress towards the MDGs.

Faced with the biggest crisis of his political life, President Bush has hit the bottle again. A Washington source said: "The sad fact is that he has been sneaking drinks for weeks now. Laura may have only just caught him, but the word is his drinking has been going on for a while in the capital. He's been in a pressure cooker for months. I think it's a concern that Bush disappears during times of stress. He spends so much time on his ranch. It's very frightening."

German election result is seen by many to be problematic in that no clear winner arose.  However, this may suit the revitalisation of the German economy and is certainly reflective of the cultural changes occurring.  The required coalition will have representation from the business community as the FDP (business orientation, reduce taxes, reduce contributions to state pension) had its strongest showing ever.  The uncertainty is not a bad thing because it encourages critical thinking and change which is what Germany needs.

Koizumi’s Liberal Democratic Party won an outright parliamentary majority in the Japanese election. He also succeeded in crushing many of the dissidents who had defied him over his insistence on privatising the postal savings system. A great vote of confidence and well deserved.  Japan's economic revitalisation will continue.

The first multiparty presidential elections were held in Egypt.  They were not as open as that sounds but this is a significant milestone in the development of Egypt and the Middle East.

I don't believe it - North Korea will provide food and fuel in exchange for giving up nuclear ambitions. But in fact, that agreement only lasted a day and North Korea retracted their acquiescence, saying it will not give up its nuclear programmes until the United States provides it with reactors, thus reinforcing the fact that dealing with that regime will be as tricky as ever.

Iran stated that it is an inalienable right to develop nuclear weapons.  This is certainly ethical as long as others have them and do not share them.  There is a nuclear apartheid until the technology is possessed by all.  The reality is that discussion has been provoked but little change will occur because America is intractable.

Congratulations to Israel for their Gaza pull-out.  Progress towards cohabitation and peace was rocked in late September by missiles after Hamas said they would cease fire!  But cooperation continues to improve.

Similarly in Northern Ireland after the IRA confirmed weapons' decommissioning, violence erupted as the Orange order, feeling disenfranchised, started a spate of coordinated mob-violence. This appears to be instigated by a few incumbents but is reviled by others including the Irish government and Sinn Fein.

Thailand's Thaksin Shinawatra opened the new $ 4 billion Bangkok airport terminal.  Unfortunately the infrastructure is only half finished and won't be completed till at least next June.  He insists the airport will beat its rivals in the region to become East Asia's dominant transport hub - a goal his critics say is within reach, but only if the government acknowledges its past mistakes.  Though he managed to fill the airport with dignitaries to fake the opening because he had promised it, this event is another indicator of limited transparency in Thai business and the evident crony capitalism.

An estimated 1,247 donkeys, 306 horses and 24 camels, not to mention helicopters and hundreds of trucks, were used to carry ballot papers to the remotest corners of Afghanistan for its elections. Such heart-warming statistics show the importance the world attaches to the first parliamentary elections in Afghanistan in more than 30 years; the $159million (€130million) cost of the United Nations-organised election was borne by foreign governments.  This may be a bit of overkill and reflective of the Bangkok airport approach above - show not substance. Many voters are illiterate and will have been baffled by newspaper-sized ballots displaying hundreds of names. Women were in many cases prevented from voting. It appears turnout was lower than for the presidential poll that confirmed the US-backed Hamid Karzai as head of state last year.

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Risk and Terror

The EC decision to legalise the importation of Monsanto’s patented GT73 oilseed rape is self-inflicted bio-terrorism.  It is the first live GMO seed to be authorised for use as animal feed in the EU, even though the spilled seeds inevitably produce a crop.  GT73 can now be freely imported. The decision was taken against the wishes of the majority of EU member states. If a single shipment of these GMO seeds is unloaded, contamination will be inevitable and irreversible. This means that in a few years time, it may be impossible for farmers to grow GM-free Brassica crops including broccoli, brussel sprouts, cabbage, cauliflower, collards, kale, kohlrabi, mustard, oilseed rape and turnips because of cross-contamination by seed dispersal and wind-borne pollen. All these contaminated crops will belong to Monsanto; contaminated farmers will have to pay royalties or face patent infringement lawsuits; they will have to put GM labels on their produce, and may no longer be able to sell it in most EU countries. Many organic farmers will lose their constitutional right to earn a livelihood.  This policy will have longer lasting and more pernicious affects than the war in Iraq, especially if other GMO's like Monsanto's Terminator are allowed to be propagated.

In Iraq, a woman walked up to the gate of a new army and police recruitment centrer in Tal Afar, a northern city, last week and blew herself up, killing 8 people in addition to herself and wounding 57.  In the same week, armed men dressed as police officers burst into a primary school in a town south of Baghdad, rounded up five Shiite teachers and their driver, marched them to an empty classroom and killed them. The war in Iraq remains bloody and inhumane.  Is there a solution?  Andy Krepinevich appears to have some sound ideas. NY Times' David Brooks' Winning in Iraq describes Andrew Krepinevich as a careful, scholarly man. A graduate of West Point and a retired lieutenant colonel, his book, "The Army and Vietnam," is a classic on how to fight counterinsurgency warfare.  His friends and colleagues in the army have no clear strategy or metrics for managing this war. Krepinevich has now published an essay in the new issue of Foreign Affairs, "How to Win in Iraq," in which he proposes a strategy. The article is already a phenomenon among the people running this war, generating discussion in the Pentagon, the C.I.A., the American Embassy in Baghdad and the office of the vice president. Krepinevich's proposal is hardly new. He's merely describing a classic counterinsurgency strategy, which was used, among other places, in Malaya by the British in the 1950's. The same approach was pushed by Tom Donnelly and Gary Schmitt in a Washington Post essay back on Oct. 26, 2003; by Kenneth Pollack in Senate testimony this July 18; and by dozens of mid level Army and Marine Corps officers in Iraq.Krepinevich calls the approach the oil-spot strategy. The core insight is that you can't win a war like this by going off on search and destroy missions trying to kill insurgents. There are always more enemy fighters waiting. You end up going back to the same towns again and again, because the insurgents just pop up after you've left and kill anybody who helped you. You alienate civilians, who are the key to success, with your heavy-handed raids. Instead of trying to kill insurgents, Krepinevich argues, it's more important to protect civilians. You set up safe havens where you can establish good security. Because you don't have enough manpower to do this everywhere at once, you select a few key cities and take control. Then you slowly expand the size of your safe havens, like an oil spot spreading across the pavement. Once you've secured a town or city, you throw in all the economic and political resources you have to make that place grow. The locals see the benefits of working with you. Your own troops and the folks back home watching on TV can see concrete signs of progress in these newly regenerated neighbourhoods. You mix your troops in with indigenous security forces, and through intimate contact with the locals you begin to even out the intelligence advantage that otherwise goes to the insurgents.

A new book, Night Draws Near: Iraq's People in the Shadow of America's War by Anthony Shadid is a favourably reviewed book that brings insight and colour to this ongoing dilemma.

The natural disasters in America have had an impact on America's conscience, though it is too early to know how large or long lasting.  I know that the initial chaos was embarrassing and painful.  New Orleans looked like Iraq.  The photo linked here, showing the difference between finding and looting, illustrates the tension caused by the loss of resources in New Orleans, but it is not printed in this note because its too inflammatory.  But on the ground Americans have pulled together.  Thousands of people have worked long hours in foul conditions to resuscitate local communities.  International aid has been offered from all quarters (even Venezuela).   Many Americans, including soldiers returning from Iraq, have leapt in to action to help.  In Houston for example a friend of mine, whose own house was boarded up, has since collaborated with friends and associates and opened an old unused school to provide facilities to immigrants from Louisiana.  Once the dust has settled, perhaps by the year end, everyone will have had a chance to reflect on how their lifestyle may change to benefit the community.

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Energy

Energy is in everything.   Oil energy has replaced human labour in most of the conveniences we take for granted.  Instead of 20 people harvesting wheat for a week or two, a single person drives a combine harvester for a few hours.  Instead of hand-working wood, a factory produces lego furniture.  As the value of oil goes up, the value of money goes down.  (And house values go up.)   This will change as alternative fuels become mainstream.  This process is accelerating, especially as climate change has blown through the Texas oil fields.  For example, car makers seemed all to be trumpeting their hybrid initiatives in September.

Philips, the world leader in lighting, is finalising the launch of commercial and retail LED lighting.  This will revolutionise the industry because LED lights, though more expensive than incandescent lights, consumes 1/8 the power, is cool to the touch, robust, can be formed in to different shapes and colours, and  last 10- 20 years.  The market is expected to grow at 25% per year.

Climate Change and Environment

The effects of Katrina and Rita have helped wake up the oiloholics and the climate change naysayers.  This satellite picture shows clearly the scale of impact by Rita which flooded the gulf coast.  And you can see NOLA here.

Carbonfund is a US initiative to allow Americans to be proactive about climate change despite not being a signatory to Kyoto.  Carbonfund reduces the threat of climate change by supporting energy efficiency, renewable energy, sequestration and other projects that reduce carbon dioxide.

We thought plants were good at reducing climate change by mopping up greenhouse gases (CO2) but new research by Laboratoire des Sciences du Climat et de l'Environnement (LSCE) in Gif-sur-Yvette near Paris, whose team published their study in the scientific journal Nature, suggests that even nature's homoeopaths may have been crippled by the fast rate of change.  The new study shows that during the 2003 heatwave, European plants produced more carbon dioxide than they absorbed from the atmosphere. They produced nearly a tenth as much as fossil fuel burning globally. The study shows that ecosystems which currently absorb CO2 from the atmosphere may in future produce it, adding to the greenhouse effect. The 2003 European summer was abnormally hot; but other studies show that these temperatures could become commonplace. In some parts of Europe, 2003 saw temperatures soaring six degrees Celsius above normal; hot enough that estimates of the deaths which it caused run into the tens of thousands. It was also significantly drier than usual; and these two factors appear to have had a major impact on plant growth. The result coming from the 18 sites was that during 2003, plants took up less CO2 from the air and grew more slowly - a finding corroborated by satellite measurements of the area under leaf.

So much for natural ecosystems, but what about farmland?  Here, the researchers drew on data from the UN Food and Agriculture Organisation, which showed a fall in European crop yields during the 2003 summer. Putting all the data together, the headline figure is that, overall, European lands were 20% less productive than during an average year. The really surprising finding came with the calculation that during the heatwave, European plants and their ecosystems were putting more carbon dioxide into the air than they were absorbing!  "In the past we expected that climate change would benefit European ecosystems because growth tends to be limited by the short growing season," said Andrew Friend, "but this analysis hadn't taken into account the possibility of extreme events. "The conclusion of our study is that this extreme event meant a loss of carbon across Europe - a loss which undoes many years of net uptake." Plants can absorb and emit carbon dioxide and oxygen; the process of respiration takes oxygen in and releases CO2, whereas in photosynthesis, the reverse happens.

Other parts of the ecosystem such as soil bacteria can also contribute to the overall flow of these gases to and from the atmosphere. During an average year, the net effect is that European plants absorb around 125 million tonnes of carbon (MtC). But in 2003, according to this analysis, they released 500 MtC to the atmosphere. By comparison, global emissions from burning fossil fuels amounts to about 7,000 MtC; by giving rather than taking, European plants were adding about 10% to the global total.

The area covered by sea ice in the Arctic has shrunk for a fourth consecutive year, according to new data released by US scientists. This record loss of sea ice in the Arctic this summer has convinced scientists that the northern hemisphere may have crossed a critical threshold beyond which the climate may never recover. Scientists fear that the Arctic has now entered an irreversible phase of warming which will accelerate the loss of the polar sea ice which has kept the climate stable for thousands of years. They believe global warming is melting Arctic ice so rapidly that the region is now absorbing more heat from the sun, causing the ice to melt further and reinforcing a cycle of melting and heating. The greatest fear is that the Arctic has reached a "tipping point" beyond which nothing can reverse the continual loss of sea ice and the massive land glaciers of Greenland, which will raise sea levels dramatically. Satellites monitoring the Arctic have found that the extent of the sea ice this August has reached its lowest monthly point on record, dipping an unprecedented 18.2pc below the long-term average.  They say that this month sees the lowest extent of ice cover for more than a century. The Arctic climate varies naturally, but the researchers conclude that human-induced global warming is at least partially responsible. They warn the shrinkage could lead to even faster melting in coming years.  The current rate of shrinkage they calculate at 8% per decade; at this rate there may be no ice at all during the summer of 2060.

The idea behind tipping-points is that at some stage the rate of global warming would accelerate, as rising temperatures break down natural restraints or trigger environmental changes which release further amounts of greenhouse gases. Possible tipping-points include

• the disappearance of sea ice leading to greater absorption of solar radiation

• a switch from forests being net absorbers of carbon dioxide to net producers

• melting permafrost, releasing trapped methane

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IT

eBay bought  Skype for $ 2.6 billion, and another $ 1.5 billion if targets are met.  Skype has got more subscribers at 54 million vs 50 million, though revenues are only $ 60 million. Other players in the online phone market include computer giants such as Google, Microsoft, AOL and Yahoo, all of whom may have bid on Skype pushing the price up.  Google recently launched its Talk service, while Microsoft purchased leading player Teleo for an undisclosed sum.This has been big news because of the massive price, and also because it is the death knell of telephone charges - users can use VoIP like email - for free once you've paid your monthly ISP charges.  The ability to make nearly free phone calls over the internet is fatally disruptive to the traditional pricing model.  It is also shaking up advertising, specifically online advertising.  The recent innovation of pay-per-click can now be enhanced to pay-per-call which leads to advertisers only paying for advertising that results in a purchase enquiry - now all your advertising dollars will bring value.

IT in China has received much press as companies like Yahoo, Google and MS have been forced to comply with central government demands.  This has become more of a challenge for China because the internet has helped boost illegal demonstrations, which are estimated to have grown by half in 2004 and more this year.  While companies will be lambasted for breach of privacy it is quite clear that in order to operate in China they must comply and that without them there would be little opportunity for the flowering of ideas that the web incubates.

Google and Sun Microsystems have joined forces to challenge the dominance of Microsuck's Office software.  Google will offer Sun's OpenOffice software via its website, while people downloading Sun's Java program will get the option to take Google's toolbar.

A study by CEBR found that personal wealth has increased because ebay has brought liquid value to things you do not really want anymore in your home.  They estimate that the new value of sellable items in your home at about € 5,000.

The US has rejected calls by European Union (EU) officials to give control of the net over to a more representative United Nations (UN) body. Wrangling over who should essentially be the net police, managing domain names and net traffic routing fairly, has been going on for some time. The matter is supposed to be discussed at November's World Summit on the Information Society in Tunisia. But at a pre-Summit meeting in September, the US said it would resist the plans.  Currently, the US Commerce Department approves any changes to the internet's core addressing systems, the root zone files, managed by Icann (Internet Corporation for Assigned Names and Numbers). Last month the UN's Working Group on Internet Governance (WGIG) published its proposals for reform of the way the net is run, which are to be debated at the Summit. Governance over the net - the management of its addressing systems and traffic routing - has historically been the role of the US because it largely funded and pushed its early development.The US argues that UN proposals would shift the regulatory approach from private sector leadership to government, top-down control. But many countries, particularly developing nations, have been calling for the US to relinquish control, or at least to come up with a compromise, to ensure the net is managed more equitably. As many developing countries seek to exploit the net for economic and social development, the issue has become more pressing.

The UN's WGIG has suggested four alternatives:

• Option One - create a UN body known as the Global Internet Council that draws its members from governments and "other stakeholders" and takes over the US oversight role of Icann.

• Option Two - no changes apart from strengthening Icann's Governmental Advisory Committee to become a forum for official debate on net issues.

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