Toys for the rich

Atanu Dey points me to a profile of Freeman Dyson in the NyTimes. His thoughts on global warming is considered heretic by many. Is he right? Find below the excerpts from the long article (well worth the long read).

The Civil Heretic – Freeman Dyson

  • Dyson had proposed that whatever inflammations the climate was experiencing might be a good thing because carbon dioxide helps plants of all kinds grow. Then he added the caveat that if CO2 levels soared too high, they could be soothed by the mass cultivation of specially bred “carbon-eating trees,”
  • Dyson accuses them of relying too heavily on computer-generated climate models that foresee a Grand Guignol of imminent world devastation as icecaps melt, oceans rise and storms and plagues sweep the earth, and he blames the pair’s “lousy science” for “distracting public attention” from “more serious and more immediate dangers to the planet.”
  • “The polar bears will be fine,” he assured her.
  • limate models, he says, take into account atmospheric motion and water levels but have no feeling for the chemistry and biology of sky, soil and trees. “The biologists have essentially been pushed aside,” he continues.
  • The warming, he says, is not global but local, “making cold places warmer rather than making hot places hotter.”
  • Far from expecting any drastic harmful consequences from these increased temperatures, he says the carbon may well be salubrious — a sign that “the climate is actually improving rather than getting worse,” because carbon acts as an ideal fertilizer promoting forest growth and crop yields.
  • Dyson has said that it all boils down to “a deeper disagreement about values” between those who think “nature knows best” and that “any gross human disruption of the natural environment is evil,” and “humanists,” like himself, who contend that protecting the existing biosphere is not as important as fighting more repugnant evils like war, poverty and unemployment.
  • But what he liked about growing up in England was the landscape. The country’s successful alteration of wilderness and swamp had created a completely new green ecology, allowing plants, animals and humans to thrive in “a community of species.” Dyson has always been strongly opposed to the idea that there is any such thing as an optimal ecosystem — “life is always changing” — and he abhors the notion that men and women are something apart from nature, that “we must apologize for being human.” Humans, he says, have a duty to restructure nature for their survival.
  • To Dyson, “the move of the populations of China and India from poverty to middle-class prosperity should be the great historic achievement of the century. Without coal it cannot happen.” That said, Dyson sees coal as the interim kindling of progress. In “roughly 50 years,” he predicts, solar energy will become cheap and abundant, and “there are many good reasons for preferring it to coal.”
  • Dyson says it’s only principle that leads him to question global warming: “According to the global-warming people, I say what I say because I’m paid by the oil industry. Of course I’m not, but that’s part of their rhetoric. If you doubt it, you’re a bad person, a tool of the oil or coal industry.” Global warming, he added, “has become a party line.”
  • But Hansen has turned his science into ideology. He’s a very persuasive fellow and has the air of knowing everything. He has all the credentials. I have none. I don’t have a Ph.D. He’s published hundreds of papers on climate. I haven’t. By the public standard he’s qualified to talk and I’m not. But I do because I think I’m right. I think I have a broad view of the subject, which Hansen does not. I think it’s true my career doesn’t depend on it, whereas his does. I never claim to be an expert on climate. I think it’s more a matter of judgement than knowledge.”
  • “The costs of what Gore tells us to do would be extremely large,” Dyson said. “By restricting CO2 you make life more expensive and hurt the poor. I’m concerned about the Chinese.”“They’re the biggest polluters,” Imme replied.“They’re also changing their standard of living the most, going from poor to middle class. To me that’s very precious.”
  • “I’m still perfectly happy if you buy me a Prius!” Imme said. “It’s toys for the rich,” her husband smiled, and then they were arguing about windmills.

The issues which connect to me are his thoughts on current problems, the move out of poverty for India and China, his belief that humans have a duty to restructure nature for their survival. More importantly, how Prius and its ilk are the toys for the rich.

Something to think about.

Giving in time of crisis

NICHOLAS D. KRISTOF from the NY Times writes about the good work of two young women in Haiti.

If slum-dwelling Haitians can share what little they have, I hope we can be equally generous during this downturn when needs are greatest.

On this trip, I met a couple of American women, Sasha Kramer and Sarah Brownell, both in their early 30s, who offer an example of outward commitment at a time when most of us are retrenching and focusing on ourselves…I was interested in their work because it addresses two of the developing world’s greatest but least glamorous challenges. One is sanitation, for human waste in poor countries routinely spreads disease and parasites. The second is agriculture, for poor countries must increase crop yields if they are to overcome poverty and hunger.

Sasha and Sarah create dry composting toilets that turn human waste into valuable fertilizer. They say that the yearlong composting process kills the pathogens in the waste, making it safe to use the fertilizer.

[...]

Haitian farmers use virtually no fertilizer — less than a pound per acre, compared with about 90 pounds in the United States — and soils are severely depleted. But Sasha calculates that if half of Haitians’ human waste could be used as fertilizer, that would amount to a 17-fold increase in fertilizer use, more than doubling the country’s agricultural production

Networking for the social entrepreneur

Jeff Chu at FastCompany writes about Kjerstin Erickson, a young social entrepreneur and her experience in building her company FORGE.

Erickson is a social entrepreneur–just 25, she founded and heads a group called FORGE, which encourages entrepreneurship among African refugees–and she has spent this week at the Skoll World Forum in Oxford. It’s her first major conference, packed with the titans of her industry, and she’s here to court donors, make connections, and seek out journalists.

Reading this I realize that I will need to do more networking if I want to take Adelaide Green Drinks to the next level. And in fact I may have to change its format!

NanoEconomics

The Economist’s Free Exchange discusses the Nano: (from the Outlook)

The economist in me is puzzled: can you claim to have made a one-lakh car … if you are selling it at a loss? After all, if Tata Motors was prepared to make a loss to realise its dream of a one-lakh car, it could simply have repriced the Tata Indica, its existing small car, at 100,000 rupees and avoided all the fuss of a fresh design and a new plant.

It seems to me that until the one-lakh car breaks even, it does not exist in an economic sense. But by the time the profitable “long run” arrives, I am not convinced that the Nano will still be 100,000 rupees.

From here, and in part II it goes on to discuss the economics of demand outstripping supply, deposits that would remain with the company:

Suppose the initial allotment of cars is subscribed twice over: Tata Motors will get an immediate cash infusion of more than 20 billion rupees. If it can sustain the hype and expectation, it won’t have to return this booking money to the surplus customers. It will, in effect, have secured for itself a cheapish source of deposits, redeemable for a car, as production allows. The cash will come in handy—in June, Tata Motors has to repay about 100 billion rupees ($2 billion) to the lenders who financed its acquisition of Jaguar Land Rover last year.

There is a peculiar circularity to all this. By declaring an impossible price tag, the company has generated enough lucrative hype to make the cheapest car viable after all.

Well, the blogger at Free Exchange seems to miss the point. This is the basics of how new products and innovations are brought to market.

First, there is the vision. The 1 lakh car.

Second, the process of innovating. Creating a brand new car from scratch. Sorry, selling the Indica at a loss does not make sense. The idea is not to create a forever loss making product. As Tata said, this is a profitable venture and not philanthropy.

Innovations in business follows this path. Companies sell various versions of a product at different prices and some even at a loss. The mix matters. Tata motors is planning to produce in the ration of 75%:25% where 25% is the l lakh version.

Another model is what the MBAs call the Razor-blade model. You sell the razor at a loss or at cost and make money on the blades. In this case, it will be the spares for the car.

Another model is the mobile phone market. Give the phone for a subsidized cost and bring in the money through data and voice. Tata is using the iPod model too. Sell accessories and branded stuff on the Nano. This is common business practice.

And in the end, creating money through demand via applications and deposits to further the cash flow of the company.

All this does not mean that profitability is guaranteed. A lot of innovations in the world are never profitable. May be the Bajaj-Renault car will be more profitable, who knows.

However, the company has created worldwide appeal for the product, put the company on the world map, created a whole new segment of cars in India and can eventually be the biggest selling car in the country.

That is the way to create a new business/product from scratch.

I am surprised why the Economist is puzzled!

The Tata Nano : A green car

The launch of the TATA Nano yesterday was a groundbreaking event in many ways. For me it was personal too. To see a automotive breakthrough from India is very satisfying. And it was all possible due to the vision of one man, Ratan Tata.

There has been much written on how the car could be a harbinger of problems in the world. Well, in this scenario any car is. Every car creates congestion (even electric cars!), pollution, uses materials to produce, creates waste at the manufacturing level and pollutes in some form or the other. The Nano is no different in that sense. However, it is much better in many ways.

The Nano Europe and Ratan Tata

The Nano  produces only 101g/km of emissions (It passes emissions norms – Euro III) , is as fuel efficient as a Prius (25 km per liter/4.2l for 100km or 52 mpg – US), is designed to use less materials, and is cheaper than any other car. In every sense it is green or greener than a Prius.

To compare, check out the Green Vehicle Guide from the Australian government. The Nano beats all.

All the environmentalists who praised the Prius and curse the Nano need to explain how a efficient car like the Nano is worse than a Prius. The same environmentalists must also been happy that the US and world automotive industry have had sales decreases of 45% in the last few months however, I do not see them celebrating it. Because it effects jobs too.

For comparison, a small country like Australia buys 1 million new cars a year. According to the LA Times, “India’s car industry has ample room to grow by the standards of other nations, with just 14 cars per 1,000 population, according to industry figures. That compares with 28 per 1,000 for neighboring Sri Lanka, 400 to 600 per 1,000 for Europe and Japan, and more than 700 per 1,000 for the United States.”

The Nano in order to cut costs has delivered a car which uses less material, less parts and less maintenance.It will also create jobs and may possibly make India the global hub of small cars. What will be interesting would be a lifecycle energy study of the Nano compared to the Prius.

The biggest benefit is in the future. When Tata Motors start putting in their electric technology developed for Indica EV into the E-Nano it will be a whole different game. A small, efficient, electric car below $10,000. Beat that!

Learning from Tata’s Nano

As Ratan Tata, chairman of the Tata group of companies, observed in an interview with The Times of London: “A bunch of entrepreneurs could establish an assembly operation and Tata Motors would train their people, would oversee their quality assurance and they would become satellite assembly operations for us. So we would create entrepreneurs across the country that would produce the car. We would produce the mass items and ship it to them as kits. That is my idea of dispersing wealth. The service person would be like an insurance agent who would be trained, have a cell phone and scooter and would be assigned to a set of customers.”

In fact, Tata envisions going even further, providing the tools for local mechanics to assemble the car in existing auto shops or even in new garages created to cater to remote rural customers. With the exception of Manjeet Kripalani, BusinessWeek’s India bureau chief, few have focused on this breakthrough element of the Nano innovation (BusinessWeek.com, 1/10/08).

via Learning from Tata’s Nano.

Public vs Private Transport

In January 2008, when the Tata ‘Nano’ was unveiled with much fanfare, Centre for Science and Environment (CSE) had come out clearly – as always — against the growing trend of private motor vehicles taking over our cities. Today, CSE reiterates its position once again – that it is against all cars, and not just the Nano. Our cities don’t need more cars; they need better public transport.

via The New Nation – Internet Edition.

Yes, India needs public transport. But who should be providing this? The govt. or the private sector. That is the issue.

Blaming the private sector for the mistakes of the govt. is ill advised.

Analysis: Nano Hypocrisy?

One car gets 46 miles per gallon, features fancy accessories, and sports two engines with a combined 145 horsepower. The other car reportedly gets 54 miles per gallon, runs on a diminutive 30-horsepower engine, and is positively spartan in its interior trimmings. The first is a darling of the environmentally conscious. The latter is reviled as a climate wrecker. These two vehicles are the Toyota Prius and the newly unveiled Tata Nano, dubbed “the people’s car.” Is there a double standard?

via Analysis: Nano Hypocrisy? | Worldwatch Institute.

Can anybody explain?

What about capitalism?

Business Spectator – Capitalism will renew itself – Alan Kohler

I’m all in favour of a better world, so the idea of some kind of ‘new capitalism’ is appealing.

But, but…let’s not apply a big solution to a smaller problem. And anyway, there is no such thing as capitalism. It was only a useful noun during the 20th century when some alternatives were being tried – socialism, communism, anarcho-syndicalism etc. Then capitalism was one of a variety of “isms”.

Now there is just freedom and a few brands of totalitarianism
, including the teetering vestiges of socialism (China, Zimbabwe), militarism (Burma), hereditary monarchy (Saudi Arabia) and the new, violently ambitious one: Islamism.

So the idea of ‘new capitalism’ can only involve the observation of change in western society, not the imposition of it, since that would mean the removal of freedom and the imposition of control – in which case it would no longer be capitalism but something else.

I like the simplicity that Alan Kohler articulates in this article and further down in the article the explanation of GDP and economic growth.