Chart of the Day: Kim Jong il’s Heritage: North Korea’s Earth Hour from Poverty

North Korea has been one country that has practiced what environmentalists celebrate as “Earth Hour”. I have earlier posted this.

Seen from a satellite photo, while South Korea has been prominently lighted at night (lower portion), North Korea stands in the dark (upper portion) where the only place lit is that of the palace of Mr. Kim. [yeah equality]

But there is a fundamental difference.

The North Korean exercise has not been designed to fulfill environmental preservation goals but has been driven by dire poverty…

This can be seen by the above chart from Reason and Washington Post

Writes the Washington Post

During the early 1970s, North Korea’s economy stagnated, with GDP per capita flatlining until Kim Il Sung’s death. Then, in 1994, after Kim Jong Il took over, the economy started shrinking noticeably, per capita incomes fell, and the country became dependent on emergency U.N. food aid to stave off famines that had already killed as many as 3 million people. North Korea became, as Eberstadt puts it, “the world’s first and only industrialized economy to lose the capacity to feed itself.” (That said, there’s evidence that North Koreaw as growing weakly in the last few years of Kim Jong Il’s rule).

At the moment, North Korea’s per capita income is less than 5 percent of the South’s. As the Atlantic Council’s Peter Beck puts it, “Each year the dollar value of South Korea’s GDP expansion equals the entire North Korean economy.”

Overall I see several lessons

The thrust of most environmental politics has been directed at atavistic policies, or attempts to retrogress world conditions similar to the medieval times or to one of absolute poverty (ala North Korea).

Second, there is no exemplary way to achieve atavism than to adapt the paragon of statism/socialism/communism—Kim Jong il version. In North Korea almost everyone is equally poor and equally without lights, except the political leaders.

Third, the concrete evidence of attaining economic prosperity can be seen in the diametric paths of governance undertaken by two Koreas: South Korea’s capitalism or market economy vis-à-vis Kim Jong il’s brand of statism/socialism/communism.

Yet bizarrely, many fantasize about having successful economic development by the taking on the latter’s path.

Are Renewable Energy ‘Renewable’?

One of the most valuable lessons I have learned in life is not to see things as presented or as they are. That’s because things or events that we see or sense does not cover on how they existed or how they got there in the first place.

I am indebted to the late great proto-Austrian Frederic Bastiat, who inspired an overhaul of life’s outlook personified by this stirring passage

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, - at the risk of a small present evil.

This applies to everything we do.

And these have been most pronounced especially in the domain of politics where populist political solutions are sold on the merits of superficiality or visibility.

In the realm of environmental politics, one good example would be the politically correct populist practice of ‘Earth Hour’.

We are told to close lights for an hour so that we can symbolically celebrate on ‘saving the environment’ by reducing carbon footprints.

However in reality, unless we decide to stop living, we will be using energy. PERIOD.

And the alternative to using ‘environmental hazardous’ conventional fossil based energy would be to revert to the medieval age and use candles. People hardly see that candles signify as more environmental unfriendly than the conventional energy.

Of course by proposing to cut lights also extrapolates to stopping or to reducing production and trade. Doing so means creating shortages in people’s needs. This means widespread hunger and famine. This brings the Malthusian nightmare to a reality.

How do you suppose that we would be able to survive 6.77 billion people by reverting to the medieval age of economic system?

So saving the environment means we end up killing one another (politics of plunder-via war) or killing ourselves (man made catastrophe).

It isn’t that Malthus was right. Instead, it is because political correctness founded the concept of saving earth signifies as concealed misanthropy.

The same blight haunts proponents of renewable energy.

From the surface, renewable energy would seem as environmental friendly. That is what is seen. What is not seen is how environmental damaging renewable energy would be when they are constructed for commercial operations.

Matt Ridley eloquently explains, (bold emphasis added)

It turns out that the great majority of this energy, 10.2% out of the 13.8% share, comes from biomass, mainly wood (often transformed into charcoal) and dung. Most of the rest is hydro; less than 0.5% of the world's energy comes from wind, tide, wave, solar and geothermal put together. Wood and dung are indeed renewable, in the sense that they reappear as fast as you use them. Or do they? It depends on how fast you use them.

One of the greatest threats to rain forests is the cutting of wood for fuel by impoverished people. Haiti meets about 60% of its energy needs with charcoal produced from forests. Even bakeries, laundries, sugar refineries and rum distilleries run on the stuff. Full marks to renewable Haiti, the harbinger of a sustainable future! Or maybe not: Haiti has felled 98% of its tree cover and counting; it's an ecological disaster compared with its fossil-fuel burning neighbor, the Dominican Republic, whose forest cover is 41% and stable. Haitians are now burning tree roots to make charcoal.

You can likewise question the green and clean credentials of other renewables. The wind may never stop blowing, but the wind industry depends on steel, concrete and rare-earth metals (for the turbine magnets), none of which are renewable. Wind generates 0.2% of the world's energy at present. Assuming that energy needs double in coming decades, we would have to build 100 times as many wind farms as we have today just to get to a paltry 10% from wind. We'd run out of non-renewable places to put them.

You may think I'm splitting hairs. Iron ore for making steel is unlikely to run out any time soon. True, but you can say the same about fossil fuels. The hydrocarbons in the earth's crust amount to more than 500,000 exajoules of energy. (This includes methane clathrates—gas on the ocean floor in solid, ice-like form—which may or may not be accessible as fuel someday.) The whole planet uses about 500 exajoules a year, so there may be a millennium's worth of hydrocarbons left at current rates.

Read the rest here.

What you see isn’t always what you get.

The Political Folly of Energy Independence

Cato’s Economist Steve Hanke on the popular political drivel called “energy independence” (bold emphasis mine)

Every president since Richard Nixon has asserted that we are sitting ducks for those who brandish the oil weapon. To keep the evildoers at bay, the government must adopt policies that ensure our energy independence. Like his predecessors, President Obama is worshiping at this altar. And why not? How many elections have been lost by blaming foreigners for an impending crisis?

Despite their cynicism about politicians, most people actually believe that mineral resources, including oil, are doomed to disappear. It’s obvious: Start with a given stock of provisions in the cupboard, subtract consumption and eventually the cupboard will be bare.

But what is obvious is often wrong. We never run out of minerals. At some point it just costs too much to produce them profitably. In the 19th century, the big energy scare was in Europe. Most thought Europe was running out of coal. That doomsday scenario never materialized. Thanks to a plethora of substitutes, the prices that European coal could fetch today are far below its development and extraction costs. Consequently, Europe sits on top of billions of tons of worthless coal.

Once economics enters the picture, the notion of fixed reserves becomes meaningless. Reserves are not fixed. Proven oil reserves, for example, represent a warehouse inventory of the expected cumulative profitable output, not a fixed stock of oil thought to be in the ground.

When thinking about oil reserves, we must also acknowledge another economic reality: Oil is sold in a world market in which every barrel, regardless of its source, competes with every other barrel. Think globally, not locally. When we do, the dwindling reserves dogma becomes nonsense. In 1971, the world’s proven oil reserves were 612 billion barrels. Since then the world has produced approximately 990 billion barrels. We should have run out of reserves fourteen years ago, but we didn’t. In fact, today’s proven reserves are 1,354 billion barrels, or 742 billion barrels more than in 1971.

How could this be? Thanks to improved exploration and development techniques, costs have declined, investments have been made and reserves have been created. The sky is not falling.

Oil is just another economic good whose value is determined by the utility it provides. Thus like all economic goods, oil and energy products are subject to price sensitivity borne out of the forces of demand and supply and technological changes.

In other words, in contrast to naive views of neo-Malthusians, the economic value of oil is never fixed.

Proof of this has been man’s shifting use of energy from firewood to coal to whale oil to kerosene and now to the manifold derivative products of crude oil—gasoline, diesel, jet fuel and etc... That’s why while Peak oil is an engineering reality, Peak oil, as an economic concept, is a myth. Engineering does NOT capture human action.

Despite the recent rise in commodity prices, the real cost prices have been declining over the past 161 years!

Yet the recent price surges have partly been about consumptive demand (mostly imputed to emerging markets) but substantially also due to reservation demand (mostly identified as speculation).

The above graph reveals of the consumptive versus reservation demand from Bank of Japan.

The point is current imbalances of energy has been mainly caused by government interventions from artificial demand (quantitative easing programs, suppressed interest rates) to distortions on the supply side (geographical restrictions, price controls, subsidies, taxes and tariffs and etc).

Thus rising prices isn’t about energy dependency, peak oil and other interventionists babble, but about government failure.

The truth is that there is a cornucopia of commodities in the world as shown by the table from Brookenews. All it takes is for the market to discover and enable them to be commercially useful through price signals.

Yet neo-Malthusians interventionists believe in the fallacy where two wrongs equals a right. They address government intervention failure with even more government intervention, seeing that government is the be-all and end-all of human affairs.

Such political religion can be seen in the widespread celebration of the crass symbolism of the earth hour movement, whose anachronistic proposition is to regress human living standards back to medieval ages. It is more than a practise of atavism, it is an implied belief in misanthrope.

Of course people who fall for the energy independence idiocy simply disdain free trade. Such political blindspots are mainly rooted in the aversion to imports which is read as a mortal sin.

Yet what they preach is hardly what they practise. They don’t ever realize that by restricting the division of labor and comparative advantage, man regresses.

Say you hate fossil fuel? Then just walk or bike. Oh, since bike is also made out of fossil fuel, so just get a horse. But like the asinine shift to candlelight in order to project social conformity to earth hour, primitive means of transportation equates to more environmental hazards.

An example expressed by Gerard Jackson of Brookesnews,

The problem of coal smoke continued into the twentieth century when it was finally solved by the benefits of growth, which had already solved a multitude of other problems such as the tens of thousands of metric tonnes of horse manure that had to be taken from city streets each day (a horse produces about 20 kilos of dung per day), not to mention the 300 grams of liquid a horse releases per mile plus the thousands of dead horses that had to be disposed off each year.

The lengthening time of transport reduces man's productivity and increases the cost of doing things.

Also increasing the use of non-commercial energy via subsidies represent as redistribution of wealth from the consumers (through higher prices or through higher taxes), as well as the transfer of wealth from traditional market appointed suppliers, to the politically endowed industries.

Moreover higher prices and taxes reduces people's purchasing power.

So how does one "prosper" with such backwardness?

As you can see noble ‘romanticized’ intentions by socialists are frequently defeated by reality.

The energy dilemma should be resolved by espousing more trade freedom. Let the markets decide on which energy is more efficient, which energy meets the public’s demand for utility and which energy is the safest (one of the reason perhaps why nuclear energy flourished).

chart from Professor Mark Perry

Intervening politicians only distorts the marketplace and shifts the balance of trade towards political favourites, such as Japan’s nuclear ‘crony’ industry.

The fact is the political economic concept known as autarky, which is the root of the political call for energy independence, translates to the promotion of poverty. This also represents a form of neo-Luddism.

Earth Hour And Reality

Bjorn Lomborg writes, (bold highlights mine)

When we switch off the electricity, many of us turn to candlelight. This seems natural and environmentally friendly, but unfortunately candles are almost 100 times less efficient than incandescent light bulbs, and more than 300 times less efficient than fluorescent lights. Using one candle for each extinguished bulb cancels the CO2 reduction; two candles emit more CO2.

That’s basically the law of unintended consequence at work. Populist political ‘feel good’ actions tend to defeat the noble intentions which it tries to achieve in the first place.

The economic implications is that:

First, we get inefficient and more costly ‘alternative’ energy (this reduces people’s purchasing power—thus we become POORER). Making us poor saves the environment (duh!).

Second, atavistic lifestyles poses more environmental hazards than the current one.

As a Latin proverb goes, Aegrescit medendo or the cure is worse than the disease...

Misanthropic Earth Hour, Redux

Hardly anyone really realizes that celebrating Earth hour is about glorifying misanthrope-hatred of mankind.

The underlying belief is that man, through free markets, cannot be trusted to be responsible or to account for his wellbeing or for his neighbors.

And thus, safekeeping environments have to be politically mandated. In other words, our behavior must be controlled politically to save the environment (Never mind if we starve to death, the important thing is to save the environment, got it? Yeah what is the environment if we are all dead anyway?)

Here is what I wrote last year….

Many of the locals have reportedly joined the celebration of Earth Hour.

Many have done so because like elections, they are there for "symbolism". It is more about social fad and peer pressure. Most of these participants hardly know of the economic and political implications and the attendant "costs" of what "earth hour" is about, and to whose benefit such policies would bring about.

Think of it, why does everyone seem to protest when prices of energy goes up, when high prices, in the real world, should spur "conservation" or a shift in consuming patterns?

So almost like everything else popular, seductive soundbites make it appear that the solution to environmental predicament is just a matter of allegorical representation or popular appeal, devoid of economic truths.

Nevertheless, we have a great example of earth hour as a permanent policy-North Korea!

According to a 2006 Daily Mail report, (picture above)

``The regime in the north is so short of electricity that the whole country is switched off at 9 p.m. - apart from the capital of Pyongyang where dictator Kim Jong-il and his cohorts live in relative luxury. But even there, lighting is drastically reduced.

``The result, as shown in this picture taken one night earlier this week, is a startling contrast between the blacked-out north and the south, which is ablaze with light, particularly around major cities and the capital, Seoul, in the north-west of the country." (bold highlights mine)

Professor Don Boudreaux makes this fitting comment ``the Dear Leader – like his father before him – works tirelessly to keep his nation’s carbon footprint to a bare minimum; in fact, if you look carefully you can see what is likely his, and only his, office light glimmering in Pyongyang.

``North Koreans show their reverence for mother nature not with a mere Earth Hour but, rather, with an entire “Earth Lifetime.”
Earth Hour, in the mainstream perspective, means bringing back societal order to the medieval eon. It means socialism. Just ask North Korea's Kim.

In short, Earth Hour represents the creed of atavism or the sham of regressing life conditions based on the paradigm of medieval times.

In addition, the Earth Hour meme represents an unwavering faith over computer based models, which has been proven majestically wrong time and again, like Japan’s failure to predict on the earthquake-tsunami-nuclear calamity.

Computer based climate models have been used as justification to grab a substantial pie of taxpayer funded privileges for the benefit of the political class. As well as, a means to expand political power which exerts control over large swathes of industries that shifts economic privileges to politically favored “green” industries (like Al Gore). In short, earth hour promotes crony capitalism and corruption. (Yes we will all be dead except for the politicians, bureaucrats and their cronies who will live this world as their own private Edens)

Remember, (noble) intent and (economic) reality are different.

Earth Hour represents no less than a big time propaganda-hoax, which tragically, many dimwits continue to fall for.

Earth Hour: North Korean Version

Many of the locals have reportedly joined the celebration of Earth Hour.

Many have done so because like elections, they are there for "symbolism". It is more about social fad and peer pressure. Most of these participants hardly know of the economic and political implications and the attendant "costs" of what "earth hour" is about, and to whose benefit such policies would bring about.

Think of it, why does everyone seem to protest when prices of energy goes up, when high prices, in the real world, should spur "conservation" or a shift in consuming patterns?

So almost like everything else popular, seductive soundbites make it appear that the solution to environmental predicament is just a matter of allegorical representation or popular appeal, devoid of economic truths.

Nevertheless, we have a great example of earth hour as a permanent policy-North Korea!

According to a 2006 Daily Mail report, (picture above)

``The regime in the north is so short of electricity that the whole country is switched off at 9 p.m. - apart from the capital of Pyongyang where dictator Kim Jong-il and his cohorts live in relative luxury. But even there, lighting is drastically reduced.

``The result, as shown in this picture taken one night earlier this week, is a startling contrast between the blacked-out north and the south, which is ablaze with light, particularly around major cities and the capital, Seoul, in the north-west of the country." (bold highlights mine)

Professor Don Boudreaux makes this fitting comment ``the Dear Leader – like his father before him – works tirelessly to keep his nation’s carbon footprint to a bare minimum; in fact, if you look carefully you can see what is likely his, and only his, office light glimmering in Pyongyang.

``North Koreans show their reverence for mother nature not with a mere Earth Hour but, rather, with an entire “Earth Lifetime.”

Earth Hour, in the mainstream perspective, means bringing back societal order to the medieval eon. It means socialism. Just ask North Korea's Kim.