wallydownundy

I’m not able to use my nose any longer. I moved to Hong Kong on 31 December and in under a month I’ve lost my sense of smell. According to colleagues and long-term residents, this is normal. It’s Hong Kong.

As part of the new morning routine, it’s custom to check daily pollution levels.  The Environmental Protection Department includes suburban and roadside pollution levels. Today it varies across town. Most places are ‘Medium’ while one or two are ‘High.’

Yet air quality remains a hot issue in Hong Kong. Yesterday the Executive Council endorsed new air quality targets for Hong Kong to reach by 2014. These require a dramatic decrease in many airborne pollutants. Still the to-be-allowed levels are, in many instances, above the recommended level set by the World Health Organization (WHO).

In Hong Kong air pollution leads to 3,200 premature deaths each year, according to University of Hong Kong. At this prestigious institution Professor Anthony Hedley studies air pollution and the impact on this city. He has devised the Hedley Environmental Index to measure the financial and human costs. As example, in December 2011 a total of 785,865 doctor visits are attributed to pollution.

And today the overall air pollution index in Hong Kong is ‘Dangerous’ according to WHO guidelines.

Developing a response to air pollution outstrips the ability of Hong Kong alone. Instead regional solutions must be developed including the cities of Guangzhou and Shenzen to the north. These mega-cities have similar problems. Together the three cities are working to create practical, long-term solutions. The challenge is enormous.

Hong Kong is an amazing city and a great place to live,. It does turn out, however, that you need to be able to breathe to survive here. And today that’s getting harder and harder.

Our business friends working in Brisbane report the city is slowly succumbing to floodwaters. Businesses across town are closing as basements flood and put at risk electricity (and elevator) service. Some key roads like Eagle Street are already cut off. Tomorrow’s high tide is expected to exacerbate the issue. Floodwaters have nowhere to go. According to The Australian, evacuations in Brisbane’s west are underway.

 This comes on top of the flash flood that hit the town of Toowoomba yesterday. The 7 metre high wall of water arrived with no notice. It’s been described as an “instant inland tsunami.”

To everyone in Brisbane and other parts of flood-affected Queensland - please stay safe. Don’t take risks with flooded roads. My thoughts are with you all.

In yesterday’s post, “The Cost of Floods” , I wrote about the provisions taken by insurers for claims from the floods in Australia. Currently a land mass the size of France and Germany combined are under water. Today’s papers announce Obama has offered help. It’s that bad.

Today Andrew Fraser, Phil Ayling and Damon Kitney at The Australian report on the drop in share value for the top three Australian insurers. A total of $830 million was wiped from the market capitalisation of the companies in one day’s trade. Investors are concerned their shares - like many Queensland properties - may be underwater.

Investors may turn to a new financial advisor to help them recover losses.

On one side the Northeast American states continue to dig out from a record snowfall - didn’t see that coming, did you Mayor Bloomberg? On the Australian side of the world we are dealing with floodwater of epic proportions.

The Queensland town of Emerald today confirmed record flood levels capping 15.6 metres (that’s 51 feet or the height of a five story building). Along with Emerald numerous towns are inundated with evacuations underway. Hundreds of families are being relocated to safety on the same day the first victim if flooding was found - a 50 year old man fell into swollen waters and his body was recovered yesterday.

While the water may be confined to Queensland, the cost of the floods will be national. Destroyed crops, flooded mines, destroyed infrastructure all add up quickly. The cost to the national economy is expected to top AU$6 billion (at today’s exchange rate, that’s US$6.1 billion). In grocers the price of vegetables and fruits are expected to rise. Considering these are core parts of the national grocery basket, Australia can expect a spike in inflation - and a potential increase then in interest rates.

All of this is a cruel joke after the long term drought. Australia suffered one of the longest and most widespread droughts in living history, and this came to an end in the last two years. Farmers were cultivating crops that were due to lift them from long term debt. Now they’re relocated to emergency shelters and newscasts feature their homes under record floodwater.

Twenty years ago I heard a speech by Bill Gates here in Sydney. He said one day we’ll be so busy watching our telephones we won’t want to get up to answer the television. That happened, right? And then ten years ago I heard another prediction. Global warming would lead to billions of dollars of damages, eradication of food crops and mass dislocation. At the time I thought they meant Bangladesh, not Bundaberg.

So if you have any change left after Christmas, donate it today at any branch of Bank of Queensland, Commonwealth Bank, Westpac, ANZ, NAB or Suncorp. Alternatively donate on-line to the Premier’s Disaster Relief Appeal.

Either I’m getting older and more sensitive to the state of the world, or we are truly lurching from crisis to crisis.

Petrol prices in Australia are $6.00 a gallon. China is digging out from under a killer earthquake. Iowa is flooded and the price of corn and soybeans has shot up. (Iowa is a “breadbasket” state that is now a “basket case” state.)

Then this morning on ABC Radio National came an interview with author Maude Barlow. She’s just released a book, Blue Covenant. Here she outlines the globe’s water shortages and predicts massive dislocation and conflict over access to clean water.

Seems our grade school lessons of constantly recycling water were false (remember condensation, rain, condensation, rain?).  Groundwater is being sucked faster than it can be replaced. Mexico City is sinking as a result. Pollution has made most of Northern China’s water non-potable and it’s beyond recovery.

So add this to the list of concerns that imperil our life. Kind of makes me wish I’d slept in today - after all it is reaining and it is cold and the world is coming to an end.

As a member of the human race I do probe crisis issues like the lack of water. But I switch off if there’s no solution. I don’t expect anything simple like a magic trick - Voila! - however the dominoes of doom crashing over and over feel unstoppable.

Can’t we just get Mother Earth safely out of this mess with a little smoke and mirror? On the count of three, everyone say “Abracadabra!” Problem solved? Or is that a sleight of hand to make us feel a little better…

The old saying that a week is a long time in politics is as true as ever.  Yesterday Australia’s new government was sworn in. Prime Minister Kevin Rudd has ratified Kyoto. The new cabinet includes a Minister for Climate Change and Water. Industrial relations laws will be rolled back.  

Former Prime Minister John Howard not only lost the election for the Liberal Party - he lost his own seat. The losing Liberal Party is in tatters with new leadership and the loss of senior leaders. This once dominant party has lost almost all power - the Mayor of Brisbane holds the senior-most elected Liberal post.

And the economy is experiencing inflation, reduced corporate profits and a likely rise in interest rates (again). 

It promises to be a rocky road for Kevin Rudd and his team - we all hope his team has the skills and determination to make the change while continuing Australia’s strong economic record. 

We’re staying two weeks in Thailand for family holidays.  After a few days in Bangkok we’re beach-side in Phuket.  Our room is 10 metres from the beach on the ground floor.  It was re-built after the tsunami as this hotel lost everything on the ground floor.

It’s hard to forget the tsunami when you come to Phuket.  There are few visible signs any more - that was three years ago.  What are new are the signs showing tsunami evacuation routes and the towers with loudspeakers on the beach. 

My first night I dreamed of the giant wave.  By the third day it was hard to remember anything ever happened.  Does lightning strike twice in the same place? I go to LA and still think of earthquakes.  Maybe it’s the oddity of massive natural forces.

Adjacent to our hotel is a hillside.  (Note to self: This flight has one emergency exit.)  On top are a series of road-side shrines.  These don’t commemorate automotive fatalities.  When we drove by all the adults in the car noticed and one began to say something.  The rest cut them off with nods of the head and wise “I know”s.  We didn’t want the children to hear. 

This morning we walked the length of the beach.  On our return lap I noticed the waves had wiped away all our footprints.  Yet every once in awhile I found sand-ground tiles or concrete chunks.  The ocean took away great segments of Phuket and is now offering them back bit by bit by bit. 

Panel discussion on corporate social responsibility.  Chaired by Diane Osgood, Business for Social Responsibility.  It inludes the following professionals:

• Wendy Lasarus, The Children’s Partnership
• Tom Adams, President, California League of Conservation Voters 
• Harvey Rosenthal, Founder, The Foundation for Taxpayer and Consumer Rights
• William Sherwood-McGraw, Portfolio Manager, California Public Employees’ Retirement System

Why the California experience with its increasing public voice - is this new, and can we expect it to be duplicated in the USA?

Wendy: If you follow the Page tenet and manage for the future, you do need to watch California.  What’s undertaken here will spread to other parts of the nation.  We’re a state of innovators - and we have a large population (in the USA, 1 in 8 kids live in California).  CA remains on the forefront of public policy. 

Tom: California has always taken the lead on environmental issues.  Once we adopt standards other states follow.  First state to regulate greenhouse gas emissions from cars.  Given the stalemate in Washington, DC many other states implement standards from California.  The business community os getting more engaged - and those that deal with the envionment successfully will make money and be leaders.  Detroit is flatering and in CA Tessler is developing electric cars. ”GreenTech” investments are reaching $2 billion each year - investments to curb carbon is the wave of the future.  Some of the largest environmental programs are funded by venture capital funds.  GreenTech is the third wave - after HiTech and BioTech. 

William: CALPERs listens to a number of important causes, such as those represented in the room.   They invest in over 8,000 securities and we’re long-term holders.  But we’re on the phone every day with the companies we own.  CALERs believes strongly in transparency and disclosure.  We use dedicated forums for the 1.5 million members we represent.  One emphasis is CEO remuneration and we engage companies behind the scenes. 

Question: How advise companies on engaging NGOs on public policy alliances?

“The single biggest obstacle to China’s growth is the physical environment,” said University of Michigan’s’s Dr. Lieberthal in Q&A time this morning.  Environmental pollution can be reversed but it takes time, investment and the willingness to change.  Compare Pittsburgh’s air quality today with Pittsburgh 40 years ago.

For China the greatest constraint is the lack of usable water.  In China the water table has dropped three feet every year since 1960.  In Northern China - where 40% of the population love and 40% of the manufacturing takes place - the water table has dropped 12 feet in the past year alone. 

What water is left is seriously compromised.  In China 40% of the water cannot be used - it is beyond salvage given the high levels of pollution.  Water is critical to civilisation.  It cannot be imported. 

Major infrastructure has been developed - but they are not being used because the treatment plants cost money. 

This leads to serious questions: Can North China maintain manufacturing and population beyond five years? There needs to be fundamental changes in the water culture which is not occurring - there are no NGOs able to push for change, and not an adequate legal system.  The incentive is purely for short-term gain. 

The lack of potable water will lead to serious social unrest in China - and we need to factor in the water equation into China’s growth potential. 

Never underestimate the power of words.  The pen is mightier than the sword is a stock quote many repeat.  Yet I am also driven by powerful imagery - especially when it condenses complex thoughts into immediately undertandable terms. 

Watch this short video for a stunning example of powerful communications.  (Thanks to my friends at Carbon Planet.)