Business Sphere Magazine | Spring 2010

The Future of Sustainable Enterprise

Special: Asia Tomorrow 2010 Conference Issue

Spring 2010

Architecture in Recession (p. 15)By Christine Jun

Microcredit in India (p. 22)By Shashwata Narain

FeaturingOil Sand & Shale (p.25)

By Dakota Meyers

hosted by

[Spring 2010. Volume I, Issue II]

Dear Conference Attendee,

Welcome to Asia Tomorrow, Yale’s undergraduate Asia business conference. Today, you and your peers will have the opportunity to listen to and interact with established leaders of business, diplomacy, politics, and academia. Through keynotes, panels, discussions, and over lunch, you will explore the sustainability of Asia’s expanding role in an increasingly global economy.

The inaugural Asia Tomorrow conference took place as the global financial crisis was hitting full force. While the global economy has since begun to recover, many have questioned the sustain-ability of not only Asia’s relatively quick recovery, but also the greater Asian business model. Today’s conference will examine this issue from a variety of perspectives.

This issue of the Business Sphere Magazine combines the Yale College Business Society’s flagship conference with its magazine. It serves not only as a guide for the conference but also as a plat-form for students investigating issues relevant to the theme of sustainable enterprise. Through this combined effort, we hope to provide a starting point for discussion and promote a compre-hensive understanding of today’s business dynamics. Yale University has developed a dynamic relationship with Asia centered on building greater mutual understanding and preparing its students for leadership and service in an increasingly in-terconnected world. Through your interactions with today’s speakers and your peers, we hope to continue this process. Take advantage of this opportunity by asking hard questions and demand-ing honest answers. After all, tomorrow, we will be inheriting the world that today’s leaders have left behind.

We would like to thank the YBS and BSM staffs for working tirelessly over the past year. We hope you enjoy the conference and leave with a greater understanding of the underlying forces that have shaped and will continue to shape Asia.

Sincerely,

Kaiyuan Wang James ZhangDirector, Asia Tomorrow President & Founder, Yale College Business SocietyYale 2011 Founder, Asia Tomorrow Yale 2011

Paul Joo Brian DeEditor-in-Chief, BSM Editor-in-Chief & Founder, BSMYale 2012 Yale 2010

Editor-In-ChiefBrian DePaul Joo

Editorial DirectorDominic Insogna

Monish Shah

Managing EditorTravis Gidado

Christopher Lee

Design DirectorJames Murphy

Layout Editor-In-ChiefJohn Good

Graphics EditorJamar Bromley

Operations DirectorBing Han

Andy Dewitt

Publishing DirectorConnie Leong

Distribution ManagerLindsey Raymond

Administrative EditorJames Zhang

This magazine is published by Yale College students. Yale University is not responsible for its contents. The opinions expressed by the contribut-ers to BSM do not necessar-ily reflect those of its staff or its advertisers. The design and content of this magazine are copyright of BSM and may not be reprinted with-out express written consent. Business Sphere Magazine • PO Box 200118 • New Haven, CT 06520-0118

[email protected] • www.BusinessSphere.org

From the Yale College Business Society & Business Sphere Magazine

Business Sphere Magazine | Spring 20102 B


46

1514

2522

2018

2831

Asia Tomorrow ConferenceSchedule, Map & Keynotes

Life Cycle Analysisby Dominic Insogna

Dry Wellsby Jennifer Barrows

Feature: Architecture in Recessionby Christine Jun

Solar Power Subsidiesby Courtney Kaplan

Asia Tomorrow ConferencePanel Descriptions

Feature: Oil Sand & Shaleby Dakota Meyers

Feature: Microfinance in Indiaby Shashwata Narain

Korean & Japanese Relationsby Christopher Lee

Project Have Hopeby Lindsey Raymond

32 Pollution in Chinaby Shiv Kachru

34 Gandhi & India’s Economyby Corinna Lewis

Spring 2010 | Business Sphere Magazine 3B

Conference Edition

Yale College Business Society Staff

Asia Tomorrow ConferenceDirector: Kaiyuan Wang

Deputy Diretors: Aimee Marquez Siddhant Jhunjhunwala

Hanqing Yu, Yujiang Wu, Jie Min, Jasmine Lau, Avichal Lalavi

Outreach and Event ManagementDirector: Shashwata Narain

Deputy Diretor: Swati Yanamadala

Eric Li, Christine Saffold, Melissa Hou, Paul Cohen

FinanceDirector: Adam Bao

Deputy Diretor: Ananya Hemvijitraphan

Dong Won, Christopher Lee, Debdeep Nath

DevelopmentDirector: Paul Joo

Deputy: Connie Leong

Shiv Kachru, Besi Bezhani, Daniel Cheng, Daniel Eldaly

Speaker OutreachDirector: Lisa Andrekovich

Deputy: Amanda Levis

Will Jordan, Runqi Song

MarketingDirector: James Murphy

Business Sphere MagazineEditors-in-Chief: Brian De, Paul Joo

YBS President: James Zhang



AgendaTime Event Description/Location

9:00AM - 10:00AM Registration - SSS 114

10:00AM - 10:10AM Opening Remarks - SSS 114

10:10AM - 10:50AM Keynote 1 - SSS 114Daniel Esty, Hillhouse Professor, Yale University

10:50AM - 12:00PMPlenary Panel - SSS 114

Sino-India Economic Integration: Relevance, Approaches and Challenges

12:00PM - 1:30PM Speaker Luncheon - Residential Dining Halls

1:30PM - 2:15PM Keynote 2 - DL 220Tarun Khanna, Jorge Paulo Lemann Professor, Harvard Business School

2:15PM - 3:15PM Business of Green - ML 211 Dragons and Tigers: Financing an Era of Re-gional Hypercompetition - DL 220

3:15PM - 4:15PM India’s Economy: The Road Ahead - ML 211

A Lasting Balance: Sustainable Energy & Policy in Asia - DL 220

4:15PM - 4:30PM Networking and Break - ML 211 and DL 220

4:30PM - 5:30PM Technological Innovations in

Sustainability and Business Capi-tal - DL 220

Leadership in a New Era - ML 211

5:30PM - 6:15PM Keynote 3 - SSS 114Rakesh Mohan, Former Deputy Governor of Reserve Bank of India

6:15PM - 6:30PM Closing Remarks - SSS 114

March 27th, 2010

23

1

1

2

3

Sheffield Sterling Strathcona Hall (SSS)

Dunham Laboratory (DL)

Mason Laboratory (ML)

Event Locations

Keynote SpeakersFull speaker details provided at www.asiatomorrow.org


Keynote SpeakersFull speaker details provided at www.asiatomorrow.org

Daniel EstyHillhouse Professor of Environmental Law and Policy at Yale University

Professor Esty is author or editor of nine books and numerous articles on environmental policy issues and the relationships between environment and corporate strategy, competitiveness, trade, globalization, governance, and development. Prior to taking up his current position at Yale, Profes-sor Esty was a Senior Fellow at the Peterson Institute for International Economics (1993-94), served in a variety of senior positions on the US Environmental Protection Agency (1989-93), and prac-ticed law in Washington, DC (1986-89). Professor Esty earned an A.B. from Harvard, an M.A. as a Rhodes Scholar at Oxford, and a J.D. from Yale.

Jane EdwardsYale University Associate Dean for International Affairs

Ms. Edwards provides strategic planning for and coordination of the various offices administer-ing international programs for undergraduates; and serves as a liaison to those offices involved in admitting and retaining international students; coordinates the relationship between Yale College international activities and global initiatives at Yale.

Tarun KhannaJorge Paulo Lemann Professor at Harvard Business School

Tarun Khanna has worked with multinational and indigenous companies and investors in emerg-ing markets worldwide. He joined Harvard faculty in 1993, after obtaining an engineering degree from Princeton University (1988) and a Ph.D. from Harvard (1993), and an interim stint on Wall Street. Outside HBS, he serves on the boards of the global power company, AES Corporation, and India’s largest microfinance firm, SKS Microfinance, along with several others in the financial services, energy, automotive, and life sciences sectors, and actively invests in and mentors startups in Asia. In 2007, he was nominated to be a Young Global Leader by the World Economic Forum. In 2009, he was elected a Fellow of the Academy of International Business.

Rakesh MohanDistinguished Consulting Professor at Stanford Center for International Development & Former Deputy Governor of Reserve Bank of India

Dr. Rakesh Mohan is Non Resident Senior Research Fellow of Stanford Centre for International Development, Stanford University Stanford. He was Distinguished Consulting Professor at Stan-ford Centre for International Development at Stanford University. Prior to this, he was Deputy Governor of the Reserve Bank of India, where he looked after the Monetary Policy Department, and many others. Dr. Rakesh Mohan received his Masters Degree, Doctorate in Economics from Princeton University, and BA in Economics from Yale University.


Sino-India Economic Integration: Relevance, Approaches and Challenges

Charles HillDiplomat-in-Residence and Lecturer in International Studies, Yale University

Charles Hill, a career minister in the U.S. Foreign Service, is a research fellow at the Hoover Institution and cochair of the Working Group on Islamism and the International Order. He was executive aide to former U.S. secretary of state George P. Shultz (1983-89) and served as special consultant on policy to the secretary-general of the United Nations from 1992 to 1996.

Over the past decade, Asia’s two largest and most ancient states have attempted to reignite diplomatic and eco-nomic ties, bridging the rifts formed since the early 1950s as a result of border disputes and military conflict. Positive trends in the Sino-Indian relationship are expected to spur regional development by removing bar-riers to free trade and increasing the free movement of people, labor, goods, and capital across national bor-ders. With China and India well positioned to become major driving forces of forming a socio-economic bloc between South Asia and East Asia, the panel will explore the promising development of the two regions as well as prospects of a Pan-Asian community.

T.N. SrinvasanSamuel C. Park Jr. Professor of Economics, Yale University

T. N. Srinivasan is a Ph.D. from and Samuel C. Park, Jr. Professor of Economics at Yale Univer-sity. His research interests include International Trade, Development, Agricultural Economics and Microeconomic Theory. He was named Distinguished Fellow of the American Economic Association in 2003 and was awarded the Padma Bhushan, the third highest civilian award of the Government of India.

Winnie SunVice President of Client Services, Strategic Outsourcing in Asia Pacific for IBM Corporation, Global Technology Services

Winnie Sun’s focus is to lead the growth and satisfaction of IBM Asia Pacific client base. Prior to this appointment, Winnie Sun was the Vice President, Global Production Procurement Sourcing for IBM Corporation, Ms. Sun graduated with a MBA and earned a bachelor’s degree in Electronic Engineering.

SSS 114 10:50am-12:00pmFor further reading, see “Stormy Straits” (p. 28)

Featured Panelists

Co-hosted with:

Rakesh MohanDistinguished Consulting Professor at Stanford Center for International Development & Former Deputy Governor of Reserve Bank of India

See speaker details on page 5.


The Business of Green

Bruce BuntingPresident, Bhutan Foundation

Bruce W. Bunting is the former managing director and vice president of World Wildlife Fund’s Special Programs and Strategic Partnerships. He has served as an advisor and on the boards of several organizations. Previously, Dr. Bunting served as consulting veterinarian for the Greenpeace Foundation in Canada. He received a B.S. in zoology and a doctorate in veterinary medicine from Michigan State University both with high honors.

Environmental issues pose increasingly serious challenges around the world, and nowhere is this looming con-cern more stark than in certain regions of Asia, where rapid industrialization is contributing to air and water pollution, deforestation, and global climate change. Effectively solving these issues will require coordinated lead-ership and innovation on many levels. This panel discussion will focus on the economics of conservation, corpo-rate sustainability, the role of government actors, and the future of different environments throughout Asia.

Radha KuppalliDirector, New Forests Inc., Former Analyst, Natsource LLC

Radha Kuppalli leads New Forests’ U.S. business and is focused on developing the ecological prod-ucts investment program and supporting forestry investment globally. Radha has Bachelor of Arts in International Studies and Economic Theory from American University in Washington, D.C., and Masters in Business Administration and Environmental Management from Yale University’s School of Management and School of Forestry and Environmental Studies.

ML 211 2:15pm-3:15pmFor further reading, see “Life Cycle Analysis” (p. 20)

Featured Panelists

Marian ChertowAssociate Professor of Industrial Environmental Management, Dir. of the Program on Solid Waste Policy, Dir. of the Industrial Environmental Management Program

Marian Chertow is Associate Professor of Industrial Environmental Management and has been Direc-tor of the Industrial Environmental Management Program at the Yale School of Forestry and Environ-mental Studies since 1991. Her research and teaching focus on industrial ecology, business/environ-ment issues, waste management, and environmental technology innovation.

Robert O. MendelsohnEdwin Weyerhaeuser Davis Professor of Forest Policy, Professor of Economics at Yale University

Professor Mendelsohn has concentrated his research on valuing the environment. His dissertation included an integrated assessment model of air pollution that could measure the damages of emis-sions. This work has been extended in recent years to greenhouse gases, where he has been trying to measure the impacts of climate change. Recently, he has returned to studying air pollution in the hope of measuring the marginal damages of emissions across the country.

Co-hosted with:


Dragons and Tigers: Financing an Era of Global Hypercompetition

George SorensonFounder & Chairman, FE Clean Energy

Mr. Sorenson has spent the past ten years originating and closing direct equity investments in electric, gas, water and telecommunications utilities in emerging markets throughout the world. Mr. Sorenson has a B.A. in Finance from the University of Utah, and an M.A. from the American Graduate School of International Management in Glendale, Arizona.

Between the tiger economies of Korea and Singapore and China’s rising dragon, finance in Asia has evolved rapidly over the past few decades. As the world struggles to climb out of the current global recession, Asia’s powerhouse cities beckon as the breeding ground for new frontiers in finance. At this pivotal moment, the decisions we make today may have lasting implications for the next century. “Dragons and Tigers” will draw from the experience and knowledge of both seasoned executives and renowned professors as they address the financial outlook for Asia’s future cities.

DL 220 2:15pm-3:15pm

Featured Panelists

India’s Economy: The Road Ahead

Jonathan KimSenior Vice President, Power & Utilities Group at RBS

Jonathan J. Kim has been the lead banker in various high-profiled and widely syndicated re-newable energy financings, as well as conventional thermal power financing since he joined the Power & Utilities Group in mid 2007. Mr. Kim received his Bachelor of Arts degree in Political Science from the University of California at Irvine.

Carl SeaholmVice President of Strategic Relationships, Gale International

Carl Seaholm is responsible for locating and developing high level private and public sector rela-tionships for Gale International’s $40 billion Songdo International Business District project. Mr. Seaholm’s current responsibilities include cultivating the company’s relationships with its world-class strategic partners to support the city’s quality of life, energy efficiency, sustainability and technologi-cal superiority. Mr. Seaholm is a graduate of the University of Colorado.

Robert ShillerArthur M. Okun Professor of Economics, Yale University

Robert J. Shiller is the Arthur M. Okun Professor of Economics at Yale University, and Profes-sor of Finance and Fellow at the International Center for Finance at Yale School of Management. Professor Shiller has written on financial markets, financial innovation, behavioral economics, macroeconomics, real estate, statistical methods, and on public attitudes, opinions, and moral judgments regarding markets. Professor Shiller received his B.A. from the University of Michigan in 1967 and his Ph.D. in economics from the Massachusetts Institute of Technology in 1972.

Co-hosted with:


Dragons and Tigers: Financing an Era of Global Hypercompetition India’s Economy: The Road Ahead

The Republic of India has been labeled as one of the strongest emerging economies of the world. However, talk of India’s economic potential is striking hard against the sobering realities of the problems that continue to per-sist on a national scale. Some of the major challenges for India include improving governance, literacy rates and infrastructure, increasing agricultural productivity and controlling inflation. The panel will discuss the nature of the obstacles that the Indian economy faces and how it may overcome them in order to attain global economic supremacy.

ML 211 3:15pm-4:15pmFor further reading, see “Microfinance in India” (p. 22) and

“A Trickle-Down Morals Economy” (p. 34)

Featured PanelistsSunil SinghalPractice Head, Energy & Utilities, North America at TCS America

Sunil Singhal heads the Energy and Utilities business for Tata Consultancy Services in North Amer-ica. TCS is a solutions provider to the Energy and Utilities sector worldwide. Sunil is interested in issues relating to Energy Efficiency, Climate Change, Sustainability and Carbon Trading. Sunil was educated at Indian Institute of Technology, Roorkee, India and NUFFIC, Netherlands.

Mark Heaphy Partner, Wiggin and DanaMark Heaphy is the chair of Wiggin and Dana’s Information Technology and Sourcing Group. His practice focuses on all aspects of the sourcing and procurement process, from initial RFP through implementation and beyond. Mark has broad experience across a variety of industry sectors, in-cluding financial services, healthcare, insurance, life-sciences, manufacturing, telecommunications and utilities. He graduated Phi Beta Kappa from College of William and Mary, earned an M.A. in international relations from Yale University and, a J.D. from University of Virginia School of Law.

Co-hosted with:

Michael CorningSenior Vice President, Client Development, Genpact

Michael Corning is a graduate of the Wharton School at the University of Pennsylvania and has over 25 years of experience in financial services. Michael joined GE Capital Vendor Financial Services where he held leadership positions in general management and business development. He later joined Genpact, which at the time was a unit of GE, in 2002 and built a global team focused on driving growth and managing relationships for clients. Michael was one of the key architects of Genpact’s commercial strategy to expand its customer base in the Financial Servic-es and Manufacturing sectors. He has lead the implementation of this strategy in the Financial Services sector, which has been exceptionally well received in the marketplace and has resulted in the addition of key strategic clients for Genpact.


A Lasting Balance: Sustainable Energy and Policy in Asia

Alessandro GomezProfessor of Mechanical Engineering, Yale University

Professor Gomez has been at Yale since 1985 involved in teaching and research. He periodically teaches undergraduate courses in the thermal/fluid area including: Thermodynamics, Aerody-namics, Fluid Mechanics, Propulsion, and Laboratory on Fluid Mechanics and Thermodynamics. His most recent effort has been the development of a class on Energy, Engines and the Environ-ment, covering thermodynamics, global warming, fossil fuels and renewable energy. He also teaches graduate classes in Combustion. On the research front, His research focuses primarily on combustion and electrospray fundamentals with applications.

Increasing energy demands by the powerhouse economies of Asia have put the highlight on how the global corporate world deals with the new-age challenges of energy sustainability. The crucial issues of energy policy have become the focal point of international debate and pose increasingly relevant questions about how corpo-rations in developing Asian countries will grapple with economic, political and financial pressure to attain the status of ‘green business’. This panel aims to discuss the present and future of the integral relationship between profitability, sustainability and international energy markets in light of the Asian business world.

Thomas Weil General Counsel, WaterHealth

Thomas Weil has years of experience in consulting on international energy matters and business transactions, and advising on major infrastructure projects in numerous countries, including India and the Philippines. Named one of the leading energy lawyers in the United States by the Chambers USA “America’s Leading Lawyers for Business 2005”, Mr. Weil spent almost two decades with Skadden, Arps, Slate, Meagher & Flom in both Washington D.C. and Houston as energy group counsel and partner - alternative energy project development and financing. He has also been Lecturer at Yale Graduate School and School of Management Studies. Mr Weil received a Bachelor of Arts from Yale University and his JD from the Univer-sity of Virginia School of Law.

DL 220 3:15pm-4:15pmFor further reading, see “Solar Power Subsidies” (p. 14),

and “The Next Last Resort” (p. 25)

Featured Panelists

Technological Innovations in Sustainability and Business Capital

George SorensonFounder & Chairman, FE Clean Energy


Co-hosted with:


A Lasting Balance: Sustainable Energy and Policy in Asia

Technological Innovations in Sustainability and Business Capital

In the midst of rapid industrialization spurring economic growth in Asia, technological advancements are a key element in pushing countries to the forefront of the business development realm. However, technology re-search is also essential for achieving climate sustainability, a prominent co-requisite for perpetuating long-term improvements in economic status and quality of life. Moreover, the basic benefits of technology and engineer-ing that can be provided to impoverished regions of Asia are often overlooked. This panel will explore various means by which modern engineering and technology seeks to directly improve the well-being of the common individual through environmental preservation and basic, indispensable social provisions that can reduce in-come inequality in Asia.

Mun Y. ChoiDean of Engineering, University of ConnecticutDr. Choi joined the Mechanical Engineering Department at University of Connecticut in 2008. He served as a faculty member in the Mechanical Engineering Department at the University of Illinois from 1994 to 2000. He joined Drexel University in 2000 and served as Department Head of Mechanical Engineering and Associate Dean for Research. Dr. Choi received his B.S. from the University of Illinois at Urbana-Champaign in 1987. He received his M.A. and Ph.D. in Mechanical & Aerospace Engineering from Princeton University in 1989 and 1992, respectively. He was a NRC post-doctoral fellow at NIST from 1992 to 1993. His current research effort is focused on advancing the understanding of sooting and radia-tion on droplet combustion and soot diagnostic techniques.

DL 220 4:30pm-5:30pmFor further reading, see “Architecture and the Recession” (p. 15)

Featured PanelistsAlessandro GomezProfessor of Mechanical Engineering, Yale University


David SaccoCivil Engineer, TPA Design Group, New Haven, CT

David Sacco works on site evaluation and design for residential, commercial and municipal cli-ents. Mr. Sacco served as a school construction volunteer with the Peace Corps in Gabon, and as an Associate Field Officer for UNHCR in Sri Lanka through the United Nations Volunteers. He is also a project mentor for the EWB Yale Student Chapter water supply project in Kikoo, Camer-oon. He received a BA in Architecture at Yale University and an M.S. in Civil Engineering at the University of Washington.

Co-hosted with:


Leadership in a New Era

Nancy YaoExecutive Director, Yale-China AssociationFormer Vice President, Goldman Sachs Hong Kong

Nancy Yao Maasbach has spent several years with Goldman Sachs in Hong Kong and New York, where she served as Vice President and as Director of Policy Research and then as the Director of Asia at the Center for Financial Research and Analysis. In the non-profit sector, Nancy served as Managing Director of Corporate Programs at the Council on Foreign Relations (CFR). She has a degree in Diplomacy and World Affairs with a minor in Chinese language from Occidental College. She received an MBA from the Yale School of Management.

Since Deng Xiaoping implemented his “open door policy” in 1978, the influx of foreign investment and the proliferation of multi-national enterprises (MNEs) have played a crucial role in China’s spectacular economic growth. In recent years, however, foreign MNEs are increasingly encountering challenges from domestic competition in the industries, as well as social and environmental externalities. As the future of MNEs seems uncertain, it becomes clear that further innovation and competent leaders are required to create logical solu-tions in order to sustain China’s economic growth. The panel discussion will focus on the role of leadership in facing opportunities and challenges to MNEs in greater China, as well as what the future holds.

Steven ChangChair, Dept of Marketing & International Business, Long Island University

Dr. Chang has a rich mix of work and professional experience in the field of international busi-ness and marketing strategy. Dr. Chang is a member of the New Jersey State Export Finance Company Advisory Council, an appointment by the then New Jersey Governor Christine T. Whitman. His research has appeared in journals such as Journal of World Business, Journal of Global Marketing, and several others. He was the recipient of a Fulbright Grant, a Keller Grant, a United Nations Development Program Grant and many scholarship awards.

Peter C. FusaroChairman, Global Change Associates, New York

Peter C. Fusaro is Chairman of Global Change Associates and is a best selling author of several books on energy and the environmental financial markets. Mr. Fusaro has been on the forefront of energy and environmental change for over 35 years focusing on oil, gas, power, coal, emissions, cleantech, carbon trading and renewable energy markets. Mr. Fu-saro graduated with an MA in international relations from Tufts University and a BA from Carnegie-Mellon University.

ML 211 4:30pm-12:00pmFor further reading, see “China’s Pollution Nightmare” (p. 32)

Featured Panelists

Co-hosted with:


Energy

The Forecast for Solar Power

Even if global energy usage were to remain constant at 2005 levels, conventional crude oil would be de-pleted by 2045, adding urgency to the movement toward alternate sources of energy. Solar energy is an enticing alternative because of its omnipres-ence; globally available solar energy resources are so vast that using only .02% of the sun’s power would suf-ficiently replace all fossil fuel and nuclear energy.

Photovoltaic cells made from silicon and cadmium convert solar radia-tion into a direct electrical current. Since 2002, solar energy has become the fastest growing sector of renew-able energy, and the production of photovoltaic cells has doubled every two years. Since the cost of solar panels today is more expensive than traditional grid electricity in most locations, government incentives are often utilized to stimulate the devel-oping industry. For example, Ger-many, Japan, Italy, and France have all implemented financial incentives for the industry, triggering growth in demand.

Germany has implemented the larg-est government incentives and cur-rently accounts for 49% of the global solar energy market. Next on the list are Japan and the United States; combined, these three countries ac-count for 89% of global photovoltaic production capacity.

In Germany, the cost of the subsidy is transferred to consumers in the form

of higher bills. However, the subsidy supports an estimated 250,000 green jobs, and Germany’s photovoltaic industry is valued at nearly 6 billion euros. Perhaps most importantly, photovoltaic cells do not release any carbon dioxide, presenting an attrac-tive alternative to traditional fossil fuels.

In 2000, the German government passed the Renewable Energy Law, which created a feed-in tariff that awards subsidies to energy provid-ers who supply electricity generated from renewable sources. The law also requires that electricity companies generate at least some energy from renewable sources, even if the com-panies must pay above market rates to do so.

In 2007, Germany produced 3.8 giga-watts of solar energy, and since then, over 1 GW of solar power has been added each year. And this number is expected to continue rising. As more photovoltaic cells are purchased, they are being manufactured in greater volumes. Due to economies of scale, their price is projected to fall steadily in coming years. Already, the Renew-able Energy Law has been amended to reduce subsidies for renewable energy as it becomes more economi-cally viable.

In comparison, solar power accounts for less than 0.1% of all energy gener-ated in the United States. However, the U.S. government has taken steps to increase this proportion. The

Emergency Economic Stabilization Act extended the 30% solar invest-ment tax credit for 8 more years, providing a boost to solar power in the U.S. In addition, the American Recovery and Reinvestment Act of 2009 allows firms to combine the solar investment tax credit with tax-exempt financing. This combina-tion reduces the amount of capital needed to develop a solar energy project, making photovoltaic panel installations cheaper for consumers. Another incentive that has stimulated the production of solar panels is the opportunity to sign power purchase agreements. Under such contracts, a company installs solar panels in pri-vate homes or businesses at no imme-diate cost in exchange for a 25-year electricity contract. Consumers also benefit from locked-in energy prices. An estimated 90% of all new solar panels in the Untied States are being installed under this agreement.

The American economy is overde-pendent on petroleum imports from the Middle East and OPEC nations; the development of solar power is an exciting opportunity to gain more independence in our energy needs. The government should observe the success that Germany has had using incentives to promote the solar power industry, such as Germany’s feed-in system, which has created thousands of jobs during a difficult period for much of the manufacturing industry.

Courtney Kaplan is a freshman in Pierson College.

By Courtney Kaplan

A comparison of renewable energy subsidies in Germany and the United States


Architecture and the Recession

In the world of architecture, those who succeed are often the ones will-ing to spend many sleepless nights on their craft, fueled by passion and caffeine. But in the world of archi-tecture during a recession, it is the sustainability-minded architects who thrive and the traditionalists who sink. Because of their close ties with the construction industry, architects have been hit far worse than their peers in many other industries; almost all architecture firms have trimmed down, at least to some extent, and are surviving by reshaping their philosophy on what a building really is.

Architects hold a very specialized license. Unlike many other de-grees, which can apply to multiple fields and various job categories, architects are limited to a relatively narrow field of professional options. With the construction industry looking as gloomy as it does today with no clear signs of a long-term upturn on the horizon, many un-employed architects have temporar-ily folded up their blueprints and stored away their drafting pencils to pursue their favorite pastime activities. A baking fanatic out of the office and once a designer at

Disney’s Imagineering, Los Angeles-native Natasha Case decided to start her own line of ice cream sand-wiches—from a truck. Similar to The Cupcake Truck founded by an ex-corporate finance employee from Harvard, the ice cream sandwich truck began with an initial invest-ment of $10,000 to buy and redeco-rate an old postal service truck from Craigslist. Since then, Ms. Case’s homemade ice cream sandwich en-deavors have grown into a business with several employees and possibly a future shelf spot at Whole Foods.

But not all architects out of com-mission have had success stories like Ms. Case’s. Some have picked up miscellaneous low-wage jobs, while others have moved back in with their parents. When he lost his job and waited to transition between firms, John Morefield began setting up a whitewashed booth at farm-ers’ markets in Seattle. The booth, which bore strong resemblance to a lemonade stand, was labeled “Archi-tecture 5 Cents.”

The demand for sustainable design is also perpetuated by evolving con-sumer dynamics. According to the American Institute of Architects, residents are increasingly opting for

houses with home offices over those with other special installations such as home theaters and additional guest rooms. Understandably, there has also been a trend toward smaller and more utilitarian spaces. For instance, The Dia Art Foundation in New York announced in November 2009 that instead of building a new 34,000-square-foot art museum, it would opt for a 25,000-square-foot space on a parking garage site the Foundation already owns in Chel-sea. At the University of California in Berkeley, major plans to extend the university’s main museum were canceled. Across the nation, the recession has highlighted the ques-tion of how space may best serve the needs of occupants. With the recession, lenders have begun to re-consider the stereotypical American ideal of “bigger is better.” Instead of installing home theaters or renovat-ing and extending museum walls, consumers and corporations alike are now seeking ways to reduce operational costs.Accordingly, the architects who are flourishing in this changing busi-ness environment are the ones who have begun incorporating sustain-able and energy-conserving designs into their art. At a time when many businesses are experiencing nega-

By Christine Jun

The uncertain business environment is behind a growing emphasis on sustainable design

Feature

Environment

“


With an ever-growing emphasis on sustain-

ability, LEED-qualified architects will be in increasing demand,

while uncertified firms and construc-

tion companies that do not have the capacity to design with envi-

ronmental and energy priorities in mind will

be left behind.

tive growth, some certified archi-tecture companies and sustainable design consulting firms such as Leadership in Energy and Environ-mental Design, or LEED, have actu-ally seen an uptick in revenue. “We were able to maintain our project load to stay productively busy. We didn’t lose money last year,” says John An, a consultant at Atelier Ten, the environmental consulting firm that played a major role in design-ing Kroon Hall at Yale University. Incidentally, Kroon Hall is currently seeking the highest energy and en-vironmental design award, known as LEED Platinum.

Other groups around the globe have also noticed the relative success of

resilience.”

Although the green movement was well under way before the reces-sion, architectural developments have been hit with a force that is turning the industry toward more engineering-focused endeavors. In-deed, architecture’s foundation rests on Newtonian mechanics as much as on artistic design, but now more than ever, the stress on reducing energy consumption requires that architecture not rely on traditional technologies for air circulation and temperature control. Instead, architects may have to think more as engineers and attempt to incor-porate novel ways of producing the same effect. Examples include using a geothermal system to heat a build-ing or using rainwater collected from a green roof as toilet water. Songdo’s success is the result of close collaboration between envi-ronmental designers, engineers, and

energy-conserving or environmen-tally conscious architecture firms. Foster + Partners in London is currently undertaking a large-scale project, Masdar City, in the United Arab Emirates, that is to rely solely on solar and renewable energy while boasting a zero-waste ecol-ogy. In South Korea, architecture firm Kohn Pedersen Fox Associates is working with Gale International and local partners to construct Songdo, a $40 billion interna-tional business district in the city of Incheon designed to be one of the greenest cities in the world. When asked about why some firms are thriving while others are faltering, a spokesman replied, “The sustain-ability industry has a better level of


other agencies are adapting at the same rate. For instance, existing building codes may not be condu-cive to pursuing sustainable design. In the case of Songdo, Mr. Gamburg notes, “Incheon is an industrial hub. Building codes that are national and local regulations in Incheon were based on older prototypes,” such as 12 lanes for major roads and the minimum 50-foot space between tall buildings. These codes may function in existing parts of Incheon, but for a district promot-ing a verdant, pedestrian-friendly atmosphere, twelve lanes of black asphalt cutting through the city may not fit the aesthetic. Nonetheless, investors, corporations, research agencies, and residents are already moving into Songdo, as construc-tion continues at a rapid pace. Even-tually, groups such as transportation agencies may need to adjust to meet environmentally-friendly standards as well.

The recession has merely acceler-ated a process that had already been underway, and the best-performing firms have been the greenest think-ers. And there is still infinite room for growth in architecture. With an ever-growing emphasis on sustain-ability, LEED-qualified architects will be in increasing demand, while uncertified firms and construc-tion companies that do not have the capacity to design with envi-ronmental and energy priorities in mind will be left behind. It seems that the recession is positioning smart architecture for dominance at the forefront of the marketplace. After all, even the guy selling his advice on sustainable design for five cents at the farmers’ market made $50,000 last year.

Christine Jun is a sophomore in Davenport College.

architects: in Korea, Kohn Pedersen Fox Associates shares offices with its main engineering partner, Arup, and the Korean construction and engineering company that first con-ceived the idea of Songdo, POSCO E&C. “It was the collaborative office set-up that was really important at the end of the day. It’s that expertise that flows freely from engineer to architect to constructor,” according to Elie Gamburg, a senior architect at Kohn Pedersen Fox.

The shifting focus in architecture is one that will be advantageous for curbing future energy consumption and influencing many other spheres, from the construction industry to independent actors considering their own environmental impact. However, this shift comes with a learning curve. Just because archi-tecture is being forced to become environmentally-conscious due to the recession does not mean that


Environment

Dry Wells

In February 2009, Governor Arnold Schwarzenegger proclaimed a state of emergency in California: 2009 marked the third year of severe drought in the state, with several more years of drought forecasted for the near future. Despite increased snowfall this year and partially replenished reservoirs, water levels remain below normal—for now, it is too early to declare California’s water crisis over.

Unfortunately, California’s situation is not singular. On a planet cov-ered 70% by water, a paltry .007% of water actually is readily acces-sible for human use, a scarcity that affects countries around the globe. From Israel to the United States, chronic water shortages are rooted

in increased agricultural production and demands from growing urban populations. Natural conditions such as drought further exacerbate this precarious situation. In simple economic terms, demand often far exceeds supply.

Legislative measures such as bring-ing in new water supplies and placing restrictions on water usage have been passed in states such as California and Florida, but these are merely stopgap methods as govern-ments try to balance growth against nature’s limits. California’s popula-tion, for instance, will grow to 53 million people by 2030, a rise that corresponds to an extra 2 to 3 mil-lion extra acre-feet per year increase in water demand. Such growth is clearly unsustainable when viewed within a geographical context: most

of the demand comes from areas south of Sacramento, but most run-off is north of this city.

Inconsistencies between geography and human needs are at the crux of water shortage crises around the world. California is relatively fortu-nate in that water access is largely a local, intrastate issue. Local officials can respond in complementary manners throughout the state, mag-nifying the measures that Governor Schwarzenegger and environmental-ists outlined as critical components for water conservation during the state’s shortage. Many other areas of the United States and other nations facing water crises must instead fight the problem out with each other, leading to or aggravating established political tensions.

By Jennifer Barrows

Water shortages, exacerbated by population growth, are fueling conflict around the world


resources into expensive, large-scale projects.

These case studies compose only a fraction of the extent of water short-age crises that nations face today as exponential population growth increases demand. Another critical factor, somewhat paradoxically, is the rise in standards of living. The average person requires about 13 gallons of water each day for sanita-tion, cooking, and survival, not in-cluding indirect water consumption through food, gardening, or indus-trial needs, but in many countries, sanitation problems, rural-urban pricing differences, and lack of ac-cess pose major obstacles, especially for poorer citizens. Daily indoor per capita water use in the United States and many other developed nations exceeds 60 gallons. As developing nations rise out of poverty, their water consumption patterns will increasingly mirror the levels of the developed world, exacerbating the demands of growing populations. Benjamin Franklin stated in his Poor Richard’s Almanac, “When the well is dry, we know the worth of water.”

Today, too many already understand the severity of water shortage prob-lems and their implications for the future. As the world nears 7 billion people, problems regarding water access will become even more acute and political and economic reper-cussions more magnified. In order to ensure safe, adequate supplies for posterity, the issues surrounding water—quality, access, supply—need to be addressed today.

Jennifer Barrows is a sophomore in Davenport College.

Since 1990, Florida, Georgia, and Alabama have been locked in a 20-plus-year water war over man-made Lake Lanier. In 1989, the U.S. Army Corps of Engineer recommended diverting more water toward Atlanta in order to support its booming population. In response to the Corps’ recommendation, both Florida and Alabama disputed the reallocation, citing ecological issues and a violation of the Na-tional Environmental Policy Act. In 2009, Judge Paul Magnuson ruled that these states had three years to legally resolve the issue; otherwise, water usage from Lake Lanier would revert to 1970s levels. Although Lake Lanier returned to full volume in late 2009, the dispute still stands, and conservationists are reluctant to declare full recovery.

Cooperation is critical for respond-ing effectively to water shortage

crises. In the Middle East, an un-likely accord has emerged between Jordan and Israel in response to dire water shortages in these two states. Although official environmental impact studies will not be released for several more years, Jordan is supporting several controversial measures to relieve the shortage issue: with Israel’s support, Jordan seeks to utilize desalination plants along Israel’s coast, create a pipeline from the Dissi Reservoir to Amman, and cut a path from the Red Sea to the Dead Sea through which water would be pumped to restore the Dead Sea’s water levels.

However, environmentalists are railing against these measures and criticizing them for failing to ad-dress underlying issues. The agricul-tural economies in Jordan and Israel depend heavily on water-intensive crops, an ironic situation in a region notoriously short of accessible water. Diverting water supplies into the region will temporarily address the supply problem, but according to some, this amounts to a bandage over an area quickly losing its life-blood.

A key issue critics point out is the amount of water Jordan wastes as a result of leakage and illegal wells—with little enforced regulation in Jordan, this widespread free rider problem continues to plague author-ities. Thus, rather than build a com-plex network of pipelines, environ-mentalists suggest that governments should embrace conservation as the first step toward remedying water shortages around the world. Because conservation is the most cost-effec-tive and immediately viable method to sustain adequate water supplies in the future, governments should first seek to exhaust a wide array of con-servation measure before pouring

“Daily indoor per capita water use in

the United States and many other developed

nations exceeds 60 gallons. As develop-

ing nations rise out of poverty, their water

consumption patterns will increasingly mir-

ror the levels of the de-veloped world, exacer-bating the demands of growing populations.


Environment

Life Cycle Analysis

In the past decade, with the envi-ronment surging to the forefront of policy debate and public concern, and with increasing pressure on large corporations to adopt more sustainable practices, a once ob-scure system of evaluating the envi-ronmental impact of products has received increasing attention from private companies and governments worldwide. Life cycle analysis, also know as life cycle assessment or “cradle-to-grave” analysis, essentially examines the entire “life cycle” of a product, tracking it from its origin as raw materials excavated from the earth until its death long after its disposal, and examining the environmental impact of a product by quantifying the waste produced at each stage of a product’s life. Under the standard-ized system of life cycle analysis, the life cycle of a product generally consists of four phases: raw materi-als acquisition, manufacturing, use, and waste management. Ultimately, the results of this evaluation allow companies to identify the most sustainable products and methods of production. According to the United State Environmental Protec-tion Agency, “Companies, federal facilities, industry organizations, or academia can benefit from learning

how to incorporate environmental performance based on the life cycle concept into their decision-making processes.” The concept of life cycle assessment arose in the 1960s amid increasing concern over limited resources and energy supplies. Throughout the de-cade, environmentalists conducted extensive research to account for the costs and environmental impact of products and energy sources. A defining case in the history of life cycle analysis came in 1969 when researchers for the Coca-Cola Com-pany analyzed the environmental effects of different containers and bottling methods, and effectively defined the methods and proce-dures of LCA that persist today.

LCA has seen an increase in popu-larity and refinement of standards throughout the decades, and the current procedure is standardized by the International Standardiza-tion Organization. Standardized life cycle analysis consists of four main processes: goal definition and scoping, inventory analysis, impact assessment, and interpretation. During the first stage, the prod-uct and the boundaries by which the analysis will be conducted are defined. During inventory analysis and impact assessment, the emis-sions or other waste produced by

the product are quantified, and the effects on the environment are analyzed. Finally, interpretation of these findings involves assessing the data along with other factors to determine the ideal product and production method. LCA has lately received the much attention from companies, govern-ments, and NGOs, but it is not the only system of environmental waste analysis presently utilized by large companies. Notably, the German chemical giant BASF devised a similar system of “eco-efficiency analysis” in 1996, which has since been used in over 250 cases in Eu-rope and North America to attempt to provide a rival analysis of the en-vironmental footprint of products. However, LCA has many advantages when compared to alternative sys-tems of waste analysis. First, LCA offers a much more comprehensive and accurate method of evaluating a product’s environmental impact. Many systems only look at the emis-sions or waste of a finished product. But under the framework of life cycle analysis, the company must not only take into account the emis-sion produced by manufacturing a product, but also the environmental impact of obtaining raw materials and the impact of disposing of the product after its use. By analyz-

By Dominic Insogna

Overview of an increasingly important link between corporate deci-sion-making and environmental concerns


ing the cradle-to-grave impact of a product rather than focusing only on easily identifiable waste, LCA allows companies, governments, or other organizations to make estimates of waste production and energy consumption more in tune with reality. Also, by quantifying the amount of waste produced and energy used, companies can more easily make decisions and trade-offs to determine the ideal balance between profits and environmental impact. As environmental advocacy has put increasing pressure on companies to adopt more sustainable practices, many large businesses have begun incorporating life cycle assessment into their business models. Multi-national companies such as Toyota, McDonald’s and DuPont have pub-licized their use of LCA to analyze the environmental impact of their products, and have made adjust-ments to their products and manu-facturing accordingly. American chemical giant DuPont in 2008 used

LCA to compare the two methods of printing and two methods of plate processing. The study found a method of “flexographic” printing to save nearly 50% of the energy and gases emitted by the compa-rable “gravure” printing process. The study also found that a specific system of plate processing saves ap-proximately 30% of the energy and greenhouse gases of other systems. But while the gradual trend shift of businesses and governments to-wards LCA is undoubtedly a step in the right direction toward a more sustainable and environmentally friendly corporate culture, it is by no means a perfect process. Among its many problems, quantifying the waste produced by a product at each stage in its life cycle can be an extremely long and complicated process. Potential factors that merit observation are nearly infinite, and a lack of concrete data can con-found the process. Tracking the environmental harm that a plastic bottle can have on the environ-ment after its disposal could take decades, and matching that impact with a concrete number is far from an exact process. Furthermore, even when an acceptably accurate assess-ment of a product’s environmental impact can be reached, a company is by no means bound to pursue the most environmentally friendly route despite the evidence, although this is a social problem that is not exclusive to LCA.

Confounding factors, most nota-bly cost, must also be considered when determining a company’s manufacturing method or product. At this junction, the element of environmental conscientiousness plays an important role as corporate leaders balance the trade-off be-

“Under the framework of life cycle analysis,

the company must not only take into account the emission produced

by manufacturing a product, but also the

environmental impact of obtaining raw mate-rials and the impact of disposing of the prod-

uct after its use.

tween sustainability and profit. And while more comprehensive than other methods, LCA is still lim-ited in scope. The primary outputs measured in LCA are kilograms of greenhouse gas emission and mega-joules of non-renewable energy consumed. But LCA does not con-sider some factors with significant environmental influence, such as toxicity. Lastly, while the methods of conducting LCA are standard-ized by the ISO, no standardization of evaluating and interpreting the results exist, and differing interpre-tations of the results of a study can undermine the intent of the analy-sis. Life cycle analysis is far from an exact science. But it is currently the best system available. Its popular-ity has been steadily increasing due to support from governments and companies, and standardization of the process has made it more accessible. But in order for LCA to assume its full potential as an effective tool to monitor waste and energy output and create sustain-able enterprise, the process must be further streamlined to include a standard system of interpretation, and more regulation must be im-posed by the government to expand its implementation. Making LCA a mandated component of compa-nies’ decision-making processes will help make environmental concerns a more integrated part of corporate culture, and will be an important step in creating a more sustainable corporate world.

Dominic Insogna is a sophomore in Berkeley College.


Microfinance in India

In a country home to nearly a third of the world’s poor, microcredit lending, or microfinance, is nearly seen as a gift sent straight from the heavens. A 21st century buzzword, microfinance has received much attention in India for its potential to provide poor indi-viduals with the means to engage in self-employment projects and gener-ate income in order to escape poverty. With an ever increasing market size at the “bottom of the pyramid” and growing receptiveness among the masses, microfinance has morphed into an exciting concept not only for India’s impoverished but also for its policymakers and the financial sector. Many foresee that the future of the enterprise lies in a partnership be-tween commercial banks and micro-finance institutions so as to overcome microcredit’s biggest challenge today: lowering lending interest rates so that microcredit can remain a viable op-tion for the poorest in India.

Microcredit lending is the extension of small loans to individuals whose credit ratings would not qualify them for conventional bank loans. More specifically, these undersized loans are aimed at poor individuals for income-generating activities, without the requirement of significant col-lateral or qualifying documentation. Microcredit institutions offer loans for amounts as little as 500 rupees,

approximately $10, typically meant for a year or less.

Since its conception in 1976 by Bangladeshi economist Muhammad Yunus, who went on to establish Grameen Bank in 1983, microcredit lending has changed the face of India’s banking sector. Over the past 30 years, microlending in the Indian economy has grown dramatically—according to a global ranking of the top microfinance institutions (MFIs) published by Forbes in 2007, India and Bangladesh together are home to a lion’s share, with seven MFIs from India alone making it into the top 50, including Bandhan, SKS and Saad-hana Microfin Society.

Studies predict that MFIs in India will likely lend more money than the formal banking sector in com-ing years. One study conducted by a Delhi-based non-profit organization reveals that microcredit lenders real-ized a 60% increase in clients in India during the year that ended in March 2009, as compared to the modest 15% growth in the number of low-income customers served by the formal bank-ing sector over the same period.

This growth disparity results from the fact that large banks in India have traditionally found it difficult to profitably service the clientele of

MFIs. There are numerous and com-plex reasons behind this problem, the most obvious of which is that lend-ing out small sums for short periods to customers with particularly low credit ratings can be financially detri-mental for large commercial banks.

On the other hand, MFIs lending without the partnership of larger banks have found it increasingly difficult to procure cheap funds to support their operations on a wider scale, which has contributed to the fact that interest rates on microcredit can be as high as 35% just so that MFIs can sustain themselves. These phenomenally high interest rates have the potential to undermine the benevolent intent of microfinance. To ensure that microcredit remains a viable option for India’s poor, it is becoming increasingly important to lower interest rates by encouraging partnership between microcredit institutions and large banks, with the former leveraging its ability to evalu-ate the risks associated with lending on an individual scale, and the latter having the access to cheap funds and general financial know-how. Such a partnership is only possible if micro-credit institutions work on lowering the default risk among borrowers in order to make the market segment more attractive for large bank partici-pation.

By Shashwata Narain

The critical role of microcredit loans and how they are shaping India’s future

Feature

Finance


In this effort, microfinance institu-tions today are pursuing many inno-vative methods to try and reduce the credit default risks associated with lending to individuals with low in-come and minimum collateral. Some of these methods include reaching out to households through women, the formation of self-help groups, building personal relationships with clients, and using technology to keep track of individual customer bank accounts.

Targeting women for lending pur-poses has become an increasingly popular approach among microfi-nance institutions in India. MFIs have found that offering small loans to the women of a household helps to reduce loan defaults in the long term. In many rural and poverty-stricken regions of India, women are solely responsible for managing the day-to-day functioning of their households while the men are out working in fields and earning a living. It has been noted that since women run the home, they have a clear grasp of the family’s expenses and a keen sense for saving money to smooth over daily cash flow. At the same time, they are generally more vulnerable to pres-sure to return loans and are statisti-cally less likely to resort to dishonest schemes or loan defaults.

Additionally, women are seen to be more resourceful with their funds, and various studies have shown a positive correlation between credit availability and a woman’s ability to undertake an enterprising economic activity. This has been especially suc-cessful in rural India, where women will often use the proceeds of a loan to start micro-businesses related to the production of village crafts or homemade snack foods. This makes women the ideal loan customer for microcredit organizations. Repre-sentative of their domestic units,

women are an essential aspect of the MFI plan to reduce default risk and thereby bring down interest rates.

Forming customer self-help groups, or SHGs, is another successful ap-proach MFIs have adopted for reduc-ing defaults on loans. There are ap-proximately 20 million women active in 1.4 million SHGs functioning in India today, which effectively makes the Indian SHG-bank linkage model the largest microfinance program in the world. SHGs function as a self-supporting entity for the purposes of saving and borrowing funds from a group fund supplied by a microcredit institution. They generally comprise twenty or fewer members, typically women from poor families, and as a SHG proves capable of managing its funds well, it may borrow more from a local bank to invest in small business or farm activities. Banks may lend up to 4 rupees for every one rupee that the group fund saves. India’s National Bank for Agriculture and Rural Development (NABARD) finances more than 500 banks and MFIs that provide funding to house-holds through SHGs.

The SHG-Bank linkage model has been phenomenally successful for a variety of reasons, many of which are related to psychological group dynamics and peer pressure. It has

been found that, due to in-group peer pressure, there is less incen-tive for women to default on a loan when they are involved in a SHG with women whose credit ratings are interdependent. SHG members are also able to save and borrow larger amounts than individual custom-ers, making the SHG approach very rewarding for customers as well as MFIs seeking to reduce the risk of defaults.

MFIs have also realized the impor-tance of building close personal relationships with borrowing house-holds in order to guarantee future payments. Banks such as ICICI, India’s largest commercial bank, employ microcredit agents who are responsible for marketing loans to prospective customers and keeping in touch with borrowing families. Each agent may be responsible for up to 50 households in a region and is respon-sible for visiting them once every two weeks or month in order to keep a tab on their account status and evalu-ate additional loan requests. Most importantly, the agent is responsible for developing a close friendship with the borrowers; in many rural regions, agents are welcomed as members of the family and have an intimate knowledge of the family’s daily financial operations. The tight agent-household relationship means


that families feel obliged to return loan payments and are less likely to default when a “friend” is involved. The relationship is further beneficial for the MFI because it provides an accurate idea of the household’s bank account and repayment status. Increased use of technology, as a means to monitor households’ ac-count balances and payments, has also aided MFIs in ensuring that cus-tomers have a lower incentive to de-fault. Financial Information Network and Operations (FINO), a company under ICICI bank, has developed a biometric smart card-based technol-ogy that holds all information about a customer’s bank account. The cus-tomer can use this card to access, save and withdraw funds from selected areas around rural regions. Not only does this provide MFIs a convenient mode of monitoring households with loans, it also makes banking easier for the poor.

Finally, many MFIs are now looking at sponsoring education plans for customers in order to improve loyalty and reduce default rates among their clientele. Education plans function at the SHG level, and each group is given lessons on health, nutrition, business and money management. As India’s rural regions are largely reliant on agriculture enterprises,

women are taught about the business sense that goes into profiting from agriculture-based ideas. In a number of research studies, it was found that women who had participated in these lessons with their SHG were more motivated to make decisions, man-age their businesses better and attain a higher level of income throughout the year. Such lessons also emphasize the importance of not defaulting on loan payments to ensure continued funding support.

The methods that MFIs are using to lower default rates and ultimately, interest rates on loans, are signifi-cant because they are responsible for much more than providing mere financial support for India’s poor; they are also responsible for the sweeping socioeconomic progress that is taking place within this strata. Among the positive changes that mi-crocredit lending has brought to rural India are the growing role of Indian women, changing perception and social acceptance of tribal groups, and increased literacy and education levels among the poor. Perhaps the most noteworthy of these is the slow but steady process of female empow-erment in India. With the ease and

reliability of credit supply, women are going beyond their traditional roles and attaining unprecedented economic independence. Women are able to gain wider experience outside their homes, raising the possibility for developing other social and politi-cal roles in their communities. Thus, women in SHGs are able to contrib-ute more to their households’ welfare.

Microcredit lending will continue to be a central element of India’s eco-nomic and political strategy to tackle the growing challenges of widespread poverty in a progressive and sustain-able manner. Recent efforts by mi-crofinance institutions to guarantee lower default rates and subsequently lower interest rates for loans holds tremendous potential for a mutu-ally beneficial partnership between MFIs and larger commercial banks to reach a greater market segment than ever before. Microfinance is playing a significant role not only in the future advancement of India’s goals to allevi-ate poverty, but also in its financial, socioeconomic and political spheres.

Shashwata Narain is a sophomore in Timothy Dwight College.


The Next Last Resort

The solution to the Western Hemi-sphere’s fuel problems may be lying beneath it: oil sand and oil shale. Canada and Venezuela contain sev-eral of the world’s largest deposits of oil sand, widely considered to be the next generation in crude oil produc-tion. Though estimates of Venezuela’s supply are uncertain and obscured by corruption, scientists suspect that Canadian deposits could contain as many as two trillion barrels of oil, about 18 times Iraq’s known re-serves. And following closely behind oil sand in the race for viability is oil shale. Current estimates indicate that deposits in Colorado alone could contain as many as one trillion bar-rels of extractable oil, and total U.S. reserves likely top two trillion bar-rels. Though both substances were previously considered economically infeasible as alternative oil sources, recent fluctuations in the price of conventional crude oil has ushered in a new wave of technology to extract crude oil from these sources. Securing a stake in dwindling oil reserves has been a key aspect of U.S. policy decisions for the last several decades. That potentially huge re-serves of crude oil exist within stable North American countries could ease political and economic pressure on the United States; however, the

stability provided by these reserves may hinder investment in cleaner energy sources. Chemistry

Oil sand is essentially oil-in-sand, consisting of bitumen, a heavy, viscous petroleum compound in-terlaced with water-enveloped sand particles. Because, under normal conditions, bitumen is too viscous to pump, one must either heat the sand and pump the bitumen or strip-mine it and separate the fuel at another location. Regardless of the method of extraction, the resulting bitumen must be further processed before it can be shipped to a conventional oil refinery.

Oil shale is composed of sedimen-tary rock laced with significant amounts of kerogen, a mixture of organic compounds from which hydrocarbons, such as crude oil, can be extracted. Because the kerogen in oil shale rests in solid rock, it is slightly more difficult to process than oil sand. It can be mined or pumped, but one must heat oil shale for a sig-nificant duration in order to extract fuel. The crude oil that results from processing bitumen or kerogen is called “synthetic crude,” as opposed to the “conventional crude” pumped from natural reservoirs.

History

Both fuels have been used in various endeavors for ages, though usually without extensive processing. Eu-ropean nations began mining their reserves of oil sand during the In-dustrial Revolution. In fact, Canada began mining its reserves early in the 19th century; however, due to the immense cost of processing the bitumen relative to that of pumping liquid crude oil, the North American oil sand industry lay dormant for much of the 19th and 20th centuries. Much of the same can be said about oil shale. Because it burns like coal without refinement, oil shale has been mined for centuries. Nations began to process oil shale in order to extract kerosene and similar fuels in the 19th century. Throughout the 20th century, government and private enterprise made various in-vestments toward the research of oil shale as a source of crude oil. Even so, the boom and bust cycle of oil prices hindered large-scale research and development, especially in the U.S., where low oil prices helped to keep production at a standstill. Why go through the trouble of processing kerogen when conventional crude oil flows freely from the ground?

However, the energy crisis of the early 1970s helped to spur modern

By Dakota Meyers

Opportunities in oil sand and shale will be accompanied by serious political and environmental risks

Feature

Energy


oil sand refinement in Canada. The cost of producing crude oil from bitumen decreased as technology increased throughout the latter part of the 20th century. And today, with the days of low oil prices appar-ently in the past, synthetic crude oil production from bitumen has caught the attention of the energy market. Analysts estimate that synthetic oil production from oil sand remains profitable as long as oil prices exceed about $45 per barrel. In fact, when crude oil prices skyrocketed in 2007, Royal Dutch Shell announced that it had made an after-tax profit of $21.75 per barrel on synthetic crude oil produced from bitumen; this nearly doubled its worldwide average profit of $12.41 per barrel of conven-tional crude.

The feasibility of producing synthetic crude from oil shale remains slightly more speculative. Current estimates suggest that crude oil prices would need to remain above $70 per barrel for extraction from shale to be prof-itable. However, this figure repre-sents, in part, the high cost of start-up capital and could reduce to about $35 per barrel in the near future. The development of new technolo-gies will also lessen this figure. For instance, Royal Dutch Shell recently announced that its method of in-situ extraction, which heats the shale and extracts oil without mining, could remain economically viable even if crude oil prices dipped as low as $30 per barrel. All of these figures, however, reflect profitability at full production capacity. Also, they apply primarily to the most easily extract-ed reserves. Thus, the average cost of production will be greater, but likely still economically viable.

Political, Economic, and Environmental Implications

The United States clearly has great interest in securing long-term oil reserves. Estimates indicate that known oil sand and shale concentra-tions in North America could meet global crude oil demand for centu-ries. The vast supplies of oil shale in the U.S. could relieve the need to use global hegemony in foreign policy in order to secure conventional oil reserves and help to lower the U.S. trade deficit, creating a geo-political fairytale: the world’s largest industri-al and technological giant could also become a self-sustaining resource exporter. The domestic extraction of oil would also create jobs and improve the infrastructure of oil shale-rich communities, providing a new source of economic expansion.

However, the emergence of oil sand and shale may inadvertently strain certain U.S. foreign relations. Canada is already the leading supplier of oil to the U.S., exporting about 2 million barrels per day, and an expanding oil sand industry will likely cause this figure to grow dramatically. Of course, this would decrease our conventional crude oil importation from Middle Eastern countries, spe-cifically Saudi Arabia, which exports about 1 million bbl/day to the U.S. A shrinking economic relationship could worsen the already declining political relationship between the U.S. and Saudi Arabia.

Aside from causing political and economic change, the extraction of crude from oil sand and shale poses four key threats to the environ-ment. First, because of the relative economic feasibility of extracting oil from these sources, they could provide petroleum for centuries and consequently slow investment

in alternative clean energy sources. Second, the refinement of oil sand and shale consumes more resources and produces far more toxins than the refinement of conventional crude oil. This process also uses large quantities of water, which could prove particularly detrimental to the ecosystems of the arid Western U.S., where most oil shale deposits are lo-cated. The extensive, new infrastruc-ture required to efficiently mine the reserves, while bringing economic expansion, will be accompanied by environmental disruption. For exam-ple, strip mining, a technique often used to extract oil sand and shale, can cause particularly severe ecologi-cal devastation. Some companies have already begun to develop technologies to reduce the environmental impact of oil sand and shale refinement. For instance, Royal Dutch Shell intends to con-struct subterranean “walls” of frozen water around its in-situ extraction cites, in order to contain potentially dangerous petroleum by-products. However, because of the immense amount of energy required, the extraction of oil from sand and shale will likely always have a greater envi-ronmental impact than pumping and processing conventional oil.

Oil sand and shale will provide immense economic and political benefits to the Western Hemisphere, especially to the United States. How-ever, this benefit will come at the expense of the environment. Thus, although regarded by some as the next generation in fuel sources, oil sand and shale appear, in fact, to be the next last resort.

Dakota Meyers is a freshman in Bran-ford College.


Culture

Stormy Straits

On February 11, Japanese Foreign Minister Katsuya Okada delivered a verbal apology for the 35 years of forced annexation that Japan had imposed on South Korea. This statement came during a joint news conference in Seoul held with South Korean Foreign Minister Yu Myung-hwan. This marks at least the second formal acknowledge-ment of Japan’s historical oppres-sion of the Korea since then-Prime Minister Junichiro Koizumi stated in 2001 that Japan’s military had caused “enormous damage” during its invasion and occupation of the Korean Peninsula. But why does this apology come now in 2010, a full century after Ja-pan formally annexed Korea as part of its empire? After centuries of uneasy and often hostile relations, in 1910, Japan forcefully overturned the Joseon Dynasty (1392-1910) and began its occupation of the Korean peninsula. Until the end of World War II in 1945, the Japanese Empire exploited Korea economically, culturally, and militarily, often through the imple-mentation of inhumane policies. Relatively little is known about the period outside of East Asia, but the tragic events that occurred during that period have left a deep his-torical rift that has yet to be fully

ous work conditions. Professor R. J. Rummel, professor emeritus of political science at the University of Hawaii, estimated that at least 270,000 Korean laborers were killed as a result. Numerous Korean public monuments and historical records were defaced and destroyed, and over 100,000 cultural artifacts were stolen and transported to Japan. In addition, under annexation rule, Koreans were banned from speak-ing Korean in public and were forced to adopt Japanese names. Meanwhile, the Japanese military also used Koreans in Unit 731, the secret human experimentation unit in which it conducted vivisections and tested a variety of chemical and biological weapons on human subjects.

By Christopher Lee

bridged even today. Thus, the legacy of Japanese occupation is not mere-ly a history lesson but continues to be a central factor and conten-tious sticking point in Korea-Japan relations, shaping the ever-growing economic, political and cultural ties between these neighbors. Mitigating the looming tension and resolving historical discrepancies will be nec-essary to ensure the sustainability of increased cooperation between the two nations and may serve as a foundation for international stabil-ity throughout East Asia. Using Korea as a base for its inva-sions into Manchuria and China, Japan engaged in a series of acts in Korea that left hundreds of thou-sands of victims dead and attempt-ed to destroy a national identity. During World War II, the Japanese Empire conscripted 5.4 million Koreans for slave labor at Japanese factories and mines under danger-

Despite a painful history, Japan and Korea also share powerful economic and cultural ties

“...within Japan, the LDP must perform an uneasy balancing act to establish positive

foreign relations with-out antagonizing the

political right.


One of Japan’s most notorious prac-tices was the systemic enslavement of Korean women for its military brothels. During World War II, Ja-pan forced roughly 200,000 women from Korea and China to serve as sex slaves, labeling them “comfort women” for its imperial army. Plac-ing them in wartime brothels next to its infantry units, the military used these women as a means of containing the widespread rapes by Japanese soldiers that had been reported on the field. Subjected to frequent beatings and rape, an esti-mated 75% of the comfort women died, and most of those who sur-vived contracted venereal disease and could no longer bear children. In 1993, the Japanese government acknowledged for the first time in nearly a century that the state had been involved with these brothels and provided monetary compensa-tion to 285 of the women still alive to testify in court. Subsequently, however, the ruling Liberal Demo-cratic Party retracted this apology and rolled back payments it had originally planned to issue through the Asian Women’s Fund. Mean-while, it approved the use of “right-wing” public school textbooks that whitewashed Japan’s sexual enslave-ment of South Korean women. When the U.S. House of Represen-tatives passed a resolution in 2007 asking Japan to “apologize and accept its historical responsibility in a clear and unequivocal manner,” Prime Minister Shinzo Abe denied that there had been any coercion and answered that the House’s deci-sion was “regrettable.” By delivering Japan’s latest apol-ogy for the destruction it caused in Korea, Okada is taking a step in the

right direction toward increased cooperation with Korea on issues ranging from bilateral trade to regional security. But within Japan, the LDP must perform an uneasy balancing act to establish positive foreign relations without antagoniz-ing the political right. Another major sticking point be-tween Korea and Japan is a dispute of sovereignty over Dokdo Island, also called Takeshima by the Japa-nese. Control of this small group of uninhabitable rocks comes with an Exclusive Economic Zone that encompasses rich fishing grounds and potential oil reserves. Although the Japanese Ministry of Foreign Affairs claims that Dokdo was given to Japan by the Allied Command after World War II, no mention of Dokdo has been found in the peace treaty with Japan. South Korea cur-rently maintains a physical presence on Dokdo, with around 40 South Korean police on guard. The na-tional government subsidizes close to a thousand citizens registered as residents there, and Korean tele-communications firms have built a wireless phone network for the island. The issue of sovereignty over these islands has stirred nationalistic sentiments within both countries. Japan’s Shimane prefecture cre-ated a “Takeshima Day” in 2005, stoking Japanese nationalism but stirring bitter memories across the Korea Strait. As secretary-general of the Democratic Party of Japan last July, Okada asserted Japan’s claim over Dokdo. If Okada now truly seeks to foster friendlier relations with South Korea, he may need to prepare to tread on some toes back at home.

Ultimately, Seoul and Tokyo will most likely work together in or-der foster stronger cooperation on the issues of containing the North Korea crisis and promoting bilateral trade. On February 17, they agreed to a joint research project with China on the feasibility of a trilater-al free trade agreement for North-east Asia. Meanwhile, officials from both countries have been calling for the construction of an undersea tunnel connecting Korea and Japan. This proposal has been gaining momentum since Korea and Japan’s collaboration on the 2002 FIFA World Cup. If constructed, the tunnel would connect the Korean port city of Busan with the Japanese city of Fukuoka. Busan has already commissioned a task force on the proposal, and the two cities are con-sidering plans to create a unified, international economic zone. Korea and Japan share a compli-cated history and an intertwined future. Although their historical relationship may have been far from amicable, recent political develop-ments have so far been conducive to increased political and economic cooperation between the two coun-tries. Granted, many issues have yet to be fully resolved, and domestic political factions within both na-tions strongly oppose any sort of compromise that might be seen as a concession. In order to build a stable relationship between the two nations that will be truly sustain-able, however, many more agree-ments have yet be reached.

Christopher Lee is a sophomore in Branford College.


Finance

Project Have Hope

To most jewelry is an adornment, to the women of the Acholi Quarter of Uganda it is a chance for a better life. Made out of recycled paper, each bead in a handcrafted work of art and an investment in their future. The Acholi Quarter is a large slum home to about 10,000 people on the outskirts of Kampala, capital city of Uganda. Project Have Hope uses the proceeds from the sale of the Acholi Quarter jewelry to fund a variety of educational and voca-tional training programs as well as issue micro loans. Project Have Hope is a small, relatively new non-profit organi-zation and part of a new influx of “microfinance” organizations. These programs provide a small loan to a low income entrepreneur in or-der to assist in a financial venture. People receiving microloans have little hope of receiving a loan from a traditional bank for various reasons. Lack of credit history, collateral, employment as well a deficiency in established financial institutions contribute to the need for micro lenders. In Uganda, most women have no access to banks that extend credit. Project Have Hope fills this void for women in Uganda. Women use the loans mainly to supplement existing businesses or start small-scale busi-nesses, such as selling vegetables

or fish. After reviewing the loan program at the end of its first year, it became apparent that although these women were able to regularly pay back their loans, the loans were still too small to enable these wom-en create sustainable income-gen-erating activity. As a result, Project Have Hope increased the loans from $175 to between $300 and $1500. In Uganda, where GDP is $300, these loans are a sizable investment. Proj-ect Have Hope has provided loans for 65 women in Uganda, including Ayoo Jennifer. Ayoo Jennifer used her loan to buy a boda boda, a motorcycle which is commonly used as a moped taxi in Kampala. Ayoo Jennifer hired a driver and now earns about $75 a month from her small taxi busi-ness. Investing the proceeds of the taxi business in a simson and gnuts farm, Ayo Jennifer also sells pro-duce in Kampala. She hopes to earn enough money from the produce to purchase a second boda boda. Ayoo Jennifer’s story illustrates the strengths of micro loans. These loans give entrepreneurs the tools to support themselves in the future and stimulate other businesses in the local economy. For example, Atim Millie Grace received a loan to start her own restaurant. Her restaurant has a loyal following and is also hired her to cater special events. Atim Millie Grace’s restau-rant provides jobs for several other

members of the community and, the local building industry, as her plans to expand her business location takes place. Project Have Hope now counts 100 Acholi women as mem-bers, but its impact reaches far be-yond, assisting nearly 1,500 people in Uganda’s Acholi Quarter. Since micro lending is such a ben-eficial activity, why not extend loans to all adults? A series of studies has shown that when women hold assets or gain incomes, family money is more likely to be spent on nutrition, medicine and housing. Studies have also shown that when men have a good crop, more money is spent on alcohol and tobacco. When female farmers are successful, households spend more money on food. Ef-ficient allocation of resources is essential to fighting poverty because the poorest families in the world spend, on average, ten times as much on alcohol, prostitution, can-dy, sugary drinks and lavish feasts as they do on children’s education. Therefore, empowering women through stimulating economic ac-tivity and education has a powerful positive effect on their families as well. Larry Summers, former chief economist at the World Bank, wrote that “investment in girl’s educa-tion may well be the highest return investment available in the develop-ing world.” Clark Boyd, reporter for Frontline, wrote “look around the [Acholi] quarter and you’ll see many women hard at work, carry-

By Lindsey Raymond

A case study of microfinance at work in Uganda


ing water, making jewelry, breaking rock. Some men are working, too. I say “some” because there are quite a few guys just sitting in small lean-tos, drinking millet beer and the homemade alcohol that often causes outbreaks of blindness. (When Josiah, the cameraman, walked by them, they demanded to be paid to be in the film. Josiah didn’t even have his camera on.)” Goldman Sachs found, in a 2008 re-search report, that gender inequality hurts economic growth. In addi-tion, greater female involvement in society correlates with a lower amount of turbulence and violence in a country. According to a 2002 CIA report on Uganda, only 57.7% of women in Uganda are literate, a huge disadvantage in meaningful participation in society. However, in the Acholi slum where many women are refugees from Northern Uganda, the percentage of liter-

ate women is much lower. Project Have Hope runs an adult literacy program from 4:00 to 5:30 pm and a second class from 5:30 to 7 pm. Due to the high cost of electricity and the constraint that most students have jobs or family duties during the day, the window of time to attend school is small. Project Have Hope is cur-rently in the process of installing a solar panel, which would provide electricity to teach more classes at night. Project Have Hope also offers the opportunity to sponsor a child to attend the two Catholic board-ing schools, St. Kizito and St. John Bosco. During elementary school, it costs $400 to sponsor a child for one year at school while the price rises to $900 once the child enters secondary education. Currently, 96 children are thriving in school due to the efforts of Project Have Hope and their sponsors. Basic education is important to empower women, and a first step towards economic empowerment. In order to encourage women to economically prosper, Project Have Hope also offers vocational pro-grams such as a driver’s education programs, computer skills classes, tailoring, catering and hairstyle and salon management. Project Have Hope offers tools for women to support themselves, but it is the strength of the women of the Acholi Quarter that turns these skills into a successful source of income. Karen Sparacio, founder of Proj-ect Have Hope recalls during her first visit to Uganda “one woman described being beaten nearly to death and then carted by bicycle to escape the war in Northern Uganda. Another woman told me about be-ing held captive by the rebels. As she

told her story, she sent her grandson away to fetch me a Coca Cola from a nearby shop. The price of this sin-gle bottle of soda equaled one half of a day’s work in the brutal condi-tions of the stone quarry where she worked to support her family.” Karen was motivated to help be-cause “the tragedies inflicted upon them and [the women’s] families in the North and their continued struggles living as displaced refu-gees in a slum outside of Uganda’s capitol – these women maintained a freeness of spirit, a way of embrac-ing and appreciating life in spite of everything that renewed my spirit. Rather than dwell on their difficult experiences, they showed incredible strength and desire to move forward so that they might improve life for themselves and their families.” This strong desire to move forward is a necessary, but often overlooked, ingredient for aid in the developing world. Project Have Hope has been successful in creating a permanent difference in others lives helping those with a strong inner drive to succeed help themselves.

Lindsey Raymond is a sophomore in Timothy Dwight College.

“According to a 2002 CIA report on Uganda, only 57.7% of women in Uganda are literate, a huge disadvantage for meaningful par-

ticipation in society. In the slums of Kampala,

where many women are refugees from northern

Uganda, the percent-age of literate women

is much lower than the national average.


China’s Pollution Nightmare

China is framing the front page story of the 21st century. Bursting every which way in a bewilder-ing rush of change and transfor-mation, China’s neck-snapping growth has drawn the attention of the world. But China is already paying the price for its rapid success. Though the economy is posting a historic series of double-digit growth rates, the expansion is fueled by an insatiable hunger for energy. China’s expansion of heavy industry relies almost exclusively on coal, the most available but dirtiest source of energy in China.

This pollution problem has already spread past China’s borders, as sulfur dioxide and nitrogen oxides emitted from China’s plants fall as acid rain in Seoul and Tokyo. Even halfway around the world, in Los Angeles, much of the city’s particulate pollution originates in China, according to the Journal of Geophysical Research.

Since Hu Jintao became the Com-munist Party chief in 2002 and Wen Jiabao became prime minis-ter the following spring, China’s stance against pollution, at least officially, has been clear: China’s economy must grow at a more sustainable, environmentally-pace.

year, and nearly 500 million people lack access to safe drinking wa-ter. With so many people’s health negatively affected by pollution, health care costs have risen sharp-ly. And the longer these issues are unresolved, the more China will become dependent on dirty coal and imported oil, making these issues even harder to resolve.

Fraud and corruption have been a huge determinant in the cur-rent state of China’s environment. With many regions desperate to attract foreign investment, they often resort to falsifying govern-ment approval for new construc-tion sites. “This is definitely a huge problem,” says Wen Bo, China’s representative for the California-based environmental group Pacific Environment. “Some of the less economically advanced regions in China have been actively working to attract investment from over-seas and other parts of China. But they don’t have huge advantages except cheap labor and loose envi-ronmental standards.”

China’s energy problem is not just about the amount of energy they consume; the dirty sources of this energy greatly impact levels of carbon dioxide emissions. Coal is the main culprit in China’s in-

By Shiv KachruCurrent pollution levels are in-tolerable, and leaders who ignore these principles will be called to account.

Yet five years later, clear signs of environmental progress have stalled. For the Communist Party, finding a balance between fast growth and environmental sta-bility is a daunting task. There is no doubt that Communist Party officials seek a more sustainable growth rate with reduced pollution levels, but the country’s authori-tarian system is addicted to high growth rates. Economic success and prosperity pacify the popu-lation, provide spoils for party members, and forestall growing demands for political account-ability. Economic slowdown could scare off foreign capital, incite so-cial unrest, and call into question the rule of the Communist Party.

But the current lack of environ-mental protection policies already poses its own threat to the country. The World Bank has noted that 16 of the world’s 20 most polluted cities are in China. Air and water pollution has caused thousands of episodes of social unrest. Ambient air pollution is blamed for hun-dreds of thousands of deaths each

Environmental degradation is contaminating the earth beyond China’s borders, and prospects for the future are grim

Environment


creasingly poor air quality, and it provides two-thirds of the coun-try’s energy needs. Though it is largely abundant in China, coal emits much more carbon dioxide than oil or natural gas, and China already burns more coal than the United States, Europe and Japan combined. This pollution has had a sharp impact on the residents of China’s urban areas, with only one percent of 560 million resi-dents breathing air considered safe by international standards. Of major concern is the particu-late matter in China’s air, which includes dangerous concentra-tions of dust, soot, and aerosol particles smaller than 10 microns in diameter (known as PM 10).

These particulates are tradition-ally measured in micrograms per cubic meter of air. According to the European Union, any reading above 40 micrograms per cubic meter or air is considered unsafe. In the United States, the maxi-mum acceptable level is 50. Yet in 2006, Beijing’s average PM 10 level exceeded 140, according to the Chinese National Bureau of Statistics. Another internal, unpublicized report by the Chinese Academy of Environmental Planning in 2003 estimated that 300,000 Chinese die each year of ambient air pollution. Many of these deaths can be at-tributed to heart disease and lung cancer. Another report, prepared by Chinese environmental experts in 2005, estimated that annual pre-mature deaths related to air pollu-tion were likely to reach 280,000 this year and 550,000 in 2020. Chinese officials are arguing that foreign powers play a large role in the degradation of the coun-try’s environment, and that other nations have turned a blind eye to their role in China’s pollution problem. Indeed, the cheap prod-ucts that fill markets in the United States and Europe are made pos-sible through energy-intensive factories in China. As the world’s appetite for cheap goods grow, the more China will pollute. But this industrial growth attracts new for-eign capital to China, and Beijing has already declared that it will not enforce any mandatory limits on carbon dioxide emissions, as this would slow growth. They argue that developed countries that initi-ated global warming should find a way to solve it without treading on

China’s growth and sovereignty.

Chinese officials may have a point: the United States, Britain and Ja-pan are already mature economies and only began to worry about en-vironmental degradation after they had already polluted themselves to prosperity. But China is still in its early stages of economic devel-opment. Pollution costs are high worldwide, but unlike in Western countries, these costs have mount-ed faster than China’s readiness to curtail economic development. Hundreds of millions of Chinese citizens live in poverty, and for the government, the well-being of China’s economy is the nation’s top priority. “Typically, industrial countries deal with green prob-lems when they are rich,” men-tions Ren Yong, a climate expert at the Center for Environment and Economy in Beijing. “We have to deal with them while we are still poor. There is no model for us to follow.” Today, China is at a crossroads. Though China’s pollution is al-ready a worldwide problem, this issue is still in its infancy. China has only begun to flex its true eco-nomic power, which could have a potentially devastating effect on the environment. The decisions the Communist Party makes today will impact not only China’s future but the health and well-being of citizens around the world. We can only watch and wait to see how Chinese officials will handle one of the greatest crises their nation has ever faced.

Shiv Kachru is a sophomore in Berkeley College.

“The World Bank has noted that 16 of the

world’s 20 most pollut-ed cities are in China. Air and water pollu-tion has caused thou-sands of episodes of

social unrest. Ambient air pollution is blamed for hundreds of thou-sands of deaths each year, and nearly 500 million people lack

access to safe drinking water.


Culture

A Trickle-Down Morals Economy

The great civil rights leader Mahatma Gandhi stood for peaceful, non-vio-lent protest, religious tolerance, and India’s freedom from foreign domina-tion. But he also led the Indian peo-ple toward economic independence—and toward a system of values that would influence their economy for generations. Those values included a breakdown of the rigid class system, inclusion of rural peoples, a focus on business within India’s borders, and a fierce opposition to corruption.

In terms of his direct impact on the Indian economy, Gandhi organized boycotts of British products, and he encouraged Indian men and women to spin their own cloth to wear, rather than purchase foreign goods. He organized protests and strikes by urban workers, farmers, and other groups of laborers, never forgetting the rural populations. In focusing on India’s ability to raise itself up inde-pendently—and including all classes of people, as well as women, in that vision—Gandhi recognized that his nation could not only be self-suffi-cient, it could thrive.

Today, India is a democracy of over a billion people, with the fifth-largest gross domestic product (GDP) in the world. Domestic consumption is responsible for roughly two-thirds of the Indian economy, and rural areas of the country have seen more economic growth than urban areas. India’s greatest strength may lie in innovative low-income products for

its villages’ populations, which is essentially a market that Gandhi had always championed, if for reasons of social justice as much as financial ones.

From cell phones and cars to soft-ware, India has harnessed the intel-ligence and energy of its citizens to make them able producers as well as consumers. It is a nation that has raised itself up with education and information technology, and, while Gandhi might not have fully foreseen the significance of the latter factor, he always sought improvement in the former. Ignorance was anathema to him.

Two specific initiatives taking place in India right now also speak to Gandhi’s spirit and values. The first is India’s National Rural Employ-ment Guarantee Act (NREGA), which offers gainful employment (at minimum-wage or above) for any rural household that seeks it, for 100 days. The work is on public projects, and the wages are fair and supportive for families who seek dignified ways of sustaining themselves. In April 2008, the act was expanded to every rural district in the country, where it had previously applied to only certain ones.

The second initiative underway is or-ganized by a local non-governmental organization called 5th Pillar, led by a man named Vijay Anand. The project seeks to respond to the widespread

corruption and extortion that takes place throughout modern, capitalistic India—a problem Gandhi saw and worried about in his time as well.

5th Pillar prints legal tender, but their fake money is not meant to be used for bribery. Rather, the notes look just like money (complete with an image of Gandhi’s face), but with the value “0 rupees” printed on them instead of a real number. The idea is that when a person hands a govern-ment official “0-rupee” notes as a bribe, the dishonest civil servant will be shamed into better behavior. With the fake money, Indians refuse to be extorted, and they stop the exchange in a clever, hard-line way.

So far, since 2007, 5th Pillar has distributed a million notes, and they show no sign of slowing. For some, the project is inspiring because the organization gives legitimacy to what can otherwise feel like a solitary, and therefore feeble, protest. Now, citizens don’t have to feel completely alone when standing up to authority figures that expect to receive bribes—they have a mint backing their cause. What’s more, the honest man may now just look down at Gandhi’s smiling face on the phony bill, and be reminded of the leader who did so much to change India, and whose influence can still be felt today—be it morally, politically, or economically.

Corinna Lewis is a freshman in Ezra Stiles College.

By Corinna Lewis

An enduring legacy of values in India’s thriving economy


If you are interested in sponsoring the Yale College Business Society or advertising in Business Sphere Magazine please contact us at [email protected]

The Yale College Business Society would like to thank the fol-

lowing organizations for their generous support. Our initiatives

and growth would not be possible without their backing and

continued support. Many thanks go out to all who supported

us since YBS was founded in 2008.

Gold Sponsors

Silver Sponsors

Bronze Sponsors

Partners

For information about individual sponsors, please visit www.asiatomorrow.org

Yale University

Dean’s and President’s

Discretionary Fund

Traphagen Fund

Yale College Business soCietY

Our Initiatives

Asia Tomorrow Conference

Mini-MBA Speaker Series

FBLA Collaboration

Business Sphere Magazine

Yale College Business Society

Business as usual is no longer an option. As globalization contin-ues to redefine the world economy, businesses today have to en-gage an ever-changing international market. Recognizing business as a powerful instrument for systematic change, the Yale College Business Society (YBS) aims to prepare members for successful and consequential careers in enterprise. The YBS hopes to ignite a pas-sion for global business among undergraduate students through a platform of lively discourse and broadened horizons.

Contact us at [email protected]

www.yale.edu/businesswww.AsiaTomorrow.orgwww.BusinessSphere.org

Visit us on the web

Documents

Business Sphere Magazine | Spring 2010