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How Much Is Your Coastline Worth?

I recently saw this demonstration of how mangroves protect shorelines from erosion.

It’s incredible how Mother Nature has developed simple tools to support biodiversity, even against the powerful forces of ocean waves. Unfortunately, we haven’t been the best stewards of these natural gifts.

WWF reports that more than 35% of the world’s mangroves are already gone. The figure is as high as 50% in countries such as India, the Philippines, and Vietnam, while in the Americas they are being cleared at a rate faster than tropical rainforests.

I am reminded of the case of Louisiana’s coastal ecosystem, presented in the Al-Jazeera investigation The Disappearing Delta. Louisiana’s bayou, dubbed one of the fastest-disappearing land masses on the planet, has experienced nearly 2,000 square miles of land erased from the state’s map in the last century. Mike Tidwell summarizes the destruction:

“An area of land the size of Manhattan is subtracted from south Louisiana every 10 months – it turns to water. A football field every 30 minutes. An area the size of Delaware since the 1930’s. It’s just astonishing how much land has disappeared.”

This destruction is caused by the fossil fuel industry and their continuous exploration for more product. The clearing of vegetation along coastal habitats leads to rapid erosion, scarring the landscape forever.

Ninety-nine percent of the Isle de Jean Charles, an island once 11 miles long and five miles wide, is now underwater. “[Jean Charles was] destroyed purely by oil and natural gas,” local resident Preston Mayeaux says. “The big deep canals brought in the saltwater intrusion, then they abandoned the canals. And when they abandoned the canals system… the saltwater goes in and out in and out, killing everything, all the vegetation.”

Beyond the environmental destruction, the government now has to pay the price of awarding this precious land to oil and gas exploration. The state’s Coastal Protection and Restoration Agency (CPRA) is now trying to rebuild land with sediment from the Mississippi River in a $50 billion plan to restore the coast. The only problem? Louisiana doesn’t have that kind of money. “We can’t protect everyone from everything, and there’s an inherent vulnerability living with the coast,” says Jerome Zeringue, head of the CPRA. “Louisiana is doing what it can to participate and protect this valuable resource, but it’s a national issue and a national concern. And we need national interests to support us as well.”

But who’s responsible for the damage? The investigation goes to the disappearing wetlands at Venice gas fields, where Chevron and other major firms have operated for decades. “The oil companies should be involved in [restoration efforts]. They benefited from Louisiana, and the people of Louisiana benefited from the oil companies,” said coastal restoration expert Ryan Lambert. “It’s all a circle. You can’t just blame the oil companies. They need to come to the table and help.”

Baton Rouge attorney Don Carmouche is pursuing a several lawsuits against oil, gas and pipeline companies in two Louisiana parishes. In Plaquemines Parish, an area heavily reliant on the industry for jobs, Councilman Byron Marinovich supported the legal challenge as a way to fund sorely needed restoration efforts. “What we need to do is start building these coasts back so we don’t have these super hurricanes coming through here like Katrina,” he says. In December 2014, he lost his re-election bid to an industry-supported candidate. Not surprisingly, the elections race in Plaquemines Parish was influenced by an organization known as LOGA, or Louisiana Oil and Gas Association.

Meanwhile, as Louisiana’s oil industry battles lawsuits onshore, the industry is shifting focus to offshore deep water drilling. Reporters went to the Gulf of Mexico to explore a new frontier for exploration, known as offshore fracking. “The industry has kept pretty silent about the amount of fracking that’s going on, and the federal agencies charged with issuing permits and enforcing environment laws have not revealed very much information,” says  Jonathan Henderson of the Gulf Restoration Network.

“We’re talking about fracking that is basically along the entire Louisiana coast,” said Miyoko Sakashita of the Center for Biological Diversity. “It’s in shallow water, near communities…Some of the fracking was actually permitted in the Mississippi Canyon, where the Deepwater Horizon accident was.”

It’s a real shame that the American authorities did not learn from the Deepwater Horizon oil spill, which released 4.9 million barrels of oil into the Gulf of Mexico as a result of the gross negligence and reckless conduct of British Petroleum. Instead, the US government continues to give leases to a fossil fuel industry making record profiles while performing extremely risky drilling and exploration. Risky for the coastal environment and everyone who depends on it.

In addition to the vulnerabilities that climate change brings to coastal communities around the world, the destruction of mangrove forests and other coastal habitats by industry, especially fossil fuel companies, leaves people at extreme risk. The costs are far too high. As seen in Louisiana, companies will destroy habitat and then leave the cleanup to the rest of us, while they’ve made incredible profits. People employed by these companies will be left jobless once they leave. Governments will cut social services to pay for the cleanup of corporate greed. We all lose.

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Rich People Don’t Create Jobs

So, if rich people do not create the jobs, what does?

A healthy economic ecosystem — one in which most participants (especially the middle class) have plenty of money to spend.

Over the last couple of years, a rich investor and entrepreneur named Nick Hanauer has annoyed all manner of other rich investors and entrepreneurs by explaining this in detail. Hanauer was the founder of online advertising company aQuantive, which Microsoft bought for $6.4 billion.

What creates a company’s jobs, Hanauer explains, is a healthy economic ecosystem surrounding the company, which starts with the company’s customers.

The company’s customers buy the company’s products. This, in turn, channels money to the company and allows the company to hire employees to produce, sell, and service those products. If the company’s customers and potential customers go broke, the demand for the company’s products will collapse. And the company’s jobs will disappear, regardless of what the entrepreneurs or investors do.

Now, again, entrepreneurs are an important part of the company-creation process. And so are investors, who risk capital in the hope of earning returns. But, ultimately, whether a new company continues growing and creates self-sustaining jobs is a function of the company’s customers’ ability and willingness to pay for the company’s products, not the entrepreneur or the investor capital. Suggesting that “rich entrepreneurs and investors” create the jobs, therefore, Hanauer observes, is like suggesting that squirrels create evolution.

Or, to put it even more simply, it’s like saying that a seed creates a tree. The seed does not create the tree. The seed starts the tree. But what actually grows and sustains the tree is the combination of the DNA in the seed and the soil, sunshine, water, atmosphere, nutrients, and other factors that nurture it. Plant a seed in an inhospitable environment, like a desert or on Mars, and the seed won’t create anything. It will die.

I found this explanation by Henry Blodget of Business Insider helpful in clarifying the limits of supply-side economics. His simple analogy on seeds is perfect in addressing the myth that “Rich people create the jobs.”

We, the people, are the true creators of jobs. Not the companies, entrepreneurs and rich investors who keep trying to sell themselves as saviors of unemployment.

ed-ao139_stevem_g_20110825162903For decades, neo-conservative politicians and economists have pushed the idea of ‘trickle-down economics’ as a reason to cut taxes for the wealthy and remove government regulations. However, the opposite appears true. A Washington Post article shows recent trends that lower taxes correlate with lower growth. Understanding this is important because companies and the wealthy lobby governments to create tax laws that disproportionately help themselves, while placing much of the burden from revenue generation to low-income workers.

Revenue from income and corporate taxes helps fund the schools that educate a workforce. It provides for health care so that workers can get back to work. And it provides welfare, like unemployment benefits, for when the short-term employment that entrepreneurs and new businesses actually create disappears. A functional society filled with well-paid employment opportunities actually creates its own self-sustaining jobs.

Data from the Economic Policy Institute shows the result of tailoring taxes under the belief that “Rich people create the jobs”. In the United States, from 1917 to 1981, the top 10 percent captured (only!) 31 percent of the growth in incomes. Following the presidency of Ronald Reagan, they have taken all of it.

The 1980s free-market/smaller-government system of ‘Reaganomics’ (also used by Margaret Thatcher in the U.K.) has left a legacy of declining incomes for nine out of ten workers over the past two decades. In addition to a lack of job creation, policies like tax cuts for the rich don’t increase incomes for workers either.

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Fish and Chips: How a Small Business Can Have Big Impact in Rural Uganda

Other Stories from Kabasheshe: Hills of Green | Ghost Water Taps | Money Loans and Satellite Dishes

IMG_3640At the end of a fun weekend, I was driving from Queen Elizabeth National Park back to Kabale. Along with a group of American and Canadian medical and public health students, I was returning from three days filled with safari and boat adventures in Southwestern Uganda. Before our weekend came to a close, we stopped at the Satellite Hotel for lunch. The hotel offers an impressive lookout for travelers along the Mbarara-Kabale Road and its restaurant was advertising a special of Fish and Chips. I jumped on the bandwagon and ordered a plate.

Fast forward two weeks and now I’m standing next to the pond where the fish I ate was raised. This fish breeding pond – one of four – is part of a business called Satellite Farmers Limited, located at the junction to Kabasheshe in the Ntungamo district. I originally decided to come here to see and learn about their first farms, but I ended up leaving with a much better understanding of how this small enterprise was playing a big role in the community.

My tour guide and teacher would be Godrey, a 20-year-old secondary school student, who was in charge of this facility. As we talked (or, more accurately, as I continually asked questions) he began to open up and seemed excited to share his work with me.

We started outdoors, walking along the trail that connects the fish ponds. Some filled with catfish and others of an unknown kind, these ponds were dug and filled only six months ago, but already had thousands of fish. To help me see their scope, as the water was murky and hid what lay underneath, Godrey went into the green, aluminum building nearer to the road to grab some feed. He threw it into the water and little mouths started to appear. Above the water were lines, closing each other in a grid formation and about 12 inches apart. These lines are used to prevent birds, which are abundant, from flying down and stealing a meal.

On top of the fish sold to the hotel down the road, Satellite Farmers Limited sells local eggs, handheld sprayers, building materials, and the animal feed (mostly for chickens and pigs) that Godfrey used earlier. But catfish are special. Instead of regular feed, they are given meat, chicken to be exact. I was fortunate to see a farmer come in and leave a bucket of future fish food. The blue plastic bucket contained slurry of meat byproduct. The innards of a chicken – heart, lungs, intestines – that people don’t consume and farmers can’t use can be brought here and sold, adding to their income and maximizing the usefulness of a single chicken.

Speaking of chickens, they have those too, both layers and broilers. Layers are the hens that produce eggs, while a broiler is a chicken raised for just the meat. An egg here sells for 250# (250 shillings, or 10 US cents), while the same egg at the rural market would sell for 400#. Say you’re the head of a household and you were looking for an affordable source of protein, this would be your best place to start. Or, if you are a market seller and looking for something to sell, this place could be your supplier, where you can buy and then sell eggs, making 150# profit on each one; you wouldn’t even need to own a chicken.

Godrey led me inside the Feed Mill, which has been in the community for over two years and was started by a man simply known as Chief.

“Who else works here?” I asked Godfrey, as we passed through the doors. “No one”, he responded, “just me.” I was perplexed. The feed mill is massive. It is similar to something I would find back home in Rural Canada. Inside, there were bags everywhere. Scales for weighing, office desks to handle paperwork, and an unorganized stack of water troughs in the corner took up more space inside this building.

It turns out that Godrey is the only full-time employee of the operation, selling eggs, equipment and bags of feed, and feeding the fish as needed. When animal feed needs to be mixed, he goes to the local trading center and hires up to five temporary workers. Together, they can produce one to two tons of feed each hour. This high level of productivity is probably the reason why Godrey can manage everything alone.

The animal feed they manufacture consists of various elements, including silverfish, maize bran, broken maize, cotton cake, shells, sunflower, and calcium. Some are sourced locally, while other bags come from the capital of Kampala. In either case, the concrete floor where these bags are tossed provides another destination for farmers to bring their grains.

It might not seem like much, but in a country where youth unemployment can reach 80%, it is nice to see a successful and growing business that is providing full- and part-time jobs to local residents. Not only that, they are providing tools to farmers to maximize their productivity and earn more, all within walking distance from their fields. Additionally, Satellite Farmers Limited is acting as a link from rural farmers, buying their excess grains, to outside markets, meaning a greatly level of economic stability in this community of a few thousand low-income farmers.

I left by thanking Godrey for his time and sharing so much knowledge with me. I also bought some eggs; it was too good of a bargain not to. This small business, invisible from the paved main roads, in Southwestern Uganda is quietly achieving what so many educated experts have failed to do – foster employment, assist farmers, and grow the local economy.

If you’re interesting in learning more about businesses in emerging markets or innovations in rural agriculture, feel free to contact myself. Questions are welcome and encouraged.