Dear Friends,

My apologies, it has been almost six months since the last publication of this electronic newsletter.  A very active legislative session temporarily put any publication on hold.  It was then decided to rethink the E-zine and with the help of the KFTC Communications team we have redesigned the newsletter.  So, with this issue you will notice substantial changes from the past.

First I would like to clarify the purpose of this “E-zine”.  Its primary purpose is to increase and deepen our knowledge about economics and economies, specifically in relation to “KFTC’s Vision”:

We have a vision.  We are working for a day when Kentuckians-and all people-enjoy a better quality of life.  When the lives of people and communities matter before profits.  When our communities have good jobs that support our families without doing damage to the water, air, and land.  When companies and the wealthy pay their share of taxes and can’t buy elections.  When all people have health care, shelter, food, education, and other basic needs.  When children are listened to and valued.  When discrimination is wiped out of our laws, habits, and hearts.  And when the voices of ordinary people are heard and respected in our democracy.

During the legislative session one of the Legislators on the House Economic Development Committee commented, “We don’t need a bunch of amateurs dabbling in economic development.” That comment has struck a chord with many people. The counterpoint to that Legislator’s opinion is obviously a knowledgeable chorus of ordinary voices.  Considering the limited success that the “experts” have given us over the last twenty years, the input of ordinary people can only be for the better.  

Another reason to expand our knowledge base is that we are better able to proactively work to make our communities, region, state, etc. a better, more sustainable place to live and raise our families. 
 

As you probably have noticed, the format of this E-zine has changed.  It is still basically a collection of links to other sources of information that others, hopefully including you, and I have gathered. These links are now loosely organized under some basic categories along with some comment about the relevance and importance of the information.  The overall intent is to make it quicker and easier to use.

In addition these E-zine issues will be archived online on KFTC’s website and parts linked to KFTC’s blog. This will hopefully make the information interactive and generate some discussion within and outside of KFTC members.  

As a listed “subscriber” you will get the entire Ezine and I invite and urge you to submit comments, ideas and links to future editions as well as bring other people into the conversation.

Martin

The KFTC and the High Road initiative

The First Two Years

Kentuckians for the Commonwealth’s work on the High Road Initiative is now two years old.  Much of the first year was spent on establishing and clarifying the basic values that not only brought KFTC to co-found the High Road Initiative, but also continues to drive the organization’s sustainable development efforts.  Those values of democratic participation, economic justice and environmental integrity led to create the Initiative’s mission:

To establish a fair and effective system of economic development that promotes a high quality of life for all Kentuckians, with an initial emphasis on eastern Kentucky.

The second year has been spent trying to apply those values to suggest new and alternative ways for Kentucky to approach economic development. It has been an effort that simultaneously has been working on crafting a compelling message and developing policy reforms, while increasing the depth of knowledge of everyone involved.

During this second year the High Road Initiative identified four basic components of economic development necessary to creating a sustainable economy.

1. A solid Foundation of fair and adequaete public services, such as education, healthcare, public infrastructure, arts and culture and a clean, healthy environment.  

2. High Community Standards upheld by laws, regulations and policies that ensure good business practices to create a fair, safe marketplace.

3. Smart Strategies of programs, policies and investments that direct public resources for creating jobs, improving job quality and overall quality of life.

4. A System of governance that manages with a vision and a plan for the future, producing success for everyone and all parts of the state.
    

KFTC’s High Road efforts in the 2008 Kentucky Legislature 

Despite having had media attention in the Gubernatorial election, the High Road Initiative entered the
2008 Legislative session as an unknown with more than one legislator surprised to learn that KFTC is involved in economic development. And while some legislators, especially in the coalfields, are happy to have some common ground with KFTC, others are only now aware of KFTC as a multi-issue organization. Though the High Road Initiative is now on the radar of Legislators, the Cabinet for Economic Development and the Administration, there remains the long term challenge of being given a respectful ear and creating a place for ordinary citizens in Kentucky’s economic development efforts.

In the 2008 Kentucky General Assembly, KFTC worked on creating and supporting legislation in all four of the sustainable development components. 

Foundation – KFTC support HB 262 to adequately and fairly raise the necessary revenue to maintain Kentucky’s basic services.

Community Standards – 1200 KFTC members and supporters rallied for HB 164, “the Stream Saver”, to protect the water supply of many Kentucky communities adversely impacted from mining. HB 70 was also widely supported by KFTC and others to restore the right of former felons to participate in Kentucky’s voting system.

Strategies – KFTC helped to introduce HCR 178 to create a task force for supporting Kentucky’s entrepreneurs and small business.  KFTC also actively worked for three bills supporting renewable energy, including the passage of HB 2.

System – With its legislative sponsors, KFTC introduce three pieces of legislation, HB 718, HB 748 and HB 750, to reform Kentucky’s system of economic development more transparent, democratic and accountable.

Economics 101

We live in a global economy!" A lot of people use that phrase, often when they are trying to present a case for "big ideas" or as a reprimand for not looking beyond our own backyard. There is truth to that saying, but it is also true that we live in local economy too. The degree of connection between the two often seems to vary but nonetheless, they are connected. Though it is often subtle, what happens globally does impact the economies of our communities (occasionally its not so subtle, like the rising price of gasoline). But it is equally true that what happens at the local level, especially collectively, ripples throughout the world - consider the effects of drought, floods or home foreclosures.

"Think global, act local" is another popular saying. It can often come with an undertone of fatalism about an individual's ability to effect change, or of a willingness to ignore what is happening outside of one's community, region, state (pick your boundary). If however, it is said with the intent of being globally aware and acting accordingly in our everyday lives, then I think it can be truly a modern proverb. This Economic 101 section is an attempt to present information in that spirit and help create an understanding of our economic connectiveness, globally and locally.

WHAT MICRO-LOANS MISS

By James Surowiecki

http://www.newyorker.com/talk/financial/2008/03/17/080317ta_talk_surowiecki/?yrail

Economic events are often portrayed in the media either in far too simplistic and isolated terms or as something far too complex for common folks to grasp. James Surowiecki is one journalist that I consistently look to for the middle ground. I occasionally may not agree with him but usually my conclusion differs because of the clarity that he has brought me.

Invest vs. loan

Making loans and fighting poverty are normally two of the least glamorous pursuits around, but put the two together and you have an economic innovation that has become not just popular but downright chic.

There's no doubt that microfinance does a tremendous amount of good, yet there are also real limits to what it can accomplish. Micro-loans make poor borrowers better off. But, on their own, they often don't do much to make poor countries richer.

This isn't because micro-loans don't work; it's because of how they work. The idealized view of microfinance is that budding entrepreneurs use the loans to start and grow businesses-expanding operations, boosting inventory, and so on. The reality is more complicated.

The Next Bubble: Priming the markets for tomorrow's big crash:

http://www.harpers.org/archive/2008/02/0081908

This is a long article and I had to reread it several times, but it provides a great big picture view of past economies and some caution about the next one.

After 1975, the United States would never again post an annual merchandise trade surplus. Such high-value, finished-goods-producing industries as steel and automobiles were no longer dominant. The new economy belonged to finance, insurance, and real estate-FIRE.

As FIRE rose in power, so did a new generation of politicians, bankers, economists, and journalists willing to invent creative justifications for the system, as well as for the projects- ranging from the housing bubble to the Iraq war- that it financed.

Capitalism's Reality Check

By E. J. Dionne Jr.

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/10/AR2008071002264.html

The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.

Since the Reagan years, free-market clichés have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.

This is the third time in 100 years that support for taken-for-granted economic ideas has crumbled. The Great Depression discredited the radical laissez-faire doctrines of the Coolidge era. Stagflation in the 1970s and early '80s undermined New Deal ideas and called forth a rebirth of radical free-market notions. What's becoming the Panic of 2008 will mean an end to the latest Capital Rules era.

The Food Economy

"Food is important" - it seems like an understatement, but as one of the necessities of life, mankind still fights wars over it. As we move from a labor-based economy into an energy-based economy, the connection between food and fuel becomes inseparable. Biofuel production is on the rise and so are hunger, famine and civil unrest. In America, where "Corn is King" understanding the connections between them has never been more important.

A Drought in Australia, a Global Shortage of Rice

By KEITH BRADSHER

http://www.nytimes.com/2008/04/17/business/worldbusiness/17warm.html

The Deniliquin mill, the largest rice mill in the Southern Hemisphere, once processed enough grain to meet the needs of 20 million people around the world. But six long years of drought have taken a toll, reducing Australia's rice crop by 98 percent and leading to the mothballing of the mill last December.

The drought's effect on rice has produced the greatest impact on the rest of the world, so far. It is one factor contributing to skyrocketing prices, and many scientists believe it is among the earliest signs that a warming planet is starting to affect food production.

It is difficult to definitely link short-term changes in weather to long-term climate change, but the unusually severe drought is consistent with what climatologists predict will be a problem of increasing frequency.

The New Economics of Hunger

By Anthony Faiola

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/26/AR2008042602041.html

A brutal convergence of events has hit an unprepared global market, and grain prices are sky high. The world's poor suffer most.

The root cause of price surges varies from crop to crop. But the crisis is being driven in part by an unprecedented linkage of the food chain.

A big reason for higher wheat prices, for instance, is the multiyear drought in Australia; something that scientists say may become persistent because of global warming. But wheat prices are also rising because U.S. farmers have been planting less of it, or moving wheat to less fertile ground. That is partly because they are planting more corn to capitalize on the biofuel frenzy.

This year 20 - 25% of the U.S. corn crop will be fed to ethanol plants.

For more insight into the relationship between food and energy, specifically ethanol, see "Deal Sweeteners" under Biofuels.

The Corn Refiners Association is launching a major advertising and public relations campaign designed to rehabilitate the reputation of high fructose corn syrup (HFCS). In June 2008, CRA launched a 18 month, $20 to $30 million public relations and advertising campaign "to convince consumers that HFCS isn't the evil it has been made out to be," reported the Wall Street Journal.

FYI - The Corn Refiners Association member companies:

Archer Daniels Midland

Cargill

Corn Products International

National Starch

Penford Products

Roquette America

Tate & Lyle Ingredients Americas

Sugar coated - We're drowning in high fructose corn syrup. Do the risks go beyond our waistline?

By Kim Severson, Chronicle Staff Writer

http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/archive/2004/02/18/FDGS24VKMh2.DTL

An overweight America may be fixated on fat and obsessed with carbs, but nutritionists say the real problem is much sweeter -- we're awash in sugar. Not just any sugar, but high fructose corn syrup.

The country eats more sweetener made from corn than from sugarcane or beets, gulping it down in drinks as well as in frozen food and baked goods. Even ketchup is laced with it.

Almost all nutritionists finger high fructose corn syrup consumption as a major culprit in the nation's obesity crisis. The inexpensive sweetener flooded the American food supply in the early 1980s, just about the time the nation's obesity rate started its unprecedented climb.

Emptying the Breadbasket

By Dan Morgan

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/28/AR2008042802509.html

For decades, wheat was king on the Great Plains and prices were low everywhere. Those days are over.

Wheat's fall from favor, little noticed when it was cheap, has been long coming.

In Kansas, wheat acreage has declined by a third since the mid-1980s, and nationwide, there is now less wheat in grain bins than at any time since World War II -- only about enough to supply the world for four days. This occurs as developing countries with some of the poorest populations are rapidly increasing their wheat imports.

This free-trade policy resulted in a run on the 2007 U.S. wheat crop this year by foreign buyers taking advantage of the favorable dollar exchange rate to stock up.

The ethanol boom, in particular, is providing strong incentives to keep former wheat acres in corn. Spurred by the availability of cheap coal for power and a local cattle industry that will buy the dry byproducts for feed, a new ethanol plant opened last year in Richardton, west of Bismarck, the capital.

A world map with examples of the current food crisis:

http://www.usnews.com/usnews/graphics/nation_and_world/food.htm

Biofuels

DEAL SWEETENERS

By James Surowiecki

http://www.newyorker.com/archive/2006/11/27/061127ta_talk_surowiecki

The favors granted to the sugar industry keep the price of domestic sugar so high that it's not cost-effective to use it for ethanol. And the tariffs and quotas for imported sugar mean that no one can afford to import foreign sugar and turn it into ethanol, the way that oil refiners import crude from the Middle East to make gasoline.

Our current policy is absurd even by Washington standards: Congress is paying billions in subsidies to get us to use more ethanol, while keeping in place tariffs and quotas that guarantee that we'll use less. Because of the ethanol tariffs, we're imposing taxes on fuel from countries that are friendly to the U.S., but no tax at all on fuel from countries that are among our most vehement opponents.

House Panel Explores Role of Small Businesses in Expanding Biofuel Production

http://www.usagnet.com/story-national.php?Id=1393&yr=2008

Earlier this Congress, The Small Energy Efficient Business Act (SEEBA) provides loans, education and investment for small ventures to help them produce renewable energy. The measure was incorporated into the Energy Independence Act, which was signed into law December of last year. The House also recently passed the Energy and Tax Extenders Act of 2008, which prolongs the biodiesel tax incentive for twelve months

How Will the U.S. Produce 36 Billion Gallons of Biofuel by 2022?

This is a relatively short article with a lot of great background and statistics about basic biofuel production in the USA.

http://www.enn.com/top_stories/article/30643

The new U.S. Renewable Fuels Standard (RFS), signed into law last month as part of the revised Energy Bill, sets high goals for the U.S. biofuels industry. It calls for the production of 36 billion gallons of biofuels-mainly ethanol and biodiesel-annually by 2022, with 21 billion gallons coming from so-called "advanced biofuels," which can be produced using a variety of new feedstocks and technologies. Of this, roughly 16 billion gallons is expected to be from "cellulosic biofuels," derived from plant sources such as trees and grasses

Ethanol Industry Contracts

http://www.dailyyonder.com/ethanol-industry-contracts-yonder-40-gains

Mergers and a bankruptcy last week in the ethanol business reveal an industry that is consolidating. Will there be room for rural communities and local investors to profit from biofuels?

The State of Cellulosic Ethanol

http://www.hoosieragtoday.com/wire/enews/00757_cellulose_124422.php

By Cindy Zimmerman

Cellulosic ethanol is no longer a pipe dream. It's real and it is being produced today. That was the message Tom Slunecka, Vice President of Business Development for KL Process Design Group of South Dakota, gave at the 2008 Agri-Marketing Conference in Kansas City last week.

ANALYSIS-Biofuels backlash could drive up energy costs

http://uk.reuters.com/article/oilRpt/idUKN1229735920080513?sp=true

"In a limited way, the use of biofuels can help slow the acceleration of gasoline prices. So if you did have a backlash that results in the biofuels mandates being reversed, that would result in more use of petroleum-derived fuels and, theoretically, in higher (energy) prices," said Eric Wittenauer, an energy analyst at A.G. Edwards in St. Louis.

Renewable Energy & Efficiency

SMALL WIND' POWER PLANTS ARE BLOWING STRONG

Climate concerns, rising utility costs, better technology, and new laws are making home units more attractive.

By Mark Clayton

http://www.csmonitor.com/2008/0430/p16s01-sten.html

The installed capacity of "on grid" small-wind residential generators has almost tripled, from 1,300 kilowatts nationwide in 2006 to 3,000 kilowatts last year, says the American Wind Energy Association (AWEA), a Washington-based trade organization. The number of residential installations rose from 400 to 1,200 units in the same period. With demand strong overseas, too, the US is the world leader in small-wind power, exporting more than half of what it sells.

"Small wind really seems to be taking off for residential, small business, and farm use," says Trudy Forsyth, leader of the distributed wind program at the National Renewable Energy Laboratory in Golden, Colo.

The Green-Collar Solution

By THOMAS L. FRIEDMAN

http://www.nytimes.com/2007/10/17/opinion/17friedman.html?_r=2&hp&oref=slogin&oref=slogin

New Solar Panel Technology Stylish and Sustainable

http://www.enn.com/top_stories/article/30372

The key component of the new modules is an organic dye, which in combination with nanoparticles converts sunlight into electricity. Due to the small size of the nanoparticles, the modules are semi-transparent. This aspect makes them well suited for facade integration. The new solar cells are being developed by members of the Fraunhofer Institute for Solar Energy Systems ISE, who will be presenting their new technology in Tokyo at Nanotech 2008, the world's largest trade fair for nanotechnology.

E.ON takes first step into U.S. renewables market

http://www.enn.com/top_stories/article/23630

FRANKFURT (Reuters) - Germany's E.ON (EONG.DE: Quote, Profile, Research), the world's largest utility, is taking its first step into the U.S. market for renewable energy with the takeover of wind farms there for $1.4 billion including debt.

With the acquisition of the American division of Ireland's Airtricity, E.ON is buying current and future projects with a total capacity of more than 7,000 megawatts in the United States and Canada, the German company said in a statement on Thursday.

ONE-ON-ONE
'E.ON is a valuable economic development weapon for Kentucky'
E.ON U.S. CEO Victor Staffieri discusses his company and the role it plays in helping Kentucky compete in today's marketplace
By Ed G. Lane

Here's an interesting interview with the CEO of E.ON, the company that owns both LG& E and KU and provides power to both Benham and Berea's municipally owned utilities. It's interesting how many times in here in mentions the public subsidies which make coal cheap to burn in KY.

http://www.kybiz.com/articles/article.cfm?id=484

California to Require Net-Zero-Energy Buildings

http://www.enn.com/top_stories/article/30652

A 2006 law requires California to reduce greenhouse gas emissions to 1990 levels by 2020; this law has spurred several initiatives to promote renewable energy projects, including small-scale renewable generation projects for residential and commercial buildings. The initiative to require net-zero-energy buildings applies only to new construction. To achieve energy savings in existing buildings, CEC is pursuing legislation to require "retrofit at resale"ù-improvements in energy performance prior to an existing building's sale. Ordinances of this type already exist in San Francisco and Berkeley. According to Bartholomy, several state legislators are looking at how such legislation would work and how the costs of required retrofits would be covered.

Ice-Based Air-conditioning Takes Off In California

http://www.enn.com/top_stories/article/23400

SAN FRANCISCO - A company that makes an ice-based air-conditioning system is teaming up with a major public utility, PG & E, in California in a $10-million dollar project. The ice-based air conditioner uses cheaper nighttime electricity to make ice and then uses that ice for daytime cooling needs. The units cooling look almost identical to a standard AC unit. The systems lowers peak daytime demand significantly, shifting the energy load up to 95%.

New MIT Start-up Aims to Make Silicon Solar Cells Competitive With Coal

http://www.enn.com/top_stories/article/33793

03/27/2008 - 1366 Technologies, a new MIT start-up aiming to make silicon solar cells competitive with coal, today announced it has secured $12,4 million in a first round of financing co-led by North Bridge Venture Partners and Polaris Venture Partners.

MIT Professor, 1366 founder and CTO, Ely Sachs added, "The science is understood, the raw materials are abundant and the products work. All that is left to do is innovate in manufacturing and scale up volume production, and that's just what we intend to do."ù The company has just taken space in Lexington to build its pilot solar cell manufacturing facility.

100 best places to live and launch

Are job worries tempting you to start your own company? We canvassed the country to find towns with the best mix of business advantages and lifestyle appeal. Check out our 100 top picks and find the perfect place to build your dream.

http://money.cnn.com/galleries/2008/fsb/0803/gallery.best_places_to_launch.fsb/index.html

Other News of Interest

New Blog

http://ecoeky.blogspot.com/

The purpose of the blog is to share and promote information about sustainable activities in eastern Kentucky. The focus of the site is not to be "anti" coal or "anti" anything else, but to be "pro" ecological responsibility and "pro" sustainability. I hope the site will grow in information and expand in function, and will eventually become "the" place eastern Kentuckians go to when they want to know what's green in our part of the state.

Sustainable Development

ENGINE OF GROWTH: CLEAN-TECH JOBS

By Ben Arnoldy | Staff writer of The Christian Science Monitor

http://www.csmonitor.com/2008/0124/p02s04-ussc.html

President Bill Clinton put it recently, to green a building "somebody's got to be standing on that roof."

Angela Greene is that person on the roof. After losing her job within the printing industry, she finds herself atop a home in Richmond, Calif., installing solar panels.

"I saw I would be able to make a stable income for myself," says Ms. Greene, "and at the same time be able to help my community and the environment."

Clean energy has become a $55-billion-a-year industry worldwide, and its rapid growth is fueling a shortage of workers in emerging hubs like California's Bay Area. Advocates for the poor say there's an opportunity here to rebuild an industrial base of well-paying, low-skilled jobs, but some critics question whether they are overstating the job potential of the sector.

STATES VIE TO ATTRACT CLEAN-TECH INDUSTRIES

California and Massachusetts have the edge, but at least half of US states have entered the race.

By Tom A. Peter | Staff writer of The Christian Science Monitor

http://www.csmonitor.com/2008/0411/p03s05-usgn.html

"This is a serious economic opportunity," says Daniel Esty, director of the Center for Business and the Environment at Yale University in New Haven, Conn. "You already see some states that have established this as part of their play to the world and a number of others that are going to be stepping up into this marketplace in the coming years."

Kentucky launches new fund to invest in companies developing renewable and alternative energy technologies

http://kentucky.gov/Newsroom/governor/20080312energy.htm

Wednesday, March 12, 2008 FRANKFORT, KY - Gov. Steve Beshear announced today the launch of Kentucky New Energy Ventures, a state program that administers $5 million in public funds for investment in promising renewable and alternative energy companies in the commonwealth. The program, established legislatively under the name, "Kentucky Alternative Fuel and Renewable Energy Fund Program," was created by the state's General Assembly under House Bill 1 during the 2007 Extraordinary Session.