Equilibrium & Sustainability

Equilibrium/Sustainability — Big parks make Americans the happiest 

Today is Wednesday. Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. Subscribe here.

For a low-cost, effective mood boost, try heading for a walk in a big city park — particularly if you live in Indianapolis; Austin, Texas; Los Angeles; Jacksonville, Fla.; Chicago or Dallas, according to a recent study

Despite relatively low levels of public spending on park infrastructure, these cities saw the highest boost in measured happiness among parkgoers, researchers from University of Vermont said. 

To calculate the happiness benefit provided by parks, researchers compared social media posts originating from urban green spaces to ones that had been posted from outside them. 
 
They found that being in nature was a powerful predictor of more positive posts — marked by words like “beautiful,” “fun,” “enjoying” or “amazing” — and that the greatest benefit came from parks larger than 100 acres.  
  
While parks between 1 and 10 acres also had significant happiness-boosting potential, “not all parks appear to be equal when it comes to happiness. The ability to immerse yourself in a larger, greener natural areas had a greater effect than smaller paved city parks,” said study coauthor Chris Danforth. 
  
Today we’ll look at Shanghai where attempts to head off a coronavirus outbreak in China’s financial and manufacturing hub are running into the insatiable demands of a global supply chain. Then we’ll look at an attempt to cut Bitcoin’s reliance on dirty energy by changing its code. 

For Equilibrium, we are Saul Elbein and Sharon Udasin. Please send tips or feedback to selbein@thehill.com and sudasin@thehill.com.

Let’s get to it.  

Shanghai ‘closed loops’ may not save supply chains 

Shanghai is turning to a “closed loop” system that has so far kept semiconductor production and financial services running in the midst of China’s worst coronavirus outbreak yet. 
 
But the lockdown is hitting other industries and companies hard — including Tesla — and tough restrictions to internal travel mean supply chain disruptions are likely even if its world-leading factories and ports can remain open.

‘Closed loops’ for critical industries: Many semiconductor manufacturers in Shanghai’s eastern industrial hub have imposed a “closed loop” system to keep running despite the strict lockdown that began Monday, the South China Morning Post reported on Wednesday. 
 
What is a ‘closed loop’ system?: In such a system workers stay on-site, often sleeping in company dormitories or offices. “Some engineers are expected to live and work on the factory floor for over a week,” as Lifu Wang, a Shanghai-based analyst, told the SCMP. 

They’re avoiding China’s most stringent lockdown yet. With 3,500 COVID-19 cases in Shanghai as of Monday — tiny for the rest of the world, but large for China — the Chinese government announced it was locking the city down for testing, Fortune reported. 
 
Due to the difficulties of shutting down an entire city of 26 million, authorities opted for a phased approach: The half of the city east of the Huangpu River will be shut down Monday to Friday, with the western half closing on Friday, The New York Times reported. 

Surreal scenes preceded the lockdown:  “It felt like an apocalyptic scene,” Shanghai counselor Ivy Sun told the Times. Before the lockdown began Sunday, “everyone ran out. A lot of people were on the streets near the neighborhood, and all the stores were filled with people.” 

The strictness of the quarantine kept some residents from getting necessary care — a particular blow in Shanghai, home of the country’s best hospitals, many of which have refused treatment due to COVID-19 measures, the Times reported. 

FACTORIES ARE KEEPING WORKERS ON SITE

Keeping workers on site means paying for housing, food and transport for employees — as well as often doubling daily salaries required to get workers to stay at their posts in isolation, without going home to their families, the analyst Wang said. 

In Lujiazui — Shanghai’s financial service’s center, sometimes called China’s Wall Street — more than 20,000 traders and bankers are sleeping in their offices, Reuters reported. 

Beating out Tesla: While Tesla has had to close its Shanghai “gigafactory” this week, semiconductor plants have been running as normal, the Wall Street Journal reported on Monday. 

But open factories aren’t enough to save supply chains: Danish shipping giant Maersk announced on Tuesday that the Shanghai lockdown would drive up internal Chinese transport costs, even if airports and seaports remained open, Reuters reported. 

That’s because while ports and some factories may be open, the transit routes between them — a labyrinthine pathway of warehouses and virus-testing checkpoints for truckers — are highly vulnerable, not least because their workers are caught in the lockdown too, the Journal reported. 

One way the lockdown hurts supply chains: Truckers — who play an essential role in getting goods from factories to warehouses and warehouses to ports — are worrying “that they can transport the goods to the port, but cannot return from the port because of the stringent pandemic restrictions,” freight company general manager Xiaodong Zou told the Journal. 

Significant disruptions: With truck drivers often finding it impossible to secure vehicle passes that let them unload, “there is a significant disruption to truck movements already…leaving a large part of the cargo ready for loading today unable to be transported to the port,” U.K. logistics provider Woodland Group told Fortune. 

This is a problem with no easy answer: While “China is getting better at managing the shocks…the shocks are getting bigger,” Hui Shan, chief China economist at Goldman Sachs in Hong Kong, told the Journal. 

Green groups lead effort to clean up Bitcoin’s code

Environmental groups are calling on Bitcoin to follow its rival Ethereum into a less energy-intensive form of code — which advocates say is necessary to avoid the cryptocurrency becoming a permanent market for the dirtiest forms of energy. 

Called “Change the Code, Not the Climate,” the campaign pulls together groups like Greenpeace, Environmental Working Group and Seneca Lake Guardian to pressure miners to shift to less polluting — and potentially less lucrative — methods.  

Why is Bitcoin dirty? Because it’s dependent on an extremely energy-intensive software design called “proof-of-work” in which banks of computers solve extremely difficult math problems to help verify transactions on the network. 

What do campaigners want: For Bitcoin to “change from its original, computer- and energy-intensive proof of work technology to secure, efficient cryptocurrency systems that require a small fraction of bitcoin’s current electricity needs,” Ken Cook of Environmental Working Group said on Tuesday. 

In such a system — which Ethereum is transitioning to as early as this summer — miners put up “stakes” of cryptocurrency to verify transactions, potentially cutting electricity usage by 99 percent, The Wall Street Journal reported. 

Can’t Bitcoin miners just use renewables? Of course — and many cryptocurrency industry groups have signed on to the Crypto Climate Accord, which seeks to have them do just that, the Journal reported. 

But that’s not enough to solve the problem: Because of the computing power required to run proof-of-work operations the industry will always be drawn to the cheapest energy sources — which today often means the dirtiest forms of fossil fuels. 

How much energy are we talking about? Global cryptocurrency mining currently uses as much energy as Sweden — and could be using the equivalent of Japan in five years, as Chris Larson, co-founder of payment protocol Ripple told reporters on Tuesday.

THREE EXAMPLES OF CARBON INTENSIVE BITCOIN OPERATIONS

Here are some of the operations that worry campaigners: 

In the New York case, the high revenues meant that Greenidge plans to increase its operations, which will drive a huge increase in computing power, and therefore carbon emissions, Gothamist reported.

A nightmare scenario: Larson, the Ripple co-founder, sees Bitcoin as a potentially infinite market for the sorts of carbon-intensive energy that the world is trying to retire. 

“What if the world is successful in creating a carbon free energy grid and fossil fuel demand crashes?” Larson asked on Tuesday. 

If that crashes the prices of coal power, “now every fossil fuel producer will have a very cheap, stranded energy that can be monetized through Bitcoin mining,” he added. 

How do you change a decentralized currency? Greenpeace and other groups are betting that by helping boost demand for low-carbon Bitcoins among (for example) the increasingly carbon-sensitive financial institutions that now invest in it, they can shift the entire community to a new form of code. 

“Bitcoin has changed its code before, notably in 2017 in what has been called the Bitcoin “civil war,” Rolf Skar of Greenpeace wrote Equilibrium. “It is not the same as the Bitcoin that debuted in 2009, and it could change again. Anyone can develop and propose code changes thanks to Bitcoin’s transparent, open-source code.” 

A limitation to that approach: “However, a level of social consensus is required for a change to have enough support to be integrated and adopted,” Skar added. “Despite being decentralized, only six people (or so) make up the Bitcoin Core maintainers group.” 
 
What are miners saying? Many aren’t happy. Bitcoin influencers and investors hit back at the proposal — and particularly at Larson and Ripple — in “swift and harsh” tweets, crypto news site CoinDesk reported. 

Prominent crypto investors Ryan Selkis called Larson a “Judas.” Other miners disputed the idea that convincing a few dozen miners would be enough to shift the network.

Skar thinks they may fall into line: “If enough investors and players create ‘demand’ for a code shift, it should take off” he told Equilibrium

World Wednesdays

Three snapshots from the global energy transition. 

Expanding solar and wind sector are keeping 1.5 degree goal on the table 

  • If global solar and wind energy can continue expanding at current rates until 2030, the world’s power sector will be “on track for 1.5 degree [Celsius] goal” — which would keep the worst climate impacts at bay, according to a recent study covered on Wednesday in Reuters. 

More methane for Europe means less for America 

  • The U.S. is shipping unprecedented amounts of methane gas to meet rising (and more lucrative) demand overseas — depleting domestic supplies and driving up prices, The Wall Street Journal reported. 

Moribund economy drives Afghanis to deadly mines 

  • With the Afghan economy collapsing, thousands are scraping a living from the country’s dangerous coal mines — despite backbreaking conditions and safety procedures that have deteriorated since the Taliban took control of the country, The New York Times reported on Tuesday. “If I had some money, I wouldn’t stay here for another second,” miner Baz Mohammad told the Times. 

Please visit The Hill’s sustainability section online for the web version of this newsletter and more stories. We’ll see you on Thursday.

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