Covers environment, transportation, urban and regional planning, economic and social issues with a focus on Finland and Portugal.

Wednesday, October 29, 2008

Korpilahti Municipality (1867-2009)

The struggle against the isolation may have stimulated the strong identification of the Finnish people with their municipality (kunta), although the identification with their nationality (kansalaisuus) be considered generally more important.

Read more

One of the special features of the Nordic countries is their decentralized organization and thus the proximity of the government to the citizens. Indeed, the municipalities are the State, since they collect most of the tax revenues. Traditional institutes of the authoritarian state, such as the army, police and judiciary, are on a more distant level to the normal citizen in his everyday life.

This strong phenomenon of identification seems to be present in the municipality of Korpilahti (Korpilahden kunta). Located in the province of Western Finland and in the region of Central Finland (Keski-Suomi), Korpilahti has a population of approx. 5,000 inhabitants, and additionally approx. 4,500 inhabitants in the summer, when they visit their summer cottages (kesämökki).

Under the developing reform of municipalities, on October 30 2006, a local referendum took place in Korpilahti. It was questioned the merger with other “neighbouring” municipality, the city of Jyväskylä (then, Jyväskylä, with its 83,582 inhabitants, didn’t have common borders with Korpilahti). The result was a “No” victory, with 52.0% (1055) of votes against the merger and 42.1% (1303) in favour.

Later, on November 13 2006, the municipal council of Korpilahti (Korpilahden kunnanvaltuusto), counteracting the non-binding referendum outcome, decided in favour of the merger with the city of Jyväskylä, from January 1 2009 - 17 councillors voted in favour of the union, while 10 were opposed. The municipal government (kunnanhallitus) would have the task of preparing the accession to later approval of the council.

New Jyväskylä

On February 18 2008, the City of Jyväskylä, the rural municipality of Jyväskylä and the municipality of Korpilahti, by their respective municipal councils, decided that New Jyväskylä would be born on January 1 2009. New Jyväskylä will be the seventh Finnish largest municipality with a population of nearly 130,000 inhabitants, about half of the Central Finland region (Keski-Suomen maakunta) population and it represents an urban development pole of the “channel” New Äänekoski (Uusi Äänekoski) - New Jyväskylä (Uusi Jyväskylä) - New Jämsä (Uusi Jämsä).

Hello Finland: Globalization does not require municipal amalgamation

An interesting article of Andrew Sancton, professor of political science specialized in local government at the University of Western Ontario, alerts for the disadvantages of the municipal amalgamation. This perspective can be applied to the Finland “Project to restructure municipalities and services” and very particularly to Korpilahti, with the aggravation of the popular will manifested in local referendum hasn't been respected:

- Indeed, it’s not proved that city-regions with fewer municipal governments representing larger populations are better off those with more governments representing smaller populations.

- Reducing the number of municipalities has nothing to do with reducing the size of government. Reducing the number of local politicians can only have one result: insuring that a higher proportion of local councillors are full-time politicians.

- Gigantic municipal service-providers pose the same problems of gigantic corporations monopolies: higher fares, lower service levels; lack of choice.

- It is consensual that some municipal functions are generally more efficient when they service larger numbers of urban residents ... It makes no sense for each municipality in the same metropolitan area to establish its own separate water-supply system. But this does not mean they all need to merge into one."

Besides the structural solution of municipal amalgamation [1] adopted in this case, there are other types of alternative solutions to territorial fragmentation, which can be divided into two categories: structural solutions, depending either on amalgamations or on intermediate levels of single or multi-purpose authority and cooperative solutions (inter municipal cooperation), leaving basic local authorities with functional responsibilities. A semi-amalgamation model is an avalaible solution as well. It combines small municipalities into larger units for administration and service provision, but leaves some form of representative body in existence in the original settlements. (Davey; Division of reponsibility between levels of power)

In fact, the sizes of local authorities vary enormously, being the optimum size hard to define and almost impossible politically to achieve. [2]

Democracy and Efficiency

In Finland, the municipal reform was subject of intense debate. A large number of small municipalities is seen as undesirable in public service provision and proposals were submitted for mergers imposed by the state. In the past, the ex-Minister for Regional and Municipal Affairs Hannes Manninen committee has proposed a municipal two-tier system, in which municipalities would have different powers. Otherwise, the Association of Finnish Local and Regional Authorities (Kuntaliitto) has supported a system with municipalities having at least 20,000-30,000 inhabitants. (current average is approx. 4,700).

High levels of government efficiency strengthen the democratic legitimacy of governments. But also legitimacy allows greater efficiency. In the process of the municipal amalgamation nowadays taking place in Finland, it would be unthinkable that the final decision of the Finnish state would be contrary to the local popular will democratically expressed in municipalities where mergers had a “negative” referendum, especially since Finland is a signatory of the European Charter of Local Self-Government /Strasbourg, 15.X.1985.

Article 5 – Protection of local authority boundaries
Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.

In addition the Act on Municipal Division, 1 § states:

(...) The municipal division is changed by legislation, or by decision made by the Council of the State or Ministry. (...) Only voluntary changes to municipal division are possible.(...)

But then again the reality overcame the fiction. On 12 June 2008, in Helsinki, the Finnish government (Valtioneuvosto) took the extinction decision of the city of Jyväskylä (Jyväskylän kaupunki), rural Jyväskylä (Jyväskylän maalaiskunta) and Korpilahti (Korpilahden kunta), as well as the creation of the new municipality of Jyväskylä, on the current areas of the abolished authorities.

The Project to Restructure Municipalities and Services (Kunta - ja palvelurakenneuudistus)

Started in 2005, the Project to Restructure Municipalities and Services had the objective of creating a solid financial structure to assure the future organisation and provision of services supplied by the municipalities.

Actually, Finland is in the implementation phase of the reform. In the next year - with municipal elections already realized - many new laws come into force. In previous years other reform phases passed, including the preparation of basic bills on legal reforms. During the period 2010-2011 will occur the execution of the legislation and the follow-up of the reform.

October 26 Municipal Elections

On October 26, more than 10,000 municipal councillors were elected to local councils across Finland - one more decisive step of the municipal reform. The dominant issues of these municipal elections covered the restructuring of the public services of health care, education and child care. However, the electoral outcome is not expected to influence the center-right coalition government (SiniVihreä Koalitio) policy.

The over 60% voter turnout in these local elections might have been caused by the electorate interest in the dozens of municipal mergers that will come into effect from the beginning of 2009. Electors of small merged communities, like Korpilahti, had keen interest to elect their representatives on the new expanded municipal councils.

It is true that Finland's municipal elections, in general, represent well the principles of “grassroots” democracy. But not this time in the case of Jyväskylä October 26 elections - in fact, the new municipality will be founded on a democratic “deficit” from the beginning. And that will be the burden of responsibility of the new Jyväskylä council for the next four years. In reality, as a municipal autonomous institution, Korpilahti lost its self-government by extinction, in exchange for a few representatives on the new council and some promises of investments.

Last Sunday, the traditional competition between the three big Finnish parties had a first-ever national win for the National Coalition Party (Kokoomus), but in New Jyväskylä the Social Democratic Party of Finland (Suomen Sosialidemokraattinen Puolue) is still the most voted.

[1] The amalgamation model means abolishing small municipalities and merging them into new basic units of local government with some minimum population size. This model is often used in Nordic countries, where minimum populations are generally around 5,000 (averages between 10,000-30,000 inhabitants)
[2] Publications in which these arguments have been well discussed:
- The Size of Municipalities, Efficiency and Citizen Participation (Council of Europe, 1995).
- Consolidation or Fragmentation: the Size of Local Governments in Central and Eastern Europe, edited by Pawel Swianiewicz, (LGI/OSI, 2002).

Andrew Sancton, Globalization does not require amalgamation, Institute for Research on Public Policy - Montreal, Quebec.

Davey, Kenneth; Division of reponsibility between levels of power, 2003.

Project to restructure municipalities and services (Kunta- ja palvelurakenneuudistus), Ministry of the Finance, 2007.



Sunday, October 19, 2008

Serpa (Brinches) Photovoltaic Power Station [PICS]

Beginning of Autumn. At the end of a warm day - half an hour before the sunset and after having rolled across the spacious Alentejo’s plains - we finally get to the little village of Brinches. Next to a roundabout we find a rural road, which takes us through hills covered by vineyards and olive trees, typical of this soft landscape.

Read more

At one “corner” of the solar power station, we meet two men (a dog and some cows as well) who are contemplating the cloudy final of the day, uncommon this time of the year in one of the Iberian zones with the highest levels of solar radiation. In fact, these two men were the land owners, having rented their terrains to the GE Energy Financial Services, the project investor. What is very interesting in the Serpa project is the integration of clean power generation with the local agriculture.

They wonder about the huge quantity of energy daily injected in the electricity grid, as well as the fact the power plant being remotely controlled. The distance between the two PV power stations of Amareleja and Brinches is around 49 Km. During the construction there were many workers, but now the attentions are more focused on the “rival” Moura, the world's largest, after having dethroned Brinches this year.

Aerial view of Serpa solar power plant /

Brinches, Serpa, Portugal / Google Earth

Specifications of Serpa photovoltaic power station

Location: Portugal, Alentejo region, district of Beja, municipality of Serpa, parish of Brinches

Area occupied by power station: 60 ha

Installed rated power: 11 MWp

Annual electricity generation: > 18 GWh (equivalent to the consumption of
8,000 homes and farms in the region)

PV surface area: 34 ha

Number of PV panels: 52 000 (Sanyo, Sharp, SunPower and Suntech)

Solar tracking system: “PowerLight PowerTracker System”

Saving of more than 30,000 tons/year in greenhouse gas emissions compared to equivalent fossil fuel generation

Investment : 62 million euros

Conclusion: operational since January 2007

Project participants:
GE Energy Financial Services (Investor)
Power Light Corporation (Project and Construction)
Catavento, S.A. (Promoter and Asset Manager)

Photos by Luis Alves /
(except the last two images)

This article is the part 5 of the article: “Alentejo: Solar Region”.

“Photovoltaic Solar in Portugal” - part 1 of the article: “Alentejo: Solar Region”
“Moura (Amareleja) Photovoltaic Power Station” - part 2 of the article: “Alentejo: Solar Region”
“Moura Renewable Energies Project“ - part 3 of the article: “Alentejo: Solar Region”The world’s largest photovoltaic power station [PICS] - part 4 of the article: “Alentejo: Solar Region”


Tuesday, October 14, 2008

Blog Action Day 08 - "Don't pay for a failed system!"

Accumulation by Dispossession
Increasing inequality within nations and increasing wealth gap between rich and poor countries -
here are the consequences of decades of “neoliberalism”.

Processes of accumulation:
• the commodification and privatisation of land and the forceful expulsion of peasant populations
• conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights
• suppression of rights to the commons
commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption
• colonial, neocolonial and imperial processes of appropriation of assets (including natural resources)
monetisation of exchange and taxation (particularly of land)
slave trade
usury, the national debt and ultimately the credit system as radical means of primitive accumulation.

The US financial meltdown - Part 1: What really happened
Roots of the economic crisis in overaccumulation, financialisation and ‘global apartheid’
By Patrick Bond
Click HERE to view the slideshow

Blog Action Day 2008 Poverty from Blog Action Day on Vimeo.


Monday, October 6, 2008

777 - Turbo-Capitalism's Failure

Dow closed at 10365.45, dropped 777.68, the largest drop ever in history - Sept. 29, 2008 (black Monday) / By faungg , Some rights reserved

Markets have inefficiencies, because of their inability to correct the negative externalities of industrial outputs (production) and industrial inputs (depletion of non-renewable resources). Failure to calculate the costs to nonparticipants in transactions and failure to allocate resources efficiently, represent market failure definitions.

Externalities represent cases of market failures. A person (or company) who makes choices that affect other people not accounted for in the market price – like the pollution costs often unaccounted for in industrial greenhouse gas emissions- is creating an externality.

Read more

Besides the externalities, non excludability and non rivalry are other common forms of market failure. To be efficient, markets should trade simultaneously both excludable and rival goods, and shouldn’t have externalities. In the market perspective, there are four types of goods: private goods (R,V), common goods (R, non-E), club goods (non-R,E) and public goods (non-R and non-E). [R-rival, E-excludable]

Excessive costs of excluding potential beneficiaries from the consumption of a rival natural or human-made resource, represent an inefficient market allocation - non excludability. Hence, "common" goods are defined by a property right regime in which only a collective body could exclude others from accessing rival resources, thereby allowing the capture of future benefits.

Stable “common property” regimes – suitable to the local level - must be based on certain principles which prevent the overexploitation of a resource system. However, these regimes are not the solution to large scale overuse , such as air pollution. In those situations, environmental regulations (economic impact estimated by cost-benefit analysis), quotas on pollution (tradeable emissions permits), taxes on pollution and adequate definition of property rights, might be preventive solutions to correct negative externalities.

Public goods are another type of market failure, because the market price doesn’t catch the social benefits of public provisions. For example, both social protection and environmental protection are inherently public goods, since their provision, in case of non-congestion, is non-rival and non-excludable, either protecting people from the risks of unemployment and illness or from environmental risks, like climate change.

If a public service faces problems of congestion or overuse, it will be a non-excludable but certainly a rivalrous good, making it a “common-pool resource”.

Privatization of public goods doesn’t change their intrinsic non-excludable, social and environmental characteristics. Nobody has the right to exclude people from protection, i.e., to prevent people who have not paid for the service, from receive its benefits .Most of public goods, like most of non-rival goods , are intangible, less fitted for an efficient private market.

Scarce, rivalrous, but also vital resources (like water) cannot be excludable. Water priced on a private market it would be the receipt to a humanitarian disaster, as the recent global market failures may prove.

With respect to local public services provision, the Finnish health care system is one of the most decentralized in Europe (as well as the other Nordic countries), with most of the Finnish people being generally satisfied with their national health care system. Local municipalities (Finnish: kunta) are the center of the system, largely public, where the private sector has little relevance today (only about 4% of Finnish doctors have a purely private activity) and the state has little intervention, defining goals and orientations. However, although the public health care and education, Finland has an advanced and competitive market economy.

According to Robin Hahnel (ecological economist), four environment related basic defects of a market economy can be enumerated: overexploitation of “common property” resources; overpollution; too little pollution cleanup; overconsumption. [ Hahnel (2005), pp66-72]

The view considering that markets are unable to correct negative externalities is in contradiction with the free-market environmentalist perspective. This perspective considers that both lack of ownership incentives to care for the property and multiplicity of ownership, represent the cause of overexploitation. In this point of view, pollution occurs because the property owners’ rights have not been totally respected and the legal authorities have inclination to favor big industry, public and common property over individuals and consumer organizations.

That approach also argue that resources are renewable and the market, by way of supply and demand, regulates consumption by adjusting it according to supply.The absence of sufficient incentives to create a potential “market” in a private economy, causes loss of efficiency, according to this view.

We can say that intrinsic characteristics of some type of goods, like the non-excludable goods (common goods and public goods), imply the design of sustainable social-environmental-economical systems, different from the private “markets”. See 1990 Ostrom's work about how people using real common property resources have worked to establish self-governing rules to reduce risks [Ostrom, E. 1990. Governing the Commons. Cambridge: Cambridge University Press]

Bailout of US financial system / Green Recovery / Low-Carbon Economy

These previous considerations are also appropriated for the financial markets, specially for institutions which utilize them. The recent dramatic intervention of the Federal Reserve, aimed at bailing out Wall Street with a US$700 billion plan, was a spectacular representation of market failure. In fact, the market took multiple decisions that would affect millions of tax-payers, who weren’t accounted for in the finance market price.

"Markets have inherent and well-known inefficiencies. One factor is failure to calculate the costs to those who do not participate in transactions. These 'externalities' can be huge. That is particularly true for financial institutions. Their task is to take risks, calculating potential costs for themselves. But they do not take into account the consequences of their losses for the economy as a whole. (…)
The unprecedented intervention of the Fed may be justified or not in narrow terms, but it reveals, once again, the profoundly undemocratic character of state capitalist institutions, designed in large measure to socialise cost and risk and privatize profit, without a public voice. “
Noam Chomsky,

The actual "turbo-capitalist" crisis, whose end and global consequences are unpredictable, could constitute an opportunity to the construction of a new alternative economic model firmly based on the environmental, economic and social domains, with new concepts of “growth” - not just a “green“ recovery based on this capitalist model, but a effective Low-Carbon Economy model.

However, a future green recovery may be compromised. The actual situation of financial collapse, with the state injecting hundreds of billions in the financial capitalist system, doesn’t assure the future application of funds on the environmental and social areas. It may even deflect these funds from many necessary and urgent investments in those areas.

Past Friday, 3 October 2008, the US House of Representatives voted in favour of a financial rescue plan after rejecting an earlier version. The approved package is aimed at buying up the bad debts of failing financial institutions on Wall Street, having the Treasury $700 billion to buy “toxic” mortgages, securities and related assets, that have undermined the US financial structure. But the deep causes of the US financial market collapse still continue unknown, and therefore this massive intervention probably cannot reach them.

So far “toxic” products are the justification for the financial market failure. However, financial products are increasingly designed trough technological innovation, which has replaced experienced professional traders by computers running software based on algorithmic trading, trying to simulate human behavior, deciding on timing, price and the final quantity of the orders. Although many claim an increased market efficiency with “robo trading” the last events could contradict it, and thus we could be in presence of a global technological (in)adaptation.

On September 29 2008, the Dow Jones lost 777.68 points, the largest one day point loss in its history, following news that the US House of Representatives had failed to pass the $700 bn bailout bill. Only after the Monday's 777-point stock-market slump the political class started to see the extension and deepness of the crisis. The “shock” and the claims from worried November potential voters motivated the Friday morning vote change. The bill that establishes the Emergency Economic Stabilization Act of 2008 - previously approved by the Senate, on October 1 2008 - was sent to the House, and on Friday, October 3, the House voted 263-171 to enact the bill into law.

Wikipedia article, Environmental economics

Related articles:
From the US housing bubble to the (proposed) bailout of US financial system
Fed eyes Nordic Model