Carbon trading scheme to exceed federal bonds
Anthony Collins…“The value of the permits is likely to be issued over the first 10 years [and] is likely to exceed $100 billion,” he said.
“That’s going to be larger than the value of Commonwealth Government bonds on issue today.”
Harold Lubansky has suggested a radical way to control inflation in Australia and at the same time fund green projects.
From The Age:
Mr Lubansky proposes the creation of a National Climate Change Savings Scheme into which Australians earning a net income of $38,000 a year or more would contribute.
Instead of the Reserve Bank needing to lift interest rates in a bid to control inflation, the central bank would be given powers to order a payment into the climate change fund.
“What it does is work to soak up excess liquidity. Raising interest rates limits the amount we have to spend, spending less elsewhere decreases the pressure on supply and that decreases the upward pressure to raise prices. This would act similarly,” Mr Lubansky said.
Under the Lubansky proposal, those earning $38,000 a year would be charged $250, or 0.66% of net disposable income, instead of paying 0.25% more on their mortgage. It rises to $2500, or 1%, for those earning $250,000 a year.
Unlike mortgage repayments which are never seen again, the money paid into the fund would be returned to individuals to spend on legislated carbon abatement measures such as solar panels, the differential cost on hybrid cars and infrastructure for green power.
I am not qualified enough to comment on this but it does sound an innovative way. Any comments?
BioteQ Environmental Technologies Inc., a waste water treatment company focussing on mines has won an Environmental excellence award from Globe Foundation.
BioteQ was honoured for the water-treatment plants it designs and operates at mines around the world, using a proprietary system that removes acid and heavy metals from runoff water leeching from mine sites – a major environmental headache for mining companies for decades.
[...]
“[The companies] outsource the whole water-treatment issue to us, we manage the water, we build the plant and run it, and generally we create a financially sustainable treatment process, in that the sale of metals from the process sustains the treatment plant …”The amount of cleaned water runs to billions of litres. For example, BioTeq cleaned 920 million litres of acid-waste water from Xstrata’s Raglan nickel-copper mine in northern Quebec last year. Mr. Marchant says the processed water was safe enough to be used in the sensitive arctic ecosystem of Nunavik – something unthinkable in the past.
[...]
Currently, the method most mining companies still use to stop acid water from leeching into the ecosystem involves catching the tainted water with lime, resulting in a toxic sludge that must be carefully stored. The expense is considerable – as is the waste, notes Mr. Marchant.
[...]
In the BioteQ system, a mixture of sulphur-loving bacteria neutralizes the acid in the water, leaving behind the heavy metals that come away in the mining process, such as copper, zinc, nickel, cobalt and selenium. These metals can then be sold on the market.
The Base of the Pyramid concept was first suggested by Prahalad and Hammond as a way to tap into the consumer power of the poor people around the world.
In a scathing review of their work, Dr. Aneel Karnani provides an alternative.
Atanu Dey provides a good summary of the paper and the possible solution.
The consumption issue:
Karnani’s paper argues against the BOP proposition. He summaries the BOP proposition as: there are profits to be made by selling to the billions of the world’s poor, and by doing so, bring prosperity to them, thus alleviating poverty, and that multinational corporations (MNCs) should sell to the poor to do good while doing well for themselves.
Production opportunity:
Karnani denies that the BOP claim that there is untapped purchasing power at the BOP. He says that the way to help is to raise the real income of the poor. The poor must be seen as producers, rather than as consumers. That is, buy from the poor instead of selling to them. He cites Amul and ITC e-Choupals as examples of more efficient markets–where the poor are the producers—that increase real incomes. And if you have to sell to the poor, then make available lower quality goods which can be priced lower so that the poor can have greater choice along the price-quality spectrum.
Possible solution:
I agree with Karnani that you have to increase the real incomes of the poor by seeing them as producers. This I believe can be done by two ways. First, the “distribution” route: produce (possibly more) stuff, and give them a larger share. This lump-sum transfer will increase their real incomes. Second, the “production” method: help them produce more and also become more productive. The former is unlikely to appeal to the rich.
To do the latter, you have to make markets for the production of the poor more efficient so that they retain more of the value they produce. To make them capable of producing more, you have to educate them. There is where I believe the fortune at the bottom of the pyramid lies. Education has positive returns in today’s world. The return on investment in education is positive. That means, the cost of the education will be more than paid for by the subsequent increase in the real income. But the poor are credit-constrained. So the way to help the poor is to release that credit constraint through financing education. How to do that is a different kettle of fish which we will leave for a later date.
Another way of looking at this is:
The essential requirements of this model are:
1. The productive capacities of the poor are organized, developed and leveraged as inputs to business;
2. Such process contributes to creation of commercial value for business;
3. Such commercial value yields economic surplus i.e., the commercial
value exceeds all costs involved in its creation, and / or strengthens
the competitiveness/growth of business; and
4. The poor are remunerated in a fair manner for the goods/services that they provide.
Consequently, the poor do become an important part of the definition of business, to the benefit of business and themselves.
It should be a very clear case that consumption decreases incomes. It is work and production that can produce income. Then, the challenge is to create a way to facilitate this income generation for the poor.
The Martu people are Australian Indigenour people living in the western desert. The Age reports that they have formed a deal with Reward Minerals, which will reward them with 7 million options at a strike price of 50c, valid for 4 years, amounting to 10% of the shareholding of the company.
This deal is being suggested a landmark deal in terms of securing appropriate compensation and ownership to the traditional owners of the land, the Martu people. The share price traded up to tis highest ever and at the current share price, the deal is is worth a little above $ 5 million.
The indigenous community believes that “the presence of a generous indigenous equity component as part of the transaction is the way of the future in mining negotiations,”.
This could well work out in a positive way, depending on the development of the mine. It may also act as a blueprint for deals in India where tribal people are being evacuated for industrial and mining projects with payments in cash now. With many issues around compensation arrangement including the sensible use of cash for the financial inexperienced tribals, a cash+stock compensation option may be a good deal.
Last year when the Sydney Earth Hour was conducted, followed by Light’s Out London, I was not very happy with the initiative. Now this year, with more than 20 cities participating, it has become an internation event.
Well, the Earth Hour organizers say that “Earth Hour is about more than one night. Its about inspiring you everyday to make changes that will help achieve Earth Hour’s ultimate goal of reducing emissions by 5%.” That is good. Like some of the comedy lines on the radio, hopefully people did not switch off their lights and switched on their Plasma TVs to watch how much energy they saved.
However, the measurement systems used by their official releases do not suggest that.
The press release on AFP says that
Tens of millions of people switched off lightbulbs this weekend as part of a global campaign to throw the spotlight on climate change, organisers of the Australian-led ‘Earth Hour’ initiative said.
“We had 2.2 million last year; I reckon by the time we finally count it up, we will have about 100 million people involved around the world,” he said.
Energy Australia, which supplies much of Sydney’s electricity, said a drop of about 8.4 percent in energy usage had been recorded in the city during the hour, equivalent to 1.6 million light bulbs being switched off.
It is not important how much energy consumption decreased in the cities that participated for that hour but it will be interesting to see how many people were informed and involved in energy conservation before the event and how many increased their understanding after the event. That would be a good outcome.
100 million participants is a big number either way.
The issue is whether participants understand this to be a small part of the challenge or whether they think that energy conservation is easy. As we can see from the articles all around the world, the entire effort was on switching off lights but not on general energy conservation principles.
