Archive for July, 2008

How’s that work again?

Wednesday, July 23rd, 2008

– So today I’m reading a story about a finance company in New Zealand, Hanover Finance, that has suspended repayments on principle and interest to 16,500 investors owed $554 million. The story is here:

– As to why they’ve done this, they explain:

“It’s a combination of the collapse of the financial markets and the whole system – the collapse of other substantial finance companies – which has affected our reinvestment rates pretty dramatically. And the inability of people with even good projects to refinance or sell to be able to repay us in a timely fashion.”

– Now, as to what going to happen, they say this:

The suspension of capital and interest repayments effective yesterday, along with a freeze on new investments, would enable the business to be “managed in a measured way as it works through a restructure plan to allow investors to be repaid over an agreed time period“.

– Mmmm. They cannot pay their bills because they haven’t been sufficiently dilligent at predicting and ameliorating their risks and now they cannot make their payments. And now that they’ve put their foot in it, they get to ‘tell‘ their creditors how it’s going to be. I.e., ‘We’ll suspend our payments to you and we’ll sort out which of you we can pay back and when.’

– I’ve read a number of stories like this with much the same text but I never connected the dots until today.

– If we, the small people, don’t judge our risks correctly and get over extended (like in a sub-prime mortgage crises), we don’t get to tell anyone how it’s going to be. Nope, we get told.

Pay up or we’ll foreclose you and take away the collateral we forced you to put up.

– Collateral? Mmmm, let me think about that. The ‘big’ guys loan us money in the hope of getting a good return on their investment in the form of the interest they’ll make. But, as a backup, they impose liens on our property so if we cannot pay, they can take away something of equal or greater value (typically) to what we owe them. That makes it pretty hard for them to lose on the deal because they either get their money back plus good interest or they get the property.

– Now, when one of us ‘small’ people invests in one of their financial firms like Hanover Finance, we’re doing it for the gains we hope to make. Essentially, we’re loaning them our money for their use and they hope, through wise investments, to grow the money sufficiently to be able to both pay us back with a profit to us and to make a profit themselves. It’s important to note here that they plan to accomplish all of this using our money to do it.

– But the finance company doesn’t have to put up any collateral to us to protect the money we loan them against any stupid decisions they might make. Nope, they just take our money, invest it, and hopefully make a profit. That’s how it’s suppose to work, anyway.

– However, if they invest our money badly, do we have any recourse? Not much. They’ll let you know, at their leisure, if they can pay you anything at all back at all on your investment which went bad under their control.

– Yeah. All of this serves well to remind us who are the ‘little‘ people and who are the ‘big‘ ones in the world of finance. And we just take all this for granted.

Mexican Resorts Destroying Mangroves, Dooming Fisheries

Wednesday, July 23rd, 2008

The loss of Mexico‘s coastal mangrove forests to development is threatening the country’s multimillion-dollar fishing industry, according to a new study.

Around Mexico’s Gulf of California—between Baja California peninsula and the west coast of the mainland—mangroves are being destroyed to make way for high-end tourism resorts, marinas, and controversial industrial shrimp farms.

The government has overvalued such development and grossly undervalued the vital role mangroves play in supporting the region’s U.S. $19-million-dollar fishing industry, the report said.

The Gulf of California harbors more than a hundred fish species, 30 percent of which depend on mangroves for survival.

In particular, the roots of the saltwater forests serve as sanctuaries and nurseries for commercial fish species such as snapper, snook, and mullet.

The study, led by researchers at the Scripps Institution of Oceanography at the University of California, San Diego, was published this week in the journal Proceedings of the National Academy of Sciences.


Warming world ‘drying wetlands’

Wednesday, July 23rd, 2008

More than 700 scientists are attending a major conference to draw up an action plan to protect the world’s wetlands.

Organisers say a better understanding of how to manage the vital ecosystems is urgently needed.

Rising temperatures are not only accelerating evaporation rates, but also reducing rainfall levels and the volume of meltwater from glaciers.

Although only covering 6% of the Earth’s land surface, they store up to an estimated 20% of terrestrial carbon.

Co-organised by the UN University and Brazil’s Universidade Federal de Mato Grosso, the five-day Intecol International Wetlands Conference in Cuiaba, Brazil, will examine the links between wetlands and climate change.

“Humanity in many parts of the world needs a wake-up call to fully appreciate the vital environmental, social and economic services wetlands provide,” said conference co-chairman Paulo Teixeira.

These included absorbing and holding carbon, regulating water levels and supporting biodiversity, he added.

Konrad Osterwalder, rector of the UN University, said that people in the past had viewed the habitats as a problem, which led to many being drained.

“Yet wetlands are essential to the planet’s health,” he explained. “With hindsight, the problems in reality have turned out to be the draining of wetlands and other ‘solutions’ we humans devised.”


Solar Thermal Power Coming to a Boil

Tuesday, July 22nd, 2008

Jonathan G. Dorn

After emerging in 2006 from 15 years of hibernation, the solar thermal power industry experienced a surge in 2007, with 100 megawatts of new capacity coming online worldwide. During the 1990s, cheap fossil fuels, combined with a loss of state and federal incentives, put a damper on solar thermal power development. However, recent increases in energy prices, escalating concerns about global climate change, and fresh economic incentives are renewing interest in this technology.

Considering that the energy in sunlight reaching the earth in just 70 minutes is equivalent to annual global energy consumption, the potential for solar power is virtually unlimited. With concentrating solar thermal power (CSP) capacity expected to double every 16 months over the next five years, worldwide installed CSP capacity will reach 6,400 megawatts in 2012—14 times the current capacity. (See data.)

Unlike solar photovoltaics (PVs), which use semiconductors to convert sunlight directly into electricity, CSP plants generate electricity using heat. Much like a magnifying glass, reflectors focus sunlight onto a fluid-filled vessel. The heat absorbed by the fluid is used to generate steam that drives a turbine to produce electricity. Power generation after sunset is possible by storing excess heat in large, insulated tanks filled with molten salt. Since CSP plants require high levels of direct solar radiation to operate efficiently, deserts make ideal locations.

Two big advantages of CSP over conventional power plants are that the electricity generation is clean and carbon-free and, since the sun is the energy source, there are no fuel costs. Energy storage in the form of heat is also significantly cheaper than battery storage of electricity, providing CSP with an economical means to overcome intermittency and deliver dispatchable power.

The United States and Spain are leading the world in the development of solar thermal power, with a combined total of over 5,600 megawatts of new capacity expected to come online by 2012. Representing over 90 percent of the projected new capacity by 2012, the output from these plants would be enough to meet the electrical needs of more than 1.7 million homes.



Fall in tiny animals a ‘disaster’

Tuesday, July 22nd, 2008

Experts on invertebrates have expressed “profound shock” over a government report showing a decline in zooplankton of more than 70% since the 1960s.

The tiny animals are an important food for fish, mammals and crustaceans.

Figures contained in the Department for Environment Food and Rural Affairs (Defra) document, Marine Programme Plan, suggested a fall in abundance.

Charity Buglife said it could be a “biodiversity disaster of enormous proportions”.

They said it could have implications for creatures all the way up the food chain, from sand eels to the seabirds, such as puffin, which feed on the fish.


Tropical Rain Forests: Bad to Worse

Monday, July 21st, 2008

Pushed from center stage by the expected record arctic ice and permafrost melt, tropical rain forest destruction has been elbowing its way back through the smoke and into view. Papua New Guinea’s rain forests disappearing faster than thought is one such look:

Previously, the forest loss was estimated at 139,000 hectares per year between 1990 and 2005. But now?

Using satellite images to reveal changes in forest cover between 1972 and 2002…Papua New Guinea (PNG) lost more than 5 million hectares of forest over the past three decades…Worse, deforestation rates may be accelerating, with the pace of forest clearing reaching 362,000 hectares (895,000 acres) per year in 2001. The study warns that at current rates 53 percent of the country’s forests could be lost or seriously degraded by 2021.

Stunning. Adding insult to injury – the good news as reported last Thursday in Malaysia didn’t last long:

PM: No clearing of forests for oil palm plantations

Abdullah, who is also Finance Minister, said the existing oil palm plantations were enough to cater to current demands and there was no need for the opening of new plantations at the moment.

Fast forward THREE DAYS:

Sarawak to open more land for oil palm

Sarawak will continue to open up more land for oil palm plantations, Chief Minister Tan Sri Abdul Taib Mahmud said here yesterday. He said this would not go against the prime minister’s directive on the clearing of land for oil palm plantation as it did not apply to the state.

So much for Malaysia lending a hand.


Hunger brings anguish for millions of Pakistanis

Monday, July 21st, 2008

THARPARKAR, Pakistan: When Pakistani labourer Mangal Ram’s children cry from hunger all he has to offer them is empty promises.

“My kids complain and cry for more food but what can I do?,” said Ram, 50, a father of seven who lives in the desert village of Tharparkar, in the southern Pakistani province of Sindh.

“We say ‘wait, we’ll cook more’, what else can we do?” he asks with a shrug.

Ram’s anguish is becoming increasingly common in Pakistan where inflation is running at about 20 percent, led by fuel and food prices.

Soaring food prices and shortages of staples mean about 77 million people of Pakistan’s 160 million population are food insecure, a 28 percent increase over the past year, according to U.N. World Food Program (WFP) estimates.

The term food insecure means people are unable to get sufficient nutritious food to meet dietary needs.

While there have not been serious food protests in Pakistan, analysts say there is a danger anger could explode in a society that has already fallen prey to Islamist militants bent on bringing down the government.


Biofuels May Be Even Worse than First Thought

Sunday, July 20th, 2008

An internal report put together by the World Bank and leaked to the Guardian claims that biofuels may be responsible for up to 75 percent of recent rises in food prices. Even environmental groups haven’t gone that far in their estimates.

With soaring food prices high on the agenda for next week’s G-8 Summit in Japan, World Bank President Robert Zoellick has been clear that action needs to be taken. “What we are witnessing is not a natural disaster — a silent tsunami or a perfect storm,” he wrote in a Tuesday letter to major Western leaders. “It is a man-made catastrophe, and as such must be fixed by people.”

According to a confidential World Bank report leaked to the Guardian on Thursday, Zoellick’s organization may have a pretty good idea what that fix might look like: stop producing biofuels.

The report claims that biofuels have driven up global food prices by 75 percent, according to the Guardian report, accounting for more than half of the 140 percent jump in price since 2002 of the food examined by the study. The paper claims that the report, completed in April, was not made public in order to avoid embarrassing US President George W. Bush.


Letter to a young idealist

Sunday, July 20th, 2008


A few more thoughts along the same lines I talked about previously.

All of humanity’s history has been a series of incremental advances along multiple paths; business, social organization, military, agriculture, technological, etc. In all of this, the thought has primarily been to advance, empower and grow.

Now, for the first time in humanity’s history, we have filled the planet and have begun to hit various unyielding limits; water, food, oil, pollution, as well as limits having to do with how much impact we can have on the biosphere without causing huge shifts in the demographics of various species and even causing their extinctions.

It is clear, if humanity wants to continue to live indefinitely on this planet, that we are going to have to shift from a growth and advance strategy in all we do to one predicated on establishing a steady-state and sustainable balance with the biosphere around us.

We cannot use renewable resources faster than they can regenerate. We cannot occupy more of the planet’s surface than is consistent with allowing the rest of the planet’s biology to exist and flourish. These both imply that our population has to come down to some sustainable number and be held there. We have to come up with ways to govern ourselves that are consistent with establishing and maintaining these essential balances. Nation against nation, system against system is not compatible with long term survival. The ultimate goal and purpose of government in an enlightened world should be to secure all of our futures (we and all the rest of the planet’s biology) and maintain the balance.

We could, if we cut our population to sustainable levels and learned to live within a sustainable footprint on this planet, exist here for tens of thousands of years and maintain a decent quality of life for all those who are alive at any specific point in time. We do not have to give up comfort or technology – we just have to dial our impact on the planet back to sustainable levels and stay with in those levels.

Anything that the Gates Foundation or any other forward looking organization works on that does not include long term goals like these is likely in the big picture to just be a shuffling of our problems from one place to the other rather than a real indefinite-term planet-wide solution to how our species is going to solve the problem of learning to live here without fouling our nest for ourselves and all the other species that depend on this planet’s biosphere.

South Australia drought worsens

Saturday, July 19th, 2008

A long-running drought in Australia’s main food-growing region, the Murray-Darling river basin, has worsened, a new report says.

Three months of dry weather and the driest June on record have plunged the area back into drought, the Murray-Darling Basin Commission says.

Crossing much of south-east Australia, the Murray-Darling is the country’s most important river system.

The basin produces 40% of Australia’s fruit, vegetables and grain.

Experts say the drought will hit irrigated crops like rice and grapes the hardest, because other crops, such as wheat, depend more on rainfall during specific periods.

Grim picture

Corey Watts, of the Australian Conservation Foundation in Melbourne, told the BBC that drought was becoming a regular occurrence instead of happening once every 20 to 25 years.

“We’ve had a string of reports, official reports, over the last fortnight painting a pretty grim picture for the climate and the future of our economy and our environment,” he said. “So now we’re looking at a future in the next few decades where drought will occur once every two years.”