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there is a commitment to “encourage home energy efficiency improvements paid for by savings from energy bills.”340

National Grid says its new investment in greener infrastructure will cost £4 a year on energy bills. It will seek £3.2bn in a rights issue next month as it steps up spending on electricity and gas infrastructure to £22bn over the next five years, from £14bn in the past five. Three-quarters of the total will be spent in the UK. The measures announced include an offshore electricity grid to support a “new generation of offshore wind power” and promoting gas from waste through anaerobic digestion.341

China mines 90% of the rare earths vital for clean energy technology. Professor Rex Harris of Birmingham University  puts it like this: “We worry about peak oil, we should worry about peak magnets as well.” Most came form the United States in the 1960s but tightening environmental regulations and a price war closed the last Californian mine, handing China a virtual monopoly. But last year the Chinese said that as part of their latest 5 year plan they would continue to reduce the export of these materials to the West and that they were considering stopping the export of certain of them. They want both Western users to do their manufacturing in China and supplies for their own wind energy programme. In the search for alternative sources of rare earths, mines are planned for California, Australia, Arctic Canada and even Greenland. But there are environmental concerns. The mines at Baotou in Chinese Inner Mongolia involve enormous open-cast mines with refineries leaking vast quantities of polluted water into the landscape. Professor Animesh Jha at Leeds University proposes a cleaner alternative, having discovered that purification of Titanium dioxide, commonly used in paints, leaves a residue of rare earths. Titanium oxide deposits are found in many places, including Norway, India, Brazil, US.342

Martin Wolf in FT:The challenge of halting the financial doomsday machine.” “Can we afford our financial system? The answer is no. Understanding why this is so is a necessary condition for evaluating ideas for reform. The more aware of the risks one is, the more obvious it becomes that radicalism is the safer option.” “People pay too much attention to the direct cost of bail-outs. As Andrew Haldane of the Bank of England has noted, these costs may be around 1 per cent of gross domestic product in the US and UK. The costs that matter, however, are those of the recession and the huge jump in public debt. If only a quarter of the world’s loss of output during the recession were to prove permanent, the present value of these losses could be as much as 90 per cent of annual world product. How did this happen? Quite simply, the financial sector has become bigger and riskier. “….The combination of state insurance (which protects creditors) with limited liability (which protects shareholders) creates a financial doomsday machine. What happens is best thought of as “rational carelessness”. Its most dangerous effect comes via the extremes of the credit cycle. Most perilous of all is the compulsion upon the authorities to blow another set of credit bubbles, to forestall the devastating impact of the implosion of the last ones. In the end, what happens to finance is not what matters most but what finance does to the wider economy.”343

Nearly a year after the recession likely ended, the US housing market looks “as sick as ever.” Wall Street Journal: “At the end of March, borrowers on 10.06% of residential mortgages had missed at least one payment, up from 9.47% at the end of 2009, according to the Mortgage Bankers Association. ….Since the end of 2007, outstanding household mortgage debt has remained at about $10 trillion, sustained in part by huge government mortgage purchases, loan-modification programs and superlow interest rates. Yet those haven't stopped house prices sliding 20%.344

21.5.10. Oil hits Louisiana wetlands as concern focuses on impacts of dispersants. Robert J Gordon, an attorney epresenting 500 commercial fishermen suing BP: “We are concerned that the cure may be as bad as the injury.” The EPA has required BP to identify and use a less toxic and more effective dispersant from the list of EPA authorized dispersants.345

Biggest Wall Street shake-up since Great Depression: Senate backs Obama’s banking reform bill. The bill gives the US government the power to seize control of a failing bank to avoid a collapse that could threaten the financial sector. Derivatives trading will have to take place through a central clearing house, rather than directly between trading teams, and banks will also have to post collateral to cover potential losses, pushing up the cost of dealing in derivatives. There will be a British-style “say on pay” vote on boardroom bonuses. A consumer financial protection bureau will be created to police the sale of products such as mortgages and credit cards. Obama: “Taxpayers will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period.” However, some measures were dropped from the bill – including stringent conflict-of-interest rules and tighter controls on proprietary trading – after Republicans prevented these topics being voted on. And it remains unclear whether US deposit-taking banks will also be banned from engaging in proprietary trading (i.e. whether the Volcker Rule will apply, and if so in what precise shape). This element will be covered in an amendment yet to be voted upon, as will a tougher proposal forcing banks to spin off desks trading in credit swaps. The Senate bill must now be merged with a version approved in December by the US House of Representatives. Then it goes to the president to be signed into law, possibly in July. Jim Hardesty, president of Hardesty Capital Management: “The lobbyists are firmly in control of Washington, and the reform efforts are likely to be modest.” He fears Wall Street firms might simply “reinvent themselves.”346

23.5.10. Europe markets set for more turmoil as rifts over how to deal with mounting deficits widen. Spanish Prime minister José Luis Rodríguez Zapatero says his government will not revise its €15bn austerity plan, despite pressure from unions. Meanwhile, the Spanish government has been forced to rescue a regional mortgage lender. £6bn of cuts mapped out by the new UK coalition government came under attack. David Blanchflower who said revised figures for last year – showing the UK spent less than expected – allows the government to delay cuts. He says the economy needs to recover before the government cuts spending or it could slip back into recession.347

Climate change concern declines in poll: only 62% of Britons interested in subject, down from 80% in 2006, according to YouGov survey. The poll also suggests resistance to building new nuclear power stations is decreasing. The number of climate change agnostics – those unsure whether human activity is warming the planet – has risen from 25% in 2007 to 33% now.348

US safety regulators to energy companies: “Your workers are dying on the job, and it has to stop.’’ Jordan Barab, of the federal Occupational Safety and Health Administration (Osha): “Something is desperately

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