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Triple Crunch Log                                                                                                            

Columbia Journalism Review on the extraordinarily powerful impact on US public opinion of pseudo-scientist TV weather reporters.53 I first became aware of the assertive ignorance of some weather reporters when my news monitoring kept turning up denialist stories on the Weather Channel website, and I dived in to try and correct some of them. The Columbia Journalism Review story explains just how widespread the problem is and, at the same time, just how central weather reporter views are to the understanding of climate change by the US public. When asked in a national survey who they trusted for information about global warming, 66 percent of respondents named television weather reporters!  Unfortunately, most weather reporters don't 'believe' in climate change. The underlying story is how the 'sceptic' Heartland Institute targeted weather reporters some years back, giving them free tickets to sceptic's conferences and the like. That would have to be one of the more successful targeted campaigns in history, helping block policy progress for years; it needs to be reversed.” Targetting investors in coal is the way to do that.54

China’s growing coal imports begin to look costly as thermal coal price hit $100 a tonne, and the FT speculates that long-term coal dependence could be under review. Domestic demand for coal began to catch up with domestic production about 2008 and China began importing from new sources recently. More than half of China’s coal imports come from Australia, Indonesia and Vietnam, with Russia, Mongolia, and Canada the main second-tier suppliers. This month, for the first time, imports include Colombia coal. Prices for thermal coal hit $100/tonne this week.55  

Jim Hansen in open letter to carbon traders: you “are choosing the path of corporate greed.” Cap-and-trade allows energy companies to add the costs of the right to pollute to consumer’s fuel bills in a hidden tax. The fee-and-dividend approach that he favours taxes fossil fuels at the point of extraction, and spreads the proceeds among the public so they can reduce their carbon footprint and avoid high fuel prices.56

Obama announces a levy that will recover $90bn from the 50 largest US financial institutions. The President calls the bankers’ bonuses “obscene” and tells them: “I’d urge you to cover the costs of the rescue not by sticking it to your shareholders or your customers or your citizens but by rolling back bonuses.” He urges other countries to follow suit.57 Obama needs to levy the fee to help cover a $117bn loss to the US treasury from the $700bn TARP bailout, and wants it in place by June. He intends to apply a levy of 15 basis points, or 0.15%, on the liabilities of 50 large financial institutions with assets of more than $50bn. Jamie Dimon, JP Morgan CEO: “Using tax policy to punish people is a bad idea. All businesses tend to pass their costs on to customers.”58

The world's biggest banks are flouting the Equator Principles, environment groups say. They continue to lend to some of the most environmentally damaging energy and infrastructure projects despite the protocol agreed to seven years ago that was meant to stem such practices, including the financing of huge projects that fuel climate change. 86 campaign groups from 27 countries have sent a letter to 60 banks pouring scorn on the way the Principles are being flouted.59

Green technologies pose “the investment opportunity of our lifetime” says Deutsche Bank.  Companies specializing in energy efficiency and renewable energy such as wind and solar power outperformed peers across the wider global economy last year, a Deutsche Bank report finds in a study. The Bank expects more of the same in 2010. Kevin Parker, global head of asset management: “The absolute imperative to prevent climate change is therefore also, I believe, the economic and investment opportunity of our lifetime.”60

15.1.10. FT editorial: “Obama is right to clobber Wall Street”. “Debate about the levy, however, must not distract from the question of how to construct a financial system where banks can fail safely. In future, it must be easier for bank debt to be turned into common equity in a crisis, and the fate of insolvent banks’ counterparties must be made clearer to prevent the panic that followed the Lehman bankruptcy. Capital requirements must also be raised.”61

Paul Krugman on the testimony of the “clueless” Wall Street bosses. “The bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer. There were two moments in Wednesday’s hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that ‘happens every five to seven years. We shouldn’t be surprised.’ ….Goldman Sachs’s Lloyd Blankfein, who compared the financial crisis to a hurricane nobody could have predicted.” 62

Areva weighs cheaper reactors after failure of Abu Dhabi bid. An internal review has been launched to assess whether to reintroduce the simpler second-generation CPR1,000 reactors, which it stopped building 20 years ago. “Safety standards in the US and Europe would not allow a second-generation reactor to be built,” an Areva executive acknowledges: but 20% of countries that would accept the lower safety standards. Areva's third generation EPR reactor, marketed as an advance in safety technology, has features such as a double shell reinforced to withstand an airline crash, and a secure chamber to contain waste from a core meltdown. EDF estimates the cost at about €4bn ($5.8bn) or even higher. This seems to have been too much for Abu Dhabi.63

17.1.10. A string of tech companies prepares IPOs in London after a drought of three years. “To float you need scale and and a good growth story. Many companies are talking about floating this year but I think you will be lucky if 20 per cent of them actually do,” says one analyst. In 2009 IPOs represented only 10 per cent of venture-backed exits, with M&A 90 per cent.64

SRI may be holding back sustainable investment: FT op-ed. Assets under management rose by 9 per cent a year to €53bn (£47bn, $77bn) by the end of June 2009. Some say this proves socially responsible investing (SRI) is more than a fashion. Yet SRI remains a niche area with SRI assets reaching a mere 1.11 per cent of total assets in Ucits funds this year. “We think part of the answer lies in the lopsided relationship between SRI and risk. SRI is often considered a non-financial overlay to the investment process. It seeks to protect the investor from making unethical, socially undesirable or environmentally unfriendly investments. Sustainable investment, however, has an investment return focus that regards sustainable development as an opportunity to invest based on a set of financial and non-financial criteria. These, therefore, are two very different animals and SRI may be holding back sustainable investing.”65

18.1.10. Goldman Sachs: oil shortages will reappear in 2011. By then  demand will be outpacing supply because of underinvestment. Analyst Jeffrey Currie forecasts demand exceeding pre-crash levels by Q3 this year. “It’s as good as it’s going to get right now in terms of supply growth,” says Currie.  Goldman predicted in December that crude would average $90 a barrel in 2010 and $110 per barrel in 2011. Goldman’s outlook for this year is

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