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Triple Crunch Log                                                                                                            

so far, been less extreme than those in the US. The only concrete measures have been a one-off bonus tax, imposed by the previous Labour government last year, and a US-style levy under its successor. … Mr Osborne’s £2bn levy on bank balance sheets– announced in his June Budget – is on the low side of City expectations and his aides say he has no plans to increase it.811

“Why it is still bank business as usual”: FT editorial. “The world’s largest banks have not pulled back from risky investment banking. This week saw Bob Diamond, a quintessential “casino” banker, designated chief executive of Barclays, a once-staid UK clearing bank that has, since buying the US rump of Lehman in 2008, become one of the world’s largest investment banks. Few doubt that his strategy will involve further forays into the securities business. In a sense, governments have been a victim of their own success. The shock of Lehman’s collapse was so terrifying that they did whatever it took to save the system. They succeeded in this endeavour, but at a cost. The rescues they engineered largely protected bank investors from the consequence of their folly. We are now paying the price. The support banks received in the form of cheap liquidity has had the effect of making investment banking activities very profitable. Eager to rebuild their battered balance sheets, banks have used the cheap capital to trade securities rather than lend money. Having been protected from loss themselves, investors have not acted to curb banks’ riskier strategies. Deleveraging may have damped animal spirits somewhat. But the conditions remain in place for another bubble to inflate. Bankers show little sign of modifying their behaviour voluntarily. Having come through the crisis intact, they doubtless don’t see the point. Moreover, they are resisting efforts to rein in their activities, especially if these involve structural changes. Some of the UK’s largest banks have, for instance, threatened to relocate abroad if they are forced to hive off their investment banking activities. It is harder to reform modern finance than it was in the 1930s. Although banking was comprehensively broken then, it remained national in scope and could be rebuilt without seeking international consensus. Now, the need to avoid arbitrage across borders, makes change much harder. All this places a huge importance on the new international capital standards for banks, and the performance of regulators in implementing them. This weekend, the Basel Committee will set out the minimum standards it believes that banks should adhere to. These must not be watered down. Regulators may have been given greater authority to keep banks on a tight leash. But they must actively enforce their new powers. To do this, they must have the political backing to make enemies of the banks.”812

BP thrown off FTSE4Good ethical index, and has been forced to delay publication of its third quarter financial results because of the Gulf oil spill. “The committee's decision to remove BP followed consideration of the company's response to the Gulf of Mexico oil spill, the environmental and social impact and its history of similar incidents,” a FTSE4Good statement reads.813

Thousands of green energy jobs under threat from end of a key US grant in December. A bipartisan group is pushing for a post-2010 extension of clean energy cash provided for big solar thermal and other renewable projects under the American Recovery and Reinvestment Act. Guar dian: “The U.S. Treasury cash grant program was introduced in 2009 as part of the American Recovery and Reinvestment Act as a way to compensate for the absence of investors interested in renewable energy projects in the aftermath of the housing mortgage meltdown. "The tax equity market has yet to recover and large scale renewable energy projects require such significant amounts of tax equity that most deals are not possible in today's market," according to a letter sent earlier this year to U.S. Senate leaders by 19 senators.”814

500 GtC can be expected from all existing infrastructure over its lifetime, study says. Guardian: “A new paper in Science by Dr Steve Davis and colleagues at Carnegie Institution of Washington in Stanford, California, estimates that our existing energy infrastructure will put about 500 gigatonnes (Gt) of CO2 into the atmosphere during the course of its life (this is about 15 times the world's annual emissions from all sources today). …. Put another 500Gt of CO2 into the atmosphere between now and 2050, and the expected temperature rise will be about 0.5C of extra warming on top of what we have already seen. … That's the good news - today's energy infrastructure probably isn't enough, by itself, to topple us into wholly unmanageable climate change. The bad news is that this figure assumes that we build no fossil fuel power stations in the future and that all our new vehicles and homes are zero-carbon. That's not going to happen and the scale of the challenge is grimly indicated by the current rate of growth in low-carbon electricity. Of the 1,300 gigawatts of new power station capacity built since 2000, 31% uses coal, 34% gas and 4% oil. This leaves 2% nuclear and 17% renewables.815

Germany leads on 100 percent renewables goal. Daniel Boeseon the website of the the Yale Center for the Study of Globalization: 100% renewables is possible, as two recent days show. On July 14 combined electrical output of solar panels in Germany was more than 50 percent of the output of the nation’s 17 nuclear plants operating at the same time. Heavy winds on December 26 delivered free electrical energy, and wind turbines produced up to 20.100 megawatts of power, pushing the price for electricity into the negative.One lesson from this—if it can be done here, in the heart of Europe, it can be done anywhere. In 2008 Germany relied on imports of coal, gas, oil and uranium for 70 percent of its primary-energy production. … The scientific advisory board to the German government, the Sachverständigenrat für Umweltfragen, produced its own study, mostly performed by the German Institute for Air and Space. Researchers calculated hour by hour throughout the whole year, comparing averages of solar and wind production to balance them with spikes of demand. The results were clear: Not only is it technically possible, but also economically viable. Increase in investment upfront is set off by savings from buying less coal and gas later. The federal office for environment, Umweltbundesamt, also published a study focusing on regional strengths and connections: While wind is strong in the north and east, solar is stronger in the south, and there are other parts where biomass and hydro-energy can be used for storage. In total, these differences can be used to balance energy production throughout the year” On the feed-in tariff: “The tricky question, of course, is costs. Critics like the British environmentalist George Monbiot argue that the feed-in-tariff costs too much. Indeed, In Germany, electricity prices have soared more than 60 percent over the past decade. But Germany’s environmental ministry says the tariff is responsible for less than a tenth of that increase, or about $3 per month for a typical household. The price is worth it—considering that Germany not only tries these technologies out as an early adaptor, but shapes a worldwide market.816

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